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Video Sunday Reader Question: Using Amex For Cathay to Hong Kong

by on April 29, 2012 · 13 comments

in American Express, British Airways, Cathay Pacific, Sunday Reader Questions, Video Blog Post

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TPG reader Mike wants to use miles for one of my favorite purposes: helping a family member take charge of their points for a great travel redemption. Mike’s issue is that he’s in Hong Kong and his dad doesn’t have quite enough points or miles to get himself there in business class. Here’s his question:

“In the next month or so I will be moving to Hong Kong for work.  My father has roughly 80k AMEX miles and would like to optimize his points to get a free trip to HK (I doubt business class is in the picture with that amount of miles). My thoughts were for him to switch his points to BA with their current 50% bonus.  I wanted to get your thoughts.”

Hope is not lost, Mike! You might just be able to get your dad to Hong Kong in business class on Cathay after all. First of all, great thought on transferring those Amex points to Avios. His 80,000 Membership Rewards points will become 120,000 Avios. Still 20,000 Avios short of the 140,000 necessary to get from New York to Hong Kong in business class (I’m just assuming it’s from the east coast since you didn’t mention your father’s point of origin). So you’d need 14,000 extra Amex points to hit the 140,000 award redemption level.

So how do you get those extra points? There are two easy ways:

-Get Amex to advance you the points. This is a little-known feature of Membership Rewards, but the program will advance you up to 15,000 points (60,000 for Platinum and Centurion) for free if you can spend your way to that within a year. It’s a great way to score a few extra points in a pinch. You’d only need 14,000 to make your 20,000 threshold.

-Buy the points. Amex will sell you points for 2.5 cents apiece, which would just cost you $350. Not too bad considering a business class ticket is upwards of $6,000.

British Airways will still levy taxes and fees in the neighborhood of $300, but even if you bought those extra points for $350, you’d basically be paying under $700 for a business class ticket on Cathay’s great product. Sounds worth it to me!

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Turbo45

    TPG, you provide a great service which I love and I hope you continue to do so. The one small thing that gets to me is when you compare premium reward value ($6,000) to the taxes and fees ($700).

    1. In this example, the readers don’t know how he accumulated the 80,000 points. You have to include some value (at minimum 0.01 per point) since he could cash those out with membership rewards. So, I would say that he is paying at least 700+800=1500 for the business class ticket.

    2. Unless you would otherwise purchase a business class ticket to HK, the comparison should be between an economy ticket (lets say $1000) and the value redeemed ($1500). In this case, the traveler would decide if the extra $500 of value is worth it for business class. Yes for me! but to each their own.

    I am a numbers guy so this just gets to me and can be misleading.

  • PJ

    Take the gift of 50K Avios from the all mighty and generous Chase for $95 . I got the 100K avios from BA card sign up and had to turned that in to get my new Sapphire Preferred .I start to wonder how much longer I have to wait to collect another 50K for owning that BA card again

  • http://intrepidmotion.com/ Marvin @ intrepidmotion

    Turbo, I like that you count the cost of getting the initial miles. I often think about this whenever I get a new card that requires the minimum spend to get the bonus miles. The question I always am torn with is that what if it is money that I would have spent anyway? (e.g. gasoline, groceries, bills).

    Doesn’t that mean that one doesn’t need to count the “accumulation” cost? Because he would have been out that cash anyway, just that he astutely decided to “put it on the card” and get added value.

    I feel like the accumulation cost is actually not cost, but rather “free money” since the expenditures are money you would have spent anyway.

    What do you think?

  • thepointsguy

    I totally agree that there is a cost to getting the miles and that using them isn’t “free”. In this case there are so many unknown variables that I just left it at vs paying for business class which is the only variable I know.

  • dracs

    Brian,

    Did you not mention sometime back that if you don’t have any membership rewards points in your account then you can call them to transfer I think upto 60000 membership points for platinum to BA and which would bring the cost of points at around I think 1.87 considering the transfer bonus available.

  • Turbo45

    TPG, I see your point.
    Marvin, I agree that it is “free money” but I like to think about the redemption alternatives. It all depends on what his other travel plans are. If this is the only trip in the near future then it is an easy decision. What I don’t like is that he is giving up 80,000 miles (no matter how it was earned) and saving $300 for the biz class ticket.

    I think I am try to be too efficient with the redemption:-) No matter how I earn my points (whether I got them for free or paid a penny per point), I try to maximize redemption (at least 2 cents per point). In this case, I am looking at a redemption of 0.375 ($300; 80,000 miles) plus free biz “upgrade”.

  • Brian (J)

    Martin,
    My wife just got the Ink Bold with the 50K points after $5,000 spend. We will pay a 2.3% fee to pay our property taxes with the card because it is worth the $115 to us to get the spend out of the way and be ready for the next opportunity, in part this is how we have come to have 1.5 M miles while spending about 500K miles/year on international business tickets. This is one way that miles can cost $$ and another is the yearly fee and I think these costs, which can be avoided, are the costs Turbo is referring to.

    I often see advice on accumulating miles that comes with costs, like buying gas and charitable giving, with no mention of the costs involved. The one that really gets me is charitable giving. If for example you give $1,000 by CC the charity will pay some fee, say $30, so you just gave $970. If you send a check instead for $970 it comes out even, so that $970 gift just cost you $30. In the case of buying gas, the gas I can buy with a CC is more expensive than the gas I buy using cash, I calculate that accumulating 50K points by buying gas would cost $1,200 or more.

  • PJ

    I buy gas cards with chase freedom cards at grocery stores to get 5 % rebate on Ultimate Reards and when using gas cards i pay at Cash price a double dipping idea.
    also I can even buy grecoery $1000 gift card for paying $950 and then using grocery gift cards to pay for gas cards — a triple dipping

  • arcticbull

    You should be able to transfer 80=>120K and make up the difference using Avios&Money at time of booking to purchase the remaining miles at approximately 1.44cpm.

  • arcticbull

    You can advance yourself 15,000 miles if you have a Green or Gold/PRG card, and up to 60,000 if you have a Platinum card.

  • dracs

    isn’t advance different from what I mentioned. Advance, I need to spend to cover what I advanced but in my case , I pay flat in beginning.

  • agk

    What happens if AMEX advances me the points but I don’t meet the spend within the next year? e.g. they advance me 30,000 points but I only end up spending $22,000?

  • Goerge

    In order for you to upgrade your limit, i would suggest to talk to AMEX customer service, they will definitely explain to you what you need in order for you to upgrade your limit. Just a suggestion.
    Cheap Flights

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