20% Bonus on American Airlines Miles Transfers – Worth It?

by on June 21, 2012 · 5 comments

in American, Purchase Miles Promotions

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During the month of June, American Airlines is offering up to a 20% bonus to AAdvantage members who transfer miles to other AAdvantage accounts. In this case, transfers take 5 business days to go through, and must be made in transactions of between 1,000-25,000 miles each up to a total of 100,000 miles. AAdvantage members can receive up to 100,000 miles per calendar year. Transferred miles don’t count toward elite status or Million Miler status.

Let me just preface this by saying that transferring miles is expensive and rarely makes sense, but I do get a lot of questions about promos like this and I try to cover as many points/miles program in as much detail as possible, so I wanted to put my two cents’ worth in on this particular promotion.

Even with this (small) bonus, transferring miles is a horrible value.

Members who transfer the following amounts earn the following bonuses to their own accounts:

-1,000 – 5,000 miles: 10% bonus
-6,000 – 10,000 miles: 15% bonus
-11,000 – 25,000 miles: 20% bonus

Worth It?
So when is it worth it to transfer miles with this bonus? Pretty much never!

Each transaction costs $30 and incurs a transfer fee in the following increments:

Transferring between 1,000 – 5,000 miles costs $50
Transferring 5,000 –10,000 miles costs $100
Transferring 11,000 – 15,000 miles costs $150
Transferring 16,000 – 20,000 miles costs $200
Transferring 21,000 – 25,000 miles costs $250

So if you were to transfer 5,000 miles, that would cost you $80. The recipient would receive 5,000 miles, and you would get 500 miles back. In essence, you’d be paying $80 for just 500 miles. 16 cents a mile.

If you transferred 10,000 miles, you’d pay a total of $130 and would get a bonus 1,500 miles back, breaking down to 11.3 cents a mile.

Going for the big one, if you transferred 25,000 miles, you’d end up with 5,000 miles (the recipient would get 25,000 miles) and you would pay a total of $280, so your bonus miles would cost you 5.6 cents each.

Those figures are disappointing enough in and of themselves, but even more so when you consider you could just buy miles for 2.75 cents each plus the $30 transaction charge.

So to buy the 5,000 miles instead of transferring 25,000 miles for the bonus would cost $177.50, breaking down to 3.55 cents per mile. That’s almost 40% lower than those bonus transfer miles.

If you’re just trying to get a few bonus points yourself, you’d be better off linking your credit card to a dining program and enjoying a few meals out, or doing some online shopping through to earn bonuses instead.

If you’ve only got a few miles in your AAdvantage account and want to give them to someone who is close to an award threshold, then sure, you could consider transferring the miles. Or if you know someone who needs just a very few amount of miles to top up their account for a specific award, you could consider it. But the high transfer cost and that $30 transaction fee make this a horrible value in every circumstance. If you were thinking of transferring a large amount of miles for someone to book travel with, you’d be better off just using your own miles to book a ticket in their name and save yourself the transfer fees, especially since AA makes it easy by allowing one-way awards. Then when they build up their account, they can repay the favor and book an award for you with their miles. Almost all the major airlines allow you to book tickets for someone else using your miles with no extra fees, so you might as well do it that way. It’s perfectly legal as long as no one is paying the other person.

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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  • Herman Maes

    The transaction-fee is indeed way too expensive.

    My wife and me have no 2 AAdvantage-accounts with 9.000 points (return flight Europe-NYC).

    The only thing we can do with the points, is booking 2 hotelrooms on the AA-website.

  • David

    Tpg, can you list the programs that can I can transfer to AA miles (spg excluded)? The problem with buying is that there is a 40K limit per account per year.

  • PJ

    get their Citi AA credit card(s) for the sign on bonus to get free flights is the solution. I think the 50K sign on bonus is till on

  • Herman Maes

    Living in Belgium, we can’t sign on for all those nice cc-deals… :-/

  • emily

    my grandfather is no longer able to travel, but he has 10k aa miles…not enough to redeem, but enough that they have value. i’ve been waiting for a bonus so that i can transfer his miles to my account, but this still seems brutally expensive.

    do you think there will be a bigger bonus in the future? do you have any other recommendations for getting value out of those miles? it seems i could get around $100 in hotel or car rental, but the locations are extremely limited.

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