Sunday Reader Question: Does It Make Sense to Pay to Transfer Delta Miles?

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TPG reader Dennis asks:

“My parents each have 13,000 Delta SkyMiles and want to transfer them to me. Since they don’t fly Delta very often, is it worth it to pay the $130 each, $260 total for them to transfer them to my account? 

 I just made Gold this year without any of the cards. I travel quite a bit (42 segments, 50K+ miles).  Does it make sense for me to pay for the transfer?  I know you normally use the cost per mile to determine whether or not something makes sense.  At $0.01 is this a good deal?  

Should I pay or pass?”

It really depends on how you ultimately plan to use your SkyMiles. If you redeem for awards that give you more than 1 cent per mile in value, then paying 1 cent for your parents miles to be consolidated into your account might make sense. Delta has run transfer bonuses in the past, including the amazing 100% bonus last year that essentially allowed you to “buy” SkyMiles at 1.1 cents a piece (instead of paying 1 cent to simply move them between accounts). However, if you redeem for merchandise or auctions, you’ll likely get far less than 1 cent per SkyMiles, so you’re better off not transferring them and just finding a way to drain the accounts. As a Gold Medallion, though, I’ll assume that you are more savvy than draining your hard earned miles on merchandise, but I had to mention how bad of a deal those redemptions are!

Maximize Miles, Minimize Fees
What I would probably try do is top each account up to at least 25,000 SkyMiles and then book awards from each account for yourself (or whomever you’d like). The easiest way to do this would be to transfer American Express Membership Rewards points into each account. Even though the accounts are not in your name, Amex allows you to link and then transfer your Membership Rewards points to anyone’s Delta account. Membershiprewards.com -> Points Summary -> Bottom right box -> Linked Programs -> Scroll to the bottom -> Link additional programs.

Amex does charge a small fee to transfer points to Delta ($.60 per 1,000 points, up to $99 maximum) so if you transferred 12,000 points into one of your accounts to get it to 25,000 points (a low-level domestic roundtrip award in economy), it would cost $7.20. Much cheaper than the $10 per 1,000 fee to transfer them between SkyMiles account.

You do have to figure the opportunity cost of using Amex points to transfer to Delta at a 1:1 ratio, when there are potentially more lucrative partners to transfer to like the current 30% transfer bonus to British Airways and 35% to Virgin Atlantic. Amex used to run lucrative transfer bonuses to Delta, but there haven’t been any in 2012 and I have no reason to believe there are plans for any in 2013 (especially since I think Delta is going to make huge changes soon to their SkyMiles program, though they may try to run a transfer bonus to create buzz around their new program).

You can also transfer many hotel point currencies to Delta, with Starwood being the most lucrative with a 1:1 ratio and 5,000 SkyMiles bonus for every 20,000 Starpoints transferred. Your Delta account name should match your Starwood account name, but if your family members live in the same household (read: have the same address that you have in your Starwood profile) you can transfer your Starpoints to them for free and then have them transfer to their respective Delta accounts.

Transfer Starpoints between accounts for free

While I think SkyMiles are one of the weaker airline currencies, it is very possible to get much more than 1 cent per mile in value so I’d absolutely try to maximize your redemptions and make sure you don’t let them go unused, because there is nothing worse than getting zero value for your miles!

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