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When Does It Make Sense to Use Miles Over Paying For a Flight?

by on April 20, 2014 · 5 comments

in American, Cash Back Rewards, Sunday Reader Questions, Video Blog Post

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What with credit card sign-up bonuses, promotions, buy miles promotions, and more, there are a lot of ways to build up your points wealth, but knowing when to use your points and miles definitely takes some skill!

One of my best friends sent me a text over the weekend asking: Does it makes sense to use 25,000 American Airlines miles for a $600 flight?

As we know, there is no real exact calculation here as there are a lot of different factors to take into consideration, including your personal finances at the time, whether you can write it off as a business expense, and so on. There is also the question of whether you’re gunning for elite status, because if you are, they maybe you should pay for the flight to get the elite miles.

In general, the one main rule of thumb is to feel good about your redemption. I think her question was valid, and it was a really good redemption as she was getting a decent value for her miles at about 2.4 cents each. So I would say to go for it if it’s going to help you with your budget, and if you feel happy about your decision, then go ahead and redeem.

Using miles? Spending dollars? Just remember to make good choices!

Using miles? Spending dollars? Just remember to make good choices!

That being said, if you’re strictly earning miles and points from your credit card and you’re getting less than 2 cents per mile in value on your spending, you should really think about getting a cash-back card, like the Fidelity Cash Back Card or a card like the Barclaycard Arrival, which gives you 2.2% back on your spend when you redeem for travel because you get 2 miles per dollar and each miles is worth 1 cent towards travel. Then you get a 10% mileage refund on travel redemptions. So if you’re not doing better than that with your redemptions, you may not want to mess with regular frequent flyer miles, because, you also don’t earn miles on mileage redemptions. With the Barclaycard Arrival and that 2.2% back, you’re also earning miles and elite miles on top of it, and that makes your value back higher, which is great.

The Barclaycard Arrival is not great, however, if you’re trying to redeem for international first or business class. That’s because the tickets are very expensive and the redemption of Arrival miles or with the Fidelity Cash Back Card are pegged to the price of the ticket. So, if you know how to work traditional frequent flier programs, they may in the end be a better fit for you.

In the end, there is no right answer here, but do what makes you happy!

Have other questions? Let me know by messaging me on Facebook, tweeting me or emailing me at [email protected]

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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  • Alex

    I agree with this as well. :) I just redeemed 30k AA miles to send my dad to LHR one way instead of paying almost over $1500, for an emergency trip. So yep, it all depends on how YOU value the miles and how they fit your budget. Great topics today Brian :)

  • Michael Heffner

    Excellent info. But what’s with the red covering the window? Got me curious.

  • Justin

    Grandmother broke her hip. I got a round trip flight (Continental US) for $150 + 20,000 miles vs $868 on United. Just have to do the math and guesstimate.

  • Jim

    Since most of my miles come from Credit Card spend, I think it also depends on the cost of the ticket like most have said. Usually, I use them to take all 5 in the family to someplace. Last trip it was Bermuda, and it cost about 30,000 miles round trip per person. Even though I don’t do the dollar calculation, it was much cheaper than $600 per ticket for 5 of us!

  • kari

    What about this — I found a RT flight in first class from ORD to Honolulu for 75k miles on American [in October]. Fantastic flight schedule, only connecting in LAX. I forgot to search for my husband as well, and when I tried to find him a ticket, there was no availability.

    The price of a first class ticket on these exact flights is $3172, or I can spend 67,500 x 2 = 135,000 miles for his ticket, OR I can buy the $829 economy ticket and hope systemwide upgrades clear.

    What would you do?

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