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TPG reader Matt emailed me for help making sense of his frequent flyer account:
“In 2015, I earned over 27,000 Elite Qualifying Miles on American Airlines, but I don’t understand what that means in terms of redeeming for flights. What’s the difference between award miles and EQMs?”
Loyalty programs use a lot of special lingo that takes some getting used to, especially if you’re new to award travel. The distinction between elite miles and redeemable award miles can be confusing, but it’s an important one. To maximize the return you get from flying and to make sure you meet elite status requirements, you’ll need to understand the differences between these miles, how you earn them and what you can do with them once they’re in your account.
Award miles are the ones you use to redeem for flights and upgrades; you can earn them by flying, as well as from co-branded credit cards and other partner activity. American Airlines currently issues award miles based on how far you travel, with bonuses given for holding elite status and for flying in a premium cabin. That will change later this year when the airline institutes a revenue-based system that issues miles according to the cost of your ticket. The bonuses for elite status and class of service will persist, and naturally premium fares will earn more award miles by virtue of being generally more expensive.
In contrast, Elite Qualifying Miles are used to track your AAdvantage status level, and can’t actually be redeemed. Matt’s EQMs from last year were enough to earn him Gold status through the end of February, 2017. However, his EQMs reset to zero at the beginning of this year. You can earn EQMs from eligible fares on American and partner airlines, with bonuses given for flying in first, business and even full-fare economy. You can also earn them from spending on select credit cards like the Citi AAdvantage Executive World Elite Mastercard and AAdvantage Aviator Silver Card.
As an example, if Matt were to fly round-trip in discount economy between LAX and JFK this summer, he would earn seven award miles per dollar spent on his base fare (which excludes any government-imposed taxes or fees). For a $400 base fare, he’d come away with 2,800 redeemable miles, but he’d earn approximately 5,000 EQMs to equal the actual flight distance. As you can see, those two numbers are vastly different.
American isn’t the only airline to track award miles and elite miles separately. Delta uses a similar system with SkyMiles and Medallion Qualification Miles, as does United with MileagePlus miles and Premier Qualifying Miles. All three major domestic carriers have adopted (or will soon adopt) a revenue-based system for earning award miles. That makes mileage runs less rewarding, and makes it more important to find opportunities to boost your frequent flyer account apart from flying.
For more on earning both award miles and elite-qualifying miles, check out these posts:
- How to Get Airline Elite Status Quickly in 2016
- American Airlines Extends Bonus Miles for Business and First Class Flights
- 21 Ways to Earn Airline Miles that You Might Not Know About
Based on TPG’s most recent valuations, the 50,000 miles are worth $700. In addition, you can earn 10,000 Elite Qualifying Miles (EQMs) toward elite status after spending $40,000 in a calendar year. As of July 23, 2017 this is the only card that offers Admirals Club lounge access so if you are an AA flyer this card might make sense for you. Aside from lounge access the primary cardholder will receive a Global Entry application fee credit every 5 years, first checked bag free for up to 8 travel companions on domestic itineraries and a 25% discount on eligible in-flight purchases on American Airlines flights.
- Earn 50,000 American Airlines AAdvantage® bonus miles after spending $5,000 in purchases within the first 3 months of account opening*
- Admirals Club® membership for you and guests with you*
- Complimentary Admirals Club® lounge access for authorized users
- Earn 10,000 AAdvantage® Elite Qualifying Miles (EQMs) after you spend $40,000 in purchases within the year*
- No Foreign Transaction Fees on purchases*
- Earn 2 AAdvantage® miles for every $1 spent on eligible American Airlines purchases and 1 AAdvantage® mile for every $1 spent on other purchases*
- First checked bag is free on domestic American Airlines itineraries for you and up to eight companions traveling with you on the same reservation*