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What exactly are airline miles, anyway?

Oct. 20, 2022
19 min read
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Airline miles. You’ve certainly heard of them. Maybe you rabidly chase them. Or maybe you view them akin to snake oil, in that they entice you but don’t ultimately turn out to be as valuable or useful as you might have hoped.

Or, if your job doesn’t require you to travel regularly, and you make most of your purchases with a debit card or non-travel credit card, you might not be familiar with the massive world of airline points and miles.

But no matter which of those buckets applies to you, know that airline miles are a big business.

It has been over 40 years since the modern airline loyalty programs were launched — and plenty has changed in those decades.

Commercial air travel went mainstream, and airline miles underwent a major transformation of their own. Long gone are the days when you earned them just for flying. These days, you can earn them when buying your mom flowers or buying yourself a toaster. With airline-cobranded credit cards, you can earn miles for anything you can charge on a credit card.

Let’s cover the basic playbook you need to know to take advantage of airline miles no matter your situation.

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why were airline miles created?

In the beginning, a mile flown was a mile earned.

The miles were earned mostly by business travelers making the weekly slog from Atlanta to Topeka, Kansas, or a hundred other cities. It didn’t take long for that to change.

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Today, airline miles come in many shapes, sizes and values and can be earned (and redeemed) without you ever needing to step foot on a plane.

Airlines miles use to literally be just actual miles. SMITH COLLECTION/GADO/GETTY IMAGES

It’s been over 40 years since the first airline mileage programs started, first at American Airlines and shortly thereafter at United Airlines. At that time, and for several decades thereafter, any time you boarded a flight you’d earn miles based on how far you flew. Fly a few round-trip flights and you could redeem your miles for a free airline ticket.

Over the years that equation got a lot more complicated (though one surprising benefit of the pandemic was relaxed rules surrounding the use of airline miles).

In the decades before the creation of frequent flyer programs, U.S. airlines had been regulated by the government, which restricted their ability to compete.

In the new era of deregulation, airlines were eager to keep their customers coming back and to acquire new ones. Airline miles were a way to keep road warriors from having a wandering eye. For a period of time, some airlines were so worried about a customer cashing out their miles and moving to another carrier they would actually deposit some fresh miles in accounts when a customer redeemed their entire balance.

Needless to say, things are a little different these days.

Related: Why loyalty programs are a lifeline for airlines and hotels during COVID-19

What is an airline mile now?

It’s been quite some time since a mile was awarded for each mile flown across most programs.

In some cases, airlines aren’t even calling them miles anymore. You’ll find Southwest Airlines' Rapid Rewards program issuing “points,” just like JetBlue’s TrueBlue loyalty program. It might be easier to think of miles (or points) as a form of currency. Just like saving up for a new TV, most people save their points and miles while planning a dream vacation somewhere.

JetBlue’s Mint business-class seat can be earned through its TrueBlue loyalty program. ZACH GRIFF/THE POINTS GUY

But these points and miles can also come in handy for a quick trip to see grandma, family emergencies or a weekend away.

It used to be much easier to understand how to redeem airline miles, with only two published “prices” for most flights: standard and some sort of less expensive, “saver” pricing.

Back in the early days, 25,000 miles was a “magic” number, because that was the price for a saver award ticket anywhere in the domestic U.S. Going way back, those awards also used to come with a certificate for a hotel and rental car that you could potentially redeem for an entire vacation.

Generally speaking, flights were less full in the early days, which meant you had a reasonable shot of finding that 25,000-mile award for your whole family, whether you wanted to head to Disney World or Hawaii.

When you did need to fly during busier times, the most expensive seat you’d find would require 50,000 miles round-trip for a domestic flight. For the most part, this was “last-seat availability,” meaning if there was an empty economy-class seat to Hawaii, 50,000 miles would get you there. These days, the busiest flights can cost you double that 50,000 miles one-way.

Current award flight pricing is much more dynamic, as airlines set the number of points needed much closer to the cash value of each flight. Airline miles are also awarded in many different ways and only rarely based on how far you fly.

Most airlines award miles based on how much you spend, and even that can depend on complicated formulas. Generally, you won’t earn miles for any portion of your ticket that’s a government tax or fee. Buy the cheapest ticket, and you’ll earn significantly fewer miles than if you bought that snazzy first-class seat at the last minute.

These days, travelers earn more airline miles from activities other than hopping on an airplane.

Credit cards are a huge part of earning miles. You can earn miles for shopping through online portals that include hundreds of retailers you already patronize. You can also earn miles for renting cars, staying in hotels, paying your energy bill, filling your car up with gas, and applying for insurance.

For example, instead of just shopping online at Macy’s and earning credit card points, if you click through a shopping portal first, you can also earn a multiple of 2 to 4 American Airlines AAdvantage miles per dollar for those purchases. United offers hundreds of bonus miles if you book a rental car through its website (though you want to be careful to check the price versus booking your rental car directly).

You can redeem those miles to buy a blender or steak knives or magazines – but please don’t unless that’s really what you want. The price, in miles, is generally pretty horrible for merchandise relative to what you could get from travel redemptions.

Related: The complete history of credit cards, from antiquity to today

What are airline miles worth?

Just to make things more complicated, not all airline miles (or points, as the case may be) are created equally.

The least valuable miles or points are generally those where the airline has given them a defined value. Southwest and JetBlue are two airlines that have essentially fixed the price of award tickets to the cost of buying a ticket outright.

Meanwhile, some airlines, such as Delta, moved away from fixed award charts years ago. While there are still plenty of ways to get great value from Delta SkyMiles, they aren’t usually worth as much as American Airlines AAdvantage miles.

Mile values fluctuate between airlines but be sure to check the respective charts of each airline for the most up-to-date information. ZACH GRIFF/THE POINTS GUY

A few programs that have chosen to maintain some form of published award charts, such as Alaska Airlines' Mileage Plan and Air Canada's Aeroplan, have miles that are worth even more.

Part of the reason for the higher valuations from those airlines who maintain award charts is that there’s generally a maximum number of miles you need to redeem for an award, whether that’s a “saver” award or a more expensive standard award.

Need an example? If a round-trip flight from New York to Los Angeles will set you back 25,000 miles, it’s a much better value when the cash price of that same ticket is $800 versus $300. For programs that have a fixed value for their miles, or even dynamic pricing where there’s generally no cap on how many miles a ticket costs, it’s just hard to get as much value since a dynamically priced program will charge far more points when the cash price is $800 than when it's $300.

All of these factors drive the methodology behind TPG’s valuations of various miles and points.

Related: How (and why) to calculate award redemption values

How can I use airline miles?

How much time do we have?

The list of ways to use your airline miles is virtually endless. On top of being able to redeem miles for travel to virtually any airport with commercial service in the world, you can use them to upgrade paid airline tickets to a better class of service.

There are the most basic options to redeem miles, such as for a family trip to Disney World. In a world of dynamic pricing for award flights, an off-peak trip to Orlando can be one of the most affordable you’ll find due to the sheer volume of flights.

Hawaii has plenty of flights as well but can be incredibly popular during the holidays. For those who live on the East Coast and would prefer not to fly 10-plus hours in economy class, you may need to put in a bit of elbow grease searching for flights.

Disney World is a good option for those looking to redeem their miles. SUMMER HULL/THE POINTS GUY

International travel presents many more options.

For starters, the major U.S. airlines – American, Delta and United – all offer premium economy as an extra class of service on many international flights. Premium economy can, in some cases, be a much better experience than economy without the steep price of a business-class or first-class cabin. The seats resemble a domestic first-class seat, with more legroom and sometimes footrests. Additionally, you’ll usually enjoy better food, increased baggage allowances and comfort items like a pillow and blanket.

Where international travel gets incredibly interesting is when you begin to leverage airline alliances. All three major U.S. carriers belong to one of the three biggest worldwide alliances. American Airlines is part of Oneworld, Delta is part of SkyTeam and United is part of the Star Alliance. Each airline in these alliances has its own award charts (or just pricing if it has eliminated charts) and the prices can vary widely.

These alliances can help you in two primary ways. First, they can serve as additional award inventory for a flight from the U.S. to a major international gateway. For example, United Airlines operates flights from San Francisco International Airport (SFO) to Tokyo’s Narita International Airport (NRT) and Haneda International Airport (HND). In addition, its Star Alliance partner ANA operates flights from SFO to both Tokyo airports as well, giving you more award options.

ANA flies to dozens of destinations from Tokyo’s airports that can be booked as connecting itineraries along with a United or ANA flight from the U.S. to get you to secondary or tertiary cities all on the same award ticket. So while United doesn’t fly to Bangkok, you can still fly there with your United miles by connecting through Tokyo on an ANA flight.

Related: Book this, not that: SkyTeam award tickets

How can I earn airline miles?

You can earn miles by flying, spending and leveraging airline partners. ANDREW KUNESH/THE POINTS GUY

You'd think that earning airline miles would be something that you primarily accomplish while flying. Thirty years ago you would have been correct. Today, there's a broad menu of options to earn airline miles. Spoiler alert: Many folks earn very few miles from actually flying.

Flying

Pretty much every airline will award you some sort of miles or points when you pay for one of its flights.

That means road warriors can still earn plenty of miles traveling, but only if they're big spenders. Virtually all of the major programs have changed their earning structure to award miles based on how much you spend, not how many times you travel or how far you fly. Alaska Airlines is the lone exception in the U.S., but that could change in the coming months.

For everyone else, you pay to play (or earn miles).

With the larger legacy carriers such as American, Delta and United you can also earn bonus miles for flying in a higher class of service or holding elite status with the airline. Southwest awards points based on which of its four fare classes you purchase and how much your ticket costs. The rest of the low-cost carriers generally award you airline miles or points based solely on the price of your ticket.

Related: How to stack rewards when you book flights with online travel agencies

Credit cards

Credit cards are big, big business for the airlines. Some airlines, such as Delta, lean in heavily on a partnership with one bank.

Delta has a relationship with American Express that includes entry-level credit cards and premium ones that come with benefits like lounge membership. Their relationship extends further to being a major transfer partner with the American Express Membership Rewards program, Amex's proprietary currency.

Other airlines, such as American, have partnerships with more than one bank. That, in theory, gives customers more choices.

That said, you're probably better off without an airline's credit card in your wallet unless you plan to give that airline quite a bit of money. That might sound counterintuitive, but it pays to follow the math. For example, the United Explorer Card earns 2 miles per dollar spent on United flights, hotels and dining.

For the exact same $95 annual fee you can hold the Chase Sapphire Preferred Card. That card earns 2 Ultimate Rewards points per dollar on all travel purchases (including airfare) and 3 points per dollar on dining, online grocery store purchases and streaming services.

In almost all cases, you'll earn more points on everyday spending on the Chase Sapphire Preferred card. Not only can you transfer the Ultimate Rewards points you earn instantly to United on a 1:1 basis, you also have the flexibility to transfer to Air Canada, Southwest, Hyatt and other great partners.

Related: How (and why) you should earn transferable points in 2022

Shopping portals

Earning bonus airline miles via shopping portals can be ridiculously easy.

You typically only need a few extra clicks to navigate to your favorite merchant. Those extra clicks through the shopping portal of your choice will earn you bonus miles for the items you already planned to buy, from the exact place you planned to buy it. With the exception of very few online merchants (the biggest being Amazon), you can find hundreds of the most popular online retail sites on a shopping portal.

Use a shopping portal aggregator like Cashback Monitor to determine where to earn the most airline miles for your purchases.

How should I redeem my airline miles?

Air Canada business class. KYLE OLSEN/THE POINTS GUY

You'll generally get the most value by redeeming them for award tickets. You can usually find award flights on the airline where you have your miles and on its partners. For example, your American Airlines AAdvantage miles can get you from Washington, D.C., to Miami on American but can also get you from Madrid to Rome on Iberia, one of its Oneworld partners.

While we maintain a full list of valuations of various airline miles and hotel points, there are some basic guidelines. For starters, if you're getting over 2 cents per airline mile you're redeeming, you're in pretty good shape. For example, let's say you want to redeem 25,000 miles for a flight. If that flight costs $500 (2 cents per mile) or more, that's generally a good use of your miles.

However, when money is tight, keeping a stash of airline miles can help with emergencies. If a family member falls ill and you absolutely have to be there, redeeming miles (even at a poor value) can help you preserve cash.

Generally, you won't get as much value when transferring your airline miles to hotel loyalty programs (and vice versa). And buying merchandise through the online retail sites some airlines operate is usually pretty horrible.

Related: From newbie to expert: 6 ways to up your mileage redemption game

Which airline miles program is the best?

Asking which airline miles program is the best is sort of like asking which of Baskin-Robbins' 31 flavors is best.

Some folks like vanilla, others like rocky road. If international travel is your goal, stick with Alaska, American, Delta and United. On the other hand, if you're perfectly fine in North America, Southwest can be an excellent value.

In short, there's no "best" airline miles program. Rather, there's a best fit for each style of travel.

Why you should care about airline miles

CAROLINE TANNER/THE POINTS GUY

If you’ve made it this far in life without investing time and energy in learning the advantages of airline miles, you might be wondering why you should start caring now.

One of the biggest reasons to care is that it’s easier than ever to earn airline miles. Most, if not all, travel credit cards have a sign-up bonus when you get approved for a card and meet the card's spending requirement. These sign-up bonuses are what jump-start your points and miles-earning potential.

Credit cards also have bonus purchase categories that can allow you to earn bonus miles that can far exceed the value of a cash-back credit card or a debit card. For example, the American Express® Gold Card earns 4 points per dollar at U.S. supermarkets (on up to $25,000 per year, then 1 point per dollar) and at restaurants worldwide.

Another major reason to get into the points and miles game is the destinations they can unlock. Even some of the stingiest programs have phenomenal award opportunities from time to time.

Delta is famous for flash sales that can make a trip across the country or to Europe or Asia incredibly affordable. When you reduce the cost of an airline ticket to virtually zero, you have so many options. It opens up your budget so you can splurge on a special dinner on your trip or cut the cost enough to make that dream trip a reality.

Who wouldn’t want to check out the Park Hyatt Tokyo’s bar on a whim? HYATT

You can also use your miles to upgrade to business class or first class, which means you can treat yourself to incredible lie-flat seats, fine wines and dining on your way to your chosen paradise. Also, points and miles are not an all-or-nothing proposition. If you only have enough miles for one airline ticket, you can still cut the cost in half for you and a loved one to head to Hawaii. This is especially key for families, where the price of four airline tickets may literally be the barrier to even being able to plan a vacation.

There are unique opportunities with airline miles as well, like United’s Excursionist Perk, which means you may not have to choose between Spain and Italy on a European trip — you may be able to do both for the same amount of miles.

Related: TPG beginners guide: Everything you need to know about points, miles, airlines and credit cards

Bottom line

Would it be a bit cheeky to say that airline miles can make your travel dreams come true? Maybe. But there are reasons airline loyalty programs issue billions (with a “B”) of miles every year. Customers with even a tiny bit of strategy can come out miles ahead when they use them — and by default that includes you, because you’re here.

Points and miles can change your life, or at least your travel frequency and costs. They can open up the world and allow you to take more trips, visit more far-flung destinations, bring along friends and family or simply enjoy the good seats every once in a while.

With that being said, airline miles don’t generally get more valuable over time, so don’t hoard them for a retirement trip many years down the road and expect them to still be worth later what they are today. Big sign-up bonuses and lucrative bonus categories make it easy to build up enough points or miles now to redeem them for a flight quickly.

While airline miles aren’t what they were in the early 1980s, they are now much easier to earn and easier to use in everyday life — which means even infrequent travelers can unlock an award trip to a destination they never thought possible.

Additional reporting by Ehsan Haque.

Featured image by SOMYOT TECHAPUWAPAT/GETTY IMAGES
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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  • Earn 10,000 bonus points after spending $1,000 on eligible purchases in the first 90 days and redeem for a $100 statement credit, gift cards, or travel
  • Earn 10x points on eligible hotels and car rentals booked through the Credit One Bank travel site
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Apply for Credit One Bank Wander® Card
at Credit One Bank's secure site
Terms & restrictions apply. See rates & fees
Best for earning alternative rewards for travel purchases
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
3 / 5
Go to review

Rewards Rate

10XEarn 10x points on eligible hotels and car rentals booked through the Credit One Bank travel partner site
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    Earn 10,000 bonus points after spending $1,000 on eligible purchases in the first 90 days and redeem for a $100 statement credit, gift cards, or travel

    Earn 10,000 Bonus Points
  • Annual Fee

    $95
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    Fair/Good

Why We Chose It

The revamped Wander Card from Credit One Bank earns cardmembers up to 10 points per dollar spent on eligible travel purchases. With no foreign transaction fees, the card is also great for international travel. However, points earned from this card can only be used at a fixed value, so it may not be the best option for those striving to get maximum value from their rewards.

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  • This card has no foreign transaction fees and earns up to 10 points per dollar on travel purchases through the Credit One Bank travel partner site.

Cons

  • While cardholders can earn a significant amount of points on travel purchases, there isn't any way to redeem points from the Wander Card for maximum value (beyond 1 cent per point).
  • Earn 10,000 bonus points after spending $1,000 on eligible purchases in the first 90 days and redeem for a $100 statement credit, gift cards, or travel
  • Earn 10x points on eligible hotels and car rentals booked through the Credit One Bank travel site
  • Earn 5x points on eligible travel, dining, and gas
  • Earn 1x points on all other purchases
  • Redeem your reward points for statement credits, gift cards, merchandise, flights, hotels, and more
  • With $0 Fraud Liability, you won’t be responsible for unauthorized charges
  • Free Online Credit Score and Credit Report summary, terms apply
  • If you are a Covered Borrower under the Military Lending Act, you may get a different offer
  • See Rates & Fees