Do You Like to Buy Points?

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In recent days I have been seeing many posts on other blogs about “so and so is offering 30% bonus on purchased points” or “100% bonus or 84.3% bonus if you buy 27,534 miles” (okay, that last one was added for dramatic effect).  Regardless, it seems that either more companies are trying to provide incentive for you to purchase their miles and points, or these deals are just getting way more coverage than they used to.

Presumably like most of you, I like to get my miles and points “free” through credit card sign-up bonuses, 5x bonus spending category bonuses, hotel and airline promotions, etc.  Of course they aren’t actually totally “free” even via those methods, but you know what I mean – I prefer to not open my wallet to buy my miles and points.  However, even though I dramatically prefer to get my points the painless way, it can sometimes make sense to go ahead and just buy them outright.  For this to make sense, a few general criteria need to be met.

1.  The miles or points must be priced at a level below the value you will get for redeeming them.  For example, if you want to purchase 50,000 miles at 2 cents a piece for a total of $1,000, then the flights you are redeeming them for should cost over $1,000.  Also take into consideration that you won’t be earning elite qualifying or redeemable miles on the flights you are using miles for, so that can swing the economics of the decision as well.

2.  In order to determine #1 you should either have an exact plan for how you will redeem the purchased miles, or at the very least a reliable general idea.  If you know you need 50,000 more miles for your dream flight that would cost thousands if purchased with dollars, and you know the availability is there, then it can make sense to go ahead and buy the miles.  Alternatively, if you know through history and research that the price the miles/points are selling for is definitely below the threshold you redeem for it can also make sense…if you don’t already have a stockpile of miles so large that you have no idea when you will possibly use them all (what a nice problem to have!).

3.  You just need a few miles to top off to obtain an award.  If you just need a few miles or points to redeem for the trip you want, then it can be worth it even if the cent per mile isn’t fantastic.

4.  You have to have the available cash to buy the miles.  i don’t care how inexpensive the miles are, if you don’t currently have the disposable cash to pull the trigger, then don’t give the deal another thought.

Bottom line is don’t buy just to buy, do the math and have a plan for the miles or points that you buy.  The more specific and immediate the plan the better.  I have bought US Airways miles before, and probably will buy miles again if and only if doing so will clearly benefit me based on the criteria above.  For example, if you have the US Airways card, it cost 55,000 miles to fly off-peak to Europe in an Envoy Suite.  To purchase 56,000 miles via the current 100% bonus promo (can’t purchase 55K exactly), it would cost $1,053.50 all-in.  That is a big chunk of change, but it is also a pretty decent deal to fly round trip in a lie-flat Envoy Suite to Europe and back considering economy tickets to some destinations aren’t always that much less than that amount.

…of course that is dependent on availability, the award chart not changing, etc.  However, if the stars align correctly, it is a pretty solid deal for what I hear is a good product.  One week until I find out for myself!  So, there is no one-size-fits-all answer on whether or not it is a good deal to buy miles and points, just use your head.  With that said, here are some of the current limited time offers:

Hyatt Gold Passport Points:

  • Purchase 1,000 to 9,000 points and get a 10% bonus
  • Purchase 10,000 to 29,000 points and get a 20% bonus
  • Purchase 30,000 to 40,000 points and get a 30% bonus
  • With the 30% bonus, points cost approximately 1.85 cents each
  • Valid through February 6, 2013

US Airways Dividend Miles:

  • Get 100% bonus on purchased miles (though this is targeted to some degree)
  • There are some service fees/taxes, and the max number purchased is 50,000 with a 50,000 bonus
  • Miles as low as 1.88 cents each all-in
  • Valid through February 28, 2013

American Airlines AAdvantage Miles:

  • Up to a 50% bonus on purchased miles
  • If you purchase exactly 40K, 50K, or 60K miles then you get a 50% bonus on miles purchased – other amounts purchased result in a smaller bonus percentage awarded.
  • Miles as low as approximately 2 cents each all-in
  • Valid through February 28, 2013

For many of us getting 50,000 points or more via signing up for a credit card makes more financial sense than buying a ton of miles, but like I have said, it can make sense to purchase some miles for time to time.  Do you ever like to buy points?  What is the threshold at which you pull the trigger?

 

Comments

  1. I think purchased miles (both elite and award) are a developing trend. I seriously consider purchasing when the price for award miles is between 1.8-2 cpm for the major programs. I use those miles not only for high-priced “aspirational” trips but also for close-in domestic flights when the fares become astronomical.

    • JetAway, if you know you are getting more value than the selling price consistently then it came make sense even for domestic awards. I know I fly some routes with stupid crazy prices where miles make way more sense, even when purchased.

  2. I’m really considering pulling the trigger on the Hyatt points especially since it will net me 2 nights at the Park Hyatt Milan! My question to you (if you’d like to answer it) is what card would you use to do it?

    I’ve got the Amex Biz Gold, the Hyatt Visa, the United Explorer (new) and the Delta Reserve (new).

    I thought the Hyatt Visa immediately, but I wasn;t sure if I was missing something.

  3. I’m thinking seriously about this one for a Europe off-peak trip next year. 35k econ – 5k CC discount is really good. Currently have enough miles for M+D+1, need another ticket for +2. It could theoretically be possible to get more value out of a paid ticket, but very unlikely that it would be on the same flight as the rest of us, and it ends up being a wash at 30k per person.

  4. Last year I was close to an award ticket on DL and due to my travel date, I couldn’t wait to earn the miles, then wait some more for it to post. So, I had to purchase the remaining 3K. That is not something I would do on a regular basis, but I may consider an offer for 50%-100% bonus miles from one of my favorite programs.

    And although I LOVE Hyatt, I’m simply not impressed by their current offer to purchase miles. I would sooner cash out some UR points before I’d take them up on that.

  5. Heather, the transaction is processed by points.com, so use the card that earns points you value the most (or a gift card at 5x for those who have that option available).
    Jason, those Europe off-peak awards are an example where it can certainly make sense!
    MCP, if you have plenty of UR points it makes more sense to use those than buy Hyatt points at this price.
    Jeff, absolutely.

  6. In many cases buying points on Amtrak makes sense. $850 cost to purchase Amtrak points will buy you a $1800 LD trip from Minneapolis to San Francisco for two adults and one child in a bedroom. There are some blackout dates when using points, but not excessively so. Also there are no award availability restrictions. If there is a seat or a bedroom available, it is yours. Better yet, get the points through credit card sign ups 🙂

  7. I bought miles quite a bit my first year of doing this, but then realized later that I had gotten hosed b/c the availability just wasn’t there. I’m still holding over 200K British Airways miles but every time I try to use them, there is no availability from Boston. UGH!

  8. POINTS TO THE RESCUE. I have bought points twice…

    1) President’s day Miami Beach… hotels on hotwire are > $350 due to the Boat show. A friend told me to look at Wnydam points and I was able to get the “Dream” for a much more reasonable rate. And point redemptions don’t come with added taxes and fees like priceline and hotwire rates.

    2) USAirways 100% to buy miles for Rio. Their “south american” off peak is steal.

  9. I bought IcelandAir miles for my upcoming trip to Hawaii, definitely worth the money. Us Airways off peak to Europe is also a great value (currently flying home from Amsterdam)

  10. Wish they would offer the USAirways 100% bonus to everyone and not just targeted. I bought miles last year but haven’t since then because I’m not targeted 🙁

  11. Unfortunately not all of us come from the US where credit card signup bonuses are plentiful. Thus, this seems to be the only travel hack for us to obtain (relatively) cheaper points and miles.

  12. I think you analyzed the issues well. I don’t buy points, because I can accumulate them by other means. Why pay retail value (or somewhat more or less) for something you can get for close to free?

    I did buy a couple of thousand miles once to top off for a reward I very much wanted and thought would soon become unavailable.

  13. I rarely buy points speculatively, unless I see an incredible deal. It is just so easy to get them without having to pay for them.

  14. I buy them as I need them to reach an award goal. For example I have about 180k dividend miles but need about 230 to 235k for a trip I want to book soon. I’ve been waiting for the share miles with bonus but may have to settle for the current 100% buy bonus.

    I’m actually more worried about devaluation if an AA merger happens before I can redeem.

    • Totally agree that Aer Lingus deal out of BOS is a fantastic way to get to Dublin on Avios – haven’t checked availability in a little while, but if it is available it is worth doing for sure!

  15. Because the cost to buy these miles are so high 1.5-2.5 cents/mile or point, I try to plan out far in advance. I also attempt to keep an emergency stash of 4-8 tickets worth of miles. Especially since in the US you can gather points/miles below .5cents a piece.

  16. +1 on the Avios Dublin deal. We’re doing it this summer! I buy air miles whenever I can get them for a penny: twice last year with “share miles” 100% bonus offers on Delta and US Airways. Picked up 100k for $1000 on each…totally worth it!

  17. I’ve primarily bought points/miles to top up for awards (and for the last Grand Slam), but this year I expect to buy significantly more as the opportunities come up. I’m not yet to where I can reliably churn cards for bonuses, and I plan to take some relatives with me to Tokyo either in October this year or April next year. I can get there solo just fine, but flying four people is almost certainly more than I can acquire through churns…

  18. I have certainly purchased miles in the past and have done so on cards that need to meet minimum spend requirements. Best deals for me were to redeem for trips in business class to Asia on Lufthansa, United and Asiana. I find that business class tickets to Asia can easily go for 3 or 4 times the price I pay for the miles so I am more than glad to do it.

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