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When to Buy Miles for Award Tickets
As most of us know, the easiest way to earn points and miles for travel awards is through credit card sign-up bonuses and points earned through spend. But that’s not the only way. There are plenty of reasons people may not want or be able to use credit cards, but that doesn’t mean they have to miss out on the perks of this hobby. There is a long standing belief that buying points or miles is generally not a good idea. I disagree, I think there are certain scenarios where it’s actually the best idea.
In some circumstances, people can’t get credit cards due to bad credit or denials. Another reason people may not want any new cards is because they’re buying a house or car and need to minimize inquiries in order to get a loan. Other times you may need to book travel before you’ve accumulated enough points for an award ticket. Even if you do have credit cards, sometimes buying points can help you meet the minimum spend on a card, or help you meet status spending requirements.
Note: Although there are many scenarios when it makes sense to buy points for hotel award nights, I mainly focused on airline awards for this post. I’ll cover hotels next week.
Potential Solution: Buy Cheap(er) Points
Just this week I noticed several different sales on loyalty points that could be good options depending upon your intended redemption route. First, SPG occasionally runs sales for Starpoints at 35% off. Generally, Starpoints are considered to have a redemption value over 2 cents each. Starpoints are great because they transfer over to most airlines at a rate of 4:5 thanks to a transfer bonus of 5,000 miles on every 20,000 Starpoints transferred. During this sale, you can get 20,000 SPG points for about $450. Thanks to the airline transfer bonus, this means you can get 25,000 miles in many airline programs. Let’s assume you buy 20k for the purpose of pricing out a few redemptions (even though the max is 30k Starpoints in a year.)
Link’s to Current Point Promotions
Let’s Look at Some Examples
SPG Point Sale
Transferring points between programs is pretty easy. One of my favorite uses of SPG points is booking domestic upper-class award tickets. For example, booking an award ticket with Virgin Atlantic can you get you a First Class Delta flight for 22.5k miles. I recently booked 1st class from JFK to Las Vegas on Delta by transferring 20,000 Starpoints to Virgin Atlantic and using those to book a partner flight with Delta for 22,500 Virgin miles. You can also book domestic, business class tickets on American and United Airlines for 25,000 miles.
American Airlines Mile Sale
I wanted to see if I could buy airlines miles straight from the airline and still save so I looked at an example using a current sale from American Airlines whereby their miles can be purchased for 10% off and they’re offering an additional miles bonus on top of that. Since we already looked at an example using domestic flights, let’s look at an international flight. I am always getting questions about booking premium award travel to Paris, so we’ll look at American Airlines Award Tickets to Paris.
Make sure you find MileSAAver Availability on American Airlines operated flights. The cost would be 115k miles round trip from JFK to Paris in Business. The cash price of the miles is $2283 and another $11 for the taxes, if you purchased the miles during this sale. The same ticket would cost you minimum $2640. The regular cash rate for this flight seems to be on average $3900, a significant savings in that comparison. So you’d be saving about $350 off the absolute lowest cash price for the tickets and around $1600 average.
Don’t forget that you do not earn miles when flying on an award ticket, that’s something people working toward status need to consider. But, the cool thing about buying miles from American Airlines is that the transaction is actually processed by American. Meaning, you could potentially earn a nice bonus by using a travel rewards card. The Amex Platinum Card earns 5x the points at airlines. Learn More Citi or Barclay AAdvantage Cards could also be good options. (Really any card that has a bonus travel category could work.)Click Here to Learn More
Last year, we covered buying Avianca Lifemiles for great value on Upper Class flights with partners.
Reasons to Buy Points
- Cheaper to buy the miles/points for a ticket or booking than to pay cash.
- Fees or taxes may be waived for award nights
- Hotel chains like Hilton and Marriott offer the 5th night free when booking an award stay.
- Take advantage of discounted point+cash rates.
To be clear, I’m not saying this is your best option. It’s only an example to show you that in certain scenarios paying cash for points can save you money on airfare and hotel. The most accepted reason for buying miles is when you’re looking to top off your balance for an upcoming award. If you can, you should wait for points to go on sale and do some research to make sure the sale is a close to the highest historical discounts.
Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.