Should You Ever Buy Miles and Who Sells Them?

Once you’ve learned a bit about redeeming frequent flyer miles, this thought will probably cross your mind:“What if I just buy miles at a discount?” While it would still be out of pocket, you’d essentially pay less for that plane ticket especially when booking a long-haul international flight in a premium cabin. So, is buying miles an effective strategy for the frequent flyer? Let’s dive in and find out.

Should You Buy Miles?

Let’s start at the beginning. Does it ever make sense to actually pay for miles? Isn’t it better to earn them through flying, shopping, and partner activity? Earning miles with the least amount of effort and monetary outlay on your part should always be your goal. However, there are times when it can make sense to actually buy miles. Here are two good reasons:

1) Top off your account for a specific award:

If your account has just about enough miles to book a trip you’ve had your eye on, it can make sense to buy the few remaining miles so you can go ahead and redeem them for a ticket and go on vacation. Do this when award seats are available for the dates you want and you’re worried they won’t be available by the time you earn the rest of the miles.

2) Buy miles for an upcoming trip:

Sometimes, if the miles are well priced and there is award availability, it can make financial sense to buy a bunch of miles and then redeem them for a flight you have to take. This generally only makes financial sense when you’re flying in first and business class, or when the domestic ticket you need is particularly expensive like a destination that commands high ticket prices or a last-minute ticket that’s exorbitantly priced.

Whatever you do, don’t buy thousands of miles and then let them sit idly in your account. Miles are a depreciating commodity and airlines can devalue their award charts at any time. Don’t buy them and just to let them pile up. You should use your miles or have a plan in place to use them as you earn them.

Also, note that when buying miles, they generally aren’t counted toward status. Spending cash on miles won’t help you become an elite traveler.

Can You Buy Miles From Anyone?

No. The most important thing to understand about frequent flyer miles is that they are actually currency with detailed rules that are set out by the carrier. One stringent rule is that it is against the programs policies to sell miles. So, even if you see an ad on Craigslist or eBay offering to sell you miles, don’t do it. You could pay money and have the miles deposited in your account only to have the airline scoop them up and perhaps along with miles you earned legitimately and ban you from future participation in the program. You don’t want that to happen.

Who Sells Miles Legitimately?

You can buy miles directly from the airline. Some carriers run frequent sales on the purchase of miles, where you either receive a discount off the base price or you get bonus miles for purchasing a certain number of them. When buying miles from an airline, expect to pay a certain amount per thousand plus a 7.5 percent Federal excise tax. Some airlines also charge a processing fee.

Whenever there is such a sale, the calculator is your best friend. Use it to determine the actual cost of the miles by adding up the cost, any processing fees, and the Federal excise tax. Then compare it to the end use of these miles. What trip are they earmarked for? If it’s a long-haul trip in first class or business class, you will likely find you’d pay less for the ticket by using miles than making a traditional cash purchase. However, if your end goal is to take a domestic trip, the economics might not work out in your favor.

Here’s a snapshot of current sale prices of miles at these major U.S.-based airlines. Note that most airlines use Points.com to process their mile purchases. That means if you use a credit card that offers bonus miles for airline purchases, you won’t receive the bonus when purchasing miles since you technically aren’t buying them directly from the airline.

Alaska Airlines

You can buy miles in 1,000-mile increments, up to 40,000 miles. Here are some examples:

• buy 1,000 miles for $27.50 plus $2.06 excise tax
• buy 6,000 miles for $165 plus $12.38 excise tax
• buy 40,000 miles for $1,100 plus $82.50 excise tax

American Airlines

You can buy miles in 1,000-mile increments, up to 100,000 miles.

Now through April 30, 2015, American is offering bonus miles whenever you purchase at least 6,000 miles. The maximum bonus is 60,000 miles.

Add a $30 processing fee and 7.5 percent excise tax.

Here are some examples:

• buy 6,000 miles and get 1,500 bonus miles for $177 plus $13.28 excise tax and a $30 processing fee
• buy 20,000 miles and get 7,500 bonus miles for $590 plus $44.25 excise tax and a $30 processing fee
• buy 100,000 miles and get 60,000 bonus miles for $2,950 plus $221.25 excise tax and a $30 processing fee

Delta

You can buy miles in 2,000-mile increments, up to 60,000 miles. Here are some examples

• buy 2,000 miles for $70.00 plus $5.25 excise tax
• buy 6,000 miles for $210 plus $15.75 excise tax
• buy 40,000 miles for $1,400 plus $105.00 excise tax

United Airlines

You can buy from 2,000 to 150,000 miles from United.

Now through April 20, 2015, save 15 percent when buying 5,000 to 14,000 miles; save 20 percent when buying 15,000 to 29,000 miles; and save 30 percent when you buy 30,000 to 150,000 miles. You must buy at least 5,000 miles in order for the discount to kick in.

Here are some examples:

• buy 2,000 miles for $70.00 plus $5.25 excise tax
• buy 40,000 miles for $980 plus $73.50 excise tax
• buy 150,000 miles for $3,675 plus $275.63 excise tax

Check your travel calendar and mileage balances, and crunch some numbers to figure out if one of these deals makes sense for you. This just might get you to your desired destination sooner.