A shade during Logan International Airport in Boston final July. Photocredit: Scott Eisen/Bloomberg… [+] Finance LP
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On a surface, airline miles seem free. You acquire them by signing adult for giveaway airline miles programs. You acquire them when regulating an airline’s credit card. Unless we undisguised buy miles, and putting aside any annual credit label fees, miles some-more or reduction cost nothing. Or do they?
The fact is that airline miles are not free. We make choices as to that airlines to fly and that credit label to use. These choices lift eventuality costs. Flying Delta means we didn’t fly Southwest or JetBlue. Paying with a label that earns we miles competence meant flitting adult a probability to lift out a label that earns we income back. That’s because it’s critical to know a loyal cost of miles.
Considering a vast 6 airlines in a United States (American, Delta, United, Southwest, JetBlue, and Alaska), we yield a simplified proceed to reckoning out a sum gratefulness of airline miles. we cover a accumulation of topics on both sides of a valuation. In this essay we concentration on a cost to acquire miles. (In a successive article, we’ll demeanour during a best approach to redeem a miles you’ve earned).
My idea is to facilitate how a routine works. After reading this article, we should know how many accruing airline miles unequivocally costs. To illustrate this valuation, we am going to open adult my airlines rewards wallet and see what is inside.
The Earning Story: Spending Money to Get Miles and Points
In a past dual years, we warranted miles or points from atmosphere travel, hotel stays, automobile rentals, airline rewards credit cards, selling points, and associate selling sites. Each form of squeeze offering a certain accumulation of cost per mile. Some opportunities valid to be distant some-more affordable than others.
To be unusually clear, when we impute to “miles” or “points” around a sum presented, we am referring to redeemable miles — not indispensably elite-status subordinate points. In a box of Alaska, Southwest, and JetBlue, their redeemable miles (or points) are also used to validate for selected status. But Delta, United, and American have a opposite set of non-redeemable miles that are used to validate for selected status. The cost to acquire elite-qualifying miles on those airlines is an wholly opposite discussion. Here, we are focusing on a cost of a miles (or points) that we can both acquire and redeem.
Flights to a East Coast, West Coast, and In-Between
I am a member of a visit flyer programs of all 6 airlines mentioned earlier. In a past dual years, we have flown all a airlines solely for American Airlines (remember that for later). On Delta, United, Southwest, and JetBlue, we can tell we accurately how many points we warranted for my airline transport formed on a cost we paid for my ticket.
United, Delta, and American Airlines prerogative miles formed on a airfare of a sheet and your visit flyer status. As a ubiquitous member of any of a airlines’ programs, we warranted 5 miles per dollar – a cost of $0.20 per mile. If we were an selected standing member of any of these airlines, we would acquire some-more points per dollar – intermittently as many as 11 points per dollar (a cost of reduction than $0.10 per mile). Therefore, a $1,000 we spent on Delta warranted me 5,000 miles. My $650 spent on United got me an endowment of 3,750 miles.
JetBlue and Southwest both calculate prerogative points formed on not customarily a airfare paid, yet also a standing and a form of airfare purchased. For these dual airlines, points are synonymous with miles when compared to other airlines. Southwest has 3 airfare forms (Wanna Get Away, Anytime, and Business Select) that offer between 6 and 12 points per dollar for a ubiquitous member. For selected members, Southwest adds a 25% to 100% bonus. we spent $400 on Wanna Get Away fares earning 2,400 points, for a cost per indicate of $0.167 per point.
JetBlue has 4 transport types: Blue, Blue Plus, Blue Flex, and Mint (business difficulty on transcontinental flights). For ubiquitous members, Blue and Mint fares endowment 6 miles per dollar spent. Blue Plus and Blue Flex supplement one or dual points, respectively. For selected members, an additional three-point prerogative is combined per dollar. we spent $150 on a Blue transport (800 points) and $230 on a Blue Plus transport (1,610 points) for a sum of 2,410 points – during an altogether cost of $0.158 per point.
Alaska Airlines is a customarily airline of these 6 that awards miles formed on stretch flown. Miles flown equals miles warranted (minimum 500 miles warranted for a moody shorter than that distance). Therefore, any moody on Alaska Airlines produces a opposite cost calculation. For a moody to San Francisco from New York that cost $250, those 5,000 miles cost $0.05 per mile. If that same moody cost $500, those same 5,000 miles cost $0.10 per mile.
For a $69 short-haul moody from Bend, Oregon to Portland, those 500 miles (remember, that’s a minimum) cost $0.138 per mile. As we can see, a estimated cost per mile varies depending on a transport distance. Frequent flyer members can find opportunities where earning miles is cheap. Personally, over a past dual years, we flew 16,000 miles on Alaska Airlines during a cost of $1,200, earning miles during an normal cost of $0.075 per mile.
From these examples, Alaska Airlines offering a cheapest miles. Still, another choice exists for earning airline miles formed on a cost matrix. In all a examples above, my flights were operated by a airline in that we warranted miles. Frequent flyers indeed have a far-reaching accumulation of options for earning miles—beyond drifting on a airline that manages a program.
For example, for my flights on United, we could have warranted miles with Air Canada’s Aeroplan program. The same could be finished clamp versa. In those cases where we fly a partner airline and acquire miles for your home program, a warranted miles are typically formed on difficulty of use and stretch flown. Consider a instance next for members of JetBlue’s TrueBlue who fly on partners Hawaiian Airlines or Icelandair.
JetBlue’s TrueBlue Points-Earning Table for Travel on Icelandair Source: JetBlue Airways
Similar matrices exist for other airline partnerships, such as a one for Air Canada and United Airlines. The doubt of that miles calculation is used for atmosphere transport could come down to who issues a ticket, as shown with this instance of Air Canada and United Airlines.
United Airlines’ MileagePlus Miles-Earning Table for Travel on Air Canada Source: United… [+] Airlines
Earning Miles with Hotel Accommodations and Car Rentals
For all my hotel and automobile let bookings, we requisitioned directly with a formula and possibly warranted miles with their rewards module or a airline directly. Each choice was probable with any of a bookings we made. For a examples here, we can uncover how to acquire miles formed on a form of engagement with possibly hotels or automobile rentals. In terms of hotel accommodations, we eliminated a hotel’s prerogative module points to a airline. In terms of automobile rentals, we deposited airline rewards directly.
In further to my airline rewards module memberships, we am also a member of a accumulation of hotel rewards programs. In this case, we intermittently stay during Best Western properties. In a past year, we stayed during a Best Western and warranted about 2,000 points in their program, bringing my sum rewards comment to 5,000 points.
Since several years had upheld in between Best Western stays, reaching 5,000 points combined an eventuality for a essential preference for me. we now had adequate miles to send these points to an airline rewards program. In this case, we wanted to send my points to my MileagePlus account. The acclimatisation was 5,000 points equals 1,000 miles. The 5:1 emancipation ratio to acquire some-more MileagePlus miles is a same ratio for a cost of these miles had we selected to fly with United Airlines, too.
When evaluating a send from my hotel rewards comment to my visit flyer account, we cruise this as a cost to acquire some-more visit flyer miles. Still, remember, in this instance, no tangible income is being exchanged to govern this transfer. Rather, we am comparing a cost of a rewards from Best Western contra a identical volume warranted directly from United Airlines.
The Best Western rewards module offers 10 points per dollar spent for ubiquitous members – a cost of $0.10 per point. Therefore, we spent $500 for a points in my account. The 1,000 United Airlines MileagePlus miles, as shown earlier, comes during a bottom cost of $200 for me. Therefore, in my send of prerogative points, we insincere an substantial cost of approximately $300.
However, these send opportunities are inestimable to investigate. When points lay new in a rewards comment for an extended period, they don’t appreciate. To a contrary, in some cases they competence expire, or we competence need to spend some-more income to strech a high adequate spin to redeem them. These transfers can paint an eventuality to get giveaway airline miles for income you’ve already spent, regulating points that competence differently go to waste.
Hotel brands do offer a eventuality to acquire airline miles directly in lieu of earning rewards with a hotel brand. For example, Intercontinental Hotel Group [IHG] (parent of Intercontinental Hotels Resorts, Kimpton Hotels Resorts, Holiday Inn, Holiday Inn Express, etc.) offers dual miles per dollar spent for those selecting to acquire American Airlines AAdvtantage miles.
Earning AAdvantage Miles for Staying during IHG Hotels Resorts Source:… [+] Intercontinental Hotels Resorts
Comparing this instance to a prior Best Western example, we still would have to compensate $500 to acquire 1,000 miles, even yet a send is direct. Therefore, in some cases, one choice of earning airline rewards with hotels competence be no improved than a other.
A third choice is engagement hotel accommodations by a airlines’ possess engagement engine or a third-party online transport agency. Friends and family have requisitioned by Southwest Airlines and JetBlue Airways (as good as their in-house, JetBlue Vacations) to acquire airline miles from hotel stays.
Southwest Airlines’ engagement engine provides a bound volume of points for any accommodation formed on a hotel brand, location, and volume paid. In a instance graphic below, a engagement engine offers 6,000 miles for spending about $350 (with estimated taxes and fees) on a hotel– reduction than $0.06 per mile! Southwest Airlines mostly offers 1:1 ratio for dollars-to-miles. This instance uses a renouned choice of prerogative points for engagement during promoted hotels.
Southwest Airlines’ Hotel Booking Engine: Denver, CO (two-night stay)
For JetBlue Airways, privately JetBlue Vacations, JetBlue’s TrueBlue members acquire points formed on a multiplier for dollars spent – 6 points per dollar for an whole vacation package that includes Blue fares for atmosphere transport and hotel accommodations of their choice.
JetBlue Vacations Booking for dual TrueBlue Members – Orlando, FL (four-night stay) Source: JetBlue… [+] Vacations
Rocketmiles Booking for AAdvantage Member – Orlando, FL (four-night stay) Source: Rocketmiles
Third-party hotel engagement sites, such as Rocketmiles, follow a identical indication to a one seen for Southwest Airlines’ hotel engagement engine when engagement a promoted hotel. Rocketmiles allows travelers to acquire a bound volume of airline rewards points (for a far-reaching accumulation of airlines) per night’s stay. Depending on a value cost paid for a hotel and a cost per mile for a selected airline’s visit flyer program, a probability exists to acquire miles during a cheaper rate than by atmosphere travel.
At a cost of approximately $0.075 per mile, a cost per mile for this hotel stay is reduction than half a cost per mile for a ubiquitous AAdvantage member when roving on a airline. Generally, a smallest of 1,000 miles/points is warranted for any night during any hotel for any rewards program.
Car let agencies offer 3 identical options from hotel brands for earning airline rewards miles. Either in transferring points or approach deposition of miles, know that a value tender is opposite for each. For this example, we chose to approach deposition miles warranted from an Alamo Car Rental directly into my American Airlines AAdvantage comment during a rate of 50 miles per day.
For a one-day let of $35, we was means to acquire miles during a rate of $0.70 per mile. The cost per mile for approach deposition automobile let varies formed on both a automobile let group and a specific airline. For example, Hertz offers United Airlines MileagePlus members opposite deposition amounts formed on selected standing and credit label membership. From these dual examples of approach deposition transactions, miles warranted from automobile rentals cost distant some-more than hotel nights and atmosphere travel.
Car let agencies also assent members of their rewards programs to send miles into name airline rewards programs on a bound ratio, as in my instance of Best Western Rewards send to United Airlines. Continuing with United Airlines, Hertz allows a Gold Plus Rewards members to send points during a rate that turns 600 Gold Rewards points into 500 MileagePlus miles.
Hertz Gold Rewards points are warranted during $1 per point; so, we would have to spend $600 with Hertz to acquire a compulsory points. Contrastingly, to acquire 500 miles with United Airlines from atmosphere travel, we would have to spend $100 (remember, for a ubiquitous United Airlines MileagePlus member, we acquire 5 points per $1). Therefore, what would cost $100 when drifting United Airlines now equals 6 times some-more income for a same series of miles regulating a rewards comment send option!
Therefore, from both of these dual automobile let examples, earning airline miles is a dear choice compared to others. we advise customarily regulating this choice if we are faced with a mileage death event. In other words, regulating a approach deposition choice or send choice to accumulate miles from automobile rentals competence be a cheaper approach to say your airline rewards mileage (or points) change than purchasing a hotel night or moody for a same purpose.
For instance, a $35 automobile let is a some-more affordable choice than engagement a $99 hotel night or a $150 airline ticket. However, we should expect earning distant fewer miles from a automobile rental. The purpose should customarily to be say your change and not to accumulate a vast series of miles.
Southwest Airlines Car Rental Booking Engine with Budget Rental Car Source: Southwest Airlines
The approach engagement engines also exist on a airline website. Frequent flyer module members competence acquire a bound volume of miles per automobile rental, per let day, or per dollar spent. Remember that these opportunities competence need we to enter a specific formula to make certain a engagement engine issues your let as a approach engagement from a airline as shown in this instance from Southwest Airlines with Budget Rental Car.
Airline Rewards Credit Cards
All of a 6 airlines offer rewards credit cards, possibly with or but an annual fee. All of these credit cards offer prerogative points for purchases with a airline (as good as a probable specific squeeze category) and bottom points (i.e. one per indicate per dollar) on ubiquitous spending. When interconnected with atmosphere transport purchases, specifically, a cardholder reduces their cost per mile as partial of a defended advantages of these cards. we was before a owners of a United Airlines credit label and can offer a following instance from my past.
I purchased an $189 (about $150 before supervision fees and taxes) moody on United Airlines with a United Explorer Card as a ubiquitous member of MileagePlus. we perceived 750 points as any other MileagePlus member (five points per dollar) would. we perceived an additional dual miles per dollar spent from a squeeze on my credit label statement. In total, that purchases warranted 1,008 miles. In this box a cost per mile is now formed on a whole squeeze cost and not customarily those warranted from “the carrier’s take”:
($179 squeeze price) / (750 bottom miles + 358 prerogative credit cardholder miles) = $0.1776/mile
In this example, a cost per mile is now cheaper than that of a ubiquitous MileagePlus member who does not use a branded credit label to make that purchase. This label does lift an annual cost of $95, that is waived for a initial year. A identical offer is promoted for Delta Airlines and American Airlines credit cards.
As partial of these initial offers for both a annual cost credit cards (and those but a annual fee), a airline competence offer a acquire prerogative – a asset of airline miles for assembly a specific spending threshold. Though we am not a stream cardholder, we have researched both offers from JetBlue for their dual credit cards as we have dreamed of perplexing to get adequate miles to redeem for a moody with Mint seating:
JetBlue Airways Credit Card Comparison Source: JetBlue
The no annual cost JetBlue Card offers 10,000 points after $1,000 in credit label spending ($0.10 cost per point). The $99 annual cost JetBlue Plus Card offers 40,000 points after $1,000 in credit label spending ($1,099 in spending for 40,000 miles = $0.0275 cost per point). These dual offers are a image of what could exist from any other airline that offers an airline rewards credit card.
The JetBlue Plus Card also offers anniversary bonuses as a defended benefit. For $99 annually, an anniversary 5,000 prerogative points endowment equals a cost of about $0.02 per mile. As these many miles could cost as many as $834 (using a Blue transport calculation of 6 points per dollar spent), a $99 annual cost is a good deal.
Nevertheless, a annual cost is not a customarily cost with this or any credit card. Choosing to acquire and keep any credit label relies on your credit worthiness and opening too many in a brief duration could have critical consequences for your credit score. The annual commission rate APR we are charged on any change we don’t compensate in full, and change send costs and any other fees we pay, could boost your effective cost per mile.
One final note on credit cards comes from non-airline rewards indicate transfers. Programs such as American Express’ Membership Rewards and Chase’s Ultimate Rewards offer many airlines as rewards send partners.
From my possess experience, we have seen send rates of about 1:1 ratio—sometimes a small reduction or more. As many cards within these particular programs offer tiered rewards, authorised cardholders can spin rewards from prerogative categories from a credit label into airline rewards during a flattering large rate.
My knowledge with selling points comes privately with American Airlines. As we final flew American Airlines several years ago, we say my comment regulating a airline’s choice to acquire miles for donations to Stand Up To Cancer. The module offers 10 miles per dollar donated (a cost of $0.10 per mile – cheaper than atmosphere transport earning rate for me as a ubiquitous AAdvantage member). Since AAdvantage accounts have balances that end after a duration of no activity, this profitable choice is a good approach to say my balance. United Airlines has offering a identical eventuality to those who present to assistance those influenced by a wildfires in California.
American Airlines AAdvantage Points Marketplace Source: American Airlines
Otherwise, visit flyer members can simply buy miles from a airline’s indicate marketplace. Throughout a year, airlines competence offer promotions that prerogative prerogative miles with a indicate purchase, such as Black Friday:
In a instance above from American Airlines, a squeeze of 10,000 miles costs $295 and a $35 transaction fee. In total, that would equal about $0.03 cost per mile ($330 for $10,000 miles). The additional 3,000 miles lowers that cost per mile to about $0.026 per mile.
The preference to buy points provides an affordable choice for those who need to bulk adult their balances for a giveaway moody (sometimes called “catch-up”). However, remember that we are customarily removing a points and zero else. By contrast, when we acquire miles/points from atmosphere travel, hotel accommodations, or automobile rentals, we accept a points as a byproduct of a products (or services) purchased. When purchasing points, a products purchased are customarily a points. So even yet purchasing points is easier and reduction time-consuming, it is practically a slightest rewarding choice available.
Airline Affiliate Shopping Marketplace: The New Sky Mall
I am a visit online shopper. The some-more we confirm to make online purchases, a some-more we comprehend how many brands offer additional rewards around associate marketing. In elementary terms, associate selling are opportunities where a tradesman has placed an opening to their website (or maybe a specific product) on a third-party selling portal (the affiliate) whereby online shoppers are funneled by a portal to a retailer’s website.
Most notably, websites such as Rakuten (formerly Ebates) and TopCashback offer a commission of dollars spent behind to shoppers as a remission when going by their portals.
Airlines also have gotten into a act and combined identical portals. All 6 of a vital U.S. airlines mentioned around this beam offer selling portals. At any of these portals, visit flyer members can acquire some additional miles for creation online purchases.
Generally, a earning rate is about 1 point/mile per dollar. However, in my opinion, a cost of these points should be valued as ‘essentially free’. Unless we are privately looking to make a squeeze to acquire points, these points are always a prerogative to a rewards we would acquire from online selling anyway.
Alaska Airlines MileagePlan Shopping Portal Source: Alaska Airlines
A healthy prolongation of a online selling marketplace is a ability to acquire points for dining during name restaurants. Through promotional programs such as Rewards Network, visit flyer members acquire points for creation purchases during name restaurants when regulating a related credit label during participating restaurants.
From my possess experiences, a customarily premonition we offer is that we customarily can't have a same credit label related to mixed airline prerogative associate dining programs. All a vital airlines that attend in a Rewards Network dining programs are all connected by what we tenure a “parent account” formed on a credit card. If a network recognizes that we are regulating that same credit label for mixed airline rewards dining programs, we will be stirred to enter a opposite credit card. Put another way, a network prevents we from earning mixed sets of airline rewards with one squeeze during one restaurant. Therefore, if we were a member of any of a 6 vital airlines’ mileage programs, we would have to couple any to a opposite dining program, and afterwards would have to remember that label was related to which.
That’s because it creates clarity to couple a label that we use a many for eating out—a good choice, for example, is a Uber Visa card, that pays we 4% behind in rewards during restaurants—to a airline that we use a most.
That reduction is essential to remember, however, typically, a same restaurants are accessible for any particular dining program.
Airline rewards can be profitable and warranted in a innumerable of ways. But reckoning out a loyal cost of your airline miles can be difficult and requires we to know a choice rewards we competence be giving up.