The Art of Buying Points
Another travel hacking concept that many may not know is the concept of buying miles/points. Currently, Starwood Preferred Guest, American Airlines, and US Airways are all promoting a buy miles promotion
US Airways & American Airlines:
As you may not know but US Airways and American Airlines will soon be merging programs in early Q2 of 2015. US Airway miles will eventually become American Airline miles. However, currently they are running on two separate systems. So if you need to top off your individual frequent flyer account or need miles for your next award level then this is your fastest way to do that. For those that are big spenders the best way to maximize this promotion is to buy miles for both programs because you eventually would end up with 250,000 American Airline miles. Here is chart breakdown of what bonus miles you get when purchasing/gifting miles:
Miles are sold for $0.0295 per mile, plus $35 processing fee, and a tax recovery charge of 7.5%. So if you want to max out at the biggest purchase of 80,000 miles you’re essentially buying 125,000 miles for $2,572 which is about 2.06 cents a mile.
You may think that’s a lot of money but if you look at it from a return of value on miles it could possibly save you a lot of money. For an example let’s say you’re a family of three and want to take a trip to Europe during the Christmas Holidays. Well lucky for you that month is considered an off-peak month (October 15 – May 15) for AA and it only costs 40K miles round-trip from North America to anywhere in Europe. Those flights from the west coast are easily ~$1,200 round-trip retail cost but if you bought the miles you’d be saving easily around $900+.
Also, if first class is the way you want to travel then maximizing the points for US Airways will allow you to travel to South America, Europe, and North Asia region regions for a fraction of the cost. All of these regions will cost either 120K or 125K + taxes/fee for a first class cabin fare. Now compare that with a retail cost of first class and you’re always going to come out ahead.
This promotion runs from November 13 through November 30, 2014. So do your research and see if the math works out in your favor and if it does then definitely opt to buy the miles.
Starwood Preferred Guest:
The more you diverge into the travel hacking world. The more you’ll come to realize that SPG points are considered one of the most valuable points. The three main reasons why is because 1) they are hard to accumulate points 2) great hotel redemption for any Starwood property and 3) flexibility to transfer to a multiple number of airline partners. Additionally, as an added bonus, transferring to an airline partners in increments of 20,000 points will get a bonus of 5,000 points.
Currently, SPG is offering up to 25% discount if you buy or gift starpoints. It’s a tiered bonus and the following picture shows the breakdown of the tiers:
- Get 10% off 500–9,500 Starpoints
- Get 15% off 10,000–14,500 Starpoints
- Get 20% off 15,000–19,500 Starpoints
- Get 25% off 20,000 Starpoints
The absolute best value is definitely 20,000 starpoints. Normally they would cost 3.5 cents per starpoint (minimum 500 starpoints) but with the discount it brings it down to ~2.625 cents a point. So you would pay a total of $525 for 20,000 points.
Now in terms of return on value for your points. This is a great way if you need miles to get an award on a specific airline. You can transfer those 20,000 Starpoints into airline miles for a total of 25,000 (bonus included) or redeem them for hotel stay. I personally would use them for Nights & Flight awards. Which is a great package value if your staying at any of SPG’s category 3 or 4 hotels. You’ll need to redeem 60,000 points or 70,000 points, respectively. In return you get 5 nights and 50,000 miles of any partnered airline of your choice. So breaking down the math you would be saving 8,000 starpoints (Category 3) and 10,000 starpoints (Category 4) if you were to redeem those miles and hotel nights separately.
So before you go out and buy points. I always would calculate whether or not the numbers are in your favor. Buying points are usually a last case scenario if you can’t accumulate points for that next award redemption because they are usually sold at a deal breaking price. However, there are times were promotions like these makes it easier to be buying points and gets you more value on your purchase.
If you have any questions pertaining to buying miles or even more questions about each of the following programs. Please leave a comment below.