# Should You Buy American Airlines Miles for 1.8 Cents Each?

3
842

American Airlines is offering up to 115,000 bonus miles when you purchase American Airlines miles through April 13, 2017. You can now buy 265,000 American Airlines miles including bonus for \$4,786.88 or 1.8 cents each.

Bonus miles are tiered based on how many miles you purchase. The best deal is to buy 150,000.

American Airlines miles cost 2.95 cents each plus a 7.5% excise tax, and every purchase has a \$30 processing fee. The cheapest per-mile price comes from purchasing 150,000 American Airlines miles + 115,000 bonus miles for \$4,786.88.

That works out to getting 265,000 miles for 1.8 cents each.

If you buy 125,000 + 75,000 bonus miles, you pay 2 cents each. If you buy 100,000 miles + 60,000 bonus miles, you pay 2.2 cents each.

#### Math

The cheapest miles cost 1.8 cents each during this promotion, and that requires shelling out \$4,786.88. I value American Airlines miles around 1.5 cents each, so there is no way I would buy these miles speculatively for 1.8 cents. The only way it could possibly make sense to buy miles at these prices is if you had an immediate high value use for them and there isn’t a better deal on your dream trip by buying Alaska miles right now.

To figure out if you have a high value use, use this simple expression:

(A – B) / (C + D)

• A: Value of the award. Important: this is the lesser of the cash price and your subjective value.
• B: Taxes on the award
• C: Miles used on the award
• D: Miles you would earn if you purchased the award ticket with cash

This will spit out the dollar value you are getting for your miles. If that number is greater than 0.018, put your dream award on a free five day hold with American Airlines, then look at whether you can get a better deal on the same or a similar award by buying Alaska miles.

Through April 6, 2017, you can buy Alaska Airlines miles with a 20 to 40% tiered bonus (your bonus options could also be different if this offer is targeted). You have to log in to your account at this link to see your offer. At a 40% bonus, you’d pay 2.11 cents per mile, but Alaska shares some partners with American Airlines and often has a far cheaper award chart.

If the AA sale offers an immediate high-value use that is better than the Alaska sale, then buy miles during this promotion, and book the held award. Otherwise, don’t buy.

AAdvantage miles purchases are processed directly by American Airlines. That’s great news!

It means you can buy them with your Chase Sapphire Reserve, and its \$300 Travel Credit will refund you \$300 of the purchase price of the miles (plus you’ll earn 3 Ultimate Rewards per dollar spent.)

It means you can purchase American Airlines miles with your Barclaycard Arrival Plus™ World Elite MasterCard®, then use your Arrival miles for an offsetting statement credit.

It also means you can purchase the miles with your American Express Platinum Card to earn 5x Membership Rewards per dollar spent.

#### Bottom Line

You can buy 265,000 American Airlines for \$4,786.88 or 1.8 cents each through April 13, 2017. That’s too high a price to buy speculatively, but it could be a good deal if you have a high value use for the miles. Use the equation in the post above to help you figure that out.

This isn’t the best American Airlines miles sale we’ve ever seen, but it’s the best this year.

The American Airlines miles sales are processed by American Airlines itself, so you can get category bonuses on cards that bonus airline or travel purchases like the American Express Platinum which offers 5x on purchases from airlines, get travel statement credits if you charge the miles to a premium card like the Sapphire Reserve or Citi Prestige, or you can use your Arrival Plus to get American Airlines miles for zero cash.

Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.