Good Deal? United Miles on Sale with 100% Bonus

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Through August 15, 2016 at 11:59 CT, United is offering a 100% bonus on purchased miles. The size of the bonus depends on the number of miles you buy, with the largest 100% bonus kicking in at 40,000 miles purchased.

United miles normally cost 3.5 cents per mile plus a 7.5% tax, bringing the full price to 3.76 cents each. During the sale, the prices, including bonus, are:
Screen Shot 2016-06-30 at 3.06.48 PM

  • Get 1,000 to 4,000 miles: 3.76 cents per mile
  • Get 5,000 to 14,000 miles: 3.01 cents per mile
  • Get 15,000 to 29,000 miles: 2.51 cents per mile
  • Get 30,000 to 75,000 miles: 1.88 cents per mile

Buying 30,000 miles–the fewest you need to purchase to get the biggest bonus–costs $1,128.75, which is 1.88 cents each for the 60,000 United miles you get.

Screen Shot 2016-06-30 at 3.15.26 PM

Is This a Good Deal?

No, this is a bad deal for speculative purchases. Since United’s huge devaluation in 2014, I value United miles at around 1.6 cents. The bottom line on all mileage sales is that they’re a good deal if you have an immediate, high-value use and not a good deal otherwise.

Screen Shot 2016-06-30 at 2.58.30 PM

There are a few United awards for which you’ll get more than 1.88 cents of value per mile, but even in those cases, you’d probably be better off buying LifeMiles for 1.47 each and redeeming them for the exact same award.

Math

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 0.0188, and you can book the dream award now, and LifeMiles somehow is offering a worse deal, buy during this promotion. Otherwise, don’t buy.

Bottom Line

You can buy 75,000 United miles for 1.88 cents each until August 15. That’s way too high to buy speculatively.

United sales are processed by points.com, so you do not get category bonuses on cards that bonus airline or travel purchases like the Citi Prestige® Card, which offers 3x on purchases from airlines.


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.

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