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US Airways and American Airlines have merged since the publication of this post so it is no longer valid.
Nine minutes ago, I received an email from US Airways saying that I was targeted to buy Dividend Miles with a 90% bonus from now through May 15. Check to see if you have the email.
Clicking the link to Buy Miles in the email, I was brought to a purchase screen where the bonus miles were automatically included. The normal US Air price for miles is $37.63 per 1,000 or 3.7625 cents per mile. I know it says $35 on the first screen, but when you click Continue a 7.5% excise tax will be added, bringing the total cents per miles to 3.7625
With the 90% bonus miles, I can buy a maximum of 50,000 miles and receive 45,000 bonus miles for 95,000 total miles at a price of $1881.25 after the 7.5% excise tax. 95,000 miles for $1881.25 works out to 1.98 cpm.
While my valuation series of US Airways miles won’t end until Wednesday, I can tell you that Dividend Miles are, in general, worth less than 1.98 cpm to most people. But I only like to think of the general value of miles when I’m contemplating the value of earning oodles of miles through a credit card sign up or the Grand Slam without having specific redemptions in mind.
So if you are going to buy 95,000 miles speculatively, with no particular use for them in mind, just because you think the price is good, you need to compare your general valuation of US Air miles to 1.98 cpm and see if this is a good deal. For me, since my personal valuation is below 1.98 cpm for Dividend Miles, this is a bad deal for me, and I will not be purchasing them speculatively.
If however, you have a very specific US Air award in mind, and will buy these miles for immediate use, you do not compare 1.98 cpm to your general valuation for US Air miles. You compare it to the value of the award. How do you do that?
This is one of the many uses of the Mile Value Calculator. Type in the value of your award, the taxes and fees to book it, the miles needed, and the miles foregone, and it will spit out a value of the award in cents per mile.
If that value is above 1.98 cents per mile, buy miles through this promotion to get to the amount you need. If it is below 1.98 cpm, according to your own valuations, you would be making a mistake buying miles at this price.
I’ll think over the next few days whether there is an award I would like to take this fall, and I’ll decide whether that award makes buying the miles a good deal. I’ll let you know whether I take advantage of this deal.
Who’s going to take advantage of this promotion?
Just getting started in the world of points and miles? The Chase Sapphire Preferred is the best card for you to start with.
With a bonus of 60,000 points after $4,000 spend in the first 3 months, 5x points on travel booked through the Chase Travel Portal and 3x points on restaurants, streaming services, and online groceries (excluding Target, Walmart, and wholesale clubs), this card truly cannot be beat for getting started!
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I received the offer from US Airways this afternoon. Mine, however, was for an 80% bonus, not 90%.
Now I’m seeing reports of 80%, 90%, and 100%. Sorry you got the junk one. 80% bonus means miles cost 2.09 cents.
1.98cpm to me is not a good deal. Even at 100% it’s still 1.88cpm and not really that great either.
They ruined it when they jacked the base cost of a mile up to 3.5cpm from the previous 2.75cpm. I still long for the old 2.5cpm rate when they first started doing 100% bonuses. 100K miles were under $1400 and that’s why this was such an insanely attractive deal.
As you all probably know the new promotion is 100% bonus through June. This lowers the cost to 1.88cpm. Like mentioned in the article if there is an immediate need to get to an award I think this is a decent deal. I have 40K US miles from a credit card sign up. Paying $900 to get to 90K miles will buy me a business class roundtrip to Tokyo or HKG and that sounds like a great deal to me. Thoughts ?
My thoughts are you’re completely right. If you have an award in mind, the deal might be out of this world. As you mention 90k biz r/r to N. Asia is the best deal on the chart. If you can find flat beds there for under $1k, you’re stealing money :). But I have no flights in mind, and I am earning enough miles “naturally,” so I won’t take advantage.