When - and When Not - to Use Your Frequent Flier Miles
By Tim Winship, SmarterTravel.com | USAToday
If you’ve been following the Joy of Miles series thus far, you might expect my overarching advice to be that frequent flier miles should be earned for everything possible. And these days, they can indeed be earned for just about anything.
In fact, though, part of being an educated consumer is knowing when not to earn miles.
Before rushing headlong to earn, earn, earn, consumers should do the math to be sure they’re not overpaying to pad their mileage accounts. That math begins with the following axiom:
Miles are a potential rebate, which, if successfully redeemed for an award ticket, have an average value of approximately 1.2 cents each.
The above has two key variables, and two corresponding caveats. First, there is the contingent aspect of miles’ value. If they aren’t redeemed—because you can’t, or because you choose not to—then their value is merely hypothetical. And second, because their value ultimately depends on the price of the ticket you could have purchased in place of the award ticket, the actual value of your miles will reflect your choice of more or less expensive flights.
With that in mind, following are several typical situations in which consumers should weigh the pros and cons of earning miles, and a discussion of the factors to be considered.
Alternative flights, with and without miles
The decision to earn miles or forego them arises most often when comparing flight arrangements, where there exists a cheaper alternative to one’s preferred carrier.
A member of US Airways’ Dividend Miles program planning to fly between Los Angeles and New York, purchasing a ticket 14 or more days in advance and making a Saturday-night stay, would find the cheapest US Airways nonstop flight available for $588. Other nonstop options include United at $298, American at $336, and Virgin America at $500. (Note: Fares are based on test bookings made September 30, 2008, at 3:45 p.m. PT, and do not include taxes and fees.)
Let’s assume that miles earned in the programs of American, United, and Virgin America will never add up to enough for a free ticket for our hypothetical US Airways loyalist, making them effectively worthless. The comparison is then as follows:
The net price of the US Airways ticket is $588 minus the value of the miles, which we’ll treat as a cash rebate. The round-trip LAX-JFK distance is 4,922 miles. Using 1.2 cents as our per-mile value, that amounts to a rebate of $59.06. So the net cost of our US Airways ticket is $528.94. Even with the value of the miles factored in, that’s $230.94 more than the United ticket, $192.94 more than American, and so on.