(EXPIRED) Buy miles cheaply: AA miles from 1.72c each

American Airlines is offering a sale on purchased miles: through June 30th, you can buy miles for as low as 1.72 cents each — though be aware that it takes a large purchase to snag that low rate. That’s higher than our Reasonable Redemption Value for American Airlines miles, though it is certainly possible to redeem miles for greater value with strategic redemption.

The Deal

• Buy AA miles and get 10% off and a bonus of up to 100,000 miles
• Direct link to this promotion

Key Terms

• Discount does not apply to taxes or $30 transaction fee
• Limit of 150,000 purchased miles per year (bonus miles do not count towards this limit)
• Bonus miles are earned separately with each purchase (if you make separate purchases that cumulatively add up to 150,000 miles, you will not get 100K bonus — your bonuses will be based on the amounts of each separate purchase.
• See promotion page for full terms

Quick Thoughts

Most readers probably prefer to generate miles than to buy them. However, in some instances it can make sense to buy miles if you have a good use in the near future. For example, business class from the US to Japan would cost 60,000 AA miles one-way — a cost of about $1,032 using miles purchased at 1.72 cents each. A first class ticket is 80K, which would be $1376. While neither number is small, both are significantly less than the cash prices to fly to Japan in business or first on JAL or Cathay Pacific, two of the partners you could fly.

In Greg’s post about earning miles in a post-SPG card world (See: Spending for miles. Best SPG alternatives), he noted that cash back cards can be a good alternative for earning certain kinds of miles. For example, let’s say you have a Bank of America Premium Rewards card with Platinum Honors and you therefore earn 2.65% cash back on purchases. Let’s further say that you use that card with the intent to buy AA miles. If you earn 2.65 cents back on every dollar and spend 1.72 cents per mile, you’re effectively earning 1.54 AA miles per dollar spent on the card. Of course, that assumes that you already have enough earned cash back to buy at the top end of the bonus chart, which rings in pretty high at $4,311.19 for 250,000 total miles (and it also assumes that you’d rather buy miles than do anything else with your cash).

That beats the earn rate for AA miles on airline credit cards, though it is again a huge investment in a currency that can devalue quickly (though I’d personally expect the award chart to stay more or less the same for a while).

This sale certainly isn’t for everyone, but if you were eyeing the purchase of AA miles, this is a pretty good rate for buying — I just wouldn’t do it speculatively.

H/T: One Mile at a Time

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