Originally Posted by
Marathon Man
Now for you, the consumer, what the use of award miles really is, is a very intricate method to do a pre-paid, self-financed flight. You paid into the system little by little day by day in tiny amounts here and there in order to build up to receive what it takes to fly. It is as if you paid off tomorrow's flight with a few pennies per day from day 1 to today.
I'm not disagreeing with the rest of what you said, but I do think that miles can help you get something you could not otherwise attain, even with careful saving and penny pinching.
An example: last year I purchased 66,000 UMP miles for $1647.50. That's about 2.5 cents per mile, not a good rate by most peoples' standards, I know. I also have a MP Visa, upon which I earned another 24,000 miles or so for purchases I would have made anyway. I paid it off every month, but I did pay an annual fee of $140.00. The 24,000 miles don't represent a 1 to 1 $24,000, since I got double and triple miles on some things, but let's pretend they did. Let's say that I could have got a fantastic deal on a cashback card: 5%. $24,000x.05=$1,200.00. So the total cost, including "opportunity cost" of 90,000 miles was $1647.50+$140.00+$1200.00=$2987.50, about $3000.00, or approximately .03 per mile - again, a very bad ratio, I know (but remember, these numbers are inflated for this example - in reality, it would be about $2000.00).
However, for that $3000.00 I got 90,000 miles, which translates into a business class ticket to Japan. And since I've never seen a business class ticket to Japan on UA for less than $5000 to $6000, I still feel that the money was well-spent...as long as I'm able to get a ticket when I want to go. I did not get a free ticket, just a heavily discounted business class ticket. And that's why I still do it, because I won't pay $6000.00 out of pocket for a business class ticket, but I will pay $3000.00 over time to purchase one.
-kirax2