Originally Posted by
Happy
Of those alternatives mentioned, you would still need to do a cost analysis on the brokerage accounts and the BankDirect method. On top of that, not everyone would qualify the brokerage deals such as Fidelity is very steadfast refusing bonus if you have existing Fido account. BankDirect works better for folks in high tax brackets. But even with such consideration, one would still need to use one's miles for high value redemption to justify the loss of interest earnings even in today's very low rate environment, especially if one already has a healthy balance of miles.
Since lkar is prepared to open his/her wallet and pay $0.02 per mile, the only decision that he/she needs to make is whether there are alternative ways to earn miles that are cheaper than $0.02 per mile and whether the effort to do so is worth the savings.
The "cost analysis" for a brokerage account bonus is whether or not the fee for transferring securities out of your old brokerage is more or less than $0.02 per mile in bonuses from Fidelity and TD Ameritrade. That's a pretty straight-forward calculation and shouldn't take more than a minute to do. (If you want to put some esoteric cost on the period of time when securities are in limbo and can't be traded or the immaterial interest that one foregoes during this time, have at it.)
The "cost analysis" for a transfer of funds to BankDirect is also a very simple calculation. Can you earn more than 2.4% after-tax in a liquid, risk-free investment? (By the way, this ignores all up-front and referral bonuses.) If you can, then keep your money where it is and pay AA $0.02 per mile. If not, BankDirect is a cheaper alternative.
What other "cost analysis" do you propose one do to analyze my suggested alternatives?