Originally Posted by
mooper
I don't follow this point. What if an airline has a promo whereby you can purchase miles for, say 1 CPM, and you have an upcoming flight that you are expecting/willing to pay $2,000 for but you can redeem 100K miles for it (getting 2 CPM). In this example, wouldn't the points be worth more to you than the program is willing to sell them for (albeit within a promo)?
My point deals not necessarily with the value of those miles, but with the cost of earning those miles.
If you are religiously using a miles credit card for daily spend that earns you 1 mile/$, but, as you point out, the airline runs a promotion where you could buy those miles at 1cpm, then you are effectively only getting a 1% return on your spend by earning miles on that card for daily spend. Instead of banking those miles in the FF program, you'd be much better off to use a no-fee 2% cashback card (or some similar card) for daily spend, and put that money in the bank. Then when/if you need those miles, purchase them at a lower rate.
My example:
If I spend $10K on my AS visa, I earn 10K miles.
Instead, I can spend 10K on my Schwab Visa and earn $200 cash. If I
need 10K miles, I can purchas them from alaskaair.com for $190, and come out $10 ahead.
It's not necessarily the $10 that is the bigger point here, as much as tying up that earning in miles vs. cash if the miles can, indeed, be purchased at favorable rates...as well as paying annual fees on mileage/points earning cards that don't offer other benefits.