How do you decide if you should use miles or just pay for it?

 
Old Apr 13, 10, 12:38 am
  #1  
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Join Date: Dec 2009
Location: Atlanta, GA
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How do you decide if you should use miles or just pay for it?

Hey guys,

I apologize for the very newbie question, but I wasn't sure where else to look or ask, so here I am!

I'll be heading to the Bahamas on June 16th-20th for a friends wedding. We'll be flying from ATL to ELH.
  • On AA's website, I currently have a flight "on hold" for 490 bucks.
  • To take this flight with points, it would cost me 55,000 points.

I currently have 86,000 AA miles, and another 30,000 on the way once my last bonus clears.

Is there a mathematical formula you guys use when determining if it's worth the points or paying cash for the flight? If that citi churn was still going I'd probably go with the points and just collect more of them, but now that this well has pretty much dried up I'd be inclined to save the 55,000 points for a more expensive flight.

At the moment, I have no real plans for the points, but within the next two years I'd live to go to Europe and Australia (using my AA points for one and my 100,000+ BA points for the other).

I'm addicted to collecting miles, I just haven't quite figured out the redemption part of it yet

Thanks in advance guys, I love this community and I'm really glad that I found it.

Cheers,

Steve
StevoVandy06 is offline  
Old Apr 13, 10, 2:16 am
  #2  
 
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My general rule of thumb is to pay for tickets until qualifying for status that year, and then go with mileage redemptions afterwards.

I think you will find that there is no single right answer to this question.
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Old Apr 13, 10, 2:28 am
  #3  
 
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Have you checked availability? Whenever I book flights with miles I find I need to book much longer in advance than the 2 or so months you have, so it may be an academic question.
Also, as you plan to go long-haul in the future, where you would really benefit from business class, I'd be saving the miles for that, rather than this shorter trip.
Finally, best bang for the buck with miles is business/first, I don't think I have ever used miles for economy flights, I'd prefer to buy it and then use those miles towards another business/first award.
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Old Apr 13, 10, 7:18 am
  #4  
 
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I just recently had to change plans and travel at short notice. The only tickets available were full fare Y because the return date (on which I had no flexibility at all) had very little availability, and the new outbound flight I needed to take was only 5 days from booking.

So I bought a one way ticket on another airline and redeemed miles on AA one-way in Y for the return at Anytime rates. No, it wasn't ideal, but 60k miles per ticket in question seemed better than $3k.

I thought of using miles to travel in J, but the relatively short flight didn't seem worth the 100k per person rather than 60k, especially since on this journey we weren't going to be able to enjoy the food and drinks in J. (And in any case, redeeming 100k AA miles for a roundtrip BA flight in F for LHR-CPT seems much more worthwhile than using them from a one-way transatlantic on AA in J.)

The only benefit was that I topped up another of my mileage accounts using the other airline (frustrating though the experience of not travelling on AA was).
salut0 is offline  
Old Apr 13, 10, 7:38 am
  #5  
 
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I try to pay for everything I can initially so that I re-qualify for status each year. In cases like the above where the price point is extremely high or my budget is extremely low (!) I place an arbitrary dollar value on a mile and do the math in times of need. If the ticket price, all in, is lower than the cost to replace the miles that's a strong indicator I should pay for it.
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Old Apr 13, 10, 8:02 am
  #6  
 
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I use a penny per mile as a general guideline. If my domestic ticket costs less than $250, then I will never use miles.

I am debating a trip to Europe this summer. Base fare is $1,100 in coach with an evip upgrade (if available). I need 200K miles to travel in J so I might just bit the bullet and buy the outrageous fee or actually stay home. Staying home seems the more likely outcome at this point in time.
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Old Apr 13, 10, 8:16 am
  #7  
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I normally use my miles for booking milesaver business awards (50K each way) for the four to five trips I take to Rio each year (although last year with the insane $342ai and then $300ai fares I just purchased the flights). That flight even with horrible connections (more than two) tends to run about $1,000ai at best.

Never would I burn miles on a domestic fare.
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Old Apr 13, 10, 8:40 am
  #8  
 
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Work vs. Vacation and paranoia

I rack up the miles on work trips, cards, partner points, etc. and then we cash them in for F/J on vacation when possible. If we can't get the award, we pay for F/J on vacation - it's a treat. Never carry too large a balance any more on any carrier. Continually sustaining a certain elite status is not that important to me anymore. I am one of the paranoid that fears the miles could be worthless at anytime. Was elite with TW for many years and had a hard time burning the miles before they expired with the AA transfer. So, I rarely let my AA miles get more than 150k or so and then I "spend" them.
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Old Apr 13, 10, 9:04 am
  #9  
 
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Everyone has their own personal worth for miles, so the answers to this (as you can see) will be all over the board.

I haven't ever redeemed for a domestic trip and try to save my miles for long-haul trips that can be planned far in advance. If the fare on your trip seems outrageous, then you might be better off with a redemption.
anotherlincoln is offline  
Old Apr 13, 10, 10:59 am
  #10  
 
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While it's true everyone has their own thoughts and opinions on the matter, the relatively consistent theme I've seen in the few responses so far mostly agrees with my personal thoughts and practices:

1. Never, ever use miles for domestic Y awards. The return on your miles is between 1% - 2% in this case.

2. Minimize usage of miles for domestic J/F awards unless it's 3-class flagship service (762 SFO/LAX-JFK or 777 LAX-MIA). The return on your miles is between 3% - 4% in this case.

3. Horde enough miles to go on a longhaul F award for vacation. This really maxes out the value of your miles, as longhaul F can cost upwards of $6K-$10K per ticket at discounted consolidator prices, and costs you anywhere from 125K - 180K miles. The return on your miles is upwards of 5% - 8% in this case.

Unlike Davesam, i have no problem keeping up to 500K miles in my account at any time, as I have been burning around that many miles per year on longhaul awards for myself and a few gift awards for family & employees.

These guidelines of mine of course assume you want to travel internationally at least occasionally and that you are capable of earning large amounts of miles in a relatively short period of time. If it takes you 3 years just to get 25K miles, then go ahead and spend them however you can...
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Old Apr 13, 10, 11:15 am
  #11  
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49,000 cents vs 55.000 mi....less than 1 cpm, usually nat a good deal.....

factor in....the mi's you will get for the paid trip including cc mi's, both eqm & rdm...

do you need the mi's for status this year?

is the cost pushing your budget?

do you have any dreams of a future trip where the mi's will be worth more...

good luck...

ps...i'm trying to summarize...nothing new here...
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Old Apr 13, 10, 11:16 am
  #12  
brp
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Originally Posted by trojanman View Post
2. Minimize usage of miles for domestic J/F awards unless it's 3-class flagship service (762 SFO/LAX-JFK or 777 LAX-MIA). The return on your miles is between 3% - 4% in this case.
One case where this is a good use is for family/friends. Earning miles may well not be useful for them, and sitting in F, even domestic, is a nice gift.

Cheers.
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Old Apr 13, 10, 11:27 am
  #13  
 
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As a rule of thumb, if I HAVE to travel and I can redeem for >2 cpm, the I do it.

My exceptions include saving the miles if I have a specific trip planned for the future (not a dream "id like to...").

My other exception is orphan miles. Ie I have 35k on as that i'll use if the desire arises even at 1 cpm or less.
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Old Apr 13, 10, 11:31 am
  #14  
 
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My personal valuation for such math is $.015/mile.

When evaluating a flight I determine the value of miles that will be earned on the paid ticket then subtract that amount from the total cost of the flight to determine my actual out of pocket expense for travel.

I then take my "real" cost if paying cash and work out the value per mile I would receive if using miles. If the value is greater than $.015/mile it makes sense to redeem.

Of course there are other factors such as upgrades, flight schedules, etc. If the valuation is similar between paying vs redeeming but I will likely get an F upgrade as EXP compared to a guaranteed coach seat via an award then paying could appear more attractive. This tends to lead towards buying most domestic tix versus using awards internationally.

There are exceptions though in certain situations. For example I'm planning a trip to Peru this summer. I can get a paid ticket all in economy (EXP upgrade DTW-MIA) for ~$600 but fly an award in Business for 60K miles. The math would actually favor buying the ticket, but with the award I get international Biz class on the 763, AC access in MIA in both directions for substantial layovers, and better flight times. With the paid Y ticket I get lengthy layovers in MIA with no AC access, terrible flight schedules and times, and guaranteed coach since the paid flight would be on LAN (I wouldn't waste evips on such a short flight anyways though). This is one case where I'll justify "splurging" a bit even though the math is off.

Sometimes once the miles accumulate you just have to start redeeming due to the inflation factor. I now get almost 500K AA miles a year between my flights and BankDirect, and the math doesn't favor redemptions enough to completely use this balance each year in the most optimal fashion.

Last edited by vxmike; Apr 13, 10 at 11:58 am
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Old Apr 13, 10, 11:34 am
  #15  
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I like to get a cost per mile upwards of 2 cents - or better. I also seem to spend more miles on rellies and friends than on ourselves. The calculation data others have mentioned - EQ Miles, RDM including bonus and credit card purchase miles - all go into the hopper when cranking the handle to make a decision.

As to accumulation of miles, when AA took over TW, it also subsumed over 500k of my Aviators miles, so no loss there for me that time. In fact, it put me over the 1M hump and I became lifetime Gold, without even knowing about the program. (Soon thereafter, iirc, I found FlyerTalk...)
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