¨Going abroad to study as a teenager, and joining the United Nations at 22, confirmed my ease with the world of the frequent flyer. I saw the average airport terminal as a familiar haven, like a friend’s sitting room. But 9/11 changed all that.¨
How are the Points Calculated?
- Until three years ago, American and United gave a point for every mile flown. Today they give points based on money spent on buying tickets from the airline (generally five points per dollar spent after taxes and fees). I sometimes used to book flights from American and United and their partners, even if they were slightly more expensive, to get points on American and United airlines. Nowadays, I think twice about doing this because:
- Sometimes, flights on some partner airlines (a partner of United Airlines), are not eligible to earn points if you use their low-cost tickets and
- I only get between 500-1500 points for most flights on American and United. (I used to get 2-3 times often this much before the airlines determined mileage based on the dollars spent on the ticket).
- As a general rule, a Frequent Flyer point is worth 1.5 cents. (Note: You can’t cash them in.1.5 cents is an estimate of their value only). Let’s assume you want to buy a ticket that requires 30000 miles to purchase. Using this rule of thumb, you should only buy the ticket if it cost you more than $450 (30,000 times 1.5 cents) to buy in cash. The value of frequent flyer miles keeps going down. Seven years ago, they were worth 2.5 cents or more.
Redeeming Frequent Flyer Miles
- Using Frequent Flyer award points for flights has another advantage over buying them with cash: It is much easier to cancel or change a trip. Generally, if you cancel a flight, you can redeposit your points back into your account online for a modest fee. ($75-125 on United; $150 on American plus $25 for each additional ticket that you cancel at the same time. Note: You may not have to pay this fee if you have some exclusive -i.e., executive- credit cards).
- If you want to get a ticket that requires a small number of frequent flyer miles to redeem, expect the trip to be inconvenient. I have several times ended up spending the night in a connecting city to take advantage of a low point Frequent Flyer flight.
That said, long-distance, transatlantic flights and business-oriented flights purchased with Frequent Flyer miles are often as convenient as those obtained with cash. (This is particularly true with short-haul flights with regular departures throughout the day).
- Sometimes, you can get better deals by booking your frequent flyer and regular tickets on an airline that is in the same alliance as your preferred airline. Until recently, for example, many travel hackers recommended using British Airlines for booking flights for members of the OneWorld alliance (instead of American Airlines).
More Tips for Making the Most From Redeeming Frequent Flyer Miles
Ensure Airlines Credit All Your Flights
- I always try to enter the appropriate Frequent Flyer membership number whenever I book a flight online. The membership number you enter should be from an airline that is a member of the same alliance as the airline. In other words, if you are booking a flight on British Airways, you need to enter the American Airlines membership number on the British Airways website upon ticket purchase. (British Airways and American Airlines are both members of the Oneworld alliance).
If I cannot figure out how to enter the number quickly (this is rare), I will call the airline and ask that they enter the number into my passenger record. While you won’t always get points from the partner airlines, many times, you will get some points. A few of the partner airlines even award miles based on the number of miles flown. (I had a pleasant surprise in 2015 when I received around 15,000 American advantage points for flying on Fiji airlines from Los Angeles to Sydney).
- I recommend that you keep your boarding pass after you finish a flight. Sometimes, airlines fail to give you points for a trip, particularly if, for some reason, the airlines have re-booked you on a different plane at check-in. (Fortunately, it is relatively rare that airlines do not credit your flights nowadays). You need the flight boarding pass to make a claim online for the airlines to credit these points.
Pay Off Your Credit Card Every Month
Be careful to pay your airline-branded credit cards off every month. Many airline-branded credit cards charge interest rates between 15-20% a year and high annual fees. If you have decent credit, it is not hard to find a credit card without a fee and lower interest rates.
Assuming you, like most Americans, carry a $6,000 balance on your card, you will pay approximately $1000-$1500 more per year in interest and fees using airline credit cards. (Note: the 6000 Frequent Flyer miles that you will get from spending $6000 on a credit card will only save you approximately $90 on a future flight.