Burn Your Miles Wisely
Let’s say that you have lots of miles in your account. Oodles. Maybe it’s because you know about earning miles by using variety of other tricks, or maybe you are just smart about credit card churning like Daraius of Million Mile Secrets. Or perhaps you are one those fortunate enough to have flown a lot. So how do you make sure that your hard-earned miles are put to good use?
I raise this question because I came across it recently, while thinking about two polar opposite cases.
A friend of mine, who tends to be somewhat modest, mentioned to me that they have over 100,000 American Airlines Miles. On the other side of the spectrum is an individual I know who recently spent 150,000 Delta SkyMiles on an award ticket—for domestic First Class. Ugghhh….
So how do you balance the two extremes? You make your miles work for you.
In the first case, Person #1 should realize that miles are not appreciating in value. In fact, considering the recent devaluations in a number of frequent flyer programs, miles are only going to depreciate in value over time. As time moves on, more and more people are playing the mileage game, and thus it is getting less and less cost-effective for the airlines. Part of why I am such a miles junkie is the idea of experiencing travel in an aspirational manner, which I could otherwise not afford. So my advice to them is to splurge on an off-peak business class award across the pond and go on a nice vacation—do something nice with your miles while you still can!
In the other case, Person #2 needs to understand the value of their miles. You can get a lot further in with SkyMiles than the other side of the country. Play your cards right, and you can
The most conservative of estimates for the value of SkyMiles, is at about 2 cents per mile. So, 150,000 SkyMiles equates to about $3,000. Thus, Person #2 just splurged $3,000 for a couple of hours in flight. The sad thing is they are a Gold Medallion, and could receive the same benefits for a small fraction of the monetized cost that the use of their miles cost them.
Even if they were to purchase an upgradeable fare for say, $600, and buy the 25,000 miles to upgrade at $0.035 per mile (despite the Delta often running bonuses for purchased miles, including the 75% bonus) you would still only pay $1500, or half the equivalent that my friend spent.
This brings me back to my point. In either case, it is important to make your miles work for you, and operate with a goal in mind. Now it may be different things to different people—it just depends on you and your situation.
For my conservative friend in the first they might keep a chunk of miles for emergency situations. But still have some to splurge a little on a dream vacation. In addition, part of making the miles work for you may be using them to make a cross-country trip that may be out of your budget.
And in the second case, a little modesty might go a long way. One should value their miles, and realize it is somewhat easy to squeeze a lot more worth out of their miles. Can you always find award availability? No, but generally it does not take much effort to find reasonable awards. And who doesn’t enjoy riding comfy at the front of the plane, but is it always necessary? Sitting in coach a few legs won’t kill you.
So in all modesty, understand the value of where your miles can take you!