The Pros And Cons of Gifting Miles

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Every year, the topic of the holiday season is always a contentious one in my household. When my mother came to visit in November, our discussions did not revolve around when she would receive non-four-legged grandchildren or what I was doing with my life, but instead about what I wanted to receive for Christmas. Despite my pleading to not receive anything, she insisted that I receive a gift of some sort – it was tradition, after all.

Previously, many of us at Frugal Travel Guy have written about how travelers are some of the most difficult people to shop for and how to surprise them with meaningful gifts nonetheless. As I struggled to wrap my head around a meaningful gift, I let it slip that I was planning a return to my beloved Germany in the coming year – to which my mother responded “I don’t know if I could help you with that.”

Little did she realize that there was an indirect way she could help me towards that goal. At this time of the year, sales run rampant with the goal of attracting consumers to purchase gifts. Though we are past the travel sales of Cyber Monday, airlines are still getting into the spirit with frequent flyer mile sales. Among them, American Airlines is once again offering bonus points for those who purchase miles for themselves, or gift to another.

Consider The Cost

Before asking for miles for a holiday gift, is it a relatively cost-effective and worthwhile gift that will help frugal travelers get closer to their next destination? As with many things involving points and miles, it could be just a matter of application.

In the American Airlines scenario, purchasing 150,000 miles (the most permissible under the promotion) would grant a bonus of 120,000 miles, for a total of 270,000 AAdvantage miles for $4,425. In total, the boost would come at an overall price of around 1.7 cents per mile. That gets slightly lower when travelers purchase those miles with the Citi AAdvantage Platinum Select World Elite MasterCard. With 270,000 AAdvantage miles, a frugal traveler could fly anywhere in the world in First Class at in at least one direction, or even round trip to certain places (like Europe) on a MileSAAver fare. Considering the price of one business fare ticket alone, a flexible round-trip ticket for the price of $4,425 may not be a bad purchase.

Citi   AAdvantage Platinum Select World Elite MasterCard
Citi® / AAdvantage® Platinum Select® World Elite™ MasterCard®

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$0 first year
$95 after first year
30,000 American Airlines AAdvantage® bonus miles
After $1,000 in purchases in the first 3 months
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Citi   AAdvantage Platinum Select World Elite MasterCard Citi® / AAdvantage® Platinum Select® World Elite™ MasterCard®
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Add to Favorites
Sign Up Bonus
$0 first year
$95 after first year
30,000 American Airlines AAdvantage® bonus miles
After $1,000 in purchases in the first 3 months
Annual Fee
Already have this card? Maximize your rewards.
Read the FTG Review »

However, asking for a $4,000 gift may be a bit…lofty. What about a more moderate gift of 10,000 AAdvantage miles plus 3,000 bonus miles for the price of $295? At this price point, miles come at a higher cost of 2.3 cents per mile, which is still in line with the assumed value of an airline mile. However, 13,000 is only enough for a one-way fare in economy. Even with an economy MileSAAver fare, 13,000 AAdvantage miles will not necessarily get a traveler home.

Know Their Value

Before deciding to purchase miles for a traveler (or yourself), be sure that traveler can use those miles, or that they are miles they are even collecting in the first place. Purchasing the wrong miles could result in overpaying for a gift card at the end of the day. Furthermore, keep in mind how much miles ultimately cost before making a purchase. Spending the cost in miles may be better spent on a better gift, or even on an airline ticket itself.

While a mileage sale could be a worthwhile gift for the points traveler in your life, it may not necessarily be a frugal gift. Even at lower levels, purchasing miles do not necessarily come at a value, but could help travelers get closer to a frugal trip.

 

Would you purchase miles for a frugal traveler as a gift? Let me know your thoughts in the comments below!

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