Loyalty programs have become a significant source of revenue for airlines and hotel companies. One of the ways they generate income is by selling airline miles and hotel points directly to travelers. This allows the loyalty programs to receive an immediate cash injection as travelers prepay for future travel. However, it is important to note that buying points and miles only makes sense in certain situations.
For most travelers, it is generally a better deal to earn points and miles for free through welcome bonuses tied to travel rewards credit cards. These cards offer a variety of benefits, including bonus points for signing up and spending a certain amount within a specified timeframe. Therefore, it is advisable to explore these options before considering purchasing points and miles.
That being said, there are instances where buying points and miles can be beneficial. For example, if you have already exhausted your credit card options and can get high value from your rewards, purchasing points and miles during a good promotion can make sense. It can also be a good idea if you need more points to secure a specific award in the near future. However, it is important to have an immediate use in mind when buying points and miles, as unexpected devaluations can occur.
Now, let’s take a look at some of the current promotions for buying points and miles.
American Airlines AAdvantage is currently offering up to a 35% discount on miles. The purchase rate can be as low as 2.45 cents per mile. Although this is higher than the valuation of American miles, buying them for high-end awards could still be a good option.
Air France-KLM Flying Blue is offering up to a 100% bonus on purchased miles. The purchase rate can be as low as 1.52 cents per mile. This promotion can be a great way to manufacture a cheap premium fare to Europe, especially since Flying Blue has recently standardized its saver-level award rates between the United States and Europe.
Lufthansa Miles & More offers a promotion of up to a 50% bonus on purchased miles. The purchase rate can be as low as 1.18 cents per mile. Lufthansa miles can be hard to earn, as there is no U.S. cobranded credit card and it does not partner with any major transferable currencies. However, the miles can be very valuable, especially if you want to experience Lufthansa’s first-class product.
Moving on to hotel points, Choice Privileges is currently offering a promotion of up to a 30% discount on purchased points. The purchase rate can be as low as 0.79 cents per point. Hilton Honors is offering a 100% bonus when purchasing at least 5,000 points, effectively buying Hilton points for just 0.5 cents each. Marriott Bonvoy is offering a 40% bonus on purchased points, with a purchase rate of 0.9 cents per point. Finally, World of Hyatt is offering a 20% discount on purchased points, with a purchase rate of 2 cents per point.
When purchasing points and miles, it is important to consider which credit card to use. Most of these promotions are processed through Points.com, so you won’t earn bonus rewards with most travel rewards cards. It is recommended to use an everyday spending card that offers a solid return on non-bonus spending. However, it is worth noting that American Airlines reportedly codes mileage purchases as airfare, so using a credit card that earns bonus miles on airfare can be beneficial when buying AAdvantage miles.
In conclusion, loyalty programs can be a lucrative source of revenue for airlines and hotel companies. Selling airline miles and hotel points directly to travelers provides an immediate cash injection. While buying points and miles can be a good deal in certain situations, it is generally more advantageous to earn them for free through travel rewards credit cards. It is important to have an immediate use in mind when purchasing points and miles and to be aware of any potential devaluations.