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how much money are freq. flyer miles worth?

Jul 15th, 2010, 09:38 AM
#1
Original Poster

Join Date: Apr 2008
Posts: 1,731
how much money are freq. flyer miles worth?

When using ff miles, is there a dollar amt. they are worth? How would you decide if cheaper to use miles or cheaper to pay? Thank you.

Karen
Jul 15th, 2010, 11:52 AM
#2

Join Date: Jul 2007
Posts: 5,686
I'm pretty sure most people nowadays will tell you FF miles have a value of somewhere between \$.015 and \$.02 each. You can do the math to determine if you'd be better off purchasing your ticket or using FF miles.
Jul 15th, 2010, 01:22 PM
#3

Join Date: Jan 2003
Posts: 17,805
100,000 miles redeemed for a \$3500 business class ticket from, say, Chicago to, say, Paris, will be worth 3c apiece.

25,000 miles redeemed for a \$400 coach ticket from, say, LA to, say, New York will have a value of 1.6c each.

Calculations vary, but earning miles through credit card use usually entails an indirect cost to you (through annual credit card fees, merchant markups etc.) of somewhere around a penny per mile.
Jul 15th, 2010, 01:23 PM
#4

Join Date: Jan 2003
Posts: 17,805
Doh. 3.5c each.
Jul 15th, 2010, 02:30 PM
#5

Join Date: Feb 2004
Posts: 23,074
To an airline's elite (especially with higher level), you also have to add the miles and EQM that one would have earned if the ticket is paid and not claimed; so the value is actually a bit lower. The \$3,500 C-class ticket from ORD to CDG will earn perhaps 20K miles and 12K EQM for that flyer. So, say \$3,500 = 120,000 miles or only 3c a mile; not counting the value of EQM (almost half-way for elite in a year).

Similarly, a 2nd level elite on Continental flying coach between LAX and NYC rountrip will earn close to 10,000 miles on CO or UA. So, the \$400 = 35,000 miles, not 25,000. Closer to 1c per mile in this case.
Jul 15th, 2010, 02:32 PM
#6

Join Date: Feb 2004
Posts: 23,074
And there's no chance of an upgrade using miles for that LAX-NYC run (at least for now); while that elite has a chance of getting a complimentary upgrade with that \$400 ticket.

Which is to say, it's probably better to pay \$400 than spending 25K miles for this particular elite passenger.
Jul 15th, 2010, 04:56 PM
#7

Join Date: Jan 2003
Posts: 6,031
Gardyloo typed: 100,000 miles redeemed for a \$3500 business class ticket from, say, Chicago to, say, Paris, will be worth 3c apiece.

That would be true only if the individual would actually purchase that business class ticket. The value of the miles is equal to the price that someone would be willing to pay for the tickets.

Price does not equal value. (To demonstrate that, consider the economy section of almost any flight. The people in that cabin are likely paying dozens of different prices.)

And most of that omits the biggest issue in the OP's question: How would you decide if cheaper to use miles or cheaper to pay? To answer that, you need to consider you current mileage balance and your anticipated travel plans. In general, I think it's generally good practice to use miles as quickly as possible, because they have tended to lose significant value year after year. That lost value is not only the number of miles required to get an award, but (probably more significantly) also the ability to use miles for the flights and dates that you want. That said, if you're flying between city pairs that offer relatively inexpensive fares, and if you don't have a particularly bountiful mileage balance, it might be better to save the miles for a trip between expensive-pair cities.
Jul 15th, 2010, 10:47 PM
#8

Join Date: Mar 2010
Posts: 704
I hold them at 1.5 cents. That said, I try to get a much better value if i can find it. For example, last year I went to Buenos Aires; the tickets would have cost \$1300, but I got them for 40,000 each-- or 3.25 cents. If the value is less than 1.5 cents I will always buy the ticket instead.
Jul 16th, 2010, 01:11 AM
#9

Join Date: Jan 2003
Posts: 15,808
One redeemable mile is worth one US penny, at best, imho.

Elite qualifying miles are worth quite a bit more because they are harder to earn: up to 3 cents per mile.

A flyer on an award ticket can upgrade for cash on United.

The value of a mile depends on how easily it is earned.
Jul 16th, 2010, 06:21 AM
#10

Join Date: Aug 2007
Posts: 25,193
I would never pay much more than a penny to buy them outright. Beyond that, I tend to only redeem for premium cabin awards, upgrades, or last-minute/very expensive tickets. Any of those would have a list price of 3 cents per mile or more, but rizzuto's point is well-taken, and it isn't clear I would pay the price for business that is being charged.

I don't typically redeem for coach tickets only because I don't want to give up the elite qualifying miles.
Jul 16th, 2010, 07:28 AM
#11

Join Date: Sep 2006
Posts: 188
My wife and I flew from Chicago to Sydney and return from Melbourne last year. It cost a total of 280,000 miles. According to expedia, those seats would cost \$18,000.00 each for a total of \$36,000.00. (I can't believe that anyone would pay that.)
That was a great trip. Too bad I'm no longer earning miles.
One rule I had was never use miles for a domestic trip. Miles and hotel points have been paying for our annual vacations to europe for the past several years.
Jul 16th, 2010, 08:00 AM
#12

Join Date: Mar 2005
Posts: 10,464
My threshold to use FF miles for tickets is about 1c/mile, maybe 1.2c. That translates to a \$250-300 ticket for 25,000 miles. If the ticket costs less I'll pay cash, if it costs more I'll use miles.

I also like the flexibility of FF tickets, especially when I'm trying to plan family trips in the summer. I know where I'll be going, but may not be 100% certain of the dates. With FF tickets you can change dates for free as longs as the itinerary is the same and there are FF seats available.

This is handy when I want to book tickets 4-5mo in advance but don't have 100% clarity of work or family/kid schedules. It that case, I may lower my threshold and use miles for a \$200-250 ticket. 250k+ miles on the books don't do me any good if I don't use them, as rizzuto pointed out.
Jul 16th, 2010, 09:19 AM
#13

Join Date: Oct 2003
Posts: 833
Some interesting replies, the way I see it, the miles are worth nothing unless you use them. I've got alot of tickets on FF miles, and I'm certainly not going to sit down and work out for this trip, I got x cents per mile, y cents per mile on another trip, etc. If you have the miles for a free ticket and can get the seats that doesn't necessarily mean use the miles. I have often paid for tickets that I could have got using FF miles just to maintain elite status.
Jul 17th, 2010, 07:17 AM
#14
Original Poster

Join Date: Apr 2008
Posts: 1,731
Thank you all for your responses. I use a Continental airlines Mastercard, seems I need to use a lot of miles for even domestic flights. I recently signed up for a Delta amex card only to get the 20,000 ffm plus 5,000 more for 2 additional names. That enables me to get a round trip from Newark to Minn/St.Paul which would cost under \$300 if paid in cash. Don't know how you would become an elite member, don't know if even worth it.Maybe I should look into some other program/ credit card.

Anyway, thank you all for your responses.

Karen
Jul 17th, 2010, 07:40 AM
#15

Join Date: Feb 2004
Posts: 23,074
Generally, if you don't fly that much (i.e. not enough to become elite by flying 25,000 miles or 30 segments in paid tickets) a year, then it's not worth the annual fees for these airline-specific cards. Better off with some card that give you 1% back on all purchases with no annual fees.
Jul 17th, 2010, 08:51 AM
#16

Join Date: Jan 2003
Posts: 2,049
Since we are strictly leisure travelers, we have some difficulty earning enough points or miles each year to maintain the lowest elite level and get perks like free luggage, early boarding, and an occasional complementary upgrade. So we do quite a lot of flying a year, probably including two trips overseas and three or four to visit grandchildren in San Diego. Frankly, we don't have time for another flight, especially given the time you have to put in to find some tickets for miles to where you want to go, and when. So I think the frequent flyer miles are almost valueless. We do sometimes use them to buy tickets for our children (who are not frequent flyers), and once I tried to upgrade an international flight with money and miles, in addition to the tourist tickets we bought, but only one overseas segment was upgraded, and one domestic, so I wouldn't count that as a successful use of frequent flyer miles. I did get a year's subscription to The Economist with some miles that were about to expire, which I suppose is a good deal considering that the miles were on the verge of deceasement.
Aug 15th, 2010, 12:25 PM
#17

Join Date: Dec 2006
Posts: 1,033
Booked tickets PHX-TLS (Toulouse) on BA a few weeks ago, using miles and the companion voucher that Chase awards after one hits the \$30K spend target. Full retail price of tickets, minus fees paid, divided by actual miles used equaled 5.3 cents per mile.
Aug 15th, 2010, 08:47 PM
#18

Join Date: Jan 2006
Posts: 1,491
Booked two tickets Seattle-Bangkok, First Class, also using miles and the Chase companion voucher awarded after spending \$30,000 last year, as RedStater above. Full price of ticket, minus fees, etc, as above, equaled 7.5 cents per mile.
Oct 6th, 2010, 04:33 PM
#19

Join Date: Nov 2009
Posts: 9
I want to buy some miles to fly two people to Australia, where could I get them?
Oct 6th, 2010, 04:48 PM
#20

Join Date: Mar 2005
Posts: 10,464
From Holland to Australia your best bet may be KLM.

But I'm not sure why plan to buy miles. That will certainly cost more than buying a ticket from Amsterdam to Australia, will it not?

According to the KLM website a ticket from AMS to Sydney requires 100,000 miles.