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# 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

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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

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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.

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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.

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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.

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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.

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I want to buy some miles to fly two people to Australia, where could I get them?

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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.

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I take the view that it is worth it to get the airline credit cards- especially the ones that offer attractive sign up bonuses- some come with one year free before an annual fee is charged. For expample my wife signed up for the American Airlines VISA card from Chase- it gave her 50,000 miles bonus sign up and the fee was I think \$75- now my friends that is worth it as those ff miles are good for one trip to Europe - which has a value of about \$800. I signed up for the British Airways VISA card from Chase and they gave me 100,000 for the 75 annual fee- folks thats 2 free tickets to Europe worth \$1600. So you see it is worth it to get the airline cards- you just have to wait for the sign up bonus offers before you take the plunge!

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J62, I actually live in the US now, but sometimes airlines have specials or people sell them.

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Selling your miles will get them confiscated by the airline.

You can look online at any of the airline sites to see what price they put on sold miles. Right now British Airways is offering a 25% bonus for purchased miles, but only allow you to buy 24,000 miles (plus 6K bonus miles) for ~\$700. Redeeming miles on BA from the US to Australia requires 140,000 miles, double that if in business class.

American will sell up to 40,000 per calendar year (\$1000) and requires 75,000 for a round trip to Australia in economy.

Other airlines will have different purchase prices and redemption requirements.

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<<I signed up for the British Airways VISA card from Chase and they gave me 100,000 for the 75 annual fee- folks thats 2 free tickets to Europe worth \$1600. So you see it is worth it to get the airline cards- you just have to wait for the sign up bonus offers before you take the plunge!>>

Sadly, that BAEC offer expired some months back - too bad, 'cause it was one heck of a deal. I already had a BA/Chase VISA and consequently wasn't eligible, worse luck.

The hot deal right now is with American - 75K or 100K miles with a new Signature card thru CitiBank. Offer expires 10/31. The 75K card is probably the better deal, since it requires only a \$1500 spend over six months to get the miles - the 100K award requires \$10K spend over a year. Cheapest steerage AA redemption RT to Europe in summer is 60K miles, but availability can be very limited.

http://www.flyertalk.com/forum/milesbuzz/1110784-american-airlines-card-75-000-sign-up-bonus.html

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Another view:

we use a USAirways Mastercard which generally gives us one mile per dollar spent; sometimes we get double miles depending on the type of purchase. We spend enough to keep us easily at the Star Alliance Silver level.

Now, if you want to fly and the cost of the ticket is 180,000 Miles that means, generally, you had to SPEND \$180,000 dollars to get those miles; and the actual price of that same ticket is in the \$3500 range, which one is actually cheaper???