Purchasing United Miles For 40% Off – Good Deal?
This morning I got an email from United saying that for the next 2 days, United will be offering a 40% discount on purchasing 15,000 to 100,000 United Miles.
Most Airlines and Hotels occasionally send “Special Offers” like this and I always get Reader emails asking if they are a good deal.
For Hotel Points and Airline Award Miles, basically the magic number that you want to stay under is 1 Cent per Mile / Point.
Anything that is close to 1 Cent per a Mile / Point or below is excellent!
So in the case of this United Offer, with the 40% off discount, you can effectively buy United Miles at 2.25 Cents per a Mile.
While it might seem like there isn’t a big difference between buying miles for 1 Cent per a Mile and 2.25 Cents per a Mile, there definitely is.
For example if you needed to purchase 60,000 Miles (enough miles for a Economy Saver to Europe), it would cost the following:
1 Cent Per A Mile: 60,000 Miles x $0.01 = $600
2.25 Cents Per A Mile: 60,000 Miles x $0.0225 = $1,354.50
As you can see at 1 Cent per a mile, the price is affordable at $600, while at 2.25 Cents per a Mile, the price is fairly expensive for an Economy ticket.
That is the main reason why this United promotion is NOT a good deal if you are just looking to stock up on United Miles since you can easily buy a Economy Ticket to Europe for less than $1,354.50.
Also with a purchased ticket you would earn miles on your flight, which is something you would not get if you redeem your miles for an Award Ticket!
Exceptions To This Rule
There are only a few rare cases where it makes sense to purchases Miles directly from the Airline.
1. You Are A Couple Thousand Miles Short Of An Award Ticket
It is better to spend $100 to get some miles so you can redeem your miles for an Award Ticket, rather than spend $1,000 out of pocket to purchase that same ticket because you didn’t have enough miles.
2. You Have Some Miles But Need More For An Upgrade
Another time is might make sense to purchase miles is when you need miles to Upgrade.
For example if you are going to India, which is a 18 hour flight from Chicago, it would take 80,000 United Miles for an Economy Award.
However for only 120,000 United Miles, you can fly in Business Class.
I have flown both Economy and Business to India, and there is a huge difference between the two when you are stuck in a plane for 18 hours.
So in this case, if you have 80,000 United Miles and have a little money laying around, it might make sense to purchase 40,000 United Miles for $903 to get you to 120,000 so you can upgrade to Business Class.
Of course, it is personal preference if spending $903 is worth 18 hours of comfort.
3. It Is Cheaper To Buy Miles Than Purchase A Ticket
This primarily only happens with Business and First Class tickets.
For example, if you wanted to go to Europe in Business Class, it would be cheaper to purchase 100,000 United Miles via this promotion for $2,257.50 rather then spend $7,673 via United.com for the same ticket.
The Value Of Miles
While this United promotion might not be useful to 99% of people since it is still fairly expensive to purchase the miles, the one thing is certainly does show is how much United Miles are worth.
At a 40% discount, to purchase 40,000 United Miles costs $903.
If United wasn’t having a 40% off sale, then those 40,000 Miles would cost you the normal price of 3.5 Cents a Mile and would total $1505.
Yet as I pointed out yesterday, you could easily earn those same 40,000 United Miles that United values at $903 – $1,505 for free if you get the Chase Sapphire Preferred and can spend $2,000 in 3 months.
Although I know that most FFU Readers would never purchase United Miles via this promotion, you know that there are people who get this email and go ahead and purchase some miles because they think it is a good deal!
If only they knew that they could get those same miles for free…
Anyways, I hope that clears up what constitutes a “good deal” when these types of opportunities to purchase discounted Airline Miles and Hotel Points show up in your inbox.
-Parag
