The value of an airline mile & why you should collect them.

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In a recent radio interview, Arthur Frommer (he is a real person) said he doesn’t believe in collecting frequent flyer miles because it is too much trouble. I can understand part of his argument that it can seem like a lot of work to redeem a free ticket since airline websites are not that easy to navigate. Before we delve into whether or not it’s worth the trouble, here’s an example of an infrequent flyer.  Meet Sally.

Sally is your typical traveler from the Northeast who travels twice a year. She vacations in the Caribbean once a year and then the West Coast. In total, she travels about 8,000 miles a year.

In addition, Sally dines out twice a week with an average check of $30 and spends about $3,000 shopping online annually. If she did not collect miles and had a cash reward credit card, she would’ve received $80 in cash rewards back.

However, if she collected miles, she would have received:

  • Flying: 8,000 miles
  • Dining: Assuming 10% of the restaurants she dined at are mileage participating restaurants, that would mean 936 miles annually at the base earning of 3 miles per dollar spent. This is in addition to her cash rewards. Information on Airline Dining Programs can be found HERE.
  • Shopping: Assuming 50% of the online shopping retailers participate in mileage programs and the average earning per dollar spent is 3 miles, she would have netted 4,500 miles. This is in addition to her cash rewards. Information on Airline Shopping Programs can be found HERE.

So let’s round that to 13,500 miles annually. Both American and United allow for one-way redemption of mileage tickets. It takes 12,500 miles for a domestic one-way award ticket. Assuming the ticket was $250 roundtrip, Sally would have saved $125. That’s a $125 savings for simply typing in a frequent flyer number on the reservation and signing up for the airline’s dining and shopping program, all of which are FREE. Let’s say Sally spent $600 for her flights annually.  The $125 would have been a 20% rebate. In general, even for the most basic of redemption, a mile is worth a penny. So a trip to California from the East Coast is worth upwards of $50 in points.

If Sally was like Arthur Frommer and did not collect miles, she would’ve lost $125 in value. I don’t know about you, but $125 is real money. Being a little flexible so that I can acquire a reward ticket seems worth it to me.

In Summary:

  • Signing up for a Frequent Flyer miles account is FREE
  • Receiving miles for flying is like receiving a significant rebate for future travel
  • You can enhance your mileage earning for travel by simply dining out and online shopping — also FREE!

 

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