Beware The Bonus – The American Airlines Buy/Share Bonus 2013

Most Airlines have annual promotions with Frequent Flyer Miles bonuses that are may look  tempting, but depending on your situation, may not be the great deal they appear to be.

For instance, this month American Airlines is having a promotion offering AAdvantage Bonuses when buying, or gifting miles.

Here’s the bonus chart:

Don’t forget to read the dreaded fine print. Prices are in U.S. dollars and do not include applicable taxes or $35 per transaction processing charge.” Ouch!

Let’s do some quick math to find out approximately how much we will pay per Mile. The least I can buy to qualify for the bonus is 5,000, at a cost of $147.50. Then we add the $35 processing charge and 7.5% tax (using what I was charged the last time I bought miles), resulting in 6,000 miles for $196.19, meaning the cost per mile is roughly $0.33. At the higher end I could buy 60,000, with a 15,000 bonus, the price drops to roughly $0.24 per mile. I might think this isn’t bad, but for $1,811.38 is it a good deal?

Is it worth it? It depends. Considering that the most you will likely be able to redeem your Miles for is about $0.03, (and even that is a very optimistic estimate, it is most likely to work out to $0.01) and when you do, you will pay booking fees and taxes for your flight, lowering the value of your miles even more, your best bet is to avoid purchasing Miles. If your Miles are going to expire or if you just need those last five thousand miles to finally book that backpacking trip through Europe, this could be just what you need.

Here’s an example of when Buying and Sharing Miles is actually a good deal (SPOILER- It’s not with American Airlines): Boarding Area – View From the Wing

American Airlines also has a annual transfer bonus. Check out a breakdown of last years bonus here.

I no make grammar good? Leave a comment and let me know.