Home > Credit Cards > What Exactly Is A “Mile?”

What Exactly Is A “Mile?”

Miles used to be an exclusively “airline” thing. You earned one mile for every mile you flew with an airline. Now we see this “unit of loyalty” popping up in all sorts of places, especially credit card rewards. Indeed, credit cards are one of the, if not most, popular ways to get miles for cheap travel. Below are the main types:

1) Fixed-Value “Miles”

These usually come from credit cards – well-known examples include CapitalOne’s Venture Rewards. Although some people refer to these credit cards as equivalent to airline miles, don’t be fooled – they’re not. These points act as cash-back toward travel, and have a general value of 1 to 1.33 cents per point, depending on which credit card you have. That means that 50,000 points can equate to anywhere from $500 to $665 toward airfare. I generally find more value in 50,000 airline miles than this amount of money. The only benefit to these types of credit card rewards is that you can use these points for any available seat for sale, which is great for those with highly inflexible plans. Also, unlike tickets paid with airline miles, you can earn airline elite miles for the distance you fly with tickets paid with credit card points.

2) Credit Card Points that are Transferable to Airline Miles

As a points junkie, these are my favorite types of points to earn. The best examples are:

  • American Express Membership Rewards (via non-branded Platinum, Premier Rewards Gold, and Gold cards … Delta Skymiles AmEx’s don’t count).
  • Chase Ultimate Rewards (via Sapphire Preferred personal card and Ink Bold business card)
  • Starwood Preferred Guest (a valuable hotel point currency, with a branded AmEx to help earn these points)

American Express transfers to various partners, such as Air Canada, British Airways, Delta, and more; Chase transfers to United and British Airways; Starwood transfers to Air Canada, Alaska Airlines, American Airlines, British Airways, Delta, Emirates, and US Airways.

Why are these points so valuable? Because they follow that timeless adage: don’t put all your eggs (points) in one basket (airline)! For example, I recently helped a friend book a trip to Asia. Award availability meant that they could use their American Airlines miles to fly OneWorld partner Cathay Pacific one way, then use United miles to fly Star Alliance partner Singapore on the return. Both AA and United allow people to use their miles to book a one-way award, which shows their value in situations like this.

My friend had only 47,000 AA miles, about 3,000 short of the necessary 50K for a one-way business class ticket. We were able to hold the award ticket, transfer 3K points from his Starwood account to AA, then book the outbound ticket.

For the inbound, my friend used United miles. He has actually never flown United and only had about 2000 miles from various promotions. However, he did have Chase UR points. With a few simple keystrokes, he transferred 58000 points to United and booked the ticket online a few seconds later.

3) Airline-branded credit cards miles

These tend to be great for signup bonuses and ancillary benefits , such as free checked baggage and priority boarding. Often times, they are not useful for everyday spending, since they tend to only offer 1 mile/$ on most spending. Some offer elite miles for reaching certain levels of spending, but you often have to pay a high annual fee for those cards (and be within striking distance of your next elite level).

Right now, Citibank is offering 50K AA miles as a signup bonus, and since you can sign up for 2 at a time, this effectively makes it 100K AA miles for $10K of spending. Chase is offering 50K United Airlines miles on first purchase, while Barclays offers 40K US Airways miles on first purchase. However, once you achieve the bonuses, the cards don’t have much spending power.


Categories: Credit Cards
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: