American Airlines is running a new promotion that offers tiered amounts of bonus miles depending on how many you purchase. American is offering up to 36% bonus miles, but it’s structured in such a way that you can still get a good deal purchasing fewer.
When an offer like this is available, it usually helps to buy the minimum number of miles required to unlock the largest bonus. If you buy more than that threshold, you’re paying for more miles but the bonus is the same — and ends up being less as a percentage. Often the bonuses get better as you climb higher tiers. But how much better is difficult to determine without some math.
|Miles Purchased||Bonus Miles||Maximum % Bonus||Best CPM|
|1,000 - 15,000||0||0%||3.37|
|16,000 - 30,000||5,000||31.25%||2.56|
|31,000 - 45,000||10,000||32.26%||2.47|
|46,000 - 60,000||15,000||32.61%||2.44|
|61,000 - 75,000||20,000||32.79%||2.43|
|76,000 - 100,000||27,500||36.18%||2.36|
As you can see, most of the bonus tiers work out to around a 32% bonus. You would purchase the lowest number of miles within that tier — e.g., 31,000 — and get a fixed bonus. In this case, any purchase between 31,000 and 45,000 miles earns 10,000 bonus miles. That’s a 32.26% bonus, but it drops to only 22.22% if you were to buy 45,000 miles.
Because all the tiers are so similar, I don’t think there’s a big push to buy lots of miles just to unlock a larger bonus. I would just recommend that if you need a number in between for a certain award — say, 40,000 miles — then you upgrade to the next highest package. That way you continue to maximize the bonus.
There is a bump when you reach the largest bonus. 76,000 miles brings with it 27,500 miles, which is over 36%. Does that extra 4% bonus make a meaningful difference in the final price per mile?
Purchasing 76,000 miles would require $2,608.30 after tax and a fixed processing fee. Including the bonus, you would receive 103,500 miles for an average price of 2.36 cents per mile. That’s pretty good (although Alaska is selling them for about 2 cents and has many of the same partners). If you purchased only 31,000 miles the CPM would work out to 2.47. That’s only 5% more. You’re already getting some bonus miles, and I say don’t push yourself too hard to buy more miles than you need.