Not all miles are created equal

I’m a big fan of airline miles – I feel like its one case where I’m essentially getting something for nothing, or at least almost.  By using one credit card over another (the only difference being an annual fee of $95, which is more than made up for by the at least one free flight I get per year.  I also don’t pay interest since I pay off the card every month) I get thousands of miles that I turn into free flight tickets.  Just two weeks ago I purchased a $1000 ticket to DC for a total of $10, plus $75 fee, and 37,500 miles.    Of course I felt good because this was a good deal.

However, I noticed something crucial when speaking with a friend about him doing the same thing.  For his system, for an $1800 dollar flight, it cost him 185,000 miles – basically 100miles/dollar.  I realized that that airlines’ mileage system is based on price, whereas mine is not.  So for example, if he wants to book a more expensive flight, be it last minute or non-stop or whatever, it will cost him more miles.

But in my system, the mileage is irregardless of price.  So if I had purchased my ticket months before when the price was only $400, it still would have cost me the same 37,500 miles.  However, if I had been using a price based system, then it would have cost me almost three times more miles to purchase the higher fare.  I never understood this before, but it hit me how much of a better system is the one not based on price.  And I was very thankful thats the system I use, which happens to be United.  I use the Mileage Plus Explorer card, which I highly recommend.

By the way, I highly recommend Chris Guillebeau’s Travel Hacking blog and Cartel, for all things airlines miles.

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