Tips for Selling Frequent Flyer Miles

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Many frequent flyers say that flying is no longer the best way to earn points and miles, but the most rewarding way is to sign up for the right credit card. Frequent flyer programs do not make much change in the Wall Street; many users do not understand the financial importance of these programs and just look for selling frequent flyer miles or earning a free flight.

Profits of airlines are subject to many variables like fuel price, actions of the competitors, or even weather. Among all these uncertainties and variables, airlines find reliable revenue by selling miles to the banks, and these banks make use of these miles to tempt customers to sign up for their credit cards.

“The bottom line is that the business of selling miles is a very profitable one and has proven historically to be far less cyclical than the core airline,” said Joseph DeNardi, a Stifel analyst. The downside for the users, though, is that there are numerous frequent flyer programs out there, due to which, each point or mile is becoming less valuable day by day.

“It is harder to use miles at the price that people are expecting to pay,” says Gary Leff, who is an expert of frequent flyer miles. However, this does not mean that travelers should not sign up for the frequent flyer programs. Instead, they will need to rethink on ways to earn, keep, and redeem or sell miles.

Experts say that most of these strategies are dependent on the credit cards. Some of the tips for frequent flyers to get the most out of their programs are discussed below.

  • Closely watch the different credit card programs for bonuses. Banks usually offer great bonuses on credit cards. For instance, last year, JPMorgan Chase offered a 100,000-mile bonus for their Sapphire Reserve card sign up.
  • Even if you use some other card to make purchases, do airline purchases with the card of the airline, as it can help you bag benefits like free bag check in and priority boarding.
  • You can stretch the miles by redeeming them to fly midweek. Miles expert Brian Karimzad says that it will take an average of 574 miles to book a Tuesday flight, but a Sunday flight will cost 41,332 miles.
  • Do not allow the miles to expire. On American Airlines that runs the biggest frequent flyer program of the country, you do not have to fly to redeem miles; you just need to purchase something within eighteen months from partners of the program, which ranges from restaurants to other airlines.

A New Attractive Offer for Citi AAdvantage Executive Card Holders

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Frequent flyers and reward point earners will be surprised and excited to hear the new offer from the Citi AAdvantage Executive Card. This latest offer from the Citi AAdvantage Executive Card presents an opportunity for cardholders to acquire 75,000 AA miles, along with plenty of other perks and rewards.

This new offer is exactly similar to the offer made by Citi AAdvantage Executive Card last month, which implies that they received the response that they were looking for and as a result, they decided to extend the offer. However, before you jump to any conclusions, take note of the fact that the annual fee for this card is on the costlier side.

The 75,000 AA miles deal is a great offer and what makes the offer more attractive is that it can be used on any Oneworld Alliance network of your choice such as Etihad Airways, Cathay Pacific, American Airlines, Japan Airlines, and Finnair. However, it is true that the latest bonus from Citi AAdvantage Executive Card comes with a catch just like all their previous offers.

Cardholders will have to spend $7,500 within the first three months and they will also have to pay the annual fee of $450 in the first year in order to acquire this offer. This means that the annual fee has not been waived off. So, you will be most probably spending a lot more money in the first half of the year just to earn the bonus.

This might have popped a new question on your mind “Is the new offer worth spending such a large sum of money on?” The answer to this question is Yes, because you will be able to receive the following benefits by earning the bonus from Citi AAdvantage Executive Card.

  • Gain access to Admirals Club at zero extra charges for authorized users
  • Users who spend $40,000 or more will be automatically qualified for 10,000 Elite Qualifying Miles
  • Free foreign transactions
  • The first bag checked in of authorized users will not be charged

Note that the American Airlines AAdvantage bonus miles will not be available to users who had previously opened or closed Citi AAdvantage in the last two years. All other users are eligible to receive the offer but it is always best to consult with other cardholders or a reliable mileage broker before making a decision.

What Flyers Should Know About Airline Mileage Account and Buy Back of Reward Points

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For many of the airline loyalty programs, airline mileage account expires if flyers don’t use the reward points or keep the account active for a time period by booking flights, making purchases in participant stores, etc. For instance, in the American Airlines AAAdvantage program, the airline mileage account will expire if flyers keep the account idle for 18 months.

However, most airlines let flyers reactive the airline mileage account post expiry for a reasonable cost mainly because airlines know that some flyers are bound to forget the expiration date. Usually, the standard cost to buy air miles back is 1.7 cent or lower, and that is the same price flyers would end up paying to buy reward points when they open the airline mileage account. Some airlines also have tiered pricing system, which encourage flyers to buy expired reward points back as a lot and that would be quite the redemption for flyers.

If 500,001 to 750,000 air miles expire from MileagePlus program of United Airlines, flyers can buy them back for $700. At the same time, in the AAadvantage program of American Airlines, buying back 250,001 to 500,000 air miles would cost flyers $2,000. Flyers would end up paying less than one penny either ways if they are to buy back points from MileagePlus or AAadvantage program as a lot.

Know When Airline Mileage Account Expires

For flyers abroad, the expiration policy of airlines varies especially for non-US airlines. For instance, Singapore Airlines mileage account would expire post three years of opening the account, even if the account stays active. Similarly, travelers need to reactivate their KrisFlyer account by paying subscription fees after three years. The Alaska Airlines, on the other hand, would close the Mileage Plan™ account post two years and delete the balances, but has a plan to reinstate air miles for a $75 subscription fee for one year post deletion.

Mileage brokers would send reminder mails to your e-mail ID if and when the airline mileage account is nearing an expiration date so you can do the needful to keep the account active. All said and done, selling airline miles to third parties online would gain flyers some liquid cash and let them keep the account active. Keep participating in loyalty programs, sell miles to flyers wanting to advance book tickets, but never let the airline mileage account of airlines expire.

Do Airlines Make More Money Selling Miles Than Seats?

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This may sound crazy, but if you are a person who carries an airline branded credit card in your wallet, your daily visit to Starbucks or iTunes selections plays an important role in keeping the airline industry in the United States happy and fat.

For many carriers such as American Airlines or Delta Air Lines, the credit card programs are a golden goose. Studies show that every mile fetches anywhere from 1.5 cents to 2.5 cents to such airline companies. The big banks in the country amass these miles and then distribute them to the cardholders.

Users who pay an annual fee for these cards to get the miles are a sure bet for the banks. Most of these users will have more than average income and will usually spend more on the cards, leading to generation of merchant fees for the bank. These users also maintain high credit scores meaning that they will pay their bills on time and so they are not a risk to the banks as they experience only a few defaulters.

Airline miles program, formally known as loyalty programs, has developed into a high margin business that has grown much in value and size among the airline consolidations and the carriers are eager to increase the credit card rolls to see their loyal members spending more. Alaska Airlines, for instance, started to tie a small percent of their 19,000 employees’ performance pay to the growth of their credit card with the Bank of America.

Many of the investors failed to appreciate the importance of these programs to airline profitability among the stability consolidations, says Joseph DeNardi, who is a senior airline analyst with Stifel Financial Corp. in Baltimore. He has repeatedly explained that the investors do not have much insight into the billions of dollars that the large banks pay to have these affiliations. “Airlines are earning upwards of 50 percent of [income] from selling miles to a credit card company, which we believe is a great business to be in,” DeNardi wrote.

Beyond the cash, the carriers also get other benefits from the cards, as the deals remain unaffected and profitable in both good and bad times. “In a recession, that [bank] business will go down, but it should provide a very high cushion to the airline,” DeNardi said. “That’s the real benefit here: It speaks to downside protection for the industry better than anything else.”

How to Earn Air Miles and Reap Mutual Benefits Through FFP Loyalty Programs

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Exchange cash for miles or sell frequent flyer miles for cash, they both mean virtual trading your reward points online. FFP schemes have been doing the rounds since the 1970’s and the FFP notion of most airlines is straightforward – reward and retain loyal flyers, reap mutual benefits.

Flyers earn air miles also known as frequent flyer miles through booking flights and redeem the reward points to book subsequent flights as well. However, choosing airlines and reaping mutual benefits involves research and math.

For instance, a return flight from Dubai to London with Emirates would earn flyers 900 Skywards in the cheaper most economy class, 6000 Skywards in the fully flexible economy, and 11,400 in the fully flexible business class journey. As a generic rule of thumb – air miles vary for flyers depending on the distance traveled and the travel class.

A lion’s share of the frequent flyer miles comes through air travel only. However, it is quite plausible to earn air miles through other means as well, such as something as outlandish as getting 20,000 Emirates Skywards miles with a 1-year subscription of Wall Street Journal. Alternatively, you can also earn 2 Etihad Guest miles for $1 spent on purchasing glass from Al Jaber Optical. There are even more pragmatic options, and to find them, you need to scout brokers participating in loyalty programs for that.

Not just earning air miles via credit cards, but cards of Starwoods and American Express Platinum card lets flyers convert the card points into air miles. In the Middle East, Etihad douches NBAD, ABID, and ADCB credit cards and Emirates, Emirates NBD credit cards. ADIB Bank’s Etihad Classic Visa will give 0.75 air miles for 4 Dhs spend in the UAE, and incurs Dh500 annual subscription fee.

Flyers should realize that air miles are not the only means to book tickets and actively participate in a loyalty program of airlines. In fact, with the higher membership status and the bonus tier points, flyers could access the private lounge of airlines, priority board, and earn more air miles each time they fly.

Remember, each loyalty programs include more than one airline and air miles can be used just like a foreign currency to advance book flights with partnering airlines as well.

Transfer Starpoints to Get Airline Mileage

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Transferring credit card points to airline miles gives value to the cardholders, as well as helps flyers book flights in United Airlines or affiliate airlines participating in a loyalty program. People can sell Starwoods points as well, but transferring Starpoints to airline miles participating in a loyalty program gives somewhat better exchange value.

Starwoods give Starwood Preferred Guest Credit Cards with an array of transfer options. To transfer Starpoints means to convert credit card points to airline miles and redeem the rewards accordingly.

If you want to fly to America, then a United Airlines ticket can be booked with the miles earned via the Starpoints transfer. If you are flying from America, say to New Zealand, you can use the points of Air New Zealand for the flight tickets, as they participate in the Star Alliance program as well. Not just airline miles but Starpoints can be transferred to Marriott rewards points also, in case you wish to dine in the famous Marriot hotel or book a stay.

American Express Platinum cardholders have no minimum limit to transfer air miles to FFP affiliate partners and that helps flyers to keep the airline mileage account from expiring. Where AmEx Platinum members can transfer even 1 Starpoint at hand, the Gold card members can transfer as fewer as 1500 Starpoints to an affiliate airline participating in the AAdvantage program.

It is noted that Singapore Airlines offers more miles and credit card points, and they are a Star Alliance Loyalty Program affiliate too. The freedom to transfer Starpoints to such affiliating airlines gives better options to flyers and cardholders.

Most of the airline affiliates of Starwoods let cardholders transfer Starpoints in a 1:1 standard exchange rate – 1 Starpoint equals 1 air mile. A few airlines in the US also give 1.5 points for each air miles transferred, whereas some international airlines offer in 1:2 or even higher ratio. Flyers can accumulate all these points, and figure out what should be done with air miles earned through the transfer.

Starwoods is not that great if you want to transfer Starpoints to United MileagePlus of United Airlines, the transfer ratio of which is 2:1. However, for Chase Sapphire Preferred card, transferring 1 card point returns 1 air miles to the cardholder.

Four Ways to Take First Class Flights with Frequent Flyer Miles

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If you fly domestically and earn more frequent flyer points by flying from point to point, you could sell frequent flyer miles someday down the line. To get on board the first class seat of an airline with upgrades means to trade FF points to someone else and enjoy the perks. Below are better ways to grab an upgraded seat in a flight with the frequent flyer points in the bag.

Use Credit Card Points

You can sell American Express points to someone else and book a first class tickets on partnering airlines. Credit cards offer a way to transfer points and gain mileage for your future flights, and it need not compulsorily be American Express points only to trade, you can use any credit card points for that.

Participate in Loyalty Programs

Every carrier has different policies so do some preliminary research to participate in the best carrier and their respective frequent flyer program. With continual participation in the loyalty program, you could get rewarded soon, given that airlines pick loyal flyers only. Some airlines have credit cards of their own, which flyers use during return journey to increase their frequent flyer points.

Trade Airline Miles and be Flexible

Take advantage of tie ups between a carrier and airline miles and get an upgraded seat with the same carrier. The airline miles denote the points you have gathered flying before, and not the miles that you can fly in the future. Do note that not all airlines tickets could be upgraded, so you need to be flexible with your FF points.

Be Choosy and Advance Book Flight Tickets

Some airlines offer the reward program for free, whereas with paid programs, you select the ways to increase airline miles and redeem cash to advance book first class ticket. Be choosy like booking airline specific dining programs, filling out surveys online, indulging in shopping on participant stores, or even opening an investment account in a bank to get bonus airline miles.

Stick with a given airline to increase the frequent flyer points, sell frequent flyer miles through a reliable broker, and grab the deal you are after. Airline carriers are most likely to pick loyal customers as their first class traveler, as frequent flyers travel in the economy class too.

Effective Ways to Minimize Frequent Flyer Fraud

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Frequent flyer miles have earned considerable popularity among the people due to the many rewards it offers. By selling frequent flyer miles, customers can earn numerous rewards in the form of points and incentives through different activities such as shopping, hotel reservations, using credit cards, and dining programs. This increasing popularity of frequent flyer miles program has resulted in many criminals exploiting such flyer miles programs from regular customers. Most of the airline reward thieves are prompted by these incentives, destination vacations, and other rewards for targeting the flyer miles programs.

There have been increasing reports of passwords being hacked of many airline miles customers. Moreover, online criminals also make several reservations and transactions of the miles by using unauthorized access of this customer accounts. They utilize the method of obtaining the credentials of the customer accounts for gaining access to the airline frequent flyer programs.

There are many ways to reduce the risk of any such fraudulent activities in the airline rewards program. This is achieved by implementing the right systems as well as being aware of the ways in which the accounts are compromised. Below are some effective ways to reduce airline reward fraud.

Adding Two-Factor Authentication

Two-factor authentication is an effective way to secure the frequent flyer miles accounts of customers. Some of the airline and travel websites offer the option of keeping the flyer miles rewards secure by adding two-factor authentication to the login process. This will require the user to enter the correct answer to a security question for proceeding to the login ID and password credentials page.

Email Address Verification

Verification of the email address is another effective way to prevent unauthorized access to flyer miles accounts. The email verification solution must be utilized while signing up with a flyer miles program. It features numerous features such as intelligent risk assessment that determines the risks associated with airline miles fraud by using the email address used in the transaction.

Periodic Password Changes

The password is the most effective defense against any fraudulent practices in airline rewards program. Having a strong password will prevent any of the criminals in accessing your flyer miles account. However, it is recommended to change the password frequently in the accounts. This will aid in keeping the account information and the flyer miles secure.

About Chase Credit Cards, Flying Caps and Waivers

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It is a known fact that you can sell Chase Ultimate rewards points or sell frequent flyer miles to onboard Southwest Airlines or some of the other air carriers, to which Chase are partners with. Anything that sells like hotcake online can be redeemed for cash or be transferred to book flight tickets or a hotel room. That said, the new 5/24 rule of Chase has put a minimum five per cardholder cap, and if any cardholder applies for a sixth one, Chase may turn down the applicant.

You may own a Chase Freedom, Freedom Unlimited, and Ink Cash Business card, but the 5/24 cap would ensure no one takes advantage of sign-up bonuses with more than five cards. Moreover, flyers of Singapore Airlines, British Airways, or Air France can hold the Ultimate Rewards Points Cards to transfer points.

Chase has recently introduced two new cards, namely Sapphire Preferred and Ink Plus Business, with ultimate bonus points of 100,000 and 80,000 points respectively on sign-up. A new Chase credit card would increase the FF points tally and help earn a spot in the Southwest Rapid Rewards points needing 110, 000 points, hence the 5/24 cap.

Credit cards are a paperless payment mechanism, and for British Airways Avios, a flyer needs to chase the British Airways Visa Signature Card. If flying is not the need of the hour for you, try chasing a Marriott Rewards Premier card and dine in an elegant Marriott Hotel. In fact, being selective about the credit cards and being tactical about payment modes would ensure you are in a flexible space, always.

What about transferring airline reward points from one carrier to the other? Transferring FF points ensures flyers will not be stuck in a quagmire of “having FF points in abundance, but not being able to use on an airline carrier since mine is not listed.”

The Chase Freedom card gives consumers a sign-up bonus point of up to 15,000 with zero annual waivers even as the cardholder remains unable to transfer points to other airline carriers. With Chase credit card, one could take domestic flights with United Airlines as well.

Do you Need to Pay Taxes for Credit Card Rewards

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The payment of taxes on the earned rewards is a common question that arises in many of the credit card reward programs. According to the Internal Revenue Service (IRS), a customer needs to report about the credit card rewards if they fall under the type of taxable income. However, this is not applicable for most of the cards, as the IRS views the various cash-back programs and rewards as discounts. Yet again, huge sign-on bonuses for a card will need to be reported as extra income.

For customers using their credit cards for business, the keeping of the records is mandatory. This requires accurately subtracting all of the rebates from the paid amount to minimize the amount that is deduced from the taxes. Failing to pay the full price can cause the increasing of the burden than the taxable income.

Note that some of the available types of credit cards never fall into the category of income. This includes travel points, cash back programs, sign-on bonuses, and purchases made using the points that are obtained only after spending money. However, customers need to use the 1099-MISC tax form if they intend to use any amount of money. This form is made available to the customers from the credit card company along with the intended bonus.

The customer is also responsible for reporting the same income to the IRS since the state would not carry it out all the time. Moreover, every state law in the country is different and the tax law is subjected change accordingly as well.

The customers must take special note that no amount of money must be received for reporting on the taxes. Taxable income falls under anything provided to the customer without the need to carry out a purchase such as gift cards, points, etc. Consulting with the credit card company is the best way to clear any doubt regarding whether to pay the taxes or not.

Relying on a tax professional is also a recommended way to get clarification regarding the various norms related to tax. The 1099-MISC form is highly important in this segment and should be well considered even with an income scale that does not qualify.

The IRS maintains strict monitoring in tracking all of the income obtained from any of the sources. Remember, ignoring the regulations pertaining to the income can result in tax penalty.

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