Frequent flyer miles are a modern phenomenon. Estimates place the number of frequent flyer miles which have been collected and redeemed to date at over 30 billion miles. That makes frequent flyer miles one of the most widespread, non-central-bank-regulated alternative currencies ever used.
Profiting from the airline miles game
Dyed-in-the-wool miles collectors base their entire spending and travel lifestyles around optimizing miles-earning opportunities. Some peoples’ passion for miles goes so far that they would rather book an indirect flight than a direct one, just to profit from the higher number of miles earned. The holy grail for miles hunters is the qualifying mile. Unlike regular miles which can be redeemed for flights, qualifying miles let you earn special frequent flyer statuses which entitle you to special airline privileges.
Airline miles as a currency
The airline mile parallel currencies are also of interest to the general public. An increasing number of airlines are beginning to offer program participants the option of redeeming miles for cash back. This development could make miles a valuable asset even for those whose feet are planted firmly on the ground.
The value of miles is not fixed
When redeeming miles, it is important to carefully choose which services you redeem your miles for. Frequent flyer programs generally offer a number of redemption options aside from actual flights. Depending on the flights or offers you choose, the actual value you get for your miles can vary in a huge way. As a rule, avoid redeeming miles for merchandise or hotel stays, as these options offer some of the lowest value for your miles. Redeeming miles for car rentals is almost always a short-change as well.
Use miles for intercontinental flights
In most cases, miles are worth a lot more when you redeem them for flights. For example, you can get up to three times the value out of your miles (around US$ 0.03 to the mile) by redeeming them for long-distance flights as opposed to redeeming them for car rentals. Upgrades on intercontinental flights offer even more value, at around US$ 0.05 to the mile. Just make sure you understand that when you redeem miles for flights, you will still have to pay flight taxes and fees separately, in most cases.
Pay attention to expiry dates
Another important thing to consider is the fact that most airline miles expire if they are not redeemed within a certain amount of time. That may not seem important, but in practice, nearly one out of three frequent flyer miles expires without being used. Even at a fairly low valuation of just 1 U.S. cent per mile, those expired miles add up to around 100 billion dollars which customer literally “donate” to airlines. Altogether, the value of non-redeemed frequent flyer miles totals 300 million dollars.
Not all frequent flyer miles are created equal, and that applies to expiry dates as well. With some airlines, including Swiss, Lufthansa, Air Berlin and Emirates, your miles expire after just three years. Miles from other airlines have expiry terms of five (Qatar Airways) or even ten years (Korean Air). A handful of airlines, of which U.S. airline Delta is probably the most prominent, let you earn frequent flyer miles that do not expire for as long as you are a program member.
Choosing the right miles program
Just because you earned your miles traveling with a certain airline does not mean that you have to redeem them for flights with the same airline. Many airlines let you redeem miles from several different frequent flyer programs when booking a flight. However, if you travel frequently, you can usually get maximum value by joining several different frequent flyer programs.
There are many ways to earn miles
Besides flying with airlines, there are a number of other ways to earn frequent flyer miles. The popularity of frequent flyer programs has encouraged many different merchants and service providers to offer airline miles as customer rewards. You may receive miles as a welcome bonus when you open a bank account or take out an insurance policy, for example. Various rental car companies let you earn miles on car rentals. Additionally, most frequent flyer programs offer online malls which let you earn miles when you purchase special offers from partner merchants. Miles can also be earned using airline credit cards.
Earning miles with credit cards
Some Swiss credit cards give you the option of earning rewards as frequent flyer miles when you use them to pay for purchases in Switzerland or abroad. That means you can earn frequent flyer miles just by going about your regular spending, and then enjoy free flights by redeeming the miles you collect.
Miles earning rates vary from card to card: The basic versions generally deliver fewer miles per franc spent, compared to higher-end gold and platinum credit cards. But the rate at which you earn miles also varies between card issuers. Running an airline mile comparison is the easiest way to find the credit cards which give you the most value.
The moneyland.ch team