The basics of buying airline and hotel points or miles – why you’d want to, and what you need to know to get a deal

GUIDE: Buying Points
DIFFICULTY: Intermediate
TIME TO READ: 7 minutes
POSTED: December 27, 2016
UPDATED: December 31, 2016
LOYALTY PROGRAMS: Relevant to Multiple Programs
STATUS: Updated with latest info in December 2016

Many overseas frequent flyer and hotel rewards programs sell their miles or points to their members, often with chunky bonuses to get you to sit up and pay attention.

If you’ve been reading Point Hacks for a while you will have seen us cover different discounts and bonuses, but it’s useful to explain the basics of why these are deals, as well as how to go about it generally.

Buying points and miles is just one pillar in earning and redeeming points for cheaper travel experiences, and in this guide I’ll try and break down the reasons for getting ‘in’ on this strategy, a basic methodology to adhere to, and a look at some of the considerations.


Why would you want to buy frequent flyer points?

The value comes from buying a heap of points in an overseas frequent flyer program instead of paying for a flight outright.

Note that Qantas, Velocity, Asia Miles and KrisFlyer – the big four programs we focus on in Australia – all don’t have direct miles purchase programs where you can buy points in enough quantities to make an outright flight redemption, which is why we are generally dealing with loyalty programs from further afield.

It is possible to buy points in other programs which can be transferred to our ‘local’ programs – for Velocity, Asia Miles and KrisFlyer through Starwood Preferred Guest or American Express Membership Rewards, and for Qantas pretty much only through Membership Rewards as a Platinum Charge cardholder.

But with overseas frequent flyer programs, it can be possible (although it’s getting harder) to get Business or First Class flights for around 50% of retail price through overseas frequent flyer programs – but with a range of considerations to take on board.

Generally you are not going to be able to pay points and use them for upgrades (or if you can, that strategy is bespoke to each frequent flyer program and beyond the scope of this guide).

The key frequent flyer programs that will sell you points

There are a few key programs to know about that will sell you points that you can then redeem into flights. These programs run promotions intermittently to let people know when these offers are available.

Here a range of in-depth guides for each program:

Each guide linked above references the most recent promotion, some of which have ended. However we keep all the information in each guide relevant, and these guides get updated with new promotions as they kick off.

The principles of buying points to use for Business and First Class travel

1. Wait for the right bonus or discount

No points programs really sell points/miles at a rate that’s worth buying unless they are running a promotion. Promotions come in the form of a bonus (e.g. 30% more points for the same price) or a discount (20% off the cost of buying miles).

Compare the current promotion versus those that have come before for the same frequent flyer program (I outline the offer histories on each ‘buy miles guide’ on the site) and see if the current deal stacks up.

2. Sign up for the right programs before a promotion comes along

Many points purchase promotions require an account to be opened for 1 or 2 weeks before miles can be purchased, and some also require the account to be open before the promotion starts to be eligible for the bonus.

Remember, you don’t need to be a resident of a foreign country to use an overseas frequent flyer program.

The list of programs to sign up for if you are starting out is here.

3. Use multiple accounts if you can or need to

Frequent flyer programs that sell miles will often put a cap on the number you can buy, usually each calendar year. As long as you can redeem the points you are buying, setting up multiple accounts in family names is a useful way around this.

You’ll be limited with each account and can’t combine your purchases (so a flight that costs 150,000 miles with an account cap of 120,000 still won’t be achievable) but you will be able to book multiple flights for yourself or multiple people.

4. Think about short term use, for long term travel plans

Buying points to redeem for flights is not a long-term game, as frequent flyer programs have shown they are willing to pull the rug out from underneath their members and devalue their programs with little notice.

Only buy as many points/miles as you know you can redeem in the short term, preferably with a specific trip in mind that you actually want to book for very soon. That trip could be a long way in the future, but get the booking in as soon as you have researched availability (see the next point) and bought the points.

5. Have a trip in mind and research availability before you buy

On that note, it’s always best to think about which trips are best to buy points/miles for.  To do this requires you to have an understanding of the ins and outs of the different advantages of the programs that sell points/miles.

Once again, the best value for purchased miles is always in Business and First Class, so aim there.

Then, actually check and see what award flights are available on your specific dates/destinations before you go and buy the miles.

6. Put an award on hold if you can

This concept is foreign to most of us as the main frequent flyer programs in Australia don’t generally allow points redemptions to go on hold. However, some overseas programs do, specifically American Airlines AAdvantage.

You can put an award booking on hold online or over the phone, then buy the miles, and then ask them to ‘ticket’ the booking after you’ve bought the miles. This eliminates much of the risk of seats disappearing while you wait for purchased miles to credit.

7. Consider the costs – remember surcharges, booking, change / cancellation fees, and the fact you won’t earn points on redemptions

There are always additional fees that go on top of a points booking despite their general flexibility compared to paid fares. Remember to factor these into your total cost and comparisons vs paid fares.

You’ll also forgo earning any points or status credits into your frequent flyer account when using bought miles to redeem for flights, so don’t go thinking this is an easy way to retain or pick up airline status either.

And finally, be sure to compare the cost of buying points versus just buying the flight outright – airfares are particularly competitive in some markets right now, so you might be able to find great bargains just by working with the right travel agent to seek them out.

8. Consider exchange rates and use the right card to minimise fees

You’ll be buying your points in foreign currency, usually USD. You’ll want to use a credit or debit card that offers minimal exchange fees, or offers you bonus points on overseas spend, if you’re spending a lot of money on overseas transactions.

9. Know how to use the points before you buy

You will need to educate yourself on the methods and techniques to research availability and make the bookings needed. These are covered in the guides linked to below an others on Point Hacks, so use them as a reference, and don’t be afraid to ask questions in the Point Hacks Community.

10. Don’t underestimate the effort involved

Buying points to redeem for cheap flights is an active and time-consuming hobby. It will take you time to read, research and understand how to do it, and you’ll need to be prepared to put the time in to learn and understand the ins and outs of all the different options.

An alternative? Businesses like iFlyFlat, Flightfox or Points Pros exist to help with frequent flyer award availability research – either as a subscription service, or for a fixed fee.

There are no easy wins, but with some preparation and knowledge it really is possible to come out well ahead. 

A methodology to use if you’re considering buying miles

I see the decision-making process around buying points a little like this:

  1. Consider the routes you might be interested in using bought miles for and check the price of buying miles for them in the programs on offer. Assess if you have a deal to work with. If so…
  2. Look for award availability for your chosen dates, and confirm with the program selling the miles that you can book the flights you are after. Spend the time to call them and ask if you’re not sure.
  3. Work out how many miles you need by using that airline’s award calculator
  4. Calculate the cost of miles and the cost of taxes for the booking
  5. Check you are still getting a deal versus just buying a paid fare
  6. Buy the miles if you are definitely getting a deal you are happy with
  7. Redeem the miles online or over the phone

Steps 1 to 6 need to be completed pretty quickly once you have found availability for your routes/dates, or award availability might change and you’ll be stuck with a chunk of purchased miles that you couldn’t use for the exact flights you wanted.

For the American Airlines AAdvantage program, at step 1 you can actually put the award on hold for 72 hours without the miles in your account, minimising any risk in purchasing miles.

Buy the miles, and call them back to ‘ticket’ the reservation within the hold window, and you’re set.

What about Hotel Loyalty programs?

Buying points for hotel redemptions is even simpler – you just compare the cash price of the room you would be redeeming your points for, versus the cost of buying the points outright.

As a general rule, you’ll find deals for buying hotel rewards points in some of the following circumstances:

  • When a city’s hotels are generally expensive
  • During peak periods or event times in cities, when nightly rates for cash bookings go up
  • In resorts with a well defined peak season where again nightly rates are high
  • When you value flexibility and don’t see much value in booking prepaid rates (points redemptions can usually be cancelled with no fee)

The arbitrage opportunities for buying points for immediate redemption arise because generally the price of a room redemption in points is fixed, whereas nightly rates fluctuate – just like redeeming points for flights.

The key hotel loyalty programs that sell points are:

Summing up

Hundreds, if not thousands, of people have managed to buy points/miles and redeemed them for Business and First Class flights or cheaper hotel stays as a result of the information here on Point Hacks, so these strategies are totally doable.

Don’t be put off by the time required to learn about how to do this as the potential savings are quite remarkable.