It seems like a deal too good to be true, but travel enthusiasts are hopping on American Airlines’s “Deal of the Year.” For just over $0.50 per mile, travelers can fly roundtrip between any two U.S.-destination cities for less than their average domestic ticket price!

American Airlines has announced that their “Deal Of The Year” buying miles at less than half a cent will be honored. This is great news for those who have been looking to purchase American Airlines miles at an affordable price. Read more in detail here: american airlines.

IT'S REAL! American's

American-Airlines-Preparing-To-Drop-AAdvantage-Award-Charts

 

Last night, I wrote about what is likely the best offer of the year: the chance to acquire American AAdvantage miles for little over $0.004 each. Many readers are concerned about whether the bargain will be fulfilled since it seems to be too good to be true.

SimplyMiles is similar to an online shopping platform in that you earn miles for taking advantage of deals, but instead of using a link that logs your purchase, you use a Mastercard credit card that you’ve registered with SimplyMiles to make purchases.

  • A sextuple mile offer (normal miles plus a bonus of 5 times the usual miles) is available until December 27, however it might be withdrawn sooner.
  • There are several deals that pay up to 40 miles per dollar. Donating to an environmental charity using Mastercard is the most profitable (but not for everyone).
  • Earning 240 miles per dollar or purchasing miles at $0.004167 cents each implies earning 40 miles per dollar + 5x the typical mileage.
  • Because it’s a charity donation, there’s a distinct conversation about whether or not you’re eligible for a tax deduction (whether or to what extent the miles received count as a quid pro quo that would reduce your deductibility). As a result, some may claim that their cost foundation is even lower here, as I’ll explain later.

Is This a Genuine Offer? Will It Be Respected?

I contacted American Airlines to check that the promotion isn’t “going to be regarded a mistake of any type, will the offer be fulfilled as-promised – that members who complete transactions would get 6 times the advertised miles?”

To be explicit, this meant that “a charity gift under a 40-mile-per-dollar offer should generate 240 miles per $1, or a return of one mile for $0.0042 invested.”

“The promotion is as stated,” according to American Airlines. It isn’t a blunder. “This is a Mastercard deal that will run through December 27th, subject to availability,” I’m informed. They’re looking for me to see “how they’ll notify subscribers if the deal expires before December 27.”

I was scared that the offer was genuine, but that the 40 miles per dollar contribution was a mistake? “No, it’s not a mistake,” they say.

Is this offer really for a 5-times-the-usual-miles bonus?

Although the offer seemed to be obvious to me, numerous people have inquired about it.

  • Two years earlier, a similar offer was made, and it was accepted. Members received six times the typical number of miles.
  • They gave a ‘5x’ incentive, not a 5 additional mile per dollar bonus.
  • Since many deals are for a specific number of miles — for example, receive 1500 miles if you spend a particular amount of money – a bonus of 5 additional bonus miles per dollar wouldn’t have made sense. In such situation, the offer would not be “earn 1505 miles through this program.”
  • In a promotional email, American stated explicitly what the deal was:

    Earn an extra 5x American Airlines AAdvantage bonus points on every deal site-wide until December 27 or while supplies last as a special holiday incentive. For example, if you earn 100 miles for spending $30 or more, you will get 100 miles plus 500 extra miles, totaling 600 miles.

Nonetheless, I was precise about the arithmetic in my email to American, asking whether this would be honored, since I was concerned about the amount of miles you’d get. “MC will cover the inaugural 40 miles per $1,” American explains, “and then it will be part of the 5X offer, which will give an extra 200 miles per dollar.”

What’s the best way to get the most out of this?

When you pay for an offer using a Mastercard connected to your profile, you can earn miles with SimplyMiles. I have three Mastercards, including two American Airlines cobrands (Barclays Aviator Silver and Citi Executive) and a Citi Premier card. Basically, your total Mastercard credit limit is the theoretical limit of what you can accomplish here (assuming you do not go over that limit..).

I’m guessing that by the time the charges are posted, you’ll be able to pay them off and free up your credit line again, and that the offer will be withdrawn due to “materials no longer available.”

I’m not advising anybody to use their whole credit limit to take advantage of this deal! American AAdvantage points aren’t worth nearly as much as US Airways miles were in 2009, when I took advantage of their Christmas shopping program (TrackItBack) for a net cost of just over 4/10ths of a penny per mile.

But consider it this way:

  • Qatar Airways QSuites to the Maldives cost 70,000 miles one way, or $291.67 (+ taxes) with this deal.
  • Between the United States and Tokyo, Japan Airlines first class costs 80,000 miles one way, or $333.33 (+ taxes).
  • Between the United States and Tahiti, Air Tahiti Nui business class costs 80,000 miles one trip, or $333.33 with this deal (+ taxes).
  • Cathay Pacific first class between the United States and Southeast Asia costs 110,000 miles round trip, or $458.33 (+ taxes).

Assume that award prices rise. Quite a bit. What is the maximum amount of deep deep discount travel you may prepay?

Let’s imagine you wanted to go to Australia and found out that American was charging 195,000 miles one way in business class… Even so, it’s just $812.50.

Do You Also Get A Tax Deduction?

SimplyMiles is now running a campaign that has some fantastic value options. SimplyMiles was something I seldom paid enough attention to. This alters the situation. Wine.com, for example, has some great bargains on wine and publications. The Conservation International grant, though, is the one that is attracting the most attention.

Some readers have given a total of $20,000 to the cause. There’s actual cash on the line here. Here’s what Mastercard has to say about deducting your donation:

The receipt of miles may limit the tax deductibility of your donation; for tax-related problems, please consult a financial counselor.

A quid pro quo donation occurs when you get something of value in return for your offering. You’re really giving the organization money in exchange for products and services, as well as a present.

“If a donor donates a charity $100 and receives a concert ticket worth $40, the donor has made a quid pro quo donation” and may deduct $60 of their gift, according to the IRS. In this case, the ‘value’ of anything is its market worth, or what a willing buyer and seller would pay for it.

Are the miles you’re getting in return for your donation worth anything? You don’t really own the miles; American AAdvantage does, but it’s a safe bet that you do. What are the value of the miles?

The IRS assigns a value of 0.42 cents per mile to miles earned through Bask Bank’s savings account. When valued in this manner, it effectively eliminates any chance of a deduction.

  • A donation of $10,000 would result in 2.4 million kilometers.
  • According to Bask Bank’s appraisal, you will get $10,080 in return for your contribution.
  • As a result, nothing is deductible.

To seek a charity deduction and lower your cost basis on the miles even more, you’d have to argue that the miles didn’t qualify as quid pro quo value under IRS criteria.

Is There Anything to Be Warned About?

The offer might be canceled at any moment, so be sure it’s still available when you use it. Take screenshots of the screen. We have no idea when it will be withdrawn, and we have no idea how they plan to tell us that it will be pulled.

Also, no matter how fantastic a bargain this is, don’t spend money on travel that you can’t afford to spend on travel. Even if you see yourself living in first-class cabins in this manner, you’ll still need to be able to pay your rent.

If this offer resurfaces, it will be much better.

Beginning in January, miles earned through SimplyMiles will be converted to Loyalty Points, which are used to obtain AAdvantage elite status. This does not include extras (for example, the 5x bonus). A contribution, on the other hand, would get you 40 miles per dollar.

Executive Platinum rank is achieved with a gift of $5000. If you achieve 30 flight segments to qualify for Choice Rewards, a $18,750 gift will gain you ‘750,000 point status’ for level 5 Choice Rewards (such guaranteed international upgrades).

And Loyalty Points will be the deciding factor in how upgrades are distributed. For a year, you’d gain Executive Platinum and be at the top of almost every upgrade list.

Unfortunately, you can’t earn Loyalty Points currently, and this offer won’t be available until 2022. However, they’ve done profitable bonuses with SimplyMiles in the past, and they’ll do even better in the future.

More From the Wing’s Perspective

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Aa is a travel company that offers its members miles for every dollar spent. They are offering their “Deal of the Year” which allows members to purchase miles at less than half a cent each. Reference: aa simply miles.

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