How Fees Sank My Award Redemption — Reader Mistake Story

Dec 3, 2018

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.

Today, I want to share a story from TPG reader Pradyot, who bought airline miles without considering all the angles:

A friend and I wanted to travel for Thanksgiving from Atlanta to New York, and revenue fares were comparatively high for a college student’s budget. Upon realizing that I was 5,000 AAdvantage miles short of being able to get us both award tickets, I jumped on the opportunity to purchase those miles for $193 (with taxes) from American Airlines.

After my purchase was complete, I realized the dreadful rookie mistake I had made of ignoring the close-in booking fees, since we were booking two weeks before our departure date. Redeeming these miles would now not only cost me as much as a revenue ticket, but also leave me without miles I could use later. At the end of the day, we decided to pay for our tickets, but I had already spent money for the miles that I couldn’t get back.

Buying miles during a sale or bonus promotion can be useful if you need to top off your account for an upcoming award, or occasionally as an investment to book premium seats at a heavy discount. Without some sort of bonus, however, points and miles purchases are less likely to be a good deal. Pradyot paid nearly 4 cents per mile; more than two and a half times what I think they’re worth. That’s justifiable if it helped him redeem his other miles efficiently, but the hefty upfront cost makes it harder to get a good return. A better option might have been to look for an inexpensive revenue fare in one direction, and use the miles in his account to book the other.

American Airlines (like United) charges a fee of $75 per ticket for awards booked less than 21 days prior to departure, which puts a dent in the redemption value of any last-minute award. This fee is a nuisance — it doesn’t pertain to any real cost incurred by the airline; they just tack it on because they can. Thankfully, you can avoid late-booking fees if you have elite status (Gold or above for AAdvantage members), or by booking with an airline program that doesn’t add them. For example, depending on availability, Pradyot could have booked the same flights for 15,000 points round-trip per person using British Airways Avios.

I appreciate this story, and I hope it can help other readers avoid making the same mistake. In appreciation for sharing this experience (and for allowing me to post it online), I’m sending Pradyot a $200 airline gift card to enjoy on future travels, and I’d like to do the same for you. Please email your own travel mistake stories to info@thepointsguy.com, and put “Reader Mistake Story” in the subject line. Tell us how things went wrong, and (where applicable) how you made them right. Offer any wisdom you gained from the experience, and explain what the rest of us can do to avoid the same pitfalls.

Feel free to also submit your best travel success stories. If your story is published in either case, I’ll send you a gift to jump-start your next adventure. I look forward to hearing from you, and until then, I wish you a safe and mistake-free journey!

Featured photo courtesy of American Airlines

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.