Mystery Bonus of Up to 85% on Buying United Miles

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Through December 14, 2015, United is offering up to an 85% bonus on purchased miles. The maximum bonus is targeted with some people being offered 60% and 70% bonuses. Also the size of the bonus depends on the number of miles you buy, with the largest 60%, 70%, or 85% bonus kicking in at 40,000 miles purchased.

Log into your account here to see the bonus you are offered. I was offered the 85% bonus.

United miles normally cost 3.5 cents per mile plus a 7.5% tax, bringing the full price to 3.76 cents each. During the sale the bonuses are:

If you get the 60% maximum bonus, the cheapest miles are 2.35 cents each. If you get the 70% bonus, you can get miles for 2.21 cents each. If you get targeted for the 85% bonus, the cheapest miles are 2.03 cents each.

For those of us targeted for the 85% bonus, buying 40,000 miles–the fewest you need to purchase to get the biggest bonus–costs $1,505, which is 2.03 cents each for the 74,000 United miles you get.

Is This a Good Deal?

No, this is a bad deal for speculative purchases. Since United’s huge devaluation last year, I value United miles at around 1.5 cents. The bottom line on all mileage sales is that they’re a good deal if you have an immediate, high-value use and not a good deal otherwise.

There are a few United awards for which you’ll get more than 2.03 cents of value per mile, but even in those cases, you’d probably be better off buying LifeMiles for 1.5 cents each and redeeming them for the exact same award.

Math

To figure out if you have a high-value use, use this simple expression:

(A – B) / (C + D)

• A: Value of the award. Important: this is the lesser of the cash price and your subjective value.
• B: Taxes on the award
• C: Miles used on the award
• D: Miles you would earn if you purchased the award ticket with cash

This will spit out the dollar value you are getting for your miles. If that number is greater than 0.0203, and you have an 85% bonus, and you can book the dream award now, and LifeMiles somehow is offering a worse deal, buy during this promotion. Otherwise, don’t buy.

Bottom Line

You can buy 148,000 United miles for 2.03 cents each if you get targeted for the 85% bonus. That’s way too high to buy speculatively.

United sales are processed by points.com, so you do not get category bonuses on cards that bonus airline or travel purchases like the Citi Prestige® Card, which offers 3x on purchases from airlines.