The best advice for collecting miles is to earn and burn. Miles tend to fall in value, and they don’t earn interest, so most people shouldn’t stockpile them.

But maybe you’re too busy to travel this year, so you’re earning miles for future travel. Or maybe you need a ton of miles to take a lot of people on a trip together. In these or other cases, you may need to stockpile miles.

If you are stockpiling miles, I would choose which miles to stockpile based on three criteria.

  1. Value
  2. Versatility
  3. Devaluation Risk

Which miles come out well as miles you should stockpile? Which are the worst miles to stockpile? How do transferable points play into the analysis?

Value

The first criterion to consider is value. You should stockpile the most valuable miles, and you should stockpile miles that get more valuable the more you have.

Absolute Value

The absolute value of a miles is how much value you tend to get from that mile. It takes into account, things like:

  • how many miles you need to book certain awards
  • how much award space there is available to that type of miles
  • award routing rules
  • fuel surcharges

For instance, US Airways charges 90k miles roundtrip in business class from the New York to Tokyo, while United charges 120k miles. Both airlines have access to the same award space, so US Airways miles would be far more valuable for this trip.

Or consider a roundtrip in economy class from New York to Los Angeles. United and Delta both charge 25,000 miles, but United offers far more award space on the route, so United miles are more valuable for the trip.

United charges 120k miles roundtrip in business class to India and lets you route through Europe or Asia to get there. American charges 135k miles and only lets you route through Asia or the Middle East, but not East Asia. That routing flexibility makes United miles far more valuable for the task.

United and US Airways don’t collect fuel surcharges on any awards, while Delta collects fuel surcharges on several of its major partners. (Click here for the list.) That is one reason why United and US Airways miles are more valuable than Delta miles.

All the factors listed here contribute to the values I assigned each major mile on the Mile Value Leaderboard. Those are my valuations of the miles. If you have idiosyncratic travel desires, your values will be different. Whatever the most valuable miles are for your travel desires are the miles you should stockpile.

Here are my valuations of some major miles:

  1. US Airways Dividend Miles                                           1.95
  2. United Mileage Plus                                                        1.81
  3. American Airlines AAdvantage                                    1.77
  4. British Airways Avios                                                      1.70
  5. Southwest Rapid Rewards                                             1.69
  6. Delta SkyMiles                                                                  1.22

Relative Value

Stockpiling means you’ll end up with a lot of a certain type of mile. Ideally, then, this mile would go up in value the more you have of it.

That’s pretty rare, but I think American Airlines miles get more valuable as you get more of them, at least up to a certain point. The reason is that the American Airlines Explorer Award (mostly for round-the-world trips) is one of the highest value uses of American Airlines miles, and each one can cost hundreds of thousands of miles depending on the length of the trip and cabin chosen.

Other miles don’t have such expensive great uses, so they fall off in value more quickly as you over-stockpile them.

Versatility

The versatility of a miles comes down to how well the miles can be used to fly:

  • different routes
  • to and in different regions
  • different airlines
  • short distance trips
  • long distance trips
  • one ways for half the price of roundtrips

One type of mile that does horribly on versatility is British Airways Avios. Avios are mostly only good for short, direct flights on American, LAN, airberlin, and Aer Lingus. (Yes, there are a few other good uses.) Stockpiling Avios would be disastrous if you want to fly varied upcoming trips including trips to Asia, Africa, or Australia.

Star Alliance miles are more valuable than oneworld or SkyTeam miles, since the Star Alliance is the largest alliance with the widest geographical reach.

For versatility, I really like United miles because they can be used one way for a fair price on the world’s largest alliance. American and US Airways aren’t far behind.

Delta miles and British Airways miles are the least versatile of the major types of miles.

Devaluation Risk

When I consider the devaluation risk of a mile, I consider its likelihood of devaluation, and its resistance to devaluation.

For the likelihood of devaluation, all we can do is look at the recent past and the airline’s history of how they’ve handled changes, both of which are an imperfect way to forecast the future.

Some key concerns are how recently an airline’s miles were devalued and how that was handled. Charts that have hung around the longest are ripe for devaluation, while charts that were just devalued (like Delta’s) are probably not going to get another devaluation immediately.

Then there’s the matter of how the airline handled devaluation. Did it give ample notice, so people could burn their miles at the old, favorable rate? Or were the changes immediate, so that your miles dropped in value overnight?

Going back to Delta’s recent devaluation where it raised the miles price of international business class awards, it gets mixed marks. The negative change took place immediately for all bookings for flights operated June 1, 2014 or later. That means you can still redeem Delta miles on the better chart as long as you travel by May 31, 2014–which is good–but if you were just days away from booking an award for next June when the changes were made, your miles irrevocably lost value–which is bad.

Besides looking at how the airline handled miles devaluation, look at how it handles negative changes–like those to lifetime status or yearly elite status–regularly. Bad actors continue their bad behavior.

The other part of the devaluation analysis is the miles’ resistance to devaluation. If one use of a type of mile is reduced in value, will there be other good uses, so that the mile maintains most of its value?

Transferable Points

At this point, you’re probably screaming at your computer that transferable points are the clear type of mile/point to stockpile. I agree. Transferable points like Ultimate Rewards, Membership Rewards, and Starpoints all perform better in all three areas of analysis than any single type of mile.

For instance, transferable points by their very nature have access to more award space on more routes at the cheapest price in miles. Plus if one of their transfer partners is devalued, it is unlikely all transfer partners will be devalued at once, which greatly reduces devaluation risk.

Not all transferable points are created equal. The value of transferable points comes from their underlying transfer partners. I would rate airline miles like this when it comes to stockpiling:

  1. United
  2. US Airways
  3. American
  4. Delta
  5. British Airways

That would make Ultimate Rewards (United, British Airways) and Starpoints (all but United) more valuable to stockpile than Membership Rewards, which transfer only to Delta and British Airways of the five major airlines.

Membership Rewards can do some awesome things like get you into Singapore Suites Class or secure big discounts from the east coast to Europe, but if you’re not stockpiling for those uses, the other transferable points are better to stockpile.

Each mile has its strong suits, just like each transferable point does. I think of Membership Rewards as awesome for certain niche awards that are tough with other transferable points. On the other hand, Starpoints and Ultimate Rewards are better for stockpiling for major awards.

Recap

If stockpiling miles is right for you, and it probably isn’t, which miles should you stockpile?

You should pick miles high in value and versatility but low in devaluation risk. The best miles to stockpile aren’t miles at all, but are transferable points. The points to stockpiles are Ultimate Rewards or Starpoints.

Transferable Ultimate Rewards are earned by the Sapphire Preferred, Ink Bold and Ink Plus.

Starpoints are earned with the Starwood Preferred Guest® Credit Card from American Express and the Starwood Preferred Guest Business Credit Card, both of which come with 25,000 Starpoint sign up bonuses.

All of the cards can be found by clicking the following banner.




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