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is the GREATEST VALUE of all frequent flyer points

The Conclusion (for those who are very impatient)

Get enrolled in every airline frequent flyer program possible, its FREE. The majority of your points are accumulated by other means, rather than by flying itself. Credit cards issued in conjunction airline award miles are the #1 way to accumulate massive amounts of points in a frequent flyer account! Every dollar charged to the card accumulates points that flow into the attached frequent flyer account.

The Immediate Action Plan

It takes 50,000 frequent flyer points to fly to Europe. You can earn them in less then 6 month and save up to $1500 per ticket.

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Frequent Flyer Basics

The frequent flyer program is an incentive program operated by an airline to reward customers for their continued loyalty. As a traveler, you earn one mile for each mile that you fly on a particular airline. The concept behind frequent flyer programs is that the airlines want their passengers to become lifetime customers. It is much more costly for the airlines to get new customers than it is to retain the ones they already have. So how do they reward you? The more frequently you fly with them, the greater your awards!

Since the frequent business traveler represents the biggest group of sales for the airlines, they are rewarded with an even greater system of upgrades. This is called the "elite" awards program. It involves three tiers: silver, gold and platinum. The elite status is often a special package of benefits given to an airline's best customers -- the ones using it most frequently.

In today's market, there are several airline alliances as well as airline partner programs. You can also earn "miles" or "points" (points can be redeemed later as miles) for other travel and non-travel transactions. Travel transactions can include hotel stays, rental cars, and more. Non-travel-related awards include credit card purchases (you earn a mile for every dollar charged), long-distance telephone services, even mortgages and stock trades! Finally, shopping at certain stores, both brick-and-mortar and online, also provides an opportunity to "rack up" those miles.

Your frequent flyer miles reside in your account -- much like your dollars in the bank. They accumulate as you travel, although unfortunately they don't earn interest! At this time, most of the larger domestic airlines use a fairly uniform policy: mileage does not expire, but there must be some activity in your account once every three years. The airlines may change their mileage expiration policies, so you should read their most current guidelines. When the mileage total reaches a certain amount, you can "redeem" them for an award, usually air travel.

How to Redeem Your Miles

Now that you have accumulated a lot of miles in your account, how can you redeem them for flights? It is a straightforward process and easily accomplished. You should always have your frequent flyer number handy when speaking with the airlines. You purchase a ticket with miles the same way you do with cash. They will use your number to access your account and subtract the appropriate amount of miles as you purchase the ticket. Tickets are available in paper form via regular mail or shipping carriers, and, of course, as an "e-ticket," the virtual way of traveling!

There are a few important issues that you, as the frequent flyer, should be aware of. They could affect how and when you use your miles.

There are quirks in the miles/points redemption process. The actual monetary value is 2 cents per frequent flyer mile -- reportedly the airline industry average. For example, if you want to redeem 25,000 miles for a free ticket, the number of miles multiplied by 2 cents per mile is $500. As some industry researchers have noted, it may be smarter to save your miles and purchase a lower cost ticket to your destination.

What about availability? The airlines have a notorious reputation for "blackout periods" and limited seat availability for frequent flyer customers. One of the most important parts of your conversation with the ticket agent will be the answer to the question, "What's available for the dates and flights that I want?" The airlines are under no obligation to offer any more than they decide is viable as outlined in their terms and conditions.

Terms And Conditions

The tiny print at the bottom or on the back of your statement contains quite a few terms and conditions. Here are some of them:

Elite Status

What is "elite" status, anyway? How can a frequent traveler attain that status and then use the benefits? Let's look at this special part of the frequent flyer system.

The elite status is a division of the awards programs that separates the frequent traveler from everyone else. In order to achieve this status, a customer must clock 25,000 frequent flyer miles. This is the level of membership where you will earn the greatest number of miles, points and/or privileges. Once you arrive, the program is again divided. Each subsequent level requires more mileage (and thus, more paid business for the airline). The customer reaps a wide range of benefits, such as preferred boarding, lounges, gratis miles added to the regular number usually awarded, etc. The three levels of elite status are silver, gold and platinum.

All frequent flyer elite programs offer some form of pre-boarding to members. A related issue is the ability to schedule seamless travel -- this is where the airline alliances are important. More on alliances in the next section.

Within the levels of elite status, there are three tiers of upgrades. These benefits are rewards in addition to those mentioned in the previous paragraph. On the first tier, a customer may receive a free upgrade and/or bonus miles. As you enter this level of status, you should review: 1) the minimum number of miles required to upgrade, and 2) what mileage threshold is required to receive a bonus. Second-tier consumers may receive unlimited domestic and some international upgrades along with lucrative mileage bonuses. Top-tier members qualify for the works! Awards include companion tickets, international flights, lounge privileges and, in the case of Air Canada, no blackout dates.

It's interesting to note that airline, hotel, and rental car personnel often are a bit more gracious and cooperative with elite customers. This stands to reason: frequent travelers are their best customers.

However, don't take any special treatment for granted, because not all elite programs are created equal. Each year, WebFlyer reviews all the frequent flyer programs, rates them, and declares a top program. If you are looking for the best all-around program to enroll in, this is the place to check.

Using Airline Alliances

An alliance is a business relationship, often between U.S. domestic carriers and foreign ones. Its purpose is to allow foreign carriers access to the U.S. market and domestic carriers a means of access to "beyond-Europe" centers. The goal of alliance growth is twofold:

Examples include American Airlines allied with British Airways (One World), and United allied with Lufthansa.

Airlines "code share" so that travel can be organized to flow from one carrier to the other. Code sharing is the industry practice in which an airline puts its "code" on a flight operated by another carrier. The airline then sells and issues tickets for the flight. For example, American may place its code on a flight that British Airways operates and then sell it to the customer. This is how air carriers get around restrictions to expand their market presence. In today's global economy, this truly benefits the frequent traveler.

When you travel using alliance carriers, the miles are credited and can be used interchangeably. This allows rapid accrual of miles so you can reach elite status quickly and receive the extra awards at that level.

Legal Issues

Here is a quick review of some legal issues related to mileage redemption.

Keep in mind that as a frequent flyer member, you do not own your miles. Many of the frequent flyer program terms and conditions state clearly that passing along mileage in the event of the death of the account holder or the dissolution of account holder's marriage is NOT part of the program. However, airlines DO have policies that allow division and/or transfer of mileage to occur. What happens to the miles seems to depend on the situation.

A financial ruling by the IRS (PLR9746048), as summarized by Ernst & Young, states that "frequent flyer miles awarded to an investor will be treated as an 'adjustment' to the purchase price of the fund shares and results in a reduction in the basis of those shares." This is an interesting point to ponder if you are considering using stock trades to gain mileage points.

Taxation

As a frequent flyer member, you may pay fees when redeeming miles for tickets. In 1997, the Taxpayer Relief Act was passed quietly. As part of this act, when an airline partner gives miles to the program member, the airline must purchase the miles from the sponsoring airline with the 7.5% tax placed on top of the purchase. For example, if Hilton Hotels rewards you with miles for staying with them, they must buy those miles from the airline (in order to give them to you) and pay the 7.5% on top of the purchase price.

What does the tax mean to you, the frequent flyer? In all probability, the cost of the tax is passed onto the consumer/frequent flyer in the form of fees, etc. According to the travel industry, the profit margin for these "partners" is so slim the cost would wipe them out. Still, they need to partner with the airlines to keep their market share (remember Hertz). So, the partners remain in the frequent flyer program, and the costs are passed onto the consumer -- that's you!

In the subsequent three years, the tax has appeared to consumers in the form of:

Managing Miles

MileTracker.com offers free and simple software that tracks all the major airline and hotel programs. Those looking for a for elite status tracking and monitoring of expiration dates, can check out MaxMiles Mileage Miner, which charges $29.95 annually.

If the ticket would cost less than $300, you're probably better off buying it outright than using your miles. Frequent-flier miles typically expire after three years of inactivity

Bonus Promotions
flyertalk
InsideFlyer
WebFlyer
Freddie Awards

Options for unused frequent-flier miles

Donate them:

Make-A-Wish Foundation
American Red Cross
Heart Association
Save the Children
UNICEF

You can find information on donating miles at airline Web sites or by logging onto MileDonor.com, HeroMiles.org, where miles can be given to soldiers returning from Iraq and Afghanistan on emergency leave.

Convert them

Combine miles from various programs or trade in lesser accumulations for gift certificates from Home Depot, Macy's and Bloomingdale's, Amtrak Guest Rewards, Hilton's HHonors and Diners Club Rewards. Typically, you lose more than half or more of the original value of your miles during an exchange process.

Points.com lets you take all your orphan miles or points from participating plans and consolidate them into one of your own choosing. Points.com allows 3,600 different exchanges for airline miles, hotel stays, free flowers, Starbucks coffee and gift certificates at Barneys New York, Crate & Barrel and 180 other retailers. Company charges $5.95 per individual transaction, or $19.95 for a year. The average exchange ratio at Points.com is just under 1.7-to-1, critics claim it is far more costly.

Most people believe they can't land a free flight unless they have earned at least 25,000 miles. Airlines regularly offer "sales," where travelers can get up to a 70 percent discount on a weekend flight to assorted destinations in the United States. You can find special weekend fares posted on Webflyer.com.

Convert to cash:

You can turn extra miles and points into cash via of mileage brokers. Just keep in mind airline rules prohibit such conversions. As the brokers on Dallas-based MrMileage.com clearly state on their Web site, "It's not against the law for you to sell your frequent flyer miles or awards, but it is against airline policy." MrMileage.com pays 1.5 cents per mile for the first 25,000 miles, or $375. Terms aren't posted on the site, but you can call a toll-free number.

Caution and disclaimer: Any time an offer changes or expires, or any time there is a new offer, this site is instantly out of date. We do not get advanced warning or any other kind of special cooperation from those who offer the miles. So there is no possible way that we could always have every listing and every category up to date and accurate, though we do my best to keep up with the changes and new offers (except when I'm traveling). If you use the information on this web site, you agree that before acting on it you will check it for accuracy from the sources giving the miles and services we mention, and to not rely on the information you read here. We do not warrant the accuracy of information on this web site, and assume no responsibility for it.

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