Travel Deal of the Day (June 17, 2008)

Now that fares are rising, you may want to start doing an important calculation when deciding how to use your frequent flyer miles.

The Deal:
When deciding how to use your frequent flyer miles, you may want to calculate the cost/mile rate of the itinerary you propose to “buy” using your miles. The calculation is straightforward – the cost of the itinerary if you paid money rather than using miles divided by the number of miles you propose to use to “purchase” the itinerary. You can compare possible uses for your miles by comparing the cost/mile of your proposed itineraries. In my opinion, when using airline miles, one cent per mile is the absolute minimum, and two to three cents per mile is a much better rate. First and Business Class travel usually generates the best cost/mile rate. (Note that if you do not normally pay for First/Business class travel and you are trying to determine the “cost” when using miles for a premium-cabin itinerary, the calculation is most accurate if you figure what is the most you would be willing to pay for a trip in any cabin.)