Making money off your miles
Updated On: Jul 31 2014 06:20:00 AM EDT
Some people are now selling their miles and points and making hundreds to thousands of dollars! They're called online "mileage brokers" and they will buy your miles for big bucks. But before you sell, you better check your fine print.
With a busy travel schedule and a points-earning credit card, Carlyn racked up thousands of airline miles with no immediate plans to redeem them. Enticed by online ads from "mileage brokerage companies," which offer money for miles or points, Carlyn decided to give it a try and sold more than 57,000 miles for $460. "I didn't see a value in holding onto them, hoping that i would find a flight I could use," Carlyn said.
Though Carlyn made a nice profit, experts say each time you sell your airline miles or points you're taking a gamble.
Brian Kelly is the founder of thepointsguy.com. He explained, "Lately it's become very popular and it's becoming a big business, but there are a lot of risks involved."
If you check the fine print of many reward programs, you'll find selling your miles or points is not allowed. If you get caught, you could lose all your miles or points, have your account cancelled and be banned from the program.
Kelly said, "You're not going to end up in a jail cell but the airlines are pretty clear and they play hardball with people who sell their miles and points."
When people sell miles or points, brokers redeem them for an airline ticket they sell to someone else. While in some cases it is permitted to transfer points or miles to family or friends, experts warn the industry is watching for transfers and tickets that seem unlikely.
"The airlines and credit card companies are looking for transferring of points to people in different states, different last names in different geographical regions," Kelly said.
Eli Hoffman with flipmymiles.com added, "Airlines definitely do not want the client to sell their miles to a company like ours."
Flipmymiles.com is one of many mileage brokerage companies operating online. They acknowledged the risk, but said over the past several years, the company has sold more than three billion miles and points.
"Even if something did arise, we still guarantee payment," Hoffman said. "You would keep the payment even if your account got shut down."
While flipmymiles.com said it guarantees payment, experts warn that there are some fly by night companies buying and selling miles and points.
"If you sell your miles to a company, they take them all and then don't pay you, you can't really go to the airline and say 'hey i sold my miles and this guy didn't follow through on his payment," Kelly warned.
Carlyn had no problem receiving payment, and soon after she sold her miles, she got an email indicating the company had used them to book someone a ticket to Paris. She also got a note from the mileage broker warning her to contact them if the airline should inquire about the ticket. Carlyn said she's not worried and that she's happy she made the deal. "I made money selling miles that I'm no longer using, and somebody else that needed a last minute flight was able to save some money."
Flip my miles says the going rate for frequent flyer miles is about one cent per mile. So if you sold one hundred thousand miles, you'd make about a thousand dollars. They say, selling points is more lucrative. They're worth about one-point-three cents per point. So, cashing in one hundred thousand points could mean about thirteen hundred dollars.
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