Are You Mismanaging Your Air Miles?

from Mark Kahler

What could be better than earning free travel tomorrow when you pay the bills today? Frequent flier programs are a cherished institution of budget travel. So you might be surprised to learn airlines cherish them far more than most travelers, and with good reason.

Take a moment to look at this from an airline perspective. A frequent flier program can keep a major airline in firm control of its hubs while chasing away budget carriers. Customers of all carriers tend to be loyal when they have frequent flier accounts.

Best of all, many consumers manage their miles so poorly that the actual cost of maintaining the programs might be far less than you imagine.

What You Need to Know

• Accumulate Miles Aggressively - Travel, credit card programs and airline partners all provide ways to get mileage. Make note of the program's "partners". Which hotels and rental car companies cooperate? Use them!



• Never Let Miles Expire - If you'll have mileage remaining after planning a flight, consider expanding that flight to use ALL of the miles in your account. Ask about converting the soon-to-expire mileage into an award certificate, which typically will extend your decision time by about a year.



• Find the Lowest-Priced Fare, then Compare - Let's say you want to fly to London from New York. If the lowest fare available is $365 USD and you're planning to use 50,000 miles, the airline wins. Each mile is worth at least one U.S. cent.



• The Goal is Free Travel, Not Big Mileage - Resist the temptation to watch mileage pile up in your account. Consider breaking that 100,000 mile block into four or five segments, each of which would be good for a free flight.



• Limit Your Accounts - Concentrate on one or two programs. Consider plans that include a number of airlines.



• Treat frequent flier miles as you would money in a bank.

What do that birthday gift for Uncle John and the red-eye flight from Chicago to Los Angeles have in common? Both can produce frequent flier miles.

Long ago, someone figured out that actual air miles flown should not be the only basis for awarding free travel. Accordingly, some credit card companies offer attractive deals for travelers. You earn a mile or more for each dollar charged. But please understand this: no one is giving away miles. You're buying them.

Likewise, when you purchase a ticket and make a trip, you pay for the service and the frequent flier miles. They are a commodity, and are not awarded without a price.

But that's not the way many travelers treat their mileage. You would think their accounts were prizes won at a carnival. They throw away miles right and left because, after all, it's not really money. They let mileage expire.

Don't think the airlines haven't noticed this behavior.

More than 50 million travelers have miles to their credit. Millions of those miles expire without being used. Every time that happens, the airlines pocket a nice dividend.

I remember a presidential debate in which someone tried to cut off Ronald Reagan. He replied incredulously: "I paid for this microphone!"

You should have the same attitude whenever someone tries to cancel, discount or steal your frequent flier miles.

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This article was written by Mark Kahler from About.com.