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So I am looking at signing up for the Citi® / AAdvantage® Platinum Select® MasterCard®

However, I am pretty confused at how all of the miles redemption options work. I understand that the AAnytime miles prevent you from having cancelation fees, etc if you are not yet an Executive Platinum member...but when you are actually booking the flight with points why does the chart that they have that outlines the points say it could cost 50,000 points and up to $60 worth of fees?

What are these fees and why does it cost potentially $50,000 worth of points and $60 additional dollars?

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First, 50,000 points is not the same as 50,000 dollars. Most airline companies allow you to buy (or top up) your points for money, and you'll end up paying around $10-20 for 1,000 points, therefore 50,000 points equates to $500-$1000 in money.

Next, to answer your actual question, you need to understand how airline tickets are priced. The cost of the ticket is composed of several items:

  • actual cost of the ticket that the airline charges you
  • government imposed taxes (e.g. X dollars for each short leg and Y dollars for each long leg)
  • airport imposed fees (e.g. Z dollars for each outgoing flight)
  • airline imposed surcharges (e.g. fuel surcharge, etc.)

Overall, the actual price of the flight is often a quarter of the total amount you have to pay for your ticket.

Now, when you are using your loyalty points to pay for the ticket, these points can only be applied toward the actual cost of the ticket (i.e. the first bullet point above). You still have to pay money for everything else.

As an example, a couple of years ago, I used loyalty points to pay for a business class ticket from London to Sydney on Virgin Atlantic. I paid 200,000 points plus about over $1000 in money for taxes and fees. On the same trip, I used loyalty points for an internal flight within Australia - I paid 30,000 points plus another about $50 for taxes, fees, etc.

Hopefully, this gives you an idea of how reward tickets (that's what they are called) work.

  • Wow, who do you fly with. Most of the airlines I fly regularly on want 3 to 5 cents per mile. – user13044 Sep 20 '15 at 1:01
  • I feel that it may be useful to qualify "50,000 points equates to $500-$1000 in money" by noting that this "exchange rate" is average for purchasing miles in cash, but at least in the USA, it is a poor rate for earning miles via credit card rewards. On the rewards side, 1 mile per cent spent is poor, 2-3 miles per 1 cent spent is better. It follows that earning 50,000 miles for $500-$1000 in spend is very poor - 1/2 to 1 mile per cent. In short, it's usually much better to earn your miles with rewards versus purchasing them - only purchase to top off in order to redeem a rewards ticket. – Jeremy Sep 20 '15 at 1:50
  • My above comment is not meant to contradict your example, rather to add additional color around the various going rates for rewards earnings vs purchasing miles from the airline. – Jeremy Sep 20 '15 at 1:52
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    @AleksG AA does not levy the fuel surcharge on award tickets, except when the award ticket is not on AA metal. This is the same for most non-European carriers. The "fuel surcharge" (which is just money to the carrier, not actually anything to do with fuel) is by far the largest component of that 1000 USD you paid for your ticket to Sydney. – Calchas Sep 20 '15 at 12:08
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    @Jeremy Very late reply now that I'm finally allowed to comment. 50,000 miles for $1000 in spend would be an unbelievably excellent CC reward rate! I think you confused cents with dollars: 2 miles per 1 dollar spent is indeed a plausible (very good) rate. It's quite appropriate that the CC reward rate is much less favorable than for "topping off" miles, because for the former (CC) you are of course getting a normal product or service for the money spent, but for the latter you are giving money to the airline and getting nothing but the miles. ... – nanoman Jun 5 '18 at 13:49
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While Aleks G's answer gives a general idea and may apply to other frequent flyer programs, AAdvantage does not simply charge all fare elements other than "base fare" in cash for awards. Government and airport taxes are charged, but fuel surcharges are not charged for flights operated by American (which all AAnytime awards are) or indeed operated by any airline other than British Airways and Iberia - source. For flights within the United States, AAdvantage award taxes are only $5.60 each way. Perhaps some international AAnytime flights would get "up to $60". (Whopping fees in the $1000 range can happen for AAdvantage awards on British Airways, which would necessarily be MileSAAver awards.)

Other notes on your question:

The AAdvantage currency for awards is called miles, not points. (Points have a role in elite status, not directly relevant here.) AAnytime awards indeed appear to have no fees for changing origin and/or destination without changing the award type, but are still subject to the $150 fee to cancel and redeposit miles (except for Executive Platinum members) - source. Note that changes keeping the same origin, destination, and award type are free for all AAdvantage awards.

As noted in Aleks G's answer, 50,000 miles should not be described as "$50,000 worth". An estimate of the effective value of those miles is ~$900. You might, though, earn the 50,000 miles by spending $50,000 on merchandise on the credit card.

  • A friend of mine just flew from New York to London using aadvantage miles. He paid about $400 in taxes, fees and surcharges in addition to 50000 air miles. – Aleks G Sep 20 '15 at 9:47
  • @AleksG He was ripped off. ;) Was he flying on AA metal? – Calchas Sep 20 '15 at 12:10
  • @AleksG This is par for the course if it was a MileSAAver on British Airways. American-operated transatlantic awards have lower fees, but their MileSAAver availability disappears faster for this very reason. – nanoman Sep 20 '15 at 22:49
  • Yes, this was a BA operated flight – Aleks G Sep 21 '15 at 8:35

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