Why buying miles outright is sometimes a good idea

As a general rule I hate the idea of buying points directly for cash. Even with the occasional US Airways 100% bonus I’m not completely convinced that it is the right move, at least for me. I’m not entirely sure why (or even if) I’m broken that way, but it just doesn’t seem the same. Still, every now and then a deal comes along which screams out to be at least tried. It seems like today is one of those days.

I see this whole obsession as a game of arbitrage, acquiring the points at a discount and redeeming at a higher value. Sometimes that’s not entirely possible. At least not directly. So when an opportunity to play the game in multiple steps comes along I get even more interested, particularly as the associated challenges make it more fun to me. In today’s example it seems that a two step process can yield rather impressive results.

The Icelandic economy collapsed a couple years ago thanks to unfortunate arbitrage plays so maybe their airline is just trying to catch up on the fun. It seems that they’ve got quite the deal available for redemptions on Alaska Airlines flights. Reading OnlineTravelReview this afternoon I came across the details of this deal. Very interesting, indeed. Not only is the current exchange rate from Icelandic Krona to USD or EUR rather favorable right now to folks not in Iceland (arbitrage #1), but the redemption rates of Saga Club points on their partner Alaska Airlines is also quite favorable (arbitrage #2). A glorious deal in the making.

The gist of it is that 30,000 Saga Club points is enough for a first class return ticket on Alaska Airlines metal. Anywhere they fly. And from now until September 28th you can purchase points in the Saga Club program and get a 20% bonus. The cost to purchase 25,000 points – netting 30,000 with the 20% bonus – is only about USD $328. That’s a tremendous bargain. Assuming availability (I’m a bit less inclined to book from the East coast because of that) a trip to Hawaii in first class is going to run you roughly $370. That’s not bad at all.

More details and the original math can be found here.

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.


  1. I’m assuming you would want to use a CC with no foreign transaction fees if you buy these points…

    1. Excellent point, Grant. Were I a better CC shill I certainly would have included a link to some no f/x card sign-up in there. 😉

      The miles buy will charge in Icelandic Krona so definitely use a 0% f/x card if you have one.

  2. Wow, this seems like a real hidden GEM. I am on the east coast, ATL. AK operates a flight between ATL and SEA, but I know nothing of the AA redemption rules. Do you know if I would be able to book FC from ATL to HNL for that 30K miles? or ATL to FAI for that matter.

  3. I just purchased 50,000 + 10,000 Bonus Points. Email from Chase because I used my CSP card:
    “A charge of ($USD) 641.13 was authorized at POINTS ICELANDAIR on 08/17/2012 12:53:44 AM EDT”. Anyone know if this will count for double points on my CSP?

  4. While this is a great deal (thank you for posting!), be aware it’s not quite as rosy as it may seem on first glance. People (especially east coasters) will find very limited availability with extremely laborious routings with the longer segments possibly in coach (i.e. KOA – SJC – OAK -FLL). Oh, and that’s leaving KOA on Friday and arriving FLL on SUNDAY, with an overnight in SJC for example. I don’t believe the AK first class product is *that* good!

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