Welp. Subprime airline miles are a thing now



Myles Ma

Myles Ma

Senior Managing Editor

Myles Ma is a health care expert & personal finance writer for Policygenius. He edits the Easy Money newsletter.

Published September 14, 2017|2 min read

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Using a credit card is borrowing money. Sooner or later, you have to pay it back.

Many cards offer incentives for doing so, however, in the form of airline miles (or cash back or points).

This year, American Express and Delta made the equation more complicated by letting some cardholders borrow airline miles, which they can "earn" back by spending money. The targeted offer is available to certain holders of Delta co-branded cards.

These include the Blue, Gold and Platinum Delta SkyMiles cards. Check your benefits if you have one of these cards to see if you received the "Fly Now, Earn Later" offer.

American Express did not immediately respond to request for comment on the program. However, according to a screenshot of the offer posted on The Points Guy, the number of miles each person is eligible to borrow varies. Plus, you have to earn the borrowed miles back over the next six months.

If you don't, they'll be charged to your account at a rate of 2.5 cents per mile. Five thousand miles provides about $50 of value when used to book Delta flights, according to Amex's terms, which converts to 1 cent a mile, so ideally you should pay off your borrowed miles before six months, because they're not worth 2.5 cents.

Plus, the SkyMiles cards don't earn miles all that fast. You'll get two miles per dollar, but only for making Delta purchases. Everything else earns one mile for every dollar, except for the Blue SkyMiles card, which gets two miles per dollar on restaurant spending.

This program sounds pretty good if you're trying to book a last-minute vacation and you need a few extra miles to get there. However, the idea of spending more money, and going deeper into debt to "earn back" your borrowed miles sounds risky. Less than optimal. Or, you know, subprime.

Make sure you're able to pay off your extra spending each month or you might face a big interest payment.

Other ways to save on travel

Besides, if you're not a fan of this offer or aren't eligible, there's plenty of other ways to save a buck on travel without going into credit card debt. You can try traveling during the week or late at night to save on airfare.

You can use a travel agent: They still exist, and they can offer inexpensive package deals to your destination of choice. You can also use a vacation rental site like Airbnb or HomeAway.

You may also want to consider travel insurance. It will cost you extra, but the peace of mind may be worth it, especially if something happens on your trip. You can compare quotes here.

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