Does it make sense to buy airline miles?

If you need just 5,000 more miles to qualify for a rewards ticket, is it a good idea to purchase the miles? Make sure it's a good deal before you buy.

Is it ever worth it to buy frequent flier miles?

What if you needed to "top off" your account to qualify for a flight for your dream vacation? Or what if you could earn double the miles for a fee?

In The Wall Street Journal article, "Tempted by Bonus Miles? Do the Math," Scott McCartney answers the question about what frequent flier miles are actually worth and whether it's worth it to buy them, even with a seemingly great deal or promotion.

What travelers paid for those miles

According to the article, travelers who purchase miles pay approximately 3 cents per mile, but redeem them for tickets at 1.5 cents or less per mile. Yet the mileage bonus programs where customers buy miles from the airline are popular. Consider the following:

• US Airways reports that its mileage sales were up 236 percent in 2010 compared to 2009. About 5 percent of its customers pay a fee to double or triple their miles when they buy tickets.
• AirTran Airways' sales from its mileage program were 40 percent higher in 2010 over 2009, totaling $1 million per month.
• United reports 700 double- or triple-mileage transactions per day.
• American Airlines won't disclose sales figures of its "Mileage Multiplier" program, but some customers are buying 10,000 or 20,000 miles.

While it's easy to go crazy over stockpiling miles, they don't deliver much value. Take the example of doubling your miles. From the article: "Double miles between New York and Los Angeles would cost $81 one-way, including an excise tax, for example. But that's 3.3 cents for each of the extra 2,475 miles [a customer would] get."

McCartney also points out the other problems with frequent flier miles, such as difficulty finding the award tickets or upgrades you want and the fact that customers often will cash in their miles for cheap tickets, which yields minimal returns.

The skinny on airline miles

Mile programs began as a way to gain customer loyalty, but the game changed when airlines found they could sell miles to credit card companies, charities and retailers who would give them to customers. Mileage-purchase processor Points.com reports selling approximately $250 million worth of miles to consumers each year.

Purchasing miles costs between 2.5 cents and 3 cents per mile, plus a 7.5 percent federal excise tax. Some airlines also charge a $25 or $30 processing fee. The average cost per mile comes to more than 3 cents. Fine print includes the following restrictions:

• Purchased miles can't be counted toward elite status.
• Miles purchased from the airline are non-refundable.
• Most airlines limit the number of miles you can buy to 40,000 to 60,000 per year.

When it's worth it to buy miles

Travelers usually buy miles to top off their account and qualify for a reward ticket. For example, you might have 35,000 miles, but you need 50,000 for a flight to Europe. You could buy the 15,000 miles you lack.

According to the article, buying miles doesn't always make sense. This is frequently the case with cheaper, domestic flights, where the cost of miles is equal to or exceeds the cost of just buying a ticket. But if it costs less to top off your account, it can be a good deal. Frequent fliers also know that using miles for upgrades and last-minute tickets can be a great deal, sometimes trading in at up to 10 cents per mile, or more.

Another example of how miles can be a good deal is the case of the Alaska Airlines program:

Alaska sells a lot of miles to people topping off accounts, and a lot to people making huge purchases. The reason: Alaska miles, which have no annual limit on purchases, can be converted into tickets on partner airlines, such as first-class seats on British Airways that go for 140,000 miles round-trip.

Purchasing 140,000 miles and paying the fuel surcharge ends up costing less than purchasing a first-class ticket, though the caveat is a limited availability of award seats on British airway flights.

Buying miles for less

If you're keen on topping off your account, but you're not flying first-class or looking for an upgrade, you can find cheaper prices on airline miles. Airlines do run sales, offering bonus miles when you buy a certain number of miles or a discount on mileage multiplier deals.

You also can collect extra miles if someone gifts or sells you their miles. The airline will charge about one cent per mile transferred, plus a $25-$30 fee. Airlines also offer transfer deals, so be sure to see what's being offered. Delta Air Lines, for example, has offered a 50 percent mileage bonus on transfers. The deal worked like this: If someone transfers 10,000 miles to you, Delta would charge $130 for the transfer and give that person 5,000 miles.

When it comes to buying miles, the savvy shopper needs to do the math. Otherwise, a free flight could really cost you. Though it might be a thrill to see hundreds of thousands of air miles in your account, many times you'd be better off parking your cash in a high interest savings account and letting the magic of compound interest help to pay for your flight.

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