This is a follow-up to my previous post because I feel this particular arbitrage opportunity deserves a look. My reader Audrey has mentioned in the comments that she was considering buying 25,500 SPG points and transferring them to Virgin America in order to take advantage of lucrative match offer from Jet Blue.
Note that if you don’t already have an SPG account that has been opened for at least 14 days, you won’t be able to buy SPG points. As a result, you will miss the deadline of July 4th, the last day to send a screenshot to Jet Blue (see my previous post for details).
So, let’s assume that you do have an SPG account that is at least 14 days old, but don’t have any points in it. What makes this deal interesting is the fact that through July 1st, you can buy SPG points at 30% off. That means as long as you purchase more than 5,000 points, you’ll pay 2.45 cents per point. You are allowed to buy a maximum of 30,000 points per calendar year/per account.
In light of this promotion, should you consider pulling the trigger? Maybe, but it really depends on your situation. Normally, I’m not a fan of buying points, but this offer can make sense for some. It’s definitely worth considering if you need to top off the account to get to the next match level.
First, here is how Jet Blue match stacks up:
There are only two purchase levels that make sense IMO: 10,500 SPG and 25,500 SPG points. Why these numbers? Well, if you buy 10,500 for $257.25, you’ll be able to transfer them to Virgin America and have 10,500 Elevate points. If you decide to participate in the match, you will qualify for 30,000 Jet Blue points. For those on a budget, this might be the best option.
Let’s say you’ll be able to find a roundtrip ticket on Jet Blue for a bit less than $143 (doable) and fly before the end of August. Your out-of-pocket cost will be $257.25+$143, a total of $400. We are not counting hotel costs, just find a friend who will take you in, OK? Or just burn some hotel points.
In exchange, this is what you’ll get: 10,500 Virgin Elevate points, good for around $230 in airfare on Virgin America. Your 30,000 Jet Blue points will give you between $300 and $500 in airfare on Jet Blue (or possibly more). So, to recap, in exchange for investing $400 plus a day away from your family, you will get value of between $530 and $730, good toward airfare on two different airlines.
Probably not to most. You are spending a lot of money and time, so IMO profit margin is questionable. However, if you have to fly somewhere before the end of August anyway and Jet Blue happens to serve that route, it is something to consider. In fact, I would take a connecting flight and pay a bit more in order to get the bonus.
What about buying 25,500 SPG points?
You would be paying $625 for this amount. If you transfer them to Virgin America, you will end up with 30,500 Elevate points. That’s because you will be getting a 5,000 points bonus. As a result, you will be eligible for 50,000 Jet Blue points match. Let’s assume that you can take that same $143 roundtrip flight. Your total investment adds up to $625+$143=$768
In exchange you will get 30,500 Elevate points, good for $671 in airfare on Virgin America. Your Jet Blue points will be worth between $500 and $900 in airfare on Jet Blue. So, your investment of $768 will give you between $1,171 and $1,571 in airfare value.
Same as the first deal, I would only do it if I had to fly somewhere anyway and could utilize Jet Blue for my route.
Let’s say you decide to go ahead with this deal because you have to buy an airline ticket anyway. Be aware that it can take up to 24 hours after purchase for SPG points to post in your account. Then it takes at least a day (could be longer) for transfer to Virgin America to go through. Remember, you can’t do anything till your points are in the account.
By then, Jet Blue may pull the plug. According to “T and C” “Offer can be cancelled or modified at any time.” Many in the miles and points community are sitting on a huge pile of SPG points and this is just the push they need to part with them. I predict that Jet Blue will be flooded with requests in the upcoming days. By the time your SPG points hit Virgin America, this offer may no longer be there. Will you be OK with this outcome?
You would also be exchanging flexible points (cold hard cash) for inflexible ones (individual airline points). Do you fly often enough to be able to utilize them without an issue? Or will you plan unnecessary trips just to burn your stash? Few years ago I bought 50,000 AAdvantage miles at a cost of 1.1 cent each. It seemed like a good deal and yet here I am, still sitting on over 205,000 AA miles. I might be able to utilize them for a trip to Europe next year, but with terrible sAAver availability, I’m not holding my breath.
Of course, since both Virgin America and Jet Blue programs are revenue-based, you don’t have to worry about finding award availability. But you do have to worry about high rate on points compared to competitors, potential bad schedule on your flight as well as program devaluation. Even if you have decent options on Jet Blue and Virgin America right now, it doesn’t mean things will stay that way indefinitely.
Most importantly, can you afford to shell out such a significant amount of money? Are there other, more important priorities you need to take care of right now?
A possible alternative
If you are an infrequent flyer, a better route might be to consider signing up for Jet Blue Plus Card I wrote about it before and compared it to other Barclaycard products. This card does pay me commission.
Here are the details of the offer:
- Earn 30,000 bonus points after $1,000 in purchases in the first 90 days
- Earn 6 points per $1 on JetBlue purchases, 2 points per $1 at restaurants and grocery stores and 1 point per $1 on all other purchases
- No blackout dates on JetBlue-operated flights & redeem for any seat, any time on JetBlue flights. – Points required for an Award Flight will vary based on the published base fare at the time of booking.
- Points awarded in your TrueBlue account don’t expire and earn and share points together with Family Pooling
- Earn 5,000 bonus points every year after your account anniversary
- 50% savings on eligible inflight purchases including cocktails, food and movies
- Enjoy Mosaic benefits for one year after you spend $50,000 or more on purchases after your anniversary date
- Get 10% of your points back every time you redeem to use toward your next redemption
- Annual fee is $99, not waived.
The most important part, of course, is the sign-up bonus of 30,000 points. If both spouses get the card, they would have 60,000 points between them, all for $198 in fees. Obviously, this option isn’t for everyone. But if you fly Jet Blue frequently and have a good coverage from your airport, then it’s worth considering. No need to buy SPG points or do mileage runs.
While transferring your existing SPG stash/mileage run scenario can be compelling for many, the math gets trickier if you actually have to buy points. Cash is king. Always.
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