Author Topic: "Airlines Make More Money Selling Miles Than Seats"  (Read 4917 times)

Offline Dan

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #15 on: March 31, 2017, 09:52:21 AM »
So chase is actually coming out ahead by offering 1.5 on csr?
I have no idea what Chase pays for miles. Probably varies by airline.
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Offline Baruch

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #16 on: March 31, 2017, 09:55:40 AM »
If the credit card companies pay more than 1.5 cents per mile, then every single credit card company would have a 1.5 cents cashback card.

It would go against all rules of logic and business to say otherwise.

Offline Dan

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #17 on: March 31, 2017, 09:59:59 AM »
If the credit card companies pay more than 1.5 cents per mile, then every single credit card company would have a 1.5 cents cashback card.

It would go against all rules of logic and business to say otherwise.
They do.
CFU
AEP
CDC
COV
ETC
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Offline aygart

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #18 on: March 31, 2017, 10:16:17 AM »
If the credit card companies pay more than 1.5 cents per mile, then every single credit card company would have a 1.5 cents cashback card.

It would go against all rules of logic and business to say otherwise.

  • Why would they pay more if they can get away with less? It is a simple calculation. Does the revenue from the additional cardmembers compare to what it would cost them to give that amount to even the ones who would be satisfied with .01
  • Most cash back card do not have AF
  • They probably do not have the same credit profile
    Quote
    For the banks, people who pay annual fees for those cards to accumulate miles are the closest thing to a sure bet. These consumers typically have higher-than-average incomes and spend more on their cards, which generates merchant fees for the banks. They also tend to maintain high credit scores, which means they pay their bills on time and banks experience fewer defaults.
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Offline JACKBLUE

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #19 on: March 31, 2017, 11:40:07 AM »
Nice write up on DDMS!

Offline m.m.

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #20 on: March 31, 2017, 01:10:36 PM »
Nice write up on DDMS!
+1
the reason aa has citi, Barclay, and bank of America is probably makes the most money that way, have three banks buying miles from them...

Offline JTZ

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #21 on: April 02, 2017, 01:33:18 PM »
What is next? How 5x CB cards are goldmines for CC companies? I have a few bridges for all you.  :)
"LESS IS MORE" It is the cumulative effect that kills deals!!! How many times do I have to say this?  >:(

Offline mmgfarb

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #22 on: April 02, 2017, 01:39:50 PM »
What is next? How 5x CB cards are goldmines for CC companies? I have a few bridges for all you.  :)
Most people aren't JTZ with 5x cards
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Offline Yammer

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #23 on: April 02, 2017, 02:05:25 PM »
I'd be shocked if they pay more than a third of that.
I remember when i assumed that Verizon gets a steep discount for the iPhone. It was only when Sprint got the iPhone and the 5 billion deal ( I believe ) was publicized when everyone realized how it works.

Same here

Offline chaaarvy

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #24 on: April 02, 2017, 02:57:16 PM »
Here's an idea for all those with millions of miles: Offer to sell them back to the bank for less than they paid for them originally.
Getting 1.7 cash per mile is pretty good. I'd like to know how such a conversation would go.

CSR: Thank you for calling. How can I help?
Customer: Here's an idea to save you guys money. Remember all those bonuses you gave me? How about buying them back and then posting a higher profit for the quarter?

How many HUCAs would that take?  ;D ;D ;D


Offline Dr Moose

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #25 on: April 02, 2017, 03:00:33 PM »
If only banks knew they can get a better deal buying the points on the grey market ...
Hey there! I am using DansDeals Forums.

Offline mmgfarb

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #26 on: April 02, 2017, 03:04:10 PM »
If only banks knew they can get a better deal buying the points on the grey market ...
I wonder well that would play with the airlines
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Offline chaaarvy

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #27 on: April 02, 2017, 03:14:36 PM »
If only banks knew they can get a better deal buying the points on the grey market ...

+ + +

You know all those brokers that boast about buying over 10 billion miles? If the banks would have a side business buying miles, they'd save $100,000,000s. Maybe I'll suggest it at the next shareholder meeting and take a broker's fee. 😂 😂
« Last Edit: April 02, 2017, 03:19:35 PM by chaaarvy »

Offline aygart

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #28 on: April 02, 2017, 05:24:47 PM »
What is next? How 5x CB cards are goldmines for CC companies? I have a few bridges for all you.  :)
I would guess that the ones with category changes and registering etc are since most probably don't take full advantage of the 5x
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Offline BP16

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #29 on: April 02, 2017, 06:25:17 PM »
I remember when i assumed that Verizon gets a steep discount for the iPhone. It was only when Sprint got the iPhone and the 5 billion deal ( I believe ) was publicized when everyone realized how it works.

Same here
You just made that up didn't you?