How to Get the Most Out of Your Frequent Flyer Miles

When’s the best time to cash in?

There could be a breakthrough in a bitter standoff between the nation's third-biggest airline and its 7,500 active pilots.

There could be a breakthrough in a bitter standoff between the nation's third-biggest airline and its 7,500 active pilots.

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You've done the hard part: You've racked up thousands of frequent flyer miles through trips, airline malls, and your airline miles credit card. Now you've got to figure out the best way to use your miles.

If you're not planning a trip in the near future, you need to make sure to retain the miles you've earned. "Keeping them current is hardly an effort," says Joe Brancatelli, publisher of the travel website JoeSentMe.com. Brancatelli says most airlines require some type of activity in 12 to 18 months, depending on the airline. (Delta miles don't expire, for example, and Air Canada miles expire after seven years, regardless of activity on the account.)

[See 10 Ways to Avoid Airline Fees]

Activity doesn't mean you have to redeem miles, however. For example, you could make a purchase with your airline miles credit card or shop at the one of the airlines' online malls.

Shopping at online airline malls not only prevents your miles from expiring, it can also earn you bonus miles. For example, some airlines will give you six, seven, or even eight miles per dollar when you make purchases online from stores like Best Buy, Crate & Barrel, and Gap through the airline's online mall, says George Hobica, founder of Airfarewatchdog.com. "Anyone who buys anything online and is not going through the airlines' shopping malls is throwing away easy points," Hobica says.

Keep in mind that you'll likely have to pay fees when you cash in your frequent flyer miles. "There's no such thing as an absolutely free ticket anymore," Brancatelli says. Airlines require you to pay taxes for your flight, which could range from $5 to $50 domestically and up to $600 internationally, and many also impose a fuel surcharge. On a British Airways flight from Washington to London, Brancatelli says the fuel surcharge alone could be from $300 to $400.

[See 11 Easy Ways to Slash Travel Costs.]

Those kinds of fees can't be avoided, but if you plan your trip far in advance, you can avoid late-booking fees. A number of airlines charge a fee for "close purchases," which is typically within 21 days of the flight, Brancatelli says. Booking your trip a month in advance will help you avoid that extra fee.

It's best to redeem your miles through the airline's mileage program website rather than over the phone, because most airlines will charge a fee if an operator assists you. For example, AirTran charges $15 for booking a flight through its call center. "Like with any ticket you now buy, there is an additional fee for the call center," Brancatelli says. The tradeoff? The call center might be able to find you a seat that's not available online. "No airline website is totally comprehensive," says Brancatelli. For more complicated purchases, such as trips with multiple stops, the call center may be worth the fee.

Save your frequent flyer miles for high-value, international, first-class travel. "Personally, I wouldn't spend 25,000 miles on a domestic round-trip ticket that cost under $300," Hobica says. "You have to try to get as much dollar value per mile as possible."

A good rule of thumb: Never redeem your miles when you'd get less than a penny a mile, Brancatelli advises. "The average customer should aim for two cents a mile," he says. "Getting three or four cents per mile is tough, but if you can get it then you're really getting a lot for your miles."

[See When to Change Investing Strategies.]

If you don't have enough miles to make a purchase, you can buy more miles from the airline. Doing this can be expensive, but the airlines frequently have bonus offers. US Airways, for example, often will give you 100 percent bonus when you buy miles, so if you buy 50,000 miles, they'll give you another 50,000 miles for free.

But snagging the seat you want might be difficult because now there's more competition than ever. "You're not only competing with frequent flyers, you're also competing with frequent credit card users who are getting their miles that way," says Brancatelli.