Tim Leffel’s Cheapest Destinations

A Calculator is a Traveler’s Best Friend

These days you can book most anything on the Internet, but you had better have a calculator handy. Psychologists have lots of fun talking about how easily people get taken by deals that sound better than they really are.

There’s a reason things are priced at $11.95 rather than $12 and there’s a reason more people will take a “buy one get one free” deal at $60 rather than “buy one at $40 and get the second one half price.” (Hint, you’re paying the same total price either way.)

For whatever reason, we have financial triggers in our brain that allow us to be easily manipulated, fooled, bamboozled, or confused. This is especially evident when it comes to frequent flyer mile scams. Hundreds of thousands of people will pay an annual fee for a credit card that earns them mileage without ever pulling out a calculator to figure out whether they will actually come out ahead or not. Here’s how you know. A mile is worth about a penny. So if you spend $75 for an annual fee, you must charge $7,500 in one year just to break even. If you get 15,000 bonus miles for signing up, however, it’s a deal no matter what. Take the deal, use it for a year, then cancel it unless you are going to rack up a lot of charges on it in year two.

No scam compares to the one I just received from Continental Airlines in today’s e-mail, however. Word for word, here is the offer:

“Transfer miles between OnePass accounts all year long with MilePass and help someone else get a head start on reward travel. For a small service fee of $7.50 per 500 miles, you can transfer your miles to another OnePass account.”

Got a calculator? (There’s one on your computer, actually, but it’s probably kind of a pain to use and you have to look under programs/accessories.) Here’s what you’ll find. That “small service fee” of $7.50 per 500 miles means $15 per 1,000 miles. That’s a penny and a half for each mile, which is more than the miles are actually worth to start with. If you transferred the 25,000 miles it would take for a domestic flight, assuming you could even get one for when you wanted it, that transfer would cost you $375. Might I suggest buying a round-trip ticket instead? You’ll probably spend less than $375 and you will still have your miles.