Mileage brokers – Are they legit?

Mileage brokers2 Mileage brokers   Are they legit?


Many a times, I am asked this question – Mileage brokers – Are they legit?


Short Answer is NO, Selling miles to third parties is against the Terms & Conditions of ALL the airline mileage programs that I am aware of.

Below is excerpts from American Airlines Frequent Flyer Program – AAdvantage

At no time may AAdvantage mileage credit or award tickets be purchased, sold or bartered (including but not limited to transferring, gifting, or promising mileage credit or award tickets in exchange for support of a certain business, product, or charity and/or participation in an auction, sweepstakes, raffle, or contest). Any such mileage or tickets are void if transferred for cash or other consideration. Violators (including any passenger who uses a purchased or bartered award ticket) may be liable for damages and litigation costs, including American Airlines attorneys fees incurred in enforcing this rule.
Use of award tickets that have been acquired by purchase or for any other consideration may result in the tickets being confiscated or the passenger being denied boarding. If a trip has been started, any continued travel will be at the passenger’s expense on a full-fare basis. The passenger and member may also be liable to American Airlines for the cost of a full fare ticket for any segments flown on a sold or bartered ticket.
Fraud, misrepresentation, abuse or violation of applicable rules (including, but not limited to, American or American Eagle conditions of carriage, tariffs and AAdvantage program rules) is subject to appropriate administrative and/or legal action by appropriate governmental authorities and American Airlines. Such action may include, without limitation, the forfeiture of all award tickets, and any accrued mileage in a member’s account, as well as cancellation of the account and the member’s future participation in the AAdvantage program. In addition, American Airlines reserves the right to take appropriate legal action to recover damages, including its attorney fees incurred in prosecuting any lawsuit.

And below is excerpt from United’s MileagePlus Program:

The sale or barter or attempted sale or barter of any such mileage, certificates, awards or benefits other than as authorized and/or sponsored by United is expressly prohibited. Any mileage, certificates, awards or benefits transferred, assigned or sold in violation of the Program Rules, in addition to exposing the member to the penalties otherwise associated with violations, may be confiscated or canceled. The use of award tickets that have been acquired by purchase, barter or other conduct in violation of Program Rules may result in termination of membership, cancellation of accrued mileage, certificates, awards or benefits, confiscation of the tickets, denial of boarding with respect to the ticket holder, and, at United’s discretion, completion of the travel only upon payment of an applicable fare.

My advice would be – if you don’t want to risk losing your miles because an airline said you broke the rules, you should AVOID them.
If you really think your miles are useless for your future travel (assuming you travel enough now that you can’t really use them, and don’t ever foresee a time in the future where you could use them), and want to cash them out now for something else…….aspx#shopping….&title=auction…ept/AA_redeem/



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Why aren’t airline reward miles considered virtual currency like Bitcoin?

Before I jump into this question – Why aren’t airline reward miles considered virtual currency like Bitcoin?

What is Bitcoin?
Bitcoin is, depending on your perspective, either a new form of money that doesn’t tie itself to any country, or a payment processing option that is able to offer lower fees than credit cards (these fees are charged to merchants and passed on to customers in the form of higher prices).
The currency was born on the web and is not minted into physical form (there are people who make unofficial physical coins, but the value of the physical coin is that it is tied to a digital quantity of Bitcoin). Unlike some digital currencies (e.g. the in-game ISK in Eve Online or Frequent Flyer miles for an airline) there is no central authority. The computers in the network convene as peers to come to a consensus on how the currency is issued into circulation and making sure that it flows from owner to owner correctly (i.e. if I have 1 Bitcoin I can’t give you 2 Bitcoins).

To use Bitcoin you have to have a wallet–a program that stores the information that allows you to spend your Bitcoins. There are several options here, from the default QT client to the Armory client (which offers advanced security features), to Electrum (which is lightweight and uses less memory and hard drive space), to online wallets like (online wallets are inherently less secure, but Blockchain does a good job and is easy to set up).

Ultimately to a user Bitcoin is designed to be like digital cash, contrasting with credit cards. You don’t have to give a lot of (or, really, any) identifying information to hold, accept, or send Bitcoin, although it is not perfectly Anonymous. It is also designed to be like digital gold, in that there is no way to arbitrarily inflate the currency–there will be a theoretical max of 21 million Bitcoins ever produced, and those 21 million coins will be produced at a predetermined rate; a little over half have been issued at this point (11.79 million).
What can I buy with Bitcoins?
You can buy a wide variety of things with Bitcoin, although not nearly as easily as with credit cards or Paypal (right now). Some website lists stores that accept Bitcoins as payment; it is quite an extensive list. Most of the places on the list are either small businesses whose owners have been turned on to Bitcoin or internet vendors for whom a fully digital currency is convenient. There are a lot of vendors for electronics and for Gold or Silver since Bitcoin attracts technology enthusiasts with its technical nature and Gold/Silver hoarders since Bitcoin has a lot of great properties that shine if your local government collapses. There are also quite a few people who sell illegal or otherwise unsavory goods for Bitcoin (e.g. Drugs, Guns, Porn) since it is, in many ways, like digital Cash.
In the end you can buy with Bitcoin anything that someone else is selling with Bitcoin.

What is [its - Bitcoins] worth?
That varies minute to minute or hour to hour, just as any currency varies against any other on foreign exchange markets. Right now 1 Bitcoin is about 110-120 US Dollars, which has been holding fairly steady. Since ~$115 is so large it is often more convenient to think of Bitcoin in terms of mBTC–1000 mBTC is 1 BTC, which puts 1 mBTC about on par with a dime. This isn’t even close to the limit of divisibility of Bitcoin.

How is “Virtual Currency” different than “Real Currency?
In contrast to real currency, “virtual” currency is a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency. In particular, virtual currency does not have legal tender status in any jurisdiction. This guidance addresses “convertible” virtual currency. This type of virtual currency either has an equivalent value in real currency, or acts as a substitute for real currency.
Now that I have explained about Bitcoin, let’s consider original question – Why aren’t airline reward miles considered virtual currency like Bitcoin?

Following are the reasons for that:

  • Airline Miles are not exchangeable. Buying/Selling miles is strictly prohibited by all airlines TOS (Terms of Service).
  • Trading of any capacity is prohibited by the airlines TOS, in the past they have been known to forfeit large mileage balances when they find this sort of activity to be taking place.
  • You cannot transfer miles from an airline to a credit card and then get cash from them, it only works the other way around. The exchanging back and fourth is the key to be considered as “Virtual Currency”.

Why arent airline reward miles considered virtual currency like Bitcoin Why arent airline reward miles considered virtual currency like Bitcoin?



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What is the IRS position on Taxability of Frequent Flyer miles for an airline?

What is the IRS position on Taxability of Frequent Flyer miles for an airline?

You probably never paid a penny in taxes for the frequent flyer miles you’ve earned. I certainly haven’t.

There’s only one exception to the no-tax-on-miles rule, as it’s been generally understood. If you WIN frequent flyer miles in a contest or sweepstakes, the sweepstakes host publishes an estimated retail value of the miles in the terms and conditions, and sends a 1099 form to the winner and to the IRS, which considers the prize’s value to be tantamount to extra income and taxable as such.

On the other hand, there are no tax consequences for earning frequent flyer miles for day-to-day transactions, such as shopping, traveling, and so on.

But what about the miles that banks award as incentives to open checking and savings accounts? Or the miles that credit card issuers routinely give to consumers as an incentive to apply for their cards?

IRS Position on Taxability of Frequent Flyer miles for an airline is as follows:

Most major airlines offer frequent flyer programs under which passengers accumulate miles for each flight. Individuals may also earn frequent flyer miles or other promotional benefits, for example, through rental cars or hotels. These promotional benefits may generally be exchanged for upgraded seating, free travel, discounted travel, travel-related services, or other services or benefits.

Questions have been raised concerning the taxability of frequent flyer miles or other promotional items that are received as the result of business travel and used for personal purposes. There are numerous technical and administrative issues relating to these benefits on which no official guidance has been provided, including issues relating to the timing and valuation of income inclusions and the
basis for identifying personal use benefits attributable to business (or official) expenditures versus those attributable to personal expenditures. Because of these unresolved issues, the IRS has not pursued a tax enforcement program with respect to promotional benefits such as frequent flyer miles.

Consistent with prior practice, the IRS will not assert that any taxpayer has understated his federal tax liability by reason of the receipt or personal use of frequent flyer miles or other in-kind promotional benefits attributable to the taxpayer’s business or official travel. Any future guidance on the taxability of these benefits will be applied prospectively.

This relief does not apply to travel or other promotional benefits that are converted to cash, to compensation that is paid in the form of travel or other promotional benefits, or in other circumstances where these benefits are used for tax avoidance purposes.

What is the IRS position on Taxability of Frequent Flyer miles for an airline What is the IRS position on Taxability of Frequent Flyer miles for an airline?

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Best Way to call place Collect Calls from Outside of the USA

If you’re traveling abroad this holiday season or in the coming cold-weather months, be sure to bring instructions for calling the United States collect.

Why? On the off-chance that you’ll need to call your bank or credit card issuer, you’ll need to know how to call the number on the back of your card collect, as no card issuer provides detailed collect-calling instructions. I learned this the hard way from personal experience.

When my laptop was recently stolen in India, I was worried about the thieves figuring out how to access my banking account and debit card number from the computer. To lock my online account and see what other security measures my bank recommended, I called the number on the back of my Chase credit card from my hotel in Mumbai.

The card displays a United States number and then says “from outside the U.S. call collect.” For some reason (I know it was idiotic), I assumed that just calling the number with 011 before it would be a collect call.

Unfortunately, when I received my hotel bill, the hour long call hadn’t been collect after all and I was charged a hefty sum for it. When I returned to the United States, I still thought I hadn’t made a mistake when calling, so I checked with a Sheraton spokesman about why I was charged for the call. He said the guest manager of the Sheraton, where I stayed, called the number I had called myself and was told by a Chase operator that the number is only a collect call if dialed within the United States or Canada. When you dial from elsewhere, it’s an international call.

Basically to call the number COLLECT you would have had to have known the Local Access Number in India for a collect call operator and should not start the call with 001.

I looked at the backs of other banks’ cards, they also had potentially confusing instructions about calling collect from outside the United States, like “International, call collect” followed by the number.

The Easiest Solution to this problem is to have a Skype account from which you can call 800 numbers in the US for FREE. If your laptop is stolen (as in my case) you just go to the business center or to any wifi store (they call these stores “Cyber Cafes” in India), Login in to you Skype account and make your calls.

Lots of people who spend much time overseas, depend on Skype to call their credit card companies, brokers, airlines, insurance companies, etc.

Best Way to call place Collect Calls from Outside of the USA Best Way to call place Collect Calls from Outside of the USA

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Gambling Safely – On the Road

Online casinos provide games that players can play either for free or using real money. If they opt to use real money, then they will need to fund their player’s account. There are a number of ways in which this can be done. Online casinos only permit members to do this through the use of the most secure payment methods. After all, sensitive financial information is being transmitted through the internet. By using secure methods, one’s information is protected. No-one wants to be away enjoying themselves at and unlawfully lose money from their account.

Gaming Club Gambling Safely   On the Road

One of the most popular as well as a secure payment method is PayPal. It is easily one of the most recognisable and accepted in the online casino world. When creating a PayPal account, users must provide a source of funding for the account. This can be a banking account or a credit card. Once this is done, providing funds can be quite simple. PayPal is equipped to serve citizens from a wide range of nations. They can accept a variety of currency and deftly convert it into another preferred currency for the member. This helps to further widen the appeal of this electronic wallet service.

PayPal makes it quite easy to transfer money into the account. This is true when a bank account has been linked to the PayPal account. On the other hand, transfers from credit cards do take longer. Usually a few days is all that are needed. Another benefit of choosing PayPal is the absence of additional fees. Many other payment methods will charge added fees every time money is transferred in or out of the casino account. PayPal levies no charges. When a player has accumulated some winnings in their players account, they may wish to withdraw them. To do this, a withdrawal can be facilitated through PayPal. It is also possible to withdraw the money to a different account than the one used to fund your online casino account.

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Air India SBI Visa Signature Review

Air India SBI Co branded credit cards Air India SBI Visa Signature Review

Air India SBI Visa Signature Review - Especially for the Indian Readers of this Blog – And probably this is the Best Airline Rewards Card in the World now.

Amazing value proposition. Best card for earning miles in the market today, if and only if you are willing to fly Air India.

- 20,000 Miles initially plus a bonus of 20k if you spend above Rs 3 Lakhs in First Year.

- Rs 5 Lakhs annual spend can get you 40k Bonus which is a one way ticket to New York and converts to 8 miles/Rs 100 spent

- Rs 10 Lakhs annual spend can get you 90K Bonus which is the round trip ticket to New York and converts to 9 miles/Rs 100 spent

This is TERRIFIC offer for my Indian Readers.

Also you get 20 Miles/Rs 100 if used for purchases on Air India Tickets.

Application Link: Click Here (I don’t get any referral for this card)

Sign-Up Bonus: This credit card offers a tidy sign-up bonus of 20,000 Air India miles to start you up with the credit card product. You also get an upgrade voucher from Air India.

Renewal Benefits: You get 20,000 Air India miles on payment of fees every year, and another upgrade voucher.

Fee: The credit card fee is tagged at (upto) Rs. 4,999 plus taxes per annum.

Eligibility: Not publicly disclosed

Features: The card comes with the usual stuff, such as a Priority Pass at the lowest end, where you need to pay $27 every trip to the lounge. There is also access built-in to the Visa Lounge Access Program, which offers you lounge access to 9 different domestic airport lounges.

The other feature which is noteworthy, is the ability to step up in the Air India Flying Returns program based on your spend. For spending Rs. 5,00,000 per annum, you get into their Silver tier, and for spending Rs. 10,00,000 per annum, you get into their Gold tier.

Earning Flying Returns Miles: To earn Flying Returns Miles, you just got to use the card. You earn 1 mile for every Rs. 25 spent on the card, and 1 mile for every Rs. 5 spent on Air India tickets. That is just not it, you even get milestone bonuses along the way, as shown below.

To put it in perspective, if you spent Rs. 10,00,000 in a year on this card, you could get into the Gold club of the Air India frequent flyer program, which gives you 2 upgrade vouchers, access to AI lounges, and a very low cancellation/rebooking fee of Rs. 200 on all domestic tickets of Air India. Plus, you get the following miles:


Annual Spends  Cumulative Bonus Reward Point
Rs. 3 Lakh  20,000
Rs. 5 Lakh  40,000
Rs. 10 Lakh  90,000

Spend Based Miles for Rs. 10,00,000: 40,000 Miles

Cumulative Bonus miles: 90,000 Miles

Total Mileage earned: 130,000 Miles

Which makes it a fabulous spend of only Rs. 7.69 per mile earned. WOW!

Redeeming Flying Returns Miles: Of course you can use your miles on Air India redemptions, but then you can also use these miles for redemptions on Singapore Airlines & Lufthansa, and for upgrades on Air India flights. You need only 112,500 points for a first class redemption to the USA.

Overall assessment: I’ve said it before, and I am saying it again – This is a TERRIFIC offer. I’m amazed by the earning potential on this card, and it come with nifty benefits as well.

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3 ways which may qualify you for a business credit card

3 Ways You May Qualify For A Business Credit Card 3 ways which may qualify you for a business credit card

3 ways which may qualify you for a business credit card:

1) Existing Business

You own an existing business.  For example, you are John Smith and you own Acme Plumbing.

Well, that’s easy then, isn’t it?  Just fill out the application form with your business information and hit submit!

2) Business Start-Up

In my experience, you don’t need to have an existing business to apply for a business credit card as a business start-up.

You could be contemplating starting a business venture and are applying for a business credit card to help keep your business expenses separate from your personal expenses.

Starting up a business is a very legitimate reason to want a business credit card!

I updated the post to mention that I learned about this method of getting a business credit card by talking to a Chase telephone representative.  I was explaining to the representative that my wife applied for the business credit card in order to to buy crafts and make paper bookmarks to sell on

“Oh!” said the representative.  “You’re in a business start-up venture.  Here’s what we can do…”

Here are some potential start-up situations which you may have experienced:

  • Are you thinking of selling your stamp or watch collection?
  • Are you thinking of selling books on e-bay or
  • Are you thinking of having regular yard sales and need to buy refreshments & candy for the visitors?
  • Are you on holiday in Turkey and thinking that you could sell that cool souvenir to your friends back in the US?
  • Are you thinking of selling your delicious homemade cookies as a side hobby?

So take a few minutes to think about your situation.  You just may find that you have a business start-up situation in your life that you never knew about!

Remember, in my experience, to get a business credit card as a start-up, all you need is the intent of starting a business.

Now start-up business are very risky to lenders (only 1 in 2 survive more than 5 years), so banks are usually stricter in approving business credit cards for start-up businesses.  Also, the banks will usually assign a very low credit line to business credit cards which are for start-ups.

3) You’re already in business but don’t know it!

I’ve observed  that many of us may be involved in business activities, but not know it.  That may be because our business activities produce a loss instead of a profit, and we usually associate businesses with profits!

For example:

  • If you sell used books or CDs on ebay or you may be in business.
  • If you have yard sales every 2 months, you may be in business.
  • If you buy trinkets while on holiday in the hope of selling them for a profit, you may be in business.

My suggestion to the readers who emailed me is to think carefully about whether they have or will be engaging in business activities.  Remember, you don’t need to be an incorporated company to engage in business activities.

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