SkyMiles cardholders can now “borrow” Delta miles, earn them later

Delta and American Express (a CreditCardForum advertising partner) are inviting SkyMiles cardholders to take an interesting gamble: Borrow miles for that trip you want to take (and don’t have enough miles for) and then earn them later. They’re calling the program Fly Now, Earn Later.

Is this a good deal for travelers? Or a trap? Here’s what to know.

How Fly Now, Earn Later works

This perk is available only to those with a co-branded Delta SkyMiles card from American Express.

You can check via online banking if you’re eligible to borrow miles and how many you’re able to borrow. The number of miles you can borrow is linked to your spending on the card, so it will vary by person.

So, say American Express and Delta have deemed you can borrow 20,000 miles. If you accept, you’d get those SkyMiles deposited into your account. You’d then have six months to earn them by spending on your card. Regular purchases earn 1 SkyMile per dollar, while Delta purchases earn 2 SkyMiles per dollar. Therefore, you’d need to spend $20,000 on the card in regular purchases, $10,000 in Delta purchases or some combination of both.

If you don’t earn back the miles you borrowed within six months, you will be charged for them — 2.5 cents per mile. So, if you still have 10,000 miles to pay back out of the 20,000 you borrowed, you’ll get charged $250.

A good deal — or a trap?

As with all things credit cards, it all depends on whether you use this perk wisely — or whether you use it to get into mile-debt. There are plenty of reasons Fly Now, Earn later is appealing:

  • You can snag a rewards seat before the rewards space disappears instead of waiting a few months to earn enough rewards. Anyone who has tried to book rewards seats for peak travel times knows how quickly those seats can disappear — or get bumped into a higher redemption tier.
  • It’s easier to take a travel buddy. Maybe you have enough miles for only your ticket but want to travel with a spouse or friend. If Fly Now, Earn Later allows you to borrow 25,000 miles, that could be enough for a second domestic round-trip airfare.
  • You might be able to bump yourself to first/business class. If you have enough miles for an economy ticket, the miles you borrow could be used to get you a first-class or business-class ticket instead.

Yet, while the ability to get thousands of miles up front is appealing, you’ll want to consider the following precautions:

  • If you don’t earn the points back within six months, you’ll be paying more for SkyMiles than they’re worth. SkyMiles are worth about 1.2 cents each, not the 2.5 cents you’ll be charged for them, according to the latest point valuations from The Points Guy.
  • Taking advantage of Fly Now, Earn Later may mess up the rest of your rewards strategy. If you borrow 20,000 SkyMiles, you need to spend $10k-$20k on your card in the next six months. That could be problematic if, say, you’re trying to earn other rewards currency on other cards. And it could be especially problematic if another card comes out with a killer sign-up bonus that requires you to spend a few grand within a couple months. If your regular spending isn’t enough to cover both that sign-up bonus and the money you need to pump through your Delta card, you’ll have to choose between missing out on a big bonus — and paying more for SkyMiles than they’re worth.

The bottom line: If you use this perk well, it can be a great deal for you. If you don’t, it’s simply a great deal for Delta and AmEx, who get the interchange fees from all those purchases you’re now obligated to use your Delta SkyMiles card for AND 2.5 cents for every mile you don’t earn back in six months.

So use Fly Now, Earn later strategically, not speculatively. In other words, take advantage only if you have a specific trip in mind — and preferably only if you’ve found sweet rewards space on Delta or another SkyTeam alliance carrier. Don’t borrow tens of thousands of miles just because you can. It’s not worth the hoops you’ll have to jump through to earn them back and could actually limit your options if you need to hop your spending to another card to chase a better rewards opportunity.

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