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No, ThAAnks – Why I’m Not Basking in this Mileage Bonus

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Bask Bank American Airlines

Bask Bank American Airlines Bonus

Airline miles are fun from multiple angles.  Accumulating, strategizing, and finally using them while completing a trip is a joy for many hobbyists.   While I love doing the same for cash back, it’s often perceived as comparatively boring.  Banks are looking to woo consumers with miles and other non-cash currencies, and it obviously works.  A new Bask Bank American Airlines bonus is a recent example.  I’m not falling for it, and many of you shouldn’t, either.  Today, I’m stepping through why to avoid it.  But first, here’s a little background on the offer.

Bask Bank American Airlines Offer

New and existing Bask Bank customers can earn 4k, 10k or 20k American Airlines bonus if they make new deposits of $10k, $25k, or $50k respectively into their Bask Mileage Savings Accounts between June 1, 2023 and August 31, 2023 and maintain the new deposit balance for 180 consecutive calendar days.  Access the full offer terms here. 

Additionally, Bask Mileage account holders currently earn 2.5 AA miles per dollar saved annually.  For simplicity, let’s look at how this would work out for saving the max $50k for 12 months.  Taking into account the 20k bonus and 125k “normal” miles earned, that’s 145k miles in 12 months.

That 145k number pops.  Many travel enthusiasts, and especially AA fans, will naturally be tempted.  But here are some areas to consider before jumping on it.

Bask Bank American Airlines
You’ll have to fork it over for the Bask Bank American Airlines bonus.

You’re Buying Miles

At the risk of stating the obvious, anyone who goes after this deal is buying miles.  Bask account holders are giving up cash to receive miles instead.  But we cannot ignore what can be easily earned elsewhere.  Savings account interest rates at many banks are well over 4%, sometimes substantially on accounts with more requirements.  Two of my online savings favorites are Ally and Discover.  These online savings accounts are easy to open and have no fees or minimums.  Current rates are 4.25% and 4.30% APY for existing customers, respectively.  Let’s use the lower Ally rate for comparison.  Those taking on a bit more risk with investing could obtain a better return, but we’ll focus on a safer option for this example.

Parking $50k in an Ally account earns $2,125 in interest at the current rate.  Bringing in the 145k mile number into the equation, an individual would pay 1.4655 cents per mile in this example.  I’m far from an airline miles value expert, by choice.  But most anyone can understand that a traveler must obtain at least 1.4655 cents per mile (and probably substantially more)  on a redemption to make this deal worth pursuing.  And that return’s far from guaranteed, which leads me to my next point.

Bask Bank American Airlines

Devaluation

Across the travel rewards landscape, devaluations have been obfuscated for years.  I’ve noticed that American award prices, even for the same searches, change within minutes.  In terms of award flights, what an individual can obtain from one day to the next is far from assured.

Bigger picture, redemptions are even iffier.  Individuals will receive the 20k bonus only after the 180 day period.  For normal earning, an account holder earns a prorated monthly deposit of miles.  It takes 12 months to get to that 145k total.  In the meantime, AA can mess with redemption rates however they want.

In my opinion, the ground is even shakier here due to the massive growth of interest (pun intended) in AA thanks to their diabolically genius Loyalty Points program.  More people are earning American miles, creating more competition for award seats.  Moving forward, American devaluing redemptions even more based on increasing demand won’t ever surprise me.

Locking Up Your Money

If the Ally account holder needs to dip into savings over the 180 days, their decrease in interest is incremental.  The loss im interest is fairly slight for a relatively small withdrawal.  Meanwhile, if the Bask account holder with a $50k balance does the same, per the offer terms, the bonus miles are cut in half to 10k.  Consequently, those Bask account holders will be paying a higher rate for less miles than they originally intended.

Bask Bank American Airlines

Other Alternatives

There’s a much easier way to pick up American miles.  Without much effort, individuals can earn more than 145k American miles, sometimes more (or infrequently less), by meeting two credit card signup bonuses.  It’s even easier, considering both Citi and Barclays offer multiple AA cards, each with personal and business versions.  Meanwhile, that $50k is earning more in savings or investments.

Caveats

Of course, my example isn’t perfect, as it doesn’t take into account changing interest rates over the next 12 months.  And taxes should be considered, as well.  Bask values AA miles at 0.42 cents each for tax purposes, which may justifiably draw in some consumers in higher tax brackets.  But that means less for people with lower/no tax obligations.  Regardless, crunch the numbers for your own situation before deciding.

Bask Bank American Airlines Offer – Conclusion

Obviously, I’m not taking advantage of this Bask Bank American Airlines bonus deal.  In addition to everything I just mentioned, we have plenty of American mileage currency.  But it may make sense for some to go after the temporary bonus now, especially if they were interested in pursuing a Bask Bank account, anyway.  Since American isn’t a permanent travel partner in any of the transferrable bank point currencies, it’s natural to place a premium on other methods to earn AA miles in chunks.  But count me out for this one.

Are you pursuing the Bask Bank American Airlines bonus?  Why or why not?

Disclosure: Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.

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Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
Benjy Harmon
Benjy Harmon
Benjy focuses on the intersection of points, travel, and financial independence (FI). An experienced world traveler, husband, and father, he currently roams throughout the USA close to expense-free. Benjy enjoys helping others achieve their FI and travel goals.

Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

12 COMMENTS

  1. Bask offers to pay interest instead of points, I’d include that comparison to show the two options at the same company.

  2. Earning 5% + on 90 day CD’s is a walk in the park. If you park $250K in Bask you get 650K miles. At 5% on $250K you get $12,500 cash, that you can spend wherever you choose. With BASK you have to use the miles on AA. If you go with BASK you get award tickets which give you 0 miles and 0 loyalty points. If you spend the $12.5K you get miles and loyalty points if you so choose. As the airlines and hotels continue to sink into the abyss of customer service in my opinion, cash is king and spend it on the best hotels and airlines you can find. Loyalty no longer amounts to much. If you could get loyalty points on BASK then you might want to reconsider. I’ve purposely ignored the tax consequences of BASK vs CD’s as each individual is different and needs to figure that out for themselves. I’ve even quit accumulating Hilton points and I’m going for a cash back card as Hilton is no longer the Hilton I signed up for in 2003, in my opinion.

  3. As was clearly pointed out, the weakness of the whole proposition is American Airlines messing up with redemption rates + poor inventory availability . Flights that used to go for less than 100K in 2020 now require 3 times as many miles. Cash is king (and you are not tied to any airline).

  4. Bask requires the money to stay put for only 180 days not a full year, so the “lost” interest income is just half of your full year calculation. Nonetheless, I like your argument that this is not a smart way to go. And, of course, the entire miles game that airlines and bank cards play is disingenuous to say the least. You are handed a chunk of miles but those miles are devalued again and again by the airlines. I occasionally find a long haul international flight that gives me serious value using miles. But 90% of my credit card usage is on a card that gives me 2% real cash back.

    • Correct Joe, perhaps I didn’t underscore that first part enough above. Thanks for chiming in with your perspective!

  5. I earning 5.25 to 5.75 interest in money market and cds
    In my worst liquid account 4.75
    For all those reasons a hard pass on bask bank
    Their customer service sucked too when I called too

    • Dwondermeant,
      Hadn’t heard anything either way about Bask’s customer service, but I’m not surprised at your DP. Thanks for sharing!

  6. Comparing Apples to Apples, 4.3% interest rate before tax = 2.5AA miles – 1099 for 1.1c (0.42c / mile x 2.5 miles)
    or 2.5 AA miles = 4.3+1.1c pre tax = 5.4c = So 1 mile costs 2.2c approx pre tax
    All we need to do is factor in tax rate = Fed + State (In NY, CA, MD etc state taxes are 10+%)
    Assuming 10% State and 20% federal= 30% discount So 1 AA mile is 1.54c
    Assuming 10% State and 30% federal= 40% discount So 1 AA mile is 1.32c
    Assuming 10% State and 40% federal= 50% discount So 1 AA mile is 1.1c
    For high income peope this is a good value; for low income less so

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