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Earn miles with your electric bill

Some utilities and cell providers offer miles for switching over. Should you make the move?

By Karen Datko Mar 4, 2010 2:25PM

This Deal of the Day comes from Kelli B. Grant at partner site SmartMoney.

 

Receiving your monthly bills may not seem like much of a reward, but paying them can earn you more travel discounts than ever before. Many airlines have widened the playing field on offers for miles in exchange for doing business with a particular phone or electric company.

 

Continental is offering 5,000 bonus miles for Connecticut, New York and Texas fliers who sign up with Energy Plus as their electric supplier, plus two miles per dollar spent on the supply portion of their monthly bill. United offers a bonus of 5,000 miles when you use its site to sign up for or extend service with a major wireless provider.

 

The move benefits all three sectors: wireless providers; electric companies, which are seeking to cement customer loyalty at a time when deregulation is allowing some consumers to choose their own electric provider; and of course, the carriers, which are using the income from the miles sold to make up for higher fuel prices and cutbacks in consumer travel. “The airlines have figured out that they can make more money selling miles to third parties than by selling tickets,” says Ed Perkins, a contributing editor for travel advice site Smarter Travel.

But does signing up for a phone plan or utility to earn miles make sense for the consumer? Chasing miles promotions for a one-time purchase is often an easy choice (for example, earn 10 Delta SkyMiles per dollar spent at 1-800-Flowers on a one-time purchase by linking to the retailer through Delta’s site). But earning miles on recurring bills isn’t quite as simple.

Switching utility companies or cell phone providers can trigger fees, and may lock you into a contract of at least a year with the new company, says Dan York, deputy director of the utilities program at the American Council for an Energy-Efficient Economy.

 

With those caveats in mind, here’s how to assess the offers:

 

Assess incentives. Many mileage deals are offered in lieu of other incentives. Before you take the miles, check that you aren’t missing a deal for an equivalent or better amount of cash (assuming each mile is valued at a penny). Earned deals like employee discounts would apply regardless of how you signed up, says Schwark Satyavolu, president of BillShrink.com, a comparison tool for cell phone plans.

 

For example, a New Yorker signing up for a new two-year contract with Verizon Wireless would pay $200 for a Motorola Droid. Through Air Tran’s A+ Rewards Wireless, powered by Simplexity, you’d pay $80 and earn three A+ reward credits (16 get you a round-trip domestic ticket). But at Simplexity’s flagship site Wirefly.com, the Droid is free. The rewards program user would be accepting roughly $50 worth of airline credits in lieu of an $80 discount.

Review the company’s reputation. An airline promotion is no guarantee that the partner company is trustworthy, says York. For utilities, check with the state’s attorney general's office or utility regulatory commission for complaints. You can also review reports on utility and communications companies at the Better Business Bureau.

 

Check mile value. Airlines have made it tougher to use miles earned, says Perkins of Smarter Travel. Under the new tiered redemption systems, avoiding blackout dates and other restrictions has pushed most non-elite fliers into paying 50,000 to 80,000 miles for a free round-trip domestic reward ticket instead of the traditional 25,000. That’s $500 to $800 for a ticket you might buy outright for $250, he says.

Read the fine print. Offers may not apply to all interested fliers. For example, American Airlines fliers who want to earn miles on their electric bill are out of luck unless they live in Texas, New York or Connecticut. Deals are also typically restricted to new customers. US Airways members who already have Dish Network TV can’t get the 5,000-mile signup bonus.

 

Related reading at SmartMoney:

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