[artaak]

I thought that "miles" is just a nice name for reward points: "Simply multiply the cost of your travel purchases by 100. For example, if your ticket costs $200, you’d multiply that by 100 to determine you need 20,000 miles to redeem."

In fact, in that story the guy might have had a lot of "miles", but it is only $12,500 in dollar equivalent. It means that this "great" hack is a hack, without "great". Please correct me if I am wrong.

[Batsu]

Indeed, miles is just a nice name for reward points, but you're not quite on target with the calculations. In American Airline's AAdvantage program, you earn miles per dollar spent (for example, CitiBank's AAdvantage card earns 1 mile per dollar spent[1]). However, it takes a static number of points depending on your departure and arrival locations[2].

On top of the $1 = 1 mile business, for whatever reason, lots of airlines hand out frequent flyer miles like candy. American Airlines used to give you 1,000 miles ($500 worth, as you get double points with AA services) just for booking a vacation through their service... the pudding is another example of this. There's lots of potential for bonus miles, basically.

So, depending on how you want to look at it, doing this without rewards, he earned $1,250,000 worth of miles for around $3750. With rewards, it could be anything, but surely he paid the minimum amount.

[1]: http://www.citicards.com/cards/wv/faq2.do?screenID=801&s... [2]: http://www.aa.com/pubcontent/en_US/disclaimers/free-ticket-a...