This post is coming a little late, since week 2 of #milemadness ended last Friday, but I wanted to share my thoughts before the week 3 results are tabulated and released.
My War on CPD
Since I started travel hacking, and in particular manufacturing spend, I've had my eye trained on a single metric: cost per dollar of manufactured spend, or CPD. It's important to note that this is a minority view — the traditional metric thrown around is CPM, or cents per mile. It's basically the difference between judging the tool of manufactured spend versus judging the outcome of free travel.
A simple example will illustrate this difference. The new TD Go Visa Buxx card allows you to pay $1 to load up to $1,000 from any Visa or MasterCard credit or debit card, which can then be unloaded using PIN-based debit. This tool gives you a fixed CPD of $1 per $1,001 in manufactured spend, or $0.001. The CPM, on the other hand, depends entirely on which card you use to load the TD Go:
- the Bank of America Alaska Airlines debit card earns 1 Alaska mile per $2 spent on the card, leading to a "traditional" CPM of 0.2;
- the Chase British Airways Visa Signature earns 1.25 Avios per dollar spent, generating a CPM of 0.098.
My point is, it doesn't make any sense to judge the TD Go based on what cards you happen to carry or how you happen to value their respective rewards currencies. That's going to depend on your travel goals, your credit limits, your bank relationships, and spiritual factors known only to you.
Playing Against Myself
At this point I'm hopelessly behind the front-runners, who have been leveraging 5% cash back credit cards to run up huge scores buying PIN-enabled gift cards at drugstores and office supply stores. Meanwhile, I've stayed laser-focused on driving down my CPD, and am very pleased with the results. Here's my CPD calculations from the first two weeks of the competition:
- Week 1: $19,861 in spend, $170 in fees, 0.86 cents per dollar of spend;
- Week 2: $10,357 in spend, $91 in fees, 0.88 cents per dollar;
- Running total: $30,218 in spend, $261 in fees, 0.86 cents per dollar;
- Week 3 estimate: $9,060 in spend, $63 in fees, 0.7 cents per dollar.
I'm truly satisfied that I've been able to scale my manufactured spending activities as much as I have without giving very much up on the CPD front. I'm remaining well below what I consider my unofficial "ceiling" of 1 cent per dollar — the maximum I'd be willing to pay for a dollar of manufactured spend.
My Extracurricular Activities
One funny side effect of the way the manufactured spending tournament is being scored is that it almost completely discounts my favorite way of earning miles: using my Bank of America Alaska Airlines debit card. The reason is somewhat technical, but basically goes like this:
- Each day, we're only allowed to count towards the competition the spend that we do within our remaining "bankroll;"
- Therefore, in order to count my Alaska Airlines debit card spending, I would have to have that amount remaining in my bankroll at the end of the day;
- However, if I had money remaining in my bankroll at the end of the day, I'd be better off using it on credit card spending (earning 1 or more mile per dollar, or 2% cash back) rather than debit card spending (earning just 0.5 miles per dollar).
So even though I've already earned 7,000 Alaska miles this month, just a tiny fraction of them count towards my official score!