My experience paying to liberate US Bank Flexperks credit through American Airlines

Two of my oldest credit cards are my US Bank Flexperks Travel Rewards card and my American Express Hilton Honors Surpass card. My reasons for holding them over the years have changed, as you’d expect given how long I’ve been playing this game.

The Flexperks Travel Rewards used to earn 3 points per dollar spent on Kiva loans (which could be funded with credit cards with no fees), and redeemed for 2 cents each on certain flight redemptions, while the Surpass used to offer bonus points at drug stores, which financed a lot of my hotel stays while I was in grad school.

But the principle reason I’ve kept both cards for all these years is that they offer bonused earning on grocery store purchases. The Flexperks Travel Rewards card earns 2 Flexpoints per dollar (worth 3% in paid flight and hotel redemptions) and the Surpass earns 6 points per dollar, which is worth roughly 3% depending on your own Hilton redemption preferences. Given how valuable grocery store promotions are, I have found it essential to have at least a few credit cards that earn bonus points there.

But this summer I had my first experience converting a Flexperks Travel Rewards redemption into American Airlines travel credit.

The original reservation

My hometown has always been expensive to fly in and out of, so I usually redeeem Alaska Airlines Mileage Plan miles for my flights, since Alaska has last-seat-availability on their own flights and their Portland and Seattle hubs provide an easy one-stop connection.

For a planned trip in June, the mileage redemption was so expensive that I decided to instead use Flexpoints to book paid American Airlines flights, which worked out to 63,781 Flexpoints for two tickets costing a total of $956.72 (including a nuisance $13.98 “Flight Facilitation Fee”).

The cancellation

We ended up not being able to take that trip, which raised the question of how to get value back out of our canceled flights. If I already had future paid travel plans on American Airlines, I believe I could have called US Bank’s travel agency and asked them to use the value of the ticket to book new flights before our original flights departed.

But I didn’t have future paid American Airlines travel plans, and since the flights I booked were changeable, but not refundable, I decided to cancel the flights through American Airlines’s website, instead of through US Bank’s “Travel Center.”

This went smoothly, and I could pull up the cancelled tickets’ value through the American Airlines website. But every time I tried to use the credit, the website prompted me to call in.

The rebooking

A few months later, I identified a perfect use for that American Airlines flight credit: while outbound flights for Thanksgiving weekend were available with Alaska miles as usual, cash return flights cost almost exactly as much as a roundtrip would: $1071.94, or about a hundred dollars more than the American Airlines credit I held in this unfortunate liminal state.

Figuring I would get a blog post out of it either way, I first called US Bank to see if they would allow me to use my “Travel Center” reference number to rebook my flights. They would not, but they did tell me to call American Airlines at their generic customer service number 800-433-7300 to use the credit with them.

After a few tries navigating their phone menu from hell, I struck on a different idea: American Airlines still allows you to prepare reservations online and then “hold” them to pay over the phone or in person.

The liberation fee

This gambit ultimately worked: once I had the reservation on hold, I could use the phone menu to skip directly to a representative who was able to pull up my held reservation. and I then asked him to apply my travel credits.

I was expecting to pay the fare difference between my flights, but the representative quoted me a price (after applying the credit) $100 higher. When I pointed out the discrepancy, he explained that they charged a $50 per-ticket fee for tickets booked through third parties.

Why it matters

Most paid domestic airline tickets are now “flexible” in a way that was rare before the COVID-19 pandemic, and the price difference between inflexible (“non-changeable,” “non-refundable”) and flexible fares is as low as it has ever been in my adult life.

But if you book paid fares through travel portals using fixed-value points like US Bank Flexpoints, Chase Ultimate Rewards, or American Express Membership Rewards, you should be asking how and whether you, personally, get to take advantage of that flexibility.

Many years ago I wrote about how US Bank was able to successfully and automatically convert a refund I had individually negotiated with Delta Airlines into redeposited Flexpoints. Knowing that the value of your redemptions can be reclaimed is one way you can be assured you’ll get something close to the prospective value you assign them while you earn them. If a sudden change in plans really could wipe out $1,000 in travel value, then you’d be insane to continue earning points in that program.

I found the $50 fee American charged me to “liberate” the value of my tickets as annoying as any sensible person would, but I found it a lot less annoying than being ask to forfeit the entire value of my US Bank redemption, and it has strengthened my fondness for the Flexperks Travel Rewards program in general.

An excellent Just4U offer on Zillions gift cards

I’ve written several times about “Zillions”-branded gift cards, and the three broad buckets I place them into: fixed-value, loose-variable, and tight-variable. All three can be exchanged for store-specific gift cards, which can then be used or sold. While not of much interest in their own right, these cards become extremely interesting when they earn bonus points in the Just4U loyalty program shared by Safeway, Albertsons, and dozens of other sub-brands across the country, as they are through Saturday, June 28, 2025.

The deal

Zillions cards currently earn 10 Just4U points per dollar spent. These cards have no activation fees, and can be purchased with credit cards wherever employees allow it.

Most weekends, Just4U runs a stackable promotion where gift card purchases earn 2 additional bonus points per dollar (this is confusingly branded as “4 points per dollar” since gift cards earn 2 points most of the time). If that promotion runs again this Saturday, then Zillions cards should earn a total of 12 Just4U points per dollar.

I value Just4U points at roughly 1.85 cents each, so on Saturday this deal will generate a rebate of about 22.5 cents per dollar spent, plus however much you earn with your credit card on grocery store spend. If you redeem your Just4U points for the most valuable grocery redemption, you’ll receive $20 off for 1,200 points, or 1.67 cents per point.

Of course, what you’re spending the money on is a Zillions gift card, so the question is how to get your money back out of the system. As a reminder, fixed-value Zillions cards cost $100 but allow you to redeem $105 for store gift cards. The best resale rate I was able to find on CardCash was 80% on Saks OFF 5th, or $84 per fixed-value Zillions card.

The most valuable Just4U redemptions have a capped number of redemptions each week, but if you sign up for the Freshpass program, which costs $99 per year or $49 if you qualify for SNAP, then your points don’t expire, so you can redeem them for their highest value week after week.

Conclusion

This is both an outstanding deal in its own right, one I myself am planning on hitting moderately hard this Saturday, and a nice reminder that travel hacking is in so many ways a subset of extreme couponing. Stocking up on toilet paper may be less glamorous than first class flights around the world, but the principle is identical and more often than not, so are the means: pay as little as possible for the things you want or need.

Playing by the rules: taking advantage of two current promotions

Much of what glamour there is in travel hacking revolves around finding the play in the joints of rewards ecosystems, for the same reason “Ocean’s 11” was about robbing a casino, not staring dead-eyed at a slot machine for 20 hours straight. That’s why I rarely pay attention to the deluge of sales and promotions that are written up in the same pasted-from-the-press-release terms on sites sponsored by credit card companies and reliant on good relationships with loyalty programs.

So I was surprised to find myself taking advantage of not one, but two promotions in a single week to book two trips that offered me satisfying value for points balances that had grown too large and that I had been sitting on for too long.

When the travel hacking community had more diverse and interesting voices, a frequent argument was over how to value redemptions: should you claim the retail value of the actual flights you take and the hotels you stay in, or use a kind of “if-not” valuation using the price of the flights and hotels you’d otherwise pay for in a world without travel hacking, or even the out-of-pocket expenses you incurred earning your miles and points (while this last can be an interesting exercise, I don’t know anyone who actually uses it since it requires meticulously tracking the cost of acquisition of every mile and point you redeem).

In this post I’ll take a middle road and give the retail price of the seats I would have paid for on the flights I actually did end up booking.

Air Canada transfer bonus from Ultimate Rewards

My partner, who works in the real world, was anxious to take a long vacation this summer, and I was anxious to oblige her. Due to scheduling uncertainty, it was only at the beginning of June that I started looking for options to Europe later this month, and naturally, award availability had grown pretty limited.

Spinning around my digital globe, I proposed Andorra, the microstate nestled in the Pyranees between France and Spain. After a few hours of searching, I found that the two easiest routes (Andorra not having an airport of its own) were to take a long bus ride from Barcelona, or a train followed by a much shorter bus ride from Toulouse, France.

Favoring as little time spent on a bus as possible, I found award availability to Toulouse on Air Canada, with a single connection in Montreal. When I explained this option, my partner sensibly replied, “or we could just go to Montreal.” This suggestion was so obviously superior that I scrapped the Andorra idea completely.

There was award space every day on Air Canada using their own Aeroplan miles, which conveniently is a transfer partner of Ultimate Rewards, where in turn I’ve been sitting on a balance far larger than I’m usually comfortable with and no other obvious upcoming uses. When I logged in, I was delighted to see that through July 17, 2025, I’d receive a 20% bonus on transfers to Aeroplan (there’s also a 25% transfer bonus to Virgin Atlantic through June 15, 2025). For those doing the math at home, that works out to a roughly 17% discount on Aeroplan awards.

I’d never booked an Aeroplan award before, so had to figure out the curious 5-tier redemption system, with “Standard,” “Flex,” and “Latitude” (refundable) options in economy and “Lowest” and “Flexible” options in business. It turned out that the “Lowest” business redemption was cheaper than the “Flex” option I would choose in economy, so I transferred 174,000 Ultimate Rewards points and received 208,800 miles in my Aeroplan account. The transfer processed instantly, and I booked the award for 208,600 miles and $230.90 (315.35 Canadian).

The cash fare for the two economy tickets I would have booked on the same flight is $2022.28, which works out to a redemption value of 1.03 cents per Ultimate Rewards point after deducting the $230.90 in taxes and fees. Since Ultimate Rewards points are redeemable for cash at 1 cent each, that makes this a classic example of “paying for coach but flying in business.” Business class on my flights is now sold out, so it’s unavailable at any price, but the closest equivalent retails for $3208.76, or 1.7 cents per Ultimate Rewards point.

Alaska partner award sale

Alaska Airlines Mileage Plan miles are incredibly valuable for flying on short-haul American Airlines flights, but one reason they’re so valuable is that you don’t need very many of them: even around the holidays I find essentially unlimited award space at 4,500 miles in economy and 9,000 miles in (domestic) first class. Consequently, I passively accumulated Mileage Plan miles far faster than I redeem them, and ended up with a massive balance I’m constantly anxious to find a use for.

As I gather is common in the white collar world these days, we also have a work-imposed week off in August I needed to plan for, so I was delighted to see Alaska Airlines announce an award sale to six destinations: Bangkok, Buenos Aires, Lisbon, Monterrey (Mexico), Tbilisi, and Naples. Alaska does not, in fact, fly to any of these destinations except Monterrey, so in practice this a sale on the seats on their airline partners.

The sale is applicable to economy and premium economy cabins, but not business or first class, and tickets have to be booked by June 30, 2025, for travel between August 1 and November 15, 2025.

While I’ve visited Naples a few times on long trips through Italy, I’ve only scratched the surface of the surrounding areas, and the idea met with instant approval. Award space was wide open when I checked shortly after the promotion went live (it’s since thinned out a little), so I booked seats in premium economy for 100,000 Mileage Plan miles and $165.22 in taxes and fees.

Economy seats on the exact flights we’re taking retail for $1939.82, resulting in a redemption value of 1.78 cents per Mileage Plan mile. The premium economy seats we’ll actually fly in cost $3307.82, for a redemption value of 3.14 cents per mile.

Conclusion

First and foremost I want to point out that these promotions are still going on, so if you foresee any Aeroplan redemptions, this is a great time to transfer Ultimate Rewards points over, and if you’re planning a late summer or fall trip to one of Alaska Airlines’ discounted award destinations, certainly book (or rebook!) your flights to take advantage of these potentially steep discounts.

But there are a few other points worth highlighting in this context.

There is no alternative to actually redeeming your miles and points for keeping yourself intellectually and financially honest. This is different from omnipresent concerns about the “devaluation” of miles and points currencies; it’s about properly valuing them at all, and deciding whether you’re earning the currencies that you personally get the most value from. It’s all well, good, and profitable for affiliate bloggers to spout fantastical valuations of every loyalty currency under the sun, but the only value that matters is the value you actually get for the trips you actually want to take.

Finally, there’s a big difference between choosing between classes of service, or between luxury and no-frills carriers, or between destinations (shall we summer in Montreal or Andorra this year?), and choosing between traveling or not traveling.

Years ago I recall a Netflix executive was quoted somewhere saying “our biggest competitor is sleep.” Speaking for myself, travel hacking is only partly and occasionally about splurging on business class when economy would serve, or staying at the Waldorf Astoria when there’s a Hilton Garden Inn next door. Travel hacking for me is about making travel possible in the first place.

Outside of business travel, most people I know fly internationally at most once a year, and only a few times more than that domestically, and if I had to pay out of pocket for flights and hotels, I’d do exactly the same. Travel hacking lets me travel very literally outside my means: not because of the threadcount of the hotel sheets, but because I get to sleep in hotels at all.

Swap expired World of Hyatt free night awards for points

I recently found myself in the unfortunate position of having to cancel a Hyatt stay booked with a Category 1-7 free night award that was itself just days from expiration. As a reminder, these are awards that you receive after accumulating 60 and 100 qualifying nights each calendar year (the slightly more generous “Ultimate” free night award is earned after 150 qualifying nights and can be used anywhere), and are redeemable for any Category 1-7 property and all-inclusive resorts up to Category D, whenever standard rooms are available.

This isn’t a situation you should find yourself in all that often, especially now that these awards are transferrable (sellable) to any World of Hyatt member: you earn free night awards by earning qualifying nights, so in principle any qualifying night you’re paying for with cash or points should instead be bookable with free night awards, especially Category 1-7 free night awards, since that covers virtually the entire World of Hyatt portfolio of hotels.

Nevertheless, that’s the exact situation I found myself in: I’d booked a long weekend in New York City at the Andaz 5th Avenue for the end of April, but had to cancel the trip at almost the last moment, with a Category 1-7 free night award expiring at the beginning of May.

Free night awards have to be redeemed for stays that take place before their expiration date, so I knew there was no way I was going to be able to use it for myself. I could have tried to sell it, but I wasn’t prepared to go hunting for a double coincidence of wants on such short notice. So I called World of Hyatt.

My first call, prior to the expiration of the free night award, had the character of a Tom Stoppard play.

I asked, “can I exchange my free night award for points?”

The young lady on the other end said, “did you know you can transfer your reward to any other World of Hyatt member?”

I said, “yes, can I exchange my free night award for points?”

She said, “we encourage people to try to redeem or transfer their free night awards if at all possible.”

I said, “it is not possible, can I exchange my free night award for points?”

She said, “we sometimes allow for exceptions but we encourage people to try to redeem or transfer their free night awards if at all possible.”

I said, “when would be the correct time to request such an exception?”

She said, “we encourage people are to use their free night awards before they expire.”

I said, “so would the correct time to request an exception be after the free night award has expired?”

She said, “yes.”

So, this week I called World of Hyatt and asked for my expired Category 1-7 free night award to be converted into points and the call lasted, I kid you not, 4 minutes. The agent was able to immediately convert my expired certificate into 20,000 World of Hyatt points.

Is it worth it?

Obviously once your free night award has expired you have a duty to yourself and those you love to call in and ask to have it converted to points. The interesting question is whether it’s worth deliberately allowing them to expire with the goal of getting more value from the points than the award.

And of course there are obvious situations where this is so: my go-to Hyatt in Prague is a Category 2 property that costs as little as 6,500 points off-season: 20,000 points is worth up to 3 nights at that property, compared to one booked with a free night award. If that were the only Hyatt I booked every year, then I’d simply let my single free night award expire and convert it into 3 nights like clockwork.

In fact, however, the World of Hyatt program isn’t especially worth gaming unless you intend to make at least a couple high-level Hyatt award reservations every year. Their footprint is small enough that if you were just making hotel reservations on price you’d have no reason to earn elite status with them at all.

I have not had any trouble getting value from my World of Hyatt free night awards so don’t have any reservations about earning more with the intention of redeeming them for nights that cost more than 20,000 points each. But the option of cashing out expired awards is, for now, still available by phone.

Using Fluz as intended: don't sleep on expiring "boosts"

Over the years I’ve occasionally mentioned on the blog, and described extensively in Subscriber-only Newsletters, Fluz, the third-party gift card merchant. As a reminder, the publicly-available version of the site sells gift cards at hundreds of merchants and offers a rebate in the form of rewards that can be redeemed for additional gift cards or withdrawn as cash, once certain thresholds are met.

A quirk of the site when used as intended are “boosts,” which can be used to receive an increased rebate on a single gift card purchase, typically 25% on the first $10 in value. A few weeks ago heavy users of the site realized they had somehow accumulated dozens of these boosts, which are expiring May 5. I checked and had 20 in my own account.

If you can find boost-eligible gift cards to stores you typically pay cash at, this is a no-brainer. Apple gift cards, for example, can be purchased in $10 denominations and loaded into your Apple account for purchases across the Apple ecosystem. Perhaps needless to say, it is difficult to find 25% discounts on brand new Apple equipment.

Unfortunately many merchants have minimum values above $10, which correspondingly reduces your total savings. Here are a few other obvious options for merchants where you might already be spending cash:

• Grubhub ($10 minimum)

• CVS ($10)

• Ace Hardware ($10)

• Target ($10)

• Starbucks ($10)

• Walmart ($10)

• REI ($10)

• Ebay ($10)

• Uber/Uber Eats ($15)

• Lyft ($25)

• Amazon ($30)

Note that some merchants, like Apple, allow you to load multiple gift cards into a single account balance, while other merchants, like Ebay, save individual gift cards and limit the number that can be used in a single transaction. Before loading up on gift cards to a single merchant, make sure you know which model that merchant uses.

Another domino falls: Giant hikes prepaid debit card fees by 34%

Over the past few years a lot of travel hackers have migrated to the ease and comfort of manufacturing spend from home. While I do plenty of manufactured spend online, I have persisted in the age-old technique of simply buying and liquidating prepaid debit cards in person. This was for three reasons.

First, I don’t find it that difficult or uncomfortable compared to some people. I’m already running around town all day, so popping into a grocery store or drugstore for a few minutes makes no difference to me whatsoever.

Second, it lets me keep an eye on what’s happening in the gift card ecosystem, for example with the release of “Zillions”-branded cards and the opportunities that came along with those.

And third, it was cheap. If a $500 card has an activation fee of $5.95, then any card that earns 3% in rewards or more (Chase Freedom Unlimited, US Bank Flexperks Travel Rewards, American Express Hilton Honors Surpass) earns travel at a minimum discount of roughly 50%.

A few months ago, Safeway and CVS simultaneously replaced those $5.95-activation-fee cards with new, $7.95 cards. Meanwhile, Walgreens seems to have pulled prepaid debit cards entirely in my market, thus neutering my Freedom Unlimited bonus at drugstores.

This didn’t affect my actual volume until last week, when Giant followed suit. The changeover happened sometime between Monday, April 21, 2025, and that Thursday.

The new math and remaining opportunities

Paying $8.95 (after $1 in liquidation costs) for $509 in spend at 3% in rewards gives you a discount of a bit over 41%. This is fine, and it’s especially fine if you’re using the spend to meet the requirements for a signup bonus, since almost anything is worth doing to trigger a big enough signup bonus. But it’s a worse deal, and it’s worse by enough that I’ve finally taken a step back from in-person manufactured spend.

While there is no “bright side” to a deal getting manifestly worse, I want to highlight some of the remaining opportunities rather than give in to despair.

First, high-spend bonuses continue to augment the base value of the spend. For example, if you do carry a Hilton Honors Surpass card, then you should want to spend $15,000 per year to trigger the annual free night certificate, and if you’re spending $15,000 per year anyway, you should want to spend it in a bonus category like grocery stores, even if that bonus spend is now more expensive.

Second, grocery store loyalty programs continue to offer periodic bonuses on gift card purchases. Every few months Giant offers 2 or 3 points per dollar spent on variable Visa prepaid debit cards. During those promotions the cards are worth buying in cash, let alone with a rewards-earning credit card.

Likewise, the Safeway Just4U program has had extremely generous promotions both on branded third-party gift cards and the Zillions cards mentioned above. While liquidating those cards can be more cumbersome than prepaid debit cards (depending on whether you think reselling gift cards or buying money orders is more cumbersome), when the stars align the ultimate value proposition can be the same or higher.

Conclusion

Pricing decisions like this are interesting because from the outside we can only speculate what the interests of the different players are. As customers, our primary experience of these cards is that grocery store employees hate them because the values are so much higher than anything else they deal with they’re terrified of mishandling the transaction and losing their jobs.

But grocery stores aren’t run on behalf of their employees, and grocery store management obviously believes there is value in carrying these cards, through some combination of increased traffic (if you’re buying a gift card you might also buy your groceries on the same trip) and payments from the gift card distributor for floor space.

The gift card distributor meanwhile presumably pays third-party merchants (Adidas, Uber, whoever) a percentage of its face value when a gift card is purchased and makes money that way. How the activation fee of prepaid debit cards is split up between the grocery store, the gift card distributor, and the card issuer is a secret, but of course the higher the activation fee the more there is to split up.

And that brings us to the perfectly reasonable question of what, if anything, inflation has to do with it. Under conditions of generally rising prices, the prices of plastic, cardboard, electricity, customer support, and all the other inputs of a prepaid debit card network will also rise, so it shouldn’t be surprising that occasionally the activation fees will tick up as well.

But if that were the excuse — and it’s not my job to make up excuses! — then it would be a nice gesture if they raised the maximum value of the cards as well. After all, just like $500 doesn’t go as far now as it did in 1800, when it could buy you a reasonably sized farm in upstate New York, it doesn’t go as far as it did in 2000 either. We know there’s no technical or legal limitation on the maximum value of prepaid debit cards, since Simon Malls has sold $1,000 cards for years.

Hopefully grocery store and drugstore sales will fall by enough at the new price point that the gift card issuers will decide something along those lines has to be done.

Hoarding, rationing, and the next dollar problem

I have recently found myself in what should be an enviable position for any travel hacker: I’ve booked all my upcoming flights and stays, used up my quarterly and semi-annual credits, and am still sitting on all the miles and points I could conceivably use through the rest of the year.

Of course, instead of giving me a chance to relax and take a break, this objectively great situation has me thinking more about how to approach travel hacking, and everything-else hacking, on the scale of years instead of months.

Hoarding

I think of myself as the kind of person who tries to strictly manage their loyalty balances, not out of moral superiority, but for the simple reason that by definition I’m virtually always earning loyalty currencies based on their current value (with the interesting exception of anticipated mergers and transfer opportunities, like the Hawaiian-Alaska merger).

The longer I let balances sit, the less likely I am to redeem them at that current value. In other words, I know the value of my points at their current redemption values, and earn them on that basis, but the longer they sit in my accounts, the less likely their ultimate redemption value will be the same.

It’s vital to differentiate between two meanings of “devaluation,” since they’re often used interchangeably. The top Hyatt redemption tier, to give a simple example, used to be at 30,000 Hyatt Gold Passport points for the seven top-tier Park Hyatt properties in the system. I used to even be able to name them all off the top of my head, although I only ever stayed in Zurich and Vienna, where you get to swim in the old Bank of Austria’s vault and eat breakfast in the old cashier’s hall — a good time!

World of Hyatt’s Category 8 now goes up to 45,000 points, with the Park Hyatts (Parks Hyatt?) in Tokyo, Paris-Vendome, Zurich, and the Maldives Hadahaa joining that category, while the other formerly “top” properties (Vienna, Sydney, and Tokyo) are still in Category 7, which now costs up to 35,000 points thanks to the introduction of seasonal pricing.

These are devaluations, if you mean that holding everything else equal, the same hotel costs more points per night. But of course, all else isn’t equal.

At the level of an individual hotel, properties age and get worn out, and get renovated and refreshed. Where the property is in that cycle should matter when deciding whether points have “really” lost value: you may have fond memories of paying 3,500 points for the rundown Category 1 where you spent your honeymoon and be disappointed it’s now Category 4. But if it’s moved up in categories because they did a gut renovation, then you may find it’s an even more romantic getaway on your 10th anniversary.

At the global level, it doesn’t matter if individual properties move up or down in categories; it only matters how much of your home currency’s value you get across all the redemptions you actually make. In the golden age of blogs and forums people often argued that using cash prices gave inflated values because we would not be able to take the trips we do without travel hacking, so it’s unreasonable to claim points “saved” you the amount of money a trip would cost that you never would have taken.

This supposed problem is just a rhetorical trick though, since people who are not travel hackers, including former and future travel hackers, still take vacations. The correct value to use in calculating your savings is neither the cash price of the hotels you stay in or the flights you take, it’s the money you would otherwise spend on the vacations you would actually take.

Rationing

I call it “hoarding” points when people accumulate more than they can realistically anticipate using in the near-term, running the risk of devaluation. Rationing is the counterpart of hoarding on the redemption side: someone is unwilling to use points except above some minimum value, and for lower-value redemptions uses cash instead.

The problem with rationing is not that it’s bad to get as much value as possible from your loyalty currencies. The problem is that if you’re regularly spending cash instead of miles and points for your travel, you’re probably not earning enough cash, and the same time and money you spend earning loyalty currencies would be better spent on earning cash and cash equivalents.

For example, both the US Bank Flexperks Travel Rewards and American Express Hilton Surpass cards earn bonus points at grocery stores: Flexperks earns 2 Flexpoints per dollar and Surpass earns 6 Hilton Honors points per dollar.

Flexpoints are worth 1.5 cents each when redeemed through the US Bank travel portal, so the Flexperks card earns the equivalent of 3% in cash.

If you spent $10,000 on each card, you’d have $300 worth of travel value or 60,000 Hilton Honors points. There are many cases where 60,000 points can get you more than $300 worth in stay value, especially when using Hilton’s 5th night free benefit, so say you decide to use the Surpass for that spend.

On your next trip, you see a 60,000-point Hilton is available, but you find a cash rate for $250 after taxes and fees, or just 0.4 cents per Hilton point. Since you’re afraid of having “wasted” that $10,000 in spend, you ration your Hilton points and pay cash for the stay instead.

The problem in this case is obvious: you’ve now spent however much it cost to manufacture $10,000 in spend, and you’ve spend $250 on a hotel stay.

If this happens once, there’s no harm done: you can still use the Hilton points on a future stay. But if you find this happening over and over again, then you are probably valuing Hilton points too highly; they probably are not actually worth 0.5 cents to you, and you should be using a different, lower value for them when deciding whether to earn or redeem cash or a different currency instead.

The next dollar problem

On the redemption side this is a version of the “sunk cost” fallacy: it doesn’t matter what you paid for your points, the only thing that matters is whether you will save money by redeeming them now or holding on to them for later.

When it comes to personal finance, I call this the “next dollar” problem, which is closely related to my concept of compounding discipline: what do you do with the next dollar you earn?

Personal finance columns often set out to make these choices sound easy: should you use the next dollar you earn to pay off low-interest student loan debt or high-interest credit card debt? Should you invest in a taxable account before maxing out your retirement contributions?

Sometimes this is explicitly framed in terms of the next dollar, for example the advice to “save every raise” by increasing your 401(k) contribution rate each time your salary increases, so your take-home pay stays the same.

It’s not important to me in the slightest what you decide to do with your next dollar. The point of this exercise is to think about it in advance. For example, should you pay off credit card debt before you make IRA contributions? There are anti-debt and economic literalists who tell you the answer has to be yes: you should rank all your debt by interest rate, start and the top, and every dollar goes into paying off those balances one-by-one before you start saving money.

There are obviously people for whom and times when that’s the right decision, but it’s equally true to describe this as a decision between putting the next dollar into an account protected in bankruptcy or paying of a balance dischargeable in bankruptcy. The more likely you are to find yourself in bankruptcy court, the less inclined you should be to do your creditors any favors.

As for me, I’m currently putting my “next dollars” into Prosper peer-to-peer loans and towards filling up my fourth rewards checking account (if you’re wondering, I have two next dollars because investing with Prosper is an extremely slow process unless you’re willing to lower your risk threshold or increase your per-loan investment, neither of which I’m willing to do).

In a month or two I’ll have met my goals for both those accounts, but there will still be a next dollar. I still have a balance on my Small Business Administration loan from the pandemic with a 3.75% adminstered interest rate, which I could accelerate payments towards, although that’s a lower return than I’m used to getting from my next dollar; even cash in my brokerage accounts earns more. I’m far from the maximum annual contribution to my solo 401(k), so I could move my weekly contribution up, which has the advantage of providing automatic compounding discipline within the account itself.

Like I say, I’ve got a couple months to think about it, but thinking about it I will be.

Use airline booking portals to evade VRBO damage deposits

I like staying in hotels. This isn’t a normative judgment, if anything it’s a confession that like everyone on Earth I’m the product of my upbringing: growing up, when my family traveled we stayed in a chaotic variety of tents, trailers, condos, cabins, and lodges. So given control over my own accommodations, I naturally gravitate towards the neat, clean, uniform sterility of hotel rooms (although they’re rarely in the same condition when I’m done with them).

This leaves me at loose ends when I need to book vacation stays for larger groups, whether it’s a family reunion or just friends getting together at the beach. Last April I tried to solve this problem by signing up for the Barclay Wyndham Rewards Earner Business card, but that didn’t pan out because Barclay wanted more information about my business than I was able or willing to provide, which put me back at square one when it came to booking an upcoming vacation in Florida.

Booking vacation homes is no treat

A curious thing that’s nevertheless impossible to avoid knowing about our late capitalist order is how abstracted it’s become.

The joke I always tell is that when Ticketmaster first started their grifting operation, “service fees” were a tax on tourists: if you lived in town, you could always go to the box office and buy your own tickets without paying the fee.

Today, if you go to the box office of a theater that uses Ticketmaster, they’ll charge you the same fee you’d pay online, and if you’re unlucky, an “in-person ticketing” service fee as well. This is, understandably, because they hate us and want us to become poorer, while they become richer.

I encountered a version of this situation while booking that upcoming stay in Florida. I knew early on that I’d need a rental that had multiple bedrooms and bathrooms, a kitchen, and was near the beach, but didn’t have any real idea how to find one. So I started checking which of my existing resources fit the bill.

• Hotels.com: I have a modest OneKeyCash balance, so booking a stay with their integrated VRBO platform seemed like a good start.

• Delta.com/stays: I have an American Express Delta Platinum Business card, which offers $200 off $200 in Delta Stays reservations per calendar year, so this could be a good way to knock that credit out early in the year — the earlier the better.

• US Bank Flexperks Travel Rewards: I have a balance of Flexpoints that are worth 1.5 cents each towards hotels and airfare, the equivalent of 3% cash back on grocery store manufactured spend.

To my surprise, these three booking channels produced entirely different results. US Bank’s travel booking portal didn’t show any home rentals at all, so those points were off the table. But to my (ultimately pleasant) surprise, Hotels.com, VRBO, and the airline booking portals offered the same properties, with different booking terms.

VRBO charges bizarre damage deposits, but their affiliate networks don’t

As I narrowed in on the specific area and properties I was interested in, I naturally started checking which booking portals would offer the lowest price after taking into account online rebates and credit card bonuses. VRBO had a 2% payout on the Capital One shopping portal, and I could use my OneKeyCash to reduce the upfront price, but I was taken aback by the final page of their booking process: a $1500 fee refundable “at the discretion of the host.”

It may go without saying but I don’t pay money “at the discretion” of anybody else. I once canceled a credit card in order to evade an overweight baggage fee that TAP Portugal tried (and failed) to charge me. I take this stuff seriously.

What I quickly discovered was that the same property I’d narrowed in on was available through airline affiliate booking channels, with neither the $59 protection fee nor the $1,500 damage deposit. I ultimately booked the property through Alaska Airlines’ affiliate channel, since I ended up using my $200 annual Delta Stays credit at a different property on the trip.

Conclusion

This is the kind of exercise that reminds me why I got into travel hacking, let alone blogging about travel hacking, in the first place. We are told throughout our lives that we are, in economics terms “price takers,” and that all the prices we pay for everything are determined in advance by forces far beyond our control.

But that’s not true, and the companies we buy services from don’t believe it’s true either.

We are, in fact price setters, because we get to decide what we’re willing to pay for. And the more tools we have to set our own prices, the lower the prices we will eventually pay.

My successful delayed baggage claim through American Airlines and Chase

On December 24, 2024, American Airlines suffered a nationwide groundstop which naturally resulted in a series of delays. My partner and I were scheduled on a short nonstop flight in the morning that ultimately arrived in the early evening. No sooner did I regain cell service than I received a text message and e-mail from American stating that both our checked bags were delayed.

We went to the baggage claim office and filled out the standard forms. I asked the woman minding the store whether we should expect the bags that night, and she said the last courier had already been dispatched so we wouldn’t receive them until the next day. So, we headed out to celebrate Christmas Eve.

I’ve had delayed bags before and was annoyed, but not worried. Carriers at large airports have contracts with local couriers to deliver bags, and we were only going to be 70 minutes or so away from the airport. I was also happy with the regular updates I was getting from American (the bags arrived at the airport on the next flight a few hours later, which obviously would have been good information to have in advance) and then later in the evening from FedEx saying that the shipping label had been created and that delivery was expected on December 26.

That didn’t happen. The bags sat at the airport until December 27, when we apparently passed them like ships in the night on our way for our next flight: we were going to Oregon for 10 days and still didn’t have any clothes but the ones on our backs. At that point, I said, “I’m on vacation, I’m not worrying about this, let’s replace everything.”

So when we arrived in Oregon, we headed to REI and did exactly that. For those who don’t remember the pivotal scene from 2014’s “Wild,” REI has a very generous return policy: almost everything they sell can be returned for a cash refund. We have an REI back home as well, so my logic was simple: spend as much money as we want replacing our stuff, and return anything that doesn’t get reimbursed by American Airlines and Chase, the issuer of the credit card I used to pay the $36.20 in taxes and fees on our award tickets.

Ultimately, between the two I was reimbursed for everything barely a month later.

Chase Ink baggage delay insurance

Like most such benefits, Chase’s baggage delay benefit is administered by a third party, in this case Assurant. To find out if your Chase credit card offers this benefit, you can navigate to “Card Benefits” from a dropdown menu on your Chase dashboard by clicking the three dots next to each card listed.

If your card has a baggage delay insurance benefit, you should see this tile or one like it once you select the “Travel” category:

My personal World of Hyatt Visa card and business Ink Plus and Ink Preferred Visa cards have this benefit (identical in all three cases) but my personal Freedom Unlimited Visa and my Freedom Flex MasterCards do not.

For a trip to qualify for the benefit, you must pay for the entire cash cost of the flight with the eligible card, whether that’s the cash fare on a paid flight or the taxes and fees on an award flight.

After settling in on the Oregon coast, I set up my account with Assurant and initiated my claim. I was able to do this entirely on my phone, although it probably would have been slightly easier on a PC.

I was able to initiate my claim without providing any documentation yet, since I wasn’t sure what they would ultimately need, and in these circumstances it’s always better to know exactly what they’re going to ask for so you don’t provide too much, too little, or too conflicting information.

Assurant’s document request

Later on the evening of December 27, I received an e-mail from Assurant with a linked document thanking me for my claim and providing a list of documents to submit:

“To avoid processing delays, please provide the following documents within 15 days:

• “A copy of the settlement payment or denial of payment from the Common Carrier claim (such as planes, trains and cruise ships)

• “Itemized Receipts for the essential items you purchased

• “Your Card Account Statement (showing the last four (4) digits of the Account number) demonstrating that the payment for the Trip was made on your Covered Card and/or with redeemable Rewards

• “Your Travel Itinerary

• “Documentation from the Common Carrier (such as planes, trains and cruise ships) indicating your baggage was delayed”

To make life as easy as possible for my claim manager, I titled each of these documents precisely as asked, and uploaded all of them but the first (my American Airlines settlement) on December 31:

On January 8 and 12, 2025, I received identical e-mails requesting the first, missing document again, which of course I still did not have.

American Airlines delayed baggage reimbursement

The reason Chase needed this final document is that, as you’d expect, credit card baggage delay insurance is always or almost always “secondary” to the reimbursement you receive from your common carrier for the same delayed baggage “event.”

However, this raised another question without an obvious answer: if the Chase baggage delay insurance is limited to $100 per day, for up to 5 days, would that $500 per passenger cap be applied before or after deducting the amount of reimbursement I receive from American? In other words, would receiving $500 in reimbursement from American “exhaust” my Chase baggage delay insurance without Chase having to pay me a thing? Fortunately, that didn’t turn out to be the case.

To apply for reimbursement from American, I navigated to this page, then expanded the “What happens next?” pane to reveal the buried “Submit a claim” button. Here, I provided the exact same information Chase required, plus photos of my baggage claim tags.

I submitted my claim on January 7, and on January 16 received an e-mail with the subject line “American Airlines Central Baggage Resolution.”

The e-mail took an oddly snarky tone, violating what seems to me one of the first principles of brand management, or even communication: if you’re doing someone a favor in order to create goodwill, don’t make a big show of how generous you’re being. The e-mail read in relevant part:

“We're reimbursing you in the amount of $9xx.xx for clothes and toiletries. Please note, that some clothes aren’t covered, because the clothes were purchased after you received the bags, the bags were delivered on December 27, 2024, at 11:25 am. We are making an exception to reimburse you for the items that are considered reasonable.”

As I explained above, the baggage was delivered after we had already left the state they were delivered to. From our perspective, the baggage was still delayed until we finally received it in Oregon on January 4, while from American’s perspective, they had already fulfilled their obligations on the morning of December 27.

I can see both perspectives, but rather than simply take credit for the gesture of good will, they decided to rub their “generosity” in my face, despite being the responsible party for the entire situation in the first place. As I said, this strikes me as an unforced error.

I received the check on January 27.

Back to Chase

With my settlement letter in hand, I uploaded it to the Chase portal on January 16, 2025. On January 24 I received an e-mail linking to the approval of my claim for the full amount of our expenses, minus the $9xx.xx paid by American. The next day I received an e-mail to register for Assurant’s payment portal (separate from the claim portal) and received an ACH for the amount due on January 27.

Conclusion and lessons learned

To get the obvious out of the way, this is an incredibly valuable credit card benefit, and I’ll never book a flight with a credit card that doesn’t offer it again. I spent over $1,000 on high-quality clothes and got every penny of it back — and I still got to keep the clothes!

On a more fundamental level, one of the sources of my stress was exactly the issue that American pointed to in their approval of my claim: on multi-leg Alaska Mileage Plan trips like this, I almost always book each leg as a separate ticket, since Alaska prices out awards as one-ways anyway. That meant neither American nor Alaska was correctly “tracking” us across the country. On future trips where I know I’ll be checking bags, I might work harder at getting each leg onto a single reservation.

But ultimately, this is a story about the need for two things: urgency and documentation.

The second your bag is delayed, you have permission to go shopping, and I suggest you take it immediately. I do a lot of my shopping at REI anyway, but picking any store with a generous return policy is a good way to give yourself “permission” to buy everything you really want or need. Replace your electric toothbrush (now I have a travel toothbrush and a home toothbrush). Buy your favorite brand of underwear (now I have a LOT of boxer briefs). Get a new raincoat.

And keep everything. I even filled up the little bag Hanes underwear comes in with the tags and labels from all the stuff we bought, just in case. A lot of the ink on receipt paper and baggage claim tags fades within a day or two, so scan or take pictures of them immediately. Do it in the parking lot. The e-mailed receipt from REI conveniently included images of the items we bought, which made it even easier to print that to a file I could submit online. Find and download the credit card statement your original ticket purchase appeared on.

And remember: they’re the ones who screwed up. Your’re not taking advantage of them, you’re being made whole.

Cash, leverage, debt, equity, and the difference between fake and real opportunity costs

Worth doing with cash

Many years ago when I spent more time on the travel hacking circuit, I heard a guest talking about a then-current Office Depot/OfficeMax deal. She exclaimed, “it was worth doing with cash!” This made such an impression on me that it’s stuck with me through the years, and has exerted a kind of gravitational pull of commonsense that not all travel hackers are naturally endowed with, myself very much included.

Longtime readers will recall that over the course of the merger between Office Depot and OfficeMax, the stores continued to be operated independently (Madison, Wisconsin, where I lived at the time of this anecdote, had an Office Depot on one side of town and an OfficeMax on the other), but they had synchronized their weekly coupons. A common promotion at the time offered a $15 discount off the purchase of $300 in Visa or MasterCard gift cards (depending on the week).

The promotion worked at both stores, but the stores had different inventory and sales policies: OfficeMax had fixed-value gift cards that could be purchased with credit cards (like Chase Ink cards that earned 5 Ultimate Rewards points per dollar) and Office Depot had variable-value cards that could only be purchased with cash and debit cards. What this meant was that most people were stuck buying two $200 fixed-value cards with their Chase Ink cards, paying two activation fees, and earning a small profit before credit card rewards and liquidation costs.

The speaker at this gathering was making the simple point that $500 variable-value cards were worth buying without earning any credit card rewards at all: you could earn all your profit up front by buying $500 variable-value cards with cash, and not face any purchase restrictions at all; she could clear the store out, write them a check, and walk out with $1,000 in profit (after liquidation). As I recall, in this iteration of the promotion purchasing three $500 gift cards would trigger five $15 credits, for a pre-liquidation profit of $54.15 per 3-card purchase.

I still use this anecdote as a kind of quality control check when I’m exploring a new technique, or a new approach to an old technique, because it helps me break them into individual parts: which parts cost money? Which parts earn money? Is there a way to skip the parts that cost money and jump straight to the parts that earn money?

A simple example is bank account signup bonuses. Doctor of Credit curates an endless list of these bonuses, which typically let you earn a few hundred dollars for setting up a direct deposit and sometimes leaving some money in the account for a few months. Some of these banks also allow you to fund your initial bank account deposit with a credit card, usually limited to a few hundred or thousand dollars.

You can imagine someone taking these two facts and deciding “the best technique is to use my highest-earning credit card to fund accounts with banks with the highest new account bonuses that accepts credit card funding.”

In this example the error is clear: you should sign up for the highest new account bonuses regardless of whether they can be funded with credit cards. Accepting a $200 signup bonus instead of a $300 signup bonus so you can charge $500 to a credit card that only earns 2% in rewards is the purest false economy — use cash and earn the $300 instead.

Leverage

If ordinary Americans ever encounter the idea of leverage, it’s in one of two places: the purchase of a primary residence, and the gutting of the industrial and commercial giants of the 20th century. The principle is the same in both cases.

Given any amount of starting capital (including $0), you can earn an excess return on any investment through the addition of borrowed money: $100,000 spent on a $100,000 house allows you to earn the appreciation on a $100,000 house, but $100,000 spent on the down payment of a $500,000 house allows you to earn the appreciation on a $500,000 house. If you can’t make your mortgage payments, or the house craters in value, you can walk away with nothing but a stern warning on your credit report.

Likewise, in the leveraged buyout of a stodgy old industrial firm, investor groups can borrow against the assets of a company and strip it for parts. If they are able to unload the shell to some greater fool at a profit, then they’ve earned free money on the exercise. If not, they haven’t staked any of their own money on it to begin with anyway.

This is the core of the ideology of leverage: stake as little of your own fortune as possible to secure an equity interest with unlimited upside.

Against opportunity cost

Many pillars of elementary economics, which is as far as most business and finance journalists seem to make it, rely on the conceit of rational economic actors who are constantly operating at an “opportunity frontier.” That is to say, all their resources are optimally allocated across all available opportunities at all times. When a new opportunity comes along, the economic actor determines whether and how many resources to allocate to it by comparing it to all other existing opportunities.

I like to think of this as the “bump off” fallacy: each new opportunity is evaluated to see whether it should bump a lower-earning opportunity off the bottom of the stack of available opportunities.

The problem, which I have only become more aware of as I have become more experienced, is that virtually no one operates anywhere close to the opportunity frontier. This is frequently parsed by malicious people as “this generation would rather eat avocado toast than save for a down payment,” but I am making a much more literal argument: most people do not hold even their long-term cash savings in accounts that earn the maximum rate of interest available to them.

They are not guilty of anything for not maximizing their rate of return. There are only so many hours in the day, and too many people spend too many of them between working and getting back and forth from work. You would be insane to blame them for preferring dinner, a beer, and a football game than moving money back and forth between high-interest checking accounts.

The flip side of that is that “opportunity cost” is an absurd way to describe the choices of someone who is not operating anywhere close to the opportunity frontier.

You only get to keep the difference

There is a commonsense logic behind the concept of opportunity cost, however, which I use when making decisions about using cash or debt for any given opportunity: you only get to keep the difference.

That is to say, if an opportunity comes along that lets you earn (pulling a number out of thin air) 19.6% APY (1.5% per month annualized), and you choose to finance that opportunity with cash that’s currently earning 5.01% APY, then you shouldn’t take credit for the full 19.6% you see in returns, but only the difference between that and the return you would have earned on your status quo ante, a “mere” 14.59%.

Obviously I’m being a bit facetious: that would be an excellent thing to do with your cash savings, if you had to. But if you didn’t have to, and you could keep the whole whack, you’d be even better off.

Administered interest rates on credit card debt make a lot of things worth doing with debt

Back in November I described my distinction between “administered” and “market” interest rates. Credit cards offer a curious combination of the two: an administered interest rate of 0% on loans of between 15 and 50 days (depending on when the purchase falls in the statement cycle and the length of your grace period), and a (high) market interest rate on loans after each statement’s grace period has expired. A credit card earning 2% in cashback rewards offers even more favorable terms, the equivalent of a 2% yield, rather than interest charge, on each new loan you originate each month, as long as you pay it back in time.

Let me illustrate this with an example present at this very moment in the real world. The Giant grocery store chain is currently offering 2 or 3 points per dollar on the purchase of Vanilla Visa prepaid debit cards. Their variable-value cards still cost $6.95 (while Safeway’s cards have gone up to $7.95 in my region), so each purchase yields a profit of $3.05 or $8.05 in grocery rewards ($10 or $15 in grocery rewards less a $6.95 activation fee), minus any liquidation cost. This is a classic “worth doing in cash” situation: the profit is present however you pay for the gift card that generates it.

But remember, you only get to keep the difference. If you did pay with a debit card linked to an account earning 5% APY and it took 5 days to liquidate the gift card back into your balance, how much did it cost you? About $0.33 in interest, bringing your final profit down by the same amount.

In this situation, the rationale for using a credit card is obvious regardless of any rewards earned: why sacrifice the interest earned on your cash when you have access to a costless source of credit?

Inverting the logic of leverage

The common examples of leverage I offered, residential home purchases and corporate buyouts, have in common the basic conceit that acquiring ownership of a productive asset with borrowed money lets you secure a larger future income stream than you would be able to afford with your cash on hand, while enjoying an unlimited upside and capped downside.

What I am telling you is that these opportunities do not only exist at the tail end of the duration curve, the 30-year mortgage or the 10-year airline turnaround or the 5-year electric car plant retooling. The precise same logic applies at very shortest durations, where administered interest rates make debt free or profitable to take on.

When and where that is the case, using capital rather than debt to pursue the same opportunities puts a drag, rather than a tailwind, on your total investment return.