Reflections on #WestCoastDO

If you follow me on Twitter you know I spent this past weekend in Phoenix at the second gathering organized in large part by Matt at Saverocity, who was also the motive force behind March's friendly Mile Madness competition.

Before I get to my own thoughts, here are a few reviews/reflections/follow-ups I've already seen around Twitter (I'll update this list if I see any more – or just search for the #WestCoastDO tag):

• TravelBloggerBuzz
• Milenomics
• Travel with Grant
• Big Habitat (whose reselling presentation is pure gold, and worth a close study)

The Schedule

One difference between this event and the Mile Madness DO in Charlotte is that Matt and his team decided to move the focus of the event from the schedule of presentations to creating a productive social environment. In this he was hugely successful.

The event for me started Friday evening, at the evening wine reception in the lobby of the venue hotel. It seemed like almost everyone arrived Friday, in order to spend as much time with like-minded folks as possible. I met lots of old and new friends, and had a lovely dinner in the hotel's restaurant. After dinner lots of folks lingered in the resort's huge patio and bar area and chatted until the small hours.

On Saturday the event proper started, late enough that we could get a few hours of sleep and still have a decent breakfast, although there were still lots of bleary eyes at 10 am. The presentations and panel discussion were lively and wide-ranging. A few stood out:

• Frequent Miler gave an updated version of his manufactured spending presentation, including his latest research on the Target REDcard.
• Marathon Man's presentation was a breath of fresh air. It's no secret that he and I have a pretty fundamental difference of opinion (he wants fewer people to manufacture spend; I want people to manufacture more, better, and smarter). But it seemed like his "old" Blue Cash shutdown may have made him just a touch less cock-sure of the purity and genius of his worldview. Or he may have just still been feeling the previous night's festivities. Either way, I thoroughly enjoyed his presentation.
• Big Habitat (see above) shared his philosophy, techniques, and calculations for buying and reselling merchandise in order to generate miles and points. He's one of the best.
• Bengali Miles Guru gave a rollicking walkthrough of his year renting dozens of cars for no good reason, and indeed for no reason whatsoever, and the lessons he learned.

Saturday evening the festivities continued, including a quick trip to a nearby shopping mall, dinner, and more time on the Firesky patio with friends old and new.

Sunday morning, I barely pulled myself out of bed in time to run out and buy an American Express for Target card, a tool that had been missing from my arsenal for far too long!

The Conversations

While the presentations were great, the real heart of the event was the conversations we had all day over breakfast, lunch, dinner, drinks, and around the beautiful (and, importantly, warm!) fire pits the hotel conveniently provided.

In the travel hacking community, there's a fact that's both simple and powerful: everyone knows something you don't know. That's why whenever anyone accidentally calls me an "expert," I'm reminded of Matt's beautiful post on the subject. In a room with 150 other travel hackers, I know for a fact there are (at least!) 150 things I don't know. Some of them may be smaller things (how to beat the lines in Vatican City – thanks Tom!), and some of them may be bigger things (how to beat the rental car racket), but I don't know any of them.

Of course, the groundwork for these conversations was laid weeks and months in advance. If you're interested in attending a conference like this, I feel it probably doesn't make much sense to just show up and hope for the best. Join online communities like The Forum, follow and interact with folks you respect on Twitter (or Facebook, I guess – I don't use it), leave comments, ask questions, share datapoints. It's a community, after all, and the more engaged you become in it, the more you'll get out of it.

The Thanks

Finally I want to thank everyone who made the event so special. I truly didn't want it to end, and it wouldn't have been the same without you. So thanks to Dean, Matt, Ivan, Kenny, Cindy, Nancy, Kunal, Scott, Eric, Tom, Annie, Aegt, all the presenters, and everyone else I managed to speak with! We'll have to do it again soon.

Deciding between low fees and bonus categories

Several months ago, around the time I moved West and decided to try my hand at blogging and travel hacking for a living, I made a sort of philosophical decision that I would only manufacture spend in bonus categories, except for the few very, very cheap options still available, where I would continue to manufacture non-bonused (but hopefully valuable!) spend.

For example, while US Bank and Nationwide Visa Buxx loads cost $2.50 and $2.00, respectively, for loads up to $500, I'm willing to earn a mere 2% or 2.22% cash back on that spend, but for gas station, drug store, and grocery store spend I decided to direct that spend exclusively towards cards that featured above-average earning rates.

That's a perfectly reasonable decision but, being me, I've long wanted to expose it to a bit more thorough analysis and make sure it's rational as well. This is that analysis.

Bonus categories

There are quite a few bonus categories which typically generate the most interest among travel hackers, including gas stations, drug stores, grocery stores, and office supply stores. Each of these might feature a variety of price points: $3.95, $4.95, or $5.95, and a variety of associated discounts, like the Visa Savings Edge 1% discount at Staples.

Non-bonused spend

In addition to bonus categories, there are a number of manufactured spend techniques that don't generate bonus category rewards, but cost somewhat less than spend in those bonus categories. For example, I've been flogging AAA Visa gift cards and the assortment of Visa Buxx cards for as long as I can remember. The fees for what we might call "generic" techniques tend to fall between $2 and $3 per $500 in manufactured spend.

Points-only earning

For spend on cards which generate only points, this analysis is relatively easy (although not as easy as it looks – more on that below). If your bonus category earns a higher multiple than the ratio of bonused category costs to non-bonused costs, you'd naturally be better off manufacturing the spend in a bonus category.

To provide a trivial example of this, the US Bank Flexperks Travel Rewards Visa card earns 2 Flexpoints per dollar spent at gas stations (or grocery stores – wherever you spend the most each statement cycle), and 1 Flexpoint per dollar spent everywhere else. If you're manufacturing spend exclusively for the value of the Flexpoints (redeemable for up to 2 cents per point on mileage-earning airline tickets), you're (almost) always better off earning 1,008 or 1,010 Flexpoints for $3.95 or $4.95 (plus liquidation costs) rather than earning 503 points for $3 (ditto), since you're paying just 33-66% more for 100% more Flexpoints per dollar.

High-spend bonuses

Next, there are cards where you're interested in manufacturing a certain amount of calendar or membership year spend, but which don't feature bonus categories or which have points that aren't worth manufacturing for their own sake.

This category is defined by products like the American Express Delta Platinum and Reserve cards, which offer bonus Medallion Qualifying Miles and redeemable Skymiles at the $25,000/$50,000 and $30,000/$60,000 spend levels, respectively, in addition to the Medallion Qualifying Dollars waiver offered to all American Express Delta co-branded credit card holders who spend $25,000 or more per calendar year across all their Delta co-branded credit cards.

Since these cards don't have any bonus categories, if you just want to meet those high-spend thresholds there's no reason not to meet them as cheaply as possible.

As another example, I've recently written about using Chase Marriott Rewards Premier cards to achieve Marriott Rewards Gold elite status. Since Marriott Rewards points are worth less than one cent each under most circumstances, you'd be crazy to cannibalize any of your valuable bonus category spend meeting that spending requirement, but might consider moving some of your cheaper spend towards the Premier card, as I in fact have.

As I've documented extensively, $3,000 spent on the Marriott Rewards Premier credit card would cost not just the $18 spent on PIN-enabled Visa gift cards, but also the $60 or $66 in foregone cash back you'd earn by putting the same spend on a 2% or 2.22% cash back card. It's fairly insane to buy 3,000 Marriott Rewards points for $60, but it becomes more understandable if you intend to use the elite-qualifying night to achieve Marriott Gold elite status – after all, even $66 is a pretty cheap mattress run for elite status.

Mixed-purpose cards

And now we've come to the crux of the issue: how do we treat cards that have both bonus categories and spend thresholds?

Here another example comes in handy: how much does it cost to achieve Hilton HHonors Diamond elite status using the American Express Hilton HHonors Surpass card?

Well, the card awards Diamond elite status after $40,000 in calendar year spend, so:

• At $3 per $503, Diamond elite status costs $238;
• At $4 per $504, Diamond elite status costs $317;
• At $5 per $505, Diamond elite status costs $396;
• At $6 per $506, Diamond elite status costs $474.

This straightforward accounting fails, however, because the first entry is in a non-bonused category, earning just 3 HHonors points per dollar, or 120,000 points total, while the other three entries earn 6 HHonors points per dollar (gas, gas, and grocery, respectively), or 240,000 points over the course of $40,000 in manufactured spend.

At each of our bonused price points, the marginal 120,000 HHonors points each cost:

• $4: 0.07 cents;
• $5: 0.13 cents;
• $6: 0.2 cents.

Hilton HHonors points get a bad rap from a lot of folks in the community, but it's ludicrously easy to get 2-5 times more value than that from even the most typical Hilton redemption.

Liquidity has value

Finally, there's one point that's not exactly fashionable to mention: liquidity. Liquidity, in the sense I mean it, is the ability to turn available credit limits into cash, that can be used (preferably through a mileage-earning debit card) to pay off existing credit card balances, while also earning credit card rewards on the initial transaction. That has value. And, most importantly, it has value independent of the value of the miles generated by the initial transaction.

Consider a travel hacker with just two credit cards and $10,000 in credit card debt: the Hilton HHonors Surpass American Express card ($0 balance, $11,000 credit limit) and the US Bank Flexperks Travel Rewards Visa ($10,000 balance, $10,000 credit limit).

A straightforward analysis of the type I gave above would suggest that the user would be better off manufacturing $10,000 on the HHonors Surpass card exclusively in bonus categories, earning 60,000 HHonors points. The problem is that for many users in many parts of the country, manufacturing that much spend in bonus categories is hard. Grocery stores and gas stations often have restrictive policies preventing large purchases, while non-bonused-category merchants can be more accommodating.

In this case, using the HHonors Surpass card at a non-bonused merchant can, while generating fewer miles per dollar, produce the liquidity necessary to pay off the Flexperks Travel Rewards card in time to avoid interest charges and liberate the card's credit limit for spend in that card's own bonus categories.

Most travel hackers will tell you you're crazy to play the game while carrying credit card balances, which eat up any rewards you could possibly earn from your activities. I'll tell you that's only true if you're paying interest on your credit card balances. Liquidity is what makes it possible to not just carry credit card balance, but profit from them, and it's worth considering in any analysis.

Thrilling follow-up to subscription week!

Last Sunday I introduced Subscription Week, 5 posts (one, two, three, four, five) selected from my archives which, while wide-ranging, I felt represented a selection of the best work I do here for my readers and which I hoped would encourage some casual readers or fence-sitters to sign up for PayPal subscriptions to help ensure the continued viability of this site.

Those who subscribed by last Friday should already have received an e-mail with information about accessing the newsletter archive; if you didn't receive an e-mail (after checking your spam folders), drop me a note and I'll get it to you ASAP.

The subscription scoreboard

I gave all sorts of figures in my Sunday post, but since last week was Subscription Week, let's stick to PayPal subscriptions. Here were my subscription figures last Sunday:

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I'm not sure what I was expecting, but I am an eternal optimist. I have a lot of readers, a lot of Twitter followers, and a lot of e-mail correspondents, but just 120 PayPal subscribers. I sort of figured if I could get up to 200 active subscribers that would be a nice round number that might justify me continuing on at this for another year.

Well, we didn't quite get there. Here are my current subscription figures:

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Conclusion

When I first wrote about my move to self-employment a lot of folks suggested going to a subscription-only model. In a way that would be easier for me, since it would both let me talk openly about stuff I'm discrete about here on the blog and give me more time to work on my other writing projects (or "get a damn job!" as other commenters have suggested).

On the other hand, I love writing for a larger audience and helping people in the comments, by e-mail, and on Twitter. If I went subscription-only it seems like that kind of presence would naturally disappear.

So I don't know. It may even turn out that the little Google Adsense box in my sidebar will start spinning off gobs of cash and render the whole discussion moot.

I have until the beginning of February to renew my hosting agreement, and I have to make some kind of a decision by then (and no, credit card affiliate links are not on the table). Stay tuned!

Survival bias and the "ease" of travel hacking

There's been a lot of great writing lately in the travel hacking blogosphere about the traps being laid by affiliate bloggers and others who suggest that travel hacking is so easy that "anyone can do it."

My favorite post on the subject was "Airheads in the Rewards Credit Cards Bubble," by Ric Garrido at Loyalty Traveler, who was reacting to Mommy Points' claim that:

"In my 3.5 years of writing about this type of stuff, I only personally know one person who has gotten a rewards credit card primarily for the travel rewards, and then maxed it out on unneeded items. I know hundreds, even thousands, who have used rewards cards successfully to maximize the purchases they were going to make anyway."

Like Ric, I find this claim utterly preposterous.

Survival bias is why your intuition is wrong

There's a concept in economic history called "survival bias" which helps explain Mommy Points' intuition that it's easy for most folks to manage multiple credit card signup bonuses and juggle things like bonus categories, all without spending beyond their means.

Survival bias is the observation that statistics compiled based on currently-existing companies (for example, the Dow Jones Industrial Average or S&P 500) will show inflated returns over long periods of time because they don't take into account the $0 value of companies that fail and are no longer included in the relevant index.

In other words, if you bought a weighted average of the S&P 500 in 1957, you wouldn't actually accrue the entire gains suggested by the increase in the value of the index since then, since the index today contains different companies than when it launched – some of the original companies have become worthless (Delta Airlines is a component of the S&P 500 today, for example, but its pre-2007 shareholders were wiped out in bankruptcy).

In the same way, by definition an overwhelming majority of currently-active travel hackers are successful travel hackers, since out of the many people who start exploring the game each year, those who are unsuccessful will also usually no longer be active in the community, and won't be sharing their experience with bloggers like Mommy Points. What you end up with is a group of folks who think travel hacking is easy because it was easy for them — after all, they were and are successful at it.

The game is not easy and it is not for everyone

There are serious cognitive and organizational demands to being successful at travel hacking:

• Keeping track of credit card application dates and minimum spend requirements. If you can't or don't want to do this, you shouldn't be playing this game, as The Miles Professor's friend discovered;
• Keeping track of anniversary dates and annual fees. If you can't or don't want to do this, you'll end up paying annual fees that cut directly into the value you're earning from your credit cards;
• If you manufacture spend, keeping track of the value remaining on every single one of your prepaid and reload cards. A single card lost under a car seat or couch cushion, or a money order left in the bottom of a drawer can wipe out a month's profit, or more.

For a lot of folks, it's not fun, interesting, or easy to meet those challenges. They should find something else to do with their time.

None of this is meant to discourage new people from joining us. If you're a good fit, then travel hacking is a fun and lucrative way to achieve your goals, whether it's to travel more, travel cheaper, or just to pocket some extra cash every month.

But if the game isn't for you, then the sooner you recognize that fact – the better. You can still read trip reports about sucking down champagne in Lufthansa first class, and when you get to the inevitable call to action to apply for another credit card you don't need, you can just close the tab and get on with your life.

Subscription week: Alaska Airlines debit card

[In today's final installment of Subscription Week, I've picked one of my favorite posts, thanks to the simplicity and genius of the mile-earning possibility: the Bank of America Alaska Airlines debit card. A person who was only interested in flying for pennies on the dollar could theoretically dispense with "manufactured spend," in the traditional sense, and just cycle tens of thousands of dollars through a mile-earning debit card to pay for all their award travel. Thanks to this post, and the signup link I shared, my readers were able to earn hundreds of thousands of Alaska Airlines Mileage Plan miles before the card finally disappeared for good. I also shared that free peer-to-peer Venmo transactions successfully earned miles with the card.

Since this post appeared, I've similarly exhorted my readers to sign up for the Suntrust Delta SkyMiles World Check Card (now closed to new applicants) and the UFB Direct Airline Rewards Checking account (still available!). This post originally appeared on May 24, 2013 — check out the comments there.]

Alaska Airlines debit card still available

I use the Alaska Airlines debit card issued by Bank of America and linked to my Bank of America checking account fairly aggressively in order to manufacture Alaska Airlines Mileage Plan miles, earning 1 Mileage Plan mile for every $2 I spend on the debit card, including PIN-based and signature transactions.

I consider Mileage Plan miles to be one of the most valuable airline currencies (although I credit my Delta flights to my Delta Skymiles account in order to retain valuable  Medallion elite status), since they can be used for one-way award tickets on Alaska Airlines and American Airlines flights (including "last seat" availability on Alaska-operated flights), and they allow you to combine one Delta-operated leg with another operated leg by Alaska or American, something you can't do with Delta's own Skymiles.

There is a lot of mistaken speculation (for example, in this flyertalk thread) that Bank of America no longer issues the Alaska Airlines debit card to new customers, so I want to make sure my readers are aware that you can still apply for the card. I first heard about the currently working link from Gary at View from the Wing, who heard about it from Free Frequent Flyer Miles.

So, if you have a Bank of America checking account, you can apply for an Alaska Airlines debit card here.

You can generate lots of easy, free, and valuable miles by using your Alaska Airlines debit card to fund Venmo transactions, load Bluebird and Gobank at Walmart, or pay other bills that only accept debit cards (although some transactions, like tax payments, may not earn miles).

One final note on the Bank of America Alaska Airlines debit card: unlike co-branded credit cards, your Alaska Airlines miles do not post after your monthly checking account statement closes. Rather, the miles are issued at the beginning of the month following the miles-earning debit card activity. I'll typically see my miles post to my Alaska Airlines Mileage Plan account between the 5th and 10th of the month, for the preceding month's debit card transactions.

Subscription week: PayPal Extras MasterCard

[Back on Sunday I explained that this week, I'm re-running 5 "classic" Free-quent Flyer Blog posts to encourage readers who find value in what I'm doing to sign up for a weekly or monthly PayPal subscription. Today's Subscription Week post is a favorite of mine: starting with a few scattered references here and there, I outlined a brand new manufactured spending technique which, while it doesn't offer outsized earning potential (a little over $400 per year), can be easily integrated into techniques many of us are using already. This post originally ran on December 18, 2013 — check out the comments there.]

As always, before I get started with today's news I have to get a few things out of the way.

First of all, the hack that I'm discussing today involves PayPal. I know everybody hates PayPal. Heck, I hate PayPal too. But they've also been very good to me. If you feel like ranting about PayPal, the comments, as always, are open.

Second, as always I want to give credit for this hack where credit is due. That's a pretty short list this time. I originally got the idea from a comment left here on the blog by Phil. If you read this, thanks Phil! Over the course of the day or two I spent researching this, I was only able to find one veiled reference (I think) left on a Frequent Miler post over the summer. So, thanks to DFW, too, I guess.

Finally, I haven't tried this personally. I'll be applying for new cards at the end of January or beginning of February, and will of course post an update then. In the meantime, I would love to hear about readers' experiences if they're able to make this work – or, especially, if not.

THE PAYPAL BUSINESS DEBIT MASTERCARD

As my readers know, one of my favorite tools for manufactured spend is the PayPal Business Debit MasterCard. It has two amazing functions:

• It earns 1% cash back on all non-PIN transactions, including all online transactions;
• It's a PIN-enabled debit card that can be loaded using PayPal My Cash cards and emptied at Walmart.

This is an amazing combination of features. But unfortunately as it stands, you have to choose which benefit to take advantage of: access to debit features like money orders, Walmart Bill Pay, and prepaid card loads (Bluebird and Gobank), or 1% cash back.

YOUR NEW .83% CASH BACK DEBIT CARD

When you don't have enough funds in your PayPal account to cover a Debit MasterCard transaction, instead of having your transaction rejected, PayPal gives you the option of pulling the funds from a backup funding source. You can choose any bank account linked to your PayPal account, or you can use a PayPal Extras MasterCard.

The PayPal Extras MasterCard earns "points" which can be redeemed for cash into your PayPal account: you can redeem 6,000 points for $50 in cash, or 0.83 cents per point. You can only earn 50,000 points per year (8 $50 redemptions, plus some change).

According to Phil's comment, these backup funding transactions earn points on the Extras MasterCard.

Since I don't have an Extras MasterCard yet, I can't confirm the limits on these backup funding transactions or whether they earn points. The standard limit on backup funding transactions is $1,000 per day, but I don't know if the same limit applies when the backup funding source is a PayPal Extras MasterCard.

IT GETS BETTER

As I mentioned, the backup funding source is only used when you don't have enough money in your PayPal account to cover a debit card transaction. That means that rather than loading your PayPal account with a PayPal My Cash card and then emptying the balance with your Debit MasterCard, you will want to use your Debit MasterCard when your account balance does not cover the transaction.

Amazingly your PayPal Extras MasterCard is managed from within your PayPal account and you can use your PayPal balance to pay off your Extras MasterCard. That means you can load a PayPal My Cash card to your account and move the money directly into your Extras MasterCard to pay off the balance you incurred using your Debit MasterCard.

WHAT IT MEANS

Let's take a look at a simple pass through this hack.

• Assume a PayPal balance of $0.70;
• Use your PayPal Business Debit MasterCard to purchase a $1,000 money order from Walmart;
• After using the $0.70 in your account (and covering the money order purchase fee), your PayPal Extras MasterCard will be charged $1,000;
• Buy 2 $500 PayPal My Cash cards at CVS for $7.90 and load them to your PayPal account;
• Move the money from your PayPal account to your Extras MasterCard;
• Redeem 1,000 points for $8.33 (when you have 6,000 points).

You'll have spent $8.60 for the money order fee and My Cash cards, and earned $8.33 worth of Extras points – and manufactured $1,007.90 in spend at CVS.

WHAT DO YOU THINK?

Does it work? Are you going to try it? Should I have kept my mouth shut? Inquiring minds want to know! See you in the comments.

Subscription week: "old" Blue Cash

[As I explained Sunday, this week I'm re-running 5 "classic" Free-quent Flyer Blog posts, with the hope that readers, both regular and new, will decide that this blog is worth supporting through a weekly or monthly PayPal subscription. Today's post is by a huge margin my most popular, and highlights a key difference between this blog and many others in the travel hacking space: since I don't and have never received any affiliate money from credit card companies, I can write about incredibly lucrative but – because of affiliate agreements – essentially ignored products like what's known as the "old" Blue Cash card, from American Express. While the post has aged well, there are a few oversights: Reward Dollars can be redeemed for statement credits, not cash directly deposited into a bank account. Additionally, my claim that American Express doesn't code 7-11 store locations as gas station was hyperbolic; 7-11 stores with gas pumps are frequently coded as gas stations by American Express. This post originally ran on January 3, 2014 — see that original post for comments.]

I wrote early last month about my search for a new "workhorse" card to replace my Citi ThankYou Preferred card which, during my first 12 billing cycles, earned 5 ThankYou points per dollar spent at grocery stores, gas stations, and drug stores. With just a week left in that promotional period, imagine my excitement in seeing this FlyerTalk thread.

By opening this link in a new browser, "private browsing" session or "incognito" window, it's still possible to apply for what people are calling the "old" Blue Cash card. This "old" card has a totally different earning structure than the "new" Blue Cash Everyday and Blue Cash Preferred:

• On your first $6,500 in purchases made with the card: 1% cash back at gas stations, grocery stores, and drug stores, and 0.5% everywhere else;
• after spending $6,500: 5% cash back at gas stations, grocery stores, and drug stores, and 1% cash back everywhere else.

In other words this card is roughly comparable to the Citi ThankYou Preferred offer that's expiring for me, and I plan on applying for this card later today (after I decide on some additional cards for this impromptu application cycle).

Here are a few things to keep in mind:

• Your net annual earning rate will be slightly less than 5% because of the lower earning rate on your first $6,500 in spend;
• but unlike ThankYou points, which must be redeemed for mortgage checks, student loan rebate checks, or travel through the ThankYou booking tool in order to get a full 1 cent per point in value, Blue Cash "reward dollars" can be redeemed directly for cash;
• 5% cash back is only awarded on gas purchases of up to $400;
• and in my experience American Express does not code 7-11 store locations as gas stations and does not award gas station bonus points for purchases there.

Here on the blog I tend not to make explicit recommendations, since every reader's travel goals and application timelines are different.

In this case I'm inclined to make an exception and say that if you are able to take advantage of these bonus categories, you should strongly consider applying for this card right now. This offer will not last forever, and you will regret not carrying this card when you start reading about how much cash back other members of the community are earning.

Subscription week: Evolve Money

[As I explained Sunday, this week I'm re-running 5 "classic" Free-quent Flyer Blog posts. One of the most exciting new developments this year in the world of manufactured spend was Evolve Money, an online bill payment service that, when launched, allowed tens of thousands of dollars in monthly online bill payments to a variety of merchants, which could be funded with prepaid debit cards. When the service first launched, payments could even be funded with credit cards, something my PayPal subscribers learned about all the way back in February, 2014. Unfortunately, that loophole was closed soon after a mainstream blogger publicized it. Much of the original research into Evolve Money took place on this blog, and can be accessed through my "Evolve Money" tag. This is the post that began it all. It originally ran on January 16, 2014 — see that original post for comments.]

HOW EVOLVE MONEY WORKS

Evolve Money is a service that allows you to pay your bills online – for free – using a Visa, MasterCard, or Discover debit card, REloadit packs (available at some grocery stores), or a product called "Evolve Pay Bucks."

You can create an account to store your payees, or use the service as a guest and input your bill information each time you pay a bill.

After searching their database of payees, you select the biller you want to pay, enter your account information, then choose your payment method.

That's it. It took me a few seconds to set up an account, add my MasterCard debit card, and make a number of experimental bill payments. I'll keep my readers updated with those results.

WHAT PAYEES ARE AVAILABLE?

There's good news and bad news on this front.

First, the bad news: as far as I can tell no bank's credit card division is listed as an eligible payee.

The good news is there are a lot of payees that are potentially lucrative. The list is incredibly long (it's free to search, so go check it out for yourself), but here are some highlights I found:

• Mortgages: Bank of America Mortgage, JP Morgan Chase Mortgage, Wells Fargo Home Mortgage, PNC Mortgage, Countrywide Home Loans, etc.;
• Student Loans: Federal Student Loans - All Servicers, Discover Private Student Loans, Citibank Loan/Private Student Loan/Line of Credit, Acs Educational Services, Great Lakes Educational Loan Services, etc.;
• Savings Accounts: Utah Educational Savings Plan, TD Ameritrade 529 College Savings Plan, Schwab 529 College Savings Plan, etc.;
• Insurance Premiums: Blue Cross Blue Shield (every state);
• Tax Payments: hundreds and hundreds of city and county revenue departments are listed.

WHICH DEBIT CARDS WORK?

I can confirm that the PayPal Business Debit MasterCard does work for bill payments, and these transactions are processed as signature purchases which should earn 1% cash back. My regular readers know what that means: you can load your PayPal account using PayPal My Cash cards purchased with a rewards-earning credit card, then earn 1% cash back liquidating those funds paying bills you wouldn't ordinarily be able to pay with a credit card. You'll be earning your credit card rewards – and a small profit – for transactions that wouldn't otherwise earn rewards.

If you are currently paying a mortgage or student loan using withdrawals from your bank account, take a look at the list of available payees and decide whether you can take advantage of this service instead and earn rewards on those payments.

Subscription week: Walmart bill payments

[As I explained yesterday, this week I'm re-running 5 "classic" Free-quent Flyer Blog posts. Today's post is a true classic, the first clear, public description of one of the most useful and flexible manufactured spending techniques: Walmart bill payments. The post that launched a thousand trips, it's still one of the most versatile and flexible techniques available, although there have been changes: for example, American Express-issued credit cards are no longer directly payable at Walmart. There are also a few oversights that are embarrassing in retrospect (Discover bill payments cost $1.50, not $1.88, for 3-day bill payments). This post originally ran on August 26, 2013 — check out the comments there.]

Walmart allows you to pay credit card bills using any PIN-based debit card

HOW IT WORKS

Walmart Money Center registers and, in locations without a separate Money Center, Customer Service registers are integrated with the CheckFreePay bill pay network. At any such register, you can ask to make a credit card bill payment and use any PIN-based debit card to pay the bill and the associated fee.

You can use up to 4 PIN-based debit cards per bill pay transaction, while paying a single transaction fee.

Credit and debit cards are issued by banks: Chase credit cards are issued by Chase, American Express credit cards are issued by American Express, Bank of America credit cards are issued by Bank of America. However, each card is also linked to a payment network: Visa, MasterCard, American Express, Discover.

The single most important thing you have to know in order to take advantage of this technique is that when you pay your credit card bills at Walmart, you must make the payment out to the payment network, not the issuing bank.

So even though your Chase Sapphire Preferred Visa Signature card and your Chase Ink Plus MasterCard are both issued by Chase, to pay your credit card bills at Walmart the payee for the Sapphire Preferred will be "Visa" and the payee for the Ink Plus will be "MasterCard."

WHAT IT COSTS

This section is based only on my experiments at my local Walmart store locations: your experience may differ.

There are two price points in the CheckFreePay system at Walmart: $1 "3 business day" payments and $1.88 "next business day" payments. Unfortunately, not every credit card payment network has both payment speeds enabled. Here are the results of my experiments:

• Visa: Next business day only ($1.88)
• MasterCard: Next business day only ($1.88)
• American Express: Next business day ($1.88) or 3 business day ($1)
• Discover: Next business day ($1.88) or 3 business day ($1)

So if you want to make a credit card payment to a Visa credit card at my local Walmart, you must pay $1.88: the $1 payment option is not available. This may vary by store location or employee. 

WHY IT MATTERS

Ever since the Federal Reserve issued new regulations forcing prepaid card issuers to allow their cards to be used as "true" PIN-based debit cards, we've been in a very exciting time for travel hacking. For example, Chase allows up to $2,600 in free gift card purchases per Chase credit card, per rolling 30-day period. Likewise, many grocery stores (a common bonus category) allow you to purchase $500 Visa and MasterCard gift cards at a typical cost of $5.95-$6.95.

Besides gift cards, in many parts of the country it's still possible to buy Vanilla Reload Network reload cards at drug stores like CVS, and PayPal Cash cards at 7-11 store locations that are processed as gas stations. 

The problem in this era of virtually unlimited manufactured spend is liquidating prepaid cards once you've purchased them.

Bluebird is a free option, loadable at all Walmart registers using PIN-based debit cards up to $1,000 per day and $5,000 per month, but those loads count against the same $5,000 calendar month limit as Vanilla Reload Network cards.

Gobank is another great option I've extensively covered, but while it's free to load Gobank accounts at Walmart up to $1,100 per transaction and $2,500 per day, it's a Green Dot product that's subject to shutdown if you exceed undisclosed monthly limits or if your loading pattern is deemed "unusual."

PayPal has a $4,000 rolling 30-day load limit using PayPal Cash cards, but unloading your account can cause problems since PayPal is notoriously sensitive to abusive behavior.

All of those problems have now gone away: you no longer need an intermediate product to liquidate your prepaid cards.  Instead, you can bring up to 4 PIN-based debit cards per bill pay transaction to your local Walmart and at a cost of $1 or $1.88 send the card balances directly to your credit card.

THE RISKS

There are 3 primary risks to this technique that I want to be perfectly clear about up front.

First, there's the risk of having an account shutdown. There are many reports of MyVanilla Debit cards being shutdown without warning, and it's still unclear what loading and unloading pattern is safest. I don't have an inside line on MyVanilla Debit's fraud prevention algorithms, but I believe cash advances are probably the riskiest method of unloading the cards, because of the high limits and fixed $1.95 fee. Large Walmart transactions are probably a close second. So while this is a great technique for liquidating MyVanilla Debit balances, you still should be careful about spacing your loads and unloads out over the course of the month. And of course, even being careful can't guarantee that your account won't be closed.

Second, there's the risk that Walmart will consider your payments suspicious activity. There are lots of reports in this thread of Walmart employees being prompted to record customers' Social Security numbers, home addresses, and other personal identifying details. Those requests seem to be triggered by credit card payments over $2,000, although the exact level that triggers scrutiny isn't clear. Many people are made uncomfortable by disclosing this sensitive information to Walmart tellers. It appears the best way to avoid doing so is to keep your bill payments below $2,000, although this will raise your cost per dollar of manufactured spend.

Finally, when it comes to Walmart there's always the risk of employee incompetence. This can take a number of different forms. Of course, an employee may simply not know how to make these bill payments. Alternatively, there are reports that some store locations demand that you physically bring your most recent credit card statement into the store. Further, some store locations refuse to allow bill pay transactions to be funded by gift cards (cards that don't have your name embossed on the front). Finally, some employees may feel uncomfortable with multiple, high-value transactions, and simply refuse to help you. Be aware that this is not corporate policy: you've just found an incompetent employee, or a store location with an over-vigilant store manager. Visit another location or return at a different time.

These are manageable risks, but they do exist and you should be aware of them before beginning to use this technique. As always, I recommend starting slowly, using money that you can afford to be temporarily without if something goes wrong, and watching your credit card statements carefully to make sure that each payment posts correctly.

CONCLUSION

This is a very basic overview of this technique. It works and it can increase your volume of manufactured spend while only slightly increasing your cost per point.

Tomorrow, I will provide my analysis of the volume and cost per dollar of manufactured spend that you can achieve using this technique, and I'll compare it to some other popular techniques.

Later in the week I'll discuss some of the most lucrative opportunities this technique unlocks and share my own plans to use it going forward.

If you've already been using this technique, please share your experiences in the comments. How long do your CheckFreePay payments take to post? Do they post at the beginning or end of the business day? What problems have you had dealing with Walmart employees, and how have you resolved them?

Introducing subscription week!

About 5 months ago, I left my job in New England to move to the upper Midwest, where I've been happily plugging away on this blog and grinding out a living as a travel hacking enthusiast. I've enjoyed posting more regularly, helping readers, and the freedom that comes from having no one but my readers to answer to.

A snapshot of the Free-quent Flyer empire

After almost 2 years blogging, today this site has an average of 3,519 unique visitors per week, plus around 1,000 more who subscribe to my RSS feed or receive posts by e-mail.

Meanwhile, there are 3 main ways readers financially support the site. First is the use of my referral links, all conveniently assembled on my "Support the Site!" page. The two best performing links so far are my BeFrugal and TopCashBack referral links. Both have long delays between referrals and payouts, but enough people have signed up that I end up hitting BeFrugal's $25 redemption threshold about once a month:

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On the other hand, about one TopCashBack referral goes from "pending" to "payable" status each month. You can see this month's hasn't quite reached that status yet:

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The second way readers support the site is by bookmarking or clicking through my Amazon.com referral link, which kicks back a small percentage of each purchase to me. Many readers have done so, and I've been earning roughly $10 to $20 per month, for which I'm incredibly grateful to my loyal readers!

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The third and most important way readers financially support the site is by signing up for weekly or monthly PayPal subscriptions. In total, I have 120 active PayPal subscribers, most of whom contribute $2 monthly, of which I receive $1.64, after PayPal takes their cut. Others contribute $5 weekly or monthly, which I earn $4.55 on, and a few heroes have signed up for $10 monthly subscriptions, of which I get $9.41. PayPal doesn't have any convenient way of displaying this kind of information, but here's the dashboard:

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Last month those subscriptions added up to $309.23 after fees.

Introducing Subscription Week!

As you can see, PayPal subscriptions provide the overwhelming majority of this site's revenue, but 120 active subscriptions means that just 2.6% of my weekly readership, or roughly 0.8% of my monthly readers, have signed up!

That's why this week, I'll be re-running 5 "classic" Free-quent Flyer Blog posts, which I think illustrate the different kinds of content that I hope make this blog worth paying (a nominal sum) for.

If you're a regular reader, I do hope you'll consider subscribing.

And if you're already a subscriber, why not take the opportunity to move from a $2 to $5 subscription, or from a monthly to weekly one?

No matter what, I hope you enjoy this week's classic posts from the archive, starting tomorrow. There are a lot of gems in there – picking out just 5 was the toughest part!