Chase Sapphire Preferred is terrible, get Slate instead

I'm going to do my readers a favor and assume that by the time they've graduated to blogs like mine from the training-wheels affiliate bloggers, they're perfectly aware of my objections to the Chase Sapphire Preferred, so I won't relitigate that case today. Suffice it to say, the only person who should even entertain the notion of paying a $95 annual fee for the card is a business traveler who's reimbursed for their travel expenses and is allowed to pay for their own hotels and meals while on the road. Even then, I'd be skeptical.

But whenever I rail against the Sapphire Preferred, someone inevitably comes back with their supposed trump card: "Sure," they say, "you'd have to be crazy to keep the Sapphire Preferred, but a 40,000 Ultimate Rewards-point signup bonus makes it worth applying whenever you're eligible for a new bonus."

That's wrong too. Here's why.

Both Sapphire Preferred and Slate can be product-changed to Freedom

While Sapphire Preferred is an Ultimate Rewards-earning card and Slate isn't, both products are "own brand" Chase credit cards, and cardholders can call in to request a product change to the best no-annual-fee Ultimate Rewards-earning credit card: Chase Freedom.

That means the end game is the same with both cards: a product change to Freedom. The only comparison worth making is the advantages of signing up for each card in the first place. So which card offers bigger rewards for signing up?

What are 40,000 more Ultimate Rewards points worth to you?

A lot of bloggers will try to tell you what 40,000 Ultimate Rewards points are worth. A night at the Park Hyatt Vendôme costs 672 Euro, so 40,000 Ultimate Rewards points must be worth $810!

But I don't really care what 40,000 Ultimate Rewards points are worth in the abstract. I care what 40,000 more Ultimate Rewards points are worth.

And the answer is that if you're not going to redeem them, they're worth $400.

Now, maybe you are going to redeem them. Maybe you keep your Ultimate Rewards balance as low as possible by continually redeeming them for premium cabin international trips and luxury hotels. But even if so, don't value 40,000 more Ultimate Rewards points at the highest value you get from the program; value them at the average value you get across all your travel redemptions.

What is a $30,000 negative-interest-rate loan worth to you?

I wouldn't have thought it was possible, but last week I understated the value of the Chase Slate introductory balance transfer offer of no balance transfer fee for transfers within the first 60 days, and a 0% interest rate on balance transfer for 15 months.

I wrote, "for the first 60 days of a Slate account membership, you can transfer up to $15,000 in balances with no balance transfer fee."

But that's not exactly right. You can transfer up to $15,000 from non-Chase-issued credit cards in the process of opening a new account, but that actually has nothing to do with the $0 balance transfer fee and 0% balance transfer APR: it's a restriction Chase places on all balance transfers.

In fact, Chase's rule is that only $15,000 can be transferred in each rolling 30-day period. Since the $0 balance transfer fee lasts for the first 60 days of card membership, you're actually able to transfer up to $30,000 under the no-fee, 0% APR offer.

Of course, that would require having a sufficiently high credit limit, but Chase does allow you to transfer available credit from other credit cards, so you can always scrounge up as large a credit line as possible from your worthless Marriott, British Airways, Hyatt, and Southwest credit cards, for example.

Before I dig any deeper, let's be clear on the math here: your $30,000, 15-month loan has a negative interest rate because you've transferred the balance from other, rewards-earning credit cards. Using conservative assumptions of a 2% cash back credit card with 1% in purchase and liquidation fees, your $30,000 loan is worth a minimum of $300 — before you even get around to using the money!

So, how should you use the money?

Money is fun. Lots of money is even more fun

So now you've got $30,000 in cash lying around, and you only need to make minimum payments on your new Slate card for 15 months. What do you do with the cash?

• Max out high-interest savings accounts. Maybe you're like me and you drip a steady amount into your high-interest savings accounts each month. That's no longer necessary: max them out and reap 5% or higher APY on your savings.
• Pay down your mortgage. While your home is hopefully financed at an extremely low interest rate, you may still be paying private mortgage insurance if you haven't yet built up enough equity. By bringing your equity up to 20% of your home's value, you may be able to save hundreds of dollars a month in mortgage insurance payments (I'm not your banker or insurance agent; check with them first).
• Pay down your student loans. I have a small Perkins student loan that's accruing interest at a rate of 5.6% APR. I'm going to pay it off, saving a few hundred dollars in interest payments over the life of the loan.
• Make retirement contributions. If you qualify for the retirement savings contribution credit, up to 50% of your contributions to qualifying retirement plans can be rebated when you file your taxes. I recently wrote a walkthrough of the retirement savings contribution credit over at the Saverocity Forum; there's a lot more information available there.
• Invest it. Of course traditional investment vehicles aren't paying much at the moment, but we're travel hackers: there are alternatives. You can fund Kiva loans with a 5%- or up-to-6%-earning credit card. If you belong to a bank or credit union that allows it, you can fund certificates of deposit with a rewards-earning credit card. A 6-month CD funded with a 2.22% cash back credit card suddenly adds 4.44% to your annualized return. 3-month CD's will double that again.
• Buy something. Of course this isn't strictly speaking a way of maximizing the yield on your loan, but if the alternative is to finance a car or appliance at a high interest rate, being able to make the purchase with cash may save you hundreds or thousands of dollars.

Conclusion

The options I listed above are just the first few that sprang to mind; you no doubt have your own ideas about what you'd do with a $30,000 negative-interest-rate loan. So do the math, and in almost all cases I suspect you'll find the loan is more valuable than the additional Ultimate Rewards points.

After all, Ultimate Rewards points are easy to earn — a lot easier than finding negative-interest-rate loans!

Personal finance digression: some high-interest savings accounts may not be long for this world

I've long been a shameless advocate of high-interest savings accounts. By replacing low-yield bonds at a one-to-one ratio in your portfolio with FDIC-insured savings accounts yielding 5%-6% APR, you can replicate or exceed the returns of those bonds in your portfolio while reducing your exposure to volatility in the bond market. That's just about as close to a free lunch as you can get in this world.

Mango appears to no longer be available to new customers

One of my favorite high-interest savings accounts is the one linked to Mango prepaid debit cards. Mango savings accounts pay 6% APY on up to $5,000 in deposits per savings account. After that, they pay a mere 0.10% APY, but customers can have up to 3 Mango savings accounts, with a distinct $5,000 limit on each.

To save my readers a headache, this works out to $24.84 in interest per month on a "maxed out" $5,000 savings account balance, less a $3 monthly fee, for a net APR of roughly 5.24%.

Via Saverocity Forum user and friend of the blog ed1chandler, I learned this morning that Mango has, at least for now, closed their site from registering new accounts. This change has not affected currently existing accounts, and indeed we can hope it's a temporary change, but in the meantime this cuts off one of the best high-interest savings account opportunities that has been widely available in the US.

Mango's parent company also administers the Union Plus prepaid card

Mango is the own-brand product of Rêv North America, which is supposedly a white-label prepaid card company. I say "supposedly" because I have no reason to believe the company actually exists. Look at their website and decide for yourself.

However, in addition to the Mango prepaid card and linked savings account, Rêv North America administers an almost identical product called the Union Plus prepaid card, which also has a linked high-interest savings account. The savings account pays just 5.1% APY on up to $5,000, but the prepaid card's $2 monthly fee is waived in months where you load over $500 to the card, making the two products much closer to a wash.

Most importantly, the Union Plus prepaid card appears to still be available for new applicants.

The Union Plus application is finicky

The first time I submitted a Union Plus prepaid application yesterday, the site returned an error. After refreshing the page, my application was submitted successfully and I was able to immediately access my new Union Plus prepaid account.

So if at first you don't succeed, I'd suggest clearing your browser cookies, using a different browser, and rinsing and repeating until your application is successfully submitted and you have access to your new account.

Consumers Credit Union offers yet another option

Based in Illinois, Consumers Credit Union offers up to 5.09% APY on up to $20,000 in balances in their rewards checking account, although it's necessary to meet a variety of hurdles each month. Still, for those of us with the resources to meet those hurdles, it offers an extremely competitive interest rate on a much higher maximum balance than either Mango or Union Plus.

Conclusion

High-interest savings accounts offer the best of all worlds: easy access to your money through ACH pulls and interest rates that exceed those of "safe" assets like US Treasury bonds. I consider them an indispensable part of a well-balanced portfolio, and hope they'll be here to stay.

But this week's developments are not an especially promising sign.

My super-boring Sam's Club Amex offer strategy

I've now finished off the last of my American Express "Offers for You" at Sam's Club, and it was nothing special: I bought a bunch of Sam's Club gift cards, which I'll use to buy cheap stuff (realistically, beer) at Walmart at a hefty discount.

This was my strategy.

Round 1: $20 Sam's Club gift card for $2

When the Offer for You first launched, risk-averse as I am I purchased a $20 Sam's Club gift card to see how they would be coded. I paid $22 (including the 10% non-member surcharge), and a few weeks later when the charge finally cleared, I received a $20 statement credit.

Unfortunately, by that time Sam's Club had implemented two changes: they started charging shipping fees on their own gift cards, and had eliminated $20 gift cards as a purchase option.

They finally relented on the first change, but $50 gift cards currently remain the lowest denomination available for purchase online.

Rounds 2 through 4: $50 Sam's Club gift cards for $15

Fortunately, thanks to Doctor of Credit I knew how to split online Sam's Club purchases between two enrolled American Express cards. So I placed 4 orders for $50 Sam's Club gift cards, putting $20 on one enrolled card and $35 on the other (including the $5 non-member penalty). I received immediate "Congrats!" confirmation e-mails for each of the four orders.

Ultimately, I'll get $200 in Walmart store credit for $60 — a 70% discount on stuff I'm going to buy anyway. My theory is that I spend a lot of time at Walmart already, and they have competitive prices on a few things I purchase regularly. This is the part of our hobby that is closer to extreme couponing than travel hacking, but the price is right.

Conclusion

In many circumstances travel hacking favors the brave: due to my risk-aversion I ended up getting a mere 70% discount on my gift cards, when I could have received a 90% discount if I'd gone all-in while $20 Sam's Club gift cards were still available.

Over the course of a career in this hobby, those differences can add up to tens of thousands of dollars, if not more. On the other hand, sometimes those big, all-in plays backfire: Frequent Miler's scheme to stock up on fruit and nut baskets springs to mind.

Ultimately, I don't have the financial resources to hit every deal as hard as possible the day it launches. So I'll just keep reporting on the slow, steady, and safe methods that make up the bulk of my miles, points, and cash back strategy.

PSA: If you structure transactions, the government will ruin your life. Don't do it

I've shared a couple news articles on Twitter recently about people being charged by the federal government with structuring transactions.

• In the first case, after being warned by the IRS not to continue, a businessman regularly deposited just less than $10,000 in order to "avoid some hassle for the bank tellers and everyone else involved."
• In the second case, former Speaker of the House Dennis Hastert was arrested for withdrawing just less than $10,000 in order to conceal alleged criminal activity.

Structuring is about reporting requirements

It's a federal crime to structure your transactions in any way with the intent to evade reporting requirements. It's not a crime to interact with the banking system in any (legal) way you want with any other intent.

Criminals structure transactions

For reasons I cannot begin to fathom, the first case I cited is being cast by the news media as a sob story about an undereducated ("10th-grade education") business owner being the victim of federal overreach.

But as the second story makes clear, criminals structure transactions and bank reporting requirements are a key way federal authorities are made aware of potential criminal activity. When people who are not committing any other crime structure their transactions to avoid federal reporting requirements, they detract scarce federal resources from investigations into criminal wrongdoing, like former House Speakers allegedly receiving bribes and paying off blackmailers.

Do whatever you want, just don't structure transactions to evade reporting requirements

If you're worried your bank or credit union will close your account if you repeatedly deposit or withdraw more than $10,000 at once, the solution is not to break up your deposits into smaller amounts in order to evade reporting requirements. That's structuring, it's a crime, and it exposes you to criminal prosecution and civil forfeiture.

The solution is to find a better bank or credit union, one that won't mind filing the Currency Transaction Reports required for transactions exceeding $10,000.

If you think that's too much of a hassle, consider the alternative.

Conclusion

We live in a society governed by laws. As long as you don't break any of those laws, the federal government will leave you alone the overwhelming majority of the time (state and local governments pose additional problems).

Structuring transactions to avoid reporting requirements is a federal crime. If you don't do it, you won't be charged by federal authorities with doing it.

An interesting FlyerTalk thread on blogging and bloggers

These days I don't spend much time reading other blogs, or FlyerTalk for that matter (although I do periodically post random thoughts on savings and investment in the Saverocity Forum). I'll skim the headlines in my RSS reader for new American Express "Sync" deals, and to see if any techniques are at risk of overexposure, but in general I have better (read: more profitable) things to do with my time than read about Japan Airlines award availability.

Award availability blogging is an interesting niche, it just doesn't have the slightest interest for me.

And of course the fact that so many bloggers recycle the same hoary talking points about the same commission-paying credit cards is another of the many reasons I rarely bother reading them.

Loyalty Traveler needs your pageviews

George, who blogs at TravelBloggerBuzz, recently pointed me towards an interesting thread on FlyerTalk, where some forum members were questioning a recent change in the format and content of the Loyalty Traveler blog.

The original poster posed the following question:

"Seems like there has been a shift from a 10 year+ focus on creative budget travel bookings to very frequent posts on rather ordinary airfare deals from SF Bay Area. 

Has Ric addressed this new direction in any post? What is the motivation for these abrupt changes."

Lo and behold, the blogger himself appeared and gave the following explanation:

"The addition of airfare deals was motivated by a need for more page views for Loyalty Traveler blog. Ad revenue has dropped by more than 50% in the past two years, meaning 100,000 page views pays me less than half what I used to get. I can't publish two blog posts per day anymore and make enough ad revenue to stay afloat.

I'll probably start affiliate links this year too for hotel bookings. 

Too many bloggers are writing in the hotel space these days to allow me to post content in the hotel space that is uniquely different enough from stuff readers see on other blogs. BoardingArea has become the 800-blog gorilla crowding me out. 

I'd love to only write about places to go, but those stories do not generate enough interest to pay a living wage. I started blogging as a lifestyle job, so I can work from home and organize my days the way I want to live my days. For eight years, I have been sustaining my self-employment without the need to sell readers anything from affiliate links."

Motivated blogging is usually bad blogging. It may still be profitable!

Ric obviously knows his business model better than I do, so it may well be that he finds his profit is greater with the addition of West Coast flight deals than it was before.

And as a gleeful dropout from your economy, I understand perfectly well the desire to blog as a "lifestyle job," in Ric's words.

But since I mostly can't stand to read travel blogging, I understand even better his readers' point of view: reading those west coast flight deal posts feels exactly like reading posts written with the sole purpose of generating additional pageviews in order to increase the blogger's revenue.

Turns out, that's what they were.

Conclusion

Obviously it's easy for me to sit here and snipe, since my livelihood (let alone my lifestyle!) doesn't depend on pageviews. Here's a fun chart of my all-time Google Adsense revenue:

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On the other hand, it's not just some kind of insane luck that I'm able to make a living writing the posts I want to write, when and how I want to write them. Rather, I set up this enterprise that way (almost) from the beginning.

The way I look at it, I have a simple deal with my readers: I write the best blog I can write, and enough readers sign up for monthly subscriptions to make it worth my time to keep writing. And honestly, when I glance at just the front page of my site, I see a slew of posts that make me think, "damn, this is a great blog."

So here's hoping it stays that way!

Documents responsive to United Danish Kroner mistake fare FOIA request

A reader passed along and asked that I share some documents provided by the Department of Transportation in response to his FOIA request regarding the Danish Kroner mistake in February, 2015. For those who weren't following the play-by-play, this was the second time I'm aware of the DoT allowing United to revoke tickets that had been issued at an incorrect price, the first being Hong Kong 4-mile mistake awards in July, 2012.

These documents appear to me to be a generic batch of e-mails and files that the Department has decided to send to anyone submitting FOIA requests regarding the Danish Kroner mistake, and they've been heavily redacted. My reader believes, and I'm inclined to agree, that the redactions are not appropriate and obscure several key parts of the decision-making process that would be in the public interest, especially since the department sided with a for-profit corporation against that company's customers.

I'll post an update if there's any movement on that front.

The documents

With all that said, here are the documents themselves. The first 2 pages are the Department's explanation of the contents, pages 3-23 are the internal DoT communications, and the remainder are social media and news reports on the mistake fare.

Riveting stuff.

Anniversary post: your economy doesn't interest me much

A little history

I graduated from college in 2007, and that fall decided to pursue a longtime dream of mine: teaching English in Russia, where I had studied abroad as an undergraduate. In the fall of 2008, I returned to the United States to look for the kind of white collar, middle class job many of my readers no doubt enjoy.

A few weeks after I landed stateside, I was standing in the atrium of the Annenberg School for Communication at the University of Pennsylvania watching the stock market collapse as Congress voted down the first version of the TARP legislation. The Great Recession had begun, and I proceeded to scratch out a meager (though cheerful as always) living as a temporary office rat while I applied for hundreds of full-time jobs.

But no one was hiring.

After a year of living hand-to-mouth, I'd had enough and decided to escape the so-called "real world" (which didn't feel particularly real to me) and return to school. I studied in an advanced, federally-funded program to develop Russian fluency, then was admitted to a prestigious doctoral program in Slavic languages and literatures.

It was at that point, settled into a pleasant, walkable New England city with a plethora of CVS stores, that I went from applying for the occasional rewards-earning credit card and meeting minimum spending requirements with Kiva loans, to identifying the most lucrative cards I could use to manufacture spend on an ongoing basis.

My responsibilities at the university were negligible, besides teaching a section of undergraduate Russian each semester and pretending to care about 18th century Russian literature, so I wrote an e-book, manufactured more and more spend, and began writing this blog.

At the same time, I looked around at my classmates and realized that the chances of turning a PhD into the kind of tenure-track position they were all aspiring to were nonexistent. I like to gamble, but I wasn't interested in spending 6 years gambling on a career in academia.

So on May 13, 2014, I left New England and the university behind to dedicate myself to the present endeavor.

Your economy doesn't interest me much

In the last year, I've received one or two comments and e-mails each month either berating or interrogating me about my lack of interest in the traditional job market. As I hope the foregoing makes clear, the traditional job market wasn't interested in me. There was certainly a window, after returning from Russia, when the right corporate gig could probably have lured me into a 40 year career, house in the suburbs, and matched 401(k) contributions.

Entering the job market when I did, those jobs weren't on offer. And rather than hanging onto what was an increasingly-unrealistic fantasy, I adjusted my expectations to suit reality. In the reality I was thrust into, the only bets worth making were sure bets. That meant federally-financed educational programs, guaranteed university funding, and finally working for myself, where my livelihood depends exclusively on my own ingenuity and effort.

Readers seem to have two reactions to my decision. On the one hand, some people try to "explain" to me that my writing and manufactured spending can't consume every waking hour, so I could theoretically work a full-time job in addition to all the extracurricular activities I'm currently doing for fun and profit.

But other readers castigate me for not being "productive" and working a "real job," and those are the comments I have the most difficult time processing. Since no one has yet commented to actually offer me job, I can only conclude that what I'm being blamed for isn't not working, but rather not caring. And they're exactly right. I don't care about your economy.

Your economy just wasn't that into me, and I lost interest.

Caring is so baked into the cake of the American job market that it's no surprise many readers don't even realize they're doing it. But for me, caring would feel hopelessly masochistic. Writing resumes and cover letters, creating online accounts with hundreds of corporate job websites, and submitting application after application in the vain hope of securing the lifestyle many of my readers take for granted is not something I'm capable of doing any longer.

Because I already did it all, and in vain.

Conclusion

I'm nothing if not practical, and I know perfectly well that no deal lasts forever. When manufactured spend dries up completely and my blog subscribers abandon me, you can be sure I'll be there in the mailroom at Goldman Sachs, trying to catch the attention of the bond traders so I can make a quick fortune before destroying the world economy again.

But in the meantime, you'll find me right here. I'll keep writing the best blog I can as long as you keep reading.

Bonus plug

Interested in keeping this project afloat for another year? Consider a monthly blog subscription!

I love last seat availability

I've written before about the lie of "no-blackout-date" policies at major hotel chains. By guaranteeing access to any standard room at a fixed redemption rate, hotel loyalty programs stave off open revolt from their most desirable properties by refusing to enforce those guarantees.

The US domestic air carriers avoid a similar problem by employing various forms of variable award pricing on flights operated by their own aircraft (partner awards are typically only available at the lowest level). With United Mileage Plus, American AAdvantage, and Alaska Mileage Plan that takes the form of a award chart with one price for a limited number of seats released, and then the ability to purchase all or some of the remaining seats at a higher rate.

Delta SkyMiles chooses not to publish an award chart, so award redemptions on Delta-operated flights cost whatever their website or phone agents say they cost.

Why I love last-seat availability

Many travel hackers seem to make it a point of pride that they will only book award tickets at the lowest award levels. I do not.

I travel hack for two reasons: I love to travel, and I cannot afford to travel as much as I would like to (thanks to all my monthly subscribers — you're doing your part to help!). I square that circle with travel hacking: if I can earn points cheaply enough, then I can redeem them for flights I want to take without paying anything close to the retail price of those flights.

The phrase here is "flights I want to take." If I'm traveling to the Western Montana Fair to catch the rodeo, then I sure as hell better get there in time to see those cowboys. If I want to attend a brother's graduation, I need to get there before he walks, whatever award availability happens to be (usually not great around cap-and-gown season).

Last seat availability on the domestic carriers allows me to take the flights I want to take to get where I want to go, when I want to go there.

I traveled before I travel hacked

What informs my attitude is that I traveled almost as much before I started travel hacking as I do now that I write a slightly popular travel hacking blog.

And it was horrible!

I once flew on Spirit Airlines between Los Angeles and Chicago because that was the cheapest flight when I hit "sort by price" on Kayak. No Big Front Seat, no assigned seating at all, in fact, and my knees drawn up so close to my chest for the 3-odd hours I'm still slightly surprised I survived.

Now I can pick the flights I want, and either pay for revenue tickets at a steep discount thanks to the miracle of price compression, or book award tickets, whether it's at the lowest award pricing level or not.

Know your trade-offs

Now, many readers no doubt object that booking at anything but the lowest award level is a "waste" of miles. After all, booking a 30,000 AAnytime one-way award ticket instead of a 12,500 SAAver award ticket costs an extra 17,500 AAdvantage miles — almost enough for a one-way award ticket to Europe during low season. If you don't have enough miles to pay for your award trip to Europe, you'll have to (insert gasp) pay with cash!

Those might be your trade-offs, but they aren't my trade-offs. When I run out of miles (God forbid, but let's entertain the possibility) and money, then I'll stop traveling until I have more. I have to prioritize the trips I really want to take, then use my leftover miles to jaunt around the world. Fortunately, I have a lot of leftover miles. But when I run out, I won't regret the fact that I took the flights I wanted to take, at a fraction of the price I would have had to pay in cash.

Earn cheaply

Ultimately this comes down to earning your miles and points as cheaply as possible. If you're earning 1 SkyMile per dollar spent with a Suntrust debit card, or 1 AAdvantage mile per two dollars spent with a UFB debit card, every flight operated by Delta or American will always be cheaper with miles than with cash.

By all means, book the cheapest flights that work for you! But what travel hacking has made possible for me is to have a slightly more expansive definition of what "works" for me (that was my last Spirit Airlines flight — and good riddance).

Bonus last-seat availability: I love Amtrak Guest Rewards

No discussion of last-seat availability would be complete without mentioning the wonderful Amtrak Guest Rewards program, which (besides some rather inconvenient blackout dates seeming mostly to do with the school year and national holidays) allows points to be redeemed for every single seat, every single roomette, every bedroom, and every family bedroom on every single train (and connecting Thruway Motorcoach) offered by Amtrak. There is no such thing as "award" availability; if you can buy it with cash, you can buy it with points.

Quick hit: Hotel Hustle Hot Rates

I'm fond of saying that what travel hacking needs is more facts and less data. Much of affiliate blogging is taken up with listing transfer partners and earning rates, without concern for the ways that people actually earn and redeem their miles and points, and how to do so as lucratively as possible.

If there is a good argument for data over facts, it's the website of Seth Miller, the Wandering Aramean. He has developed a number of tools, some more and some less useful, but one I've been spending a lot of time on lately is Hotel Hustle. Hotel Hustle allows you to search, by airport or city, for properties in eight major hotel loyalty programs. It has a number of bugs which require it to be used in conjunction with another tool like AwardMapper, but it's a great resource.

The other day I noticed that Seth introduced what had the potential to be a very fun addition to Hotel Hustle: Hot Rates.

When I saw him post about Hot Rates on Twitter, I thought it might be an interesting way to see which hotel loyalty points are really worth earning for "aspirational" properties. My thought was that since cash prices have no upward bound (a hotel can theoretically charge any amount for a night), but award prices do have an upward bound (the top of the award chart), outsized per-point values would be most likely to occur at the most expensive properties.

Oddly, that proves to be not at all the case. Since the Hot Rates are powered by users' searches on Hotel Hustle, it's impossible to tell how representative they are, but the vast majority of Hot Rate properties are either airport properties or random mid- and low-tier properties in cities that happen to host one or more huge events each year.

Here's the entirety of the Club Carlson Hot Rate list. Besides the Radisson Blu in Beijing, these are not properties folks are sprinting to redeem their last-night-free benefit:

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Anyway, this post isn't meant to be an endorsement or an indictment, just a quick hit making my readers aware of this potentially useful resource.

Hopefully Seth will continue to introduce new features that will eventually make it truly valuable to the working travel hacker, and prove me wrong once and for all about the usefulness of data in this hobby!

Trailing interest charges: the silent killer

Every travel hacker knows that interest charges (and annual fees) are the flip side of credit card rewards. You may earn 2% on the front end when paying with a credit card, whether you're buying a cup of coffee or manufacturing spend, but if you don't pay off your entire balance in full by the due date on your statement, you'll give it all back and more as your remaining balance accrues interest. On my credit cards rates typically start at 12.99% APR annually and go way, way up from there.

All over the travel hacking blogosphere you'll find variations of the mantra, "if you don't pay your credit cards off in full every month, travel hacking isn't for you." There's an ironclad kernel of truth to that (your interest charges will far exceed the value of your rewards) but also a deep illogic: even if you have to pay interest, you're strictly better off earning the most valuable rewards possible on any purchases you have to make. So I'll skip the lectures and stick to the facts.

Warning: trailing interest is like interest, but worse

Just like the interest earned on your savings, the interest paid on your credit card balances compounds, which gives rise to a (deliberately) confusing concept: trailing interest. Trailing interest is the product of a mismatch between the pace at which interest accrues (daily) and the pace at which it posts to your outstanding credit card balance (monthly).

Here's the description of trailing interest given on my American Express credit card statements:

"About Trailing Interest

You may see interest on your next statement even if you pay the new balance in full and on time and make no new charges. This is called "trailing interest." Trailing interest is the interest charged when, for example, you didn't pay your previous balance in full. When that happens we charge interest from the first day of the billing period until we receive your payment in full. You can avoid paying interest on purchases by paying your balance in full and on time each month."

The takeaway from this statement is that, if you failed to pay for your purchases in full and thus have a balance that's accruing interest, the date your credit card statement closes is the only date when your outstanding balance accurately reflects the amount you owe. Every subsequent day, a hidden amount of trailing interest accrues which will only post on the following statement closing date.

To avoid paying interest, you have to pay your balances off on time. To avoid paying trailing interest, you have to pay any interest-bearing balances off early, preferably on the statement closing date, to avoid giving trailing interest a chance to accrue.

Bonus warning: know how your banks calculate interest charges

Since I pay off my credit cards in full every month (preferably before my statement closes, to ensure as low a credit utilization as possible is reported to the credit bureaux), I never took the slightest interest in how banks calculate interest charges.

Until a few months back, that is, when due entirely to my own negligence I paid $5 less than my statement balance on my US Bank Flexperks Travel Rewards Visa Signature card:

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Mint, the website I use to track my bank accounts, credit cards, and investments alerted me that interest had been charged on one of my accounts, so I pulled up my statement and was horrified to see an interest charge of $20.35. Naturally my first move was to call in and ask a representative reverse the interest charge:

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But while I was on the phone, I asked her to explain how it was possible that I was charged $20.35 in interest on a $5 unpaid balance. The representative explained that at US Bank, they charge interest on your entire balance if any part of it is unpaid on the statement's due date.

So in case you were wondering how credit card companies pay for the rewards they shower on us, this is how: by aggressively charging customers who are anything less than totally and utterly vigilant about paying off their credit cards in full and on time.

Conclusion

I hope credit card interest charges are an issue that will remain completely and utterly academic for all my readers. Realistically, that's not going to be the case, but the more information you have about the kinds of interest charges and the way they're calculated, the more lucrative I hope your relationship with your credit card issuers will be.