Ben Schlappig's hobby has nothing to do with mine

I don't know Ben Schlappig, although I've been in the same, large room with him a few times. But Ben has been the subject of a recent media blitz (Rolling Stone, Nightline, the Economist) which has upset a number of people I do know for the attention it has drawn to travel hacking.

PFDigest, for example, describes the Rolling Stone article as putting "another nail in the coffin," while TravelBloggerBuzz asserts about the Economist article and Nightline segment that "each one of these PR stunts hurts the hobby."

Ben Schlappig's hobby is buying remaindered premium-cabin seats at deep discounts

Ben Schlappig is a rich weirdo.

And God bless him! Many immigrant families take multiple generations to attain the middle class, and here he is: the son of immigrants, buying Florida condos, living out of luxury hotels, and subjected to the affection of fans and flight attendants all over the world.

But needless to say, virtually no actual travel hackers are the proprietors of popular blogs where they're able to earn hundreds of thousands of dollars selling credit cards to unsuspecting newbies while farming out their award booking business to independent contractors.

It's certainly an interesting fact that wealthy people with knowledge of loyalty programs can buy premium-cabin seats at a deep discount compared to their unknowledgeable peers.

But it has nothing to do with me.

My hobby is travel hacking

While buying discounted premium-cabin seats is a hobby, it isn't my hobby. My hobby is traveling, and figuring out how to pay as little as possible for my trips.

Before the site was rebranded, Travel Codex was called "Hack My Trip," which I always liked the sound of. A trip to me is more than a seat in a premium cabin: it's hotels, museums, restaurants, churches, universities, people, and more.

So I plan dozens of trips per year, often to visit friends and family, sometimes to visit new cities, sometimes just to take advantage of Bank of America's underrated "Museums on Us" program.

And since I'm the opposite of a rich weirdo (a poor weirdo?), my goal is to spend as little money as possible paying for the trips I want to take. Furthermore, those trips are often inflexible! I know when my brother's graduation is going to be, so if I want to be there, I need to be there on time. I know when my partner's work conferences are, so if I want to go, I need to be on flights that get me there while they're taking place.

And that's the experience of almost everyone I talk to in the travel hacking community. With limited vacation time or fixed school schedules, most people need to get where they actually want to go, and they hope to use travel hacking techniques to get there as cheaply as possible.

There is no reason for people like me to care when Lufthansa opens their premium cabin seats for partner award redemptions — unless I actually want to fly somewhere on Lufthansa!

And that's the difference between Ben Schlappig's hobby and mine: he cares even when he has nowhere to be and no reason to be there.

I'll worry when the mainstream media pays attention to real travel hacking

A photogenic, tortured protagonist. A whiff of scandal. Shots of first class cabins and luxury hotel rooms. That's the kind of story anyone can understand, and it's the kind of story the mainstream media eats up.

Merchant coding? Adverse action? ChexSystems? Maybe you'll read about them in trade publications, but what would Rolling Stone, Nightline, or the Economist have to say about them? And how many of their readers would care?

The fact is, most of what actual travel hackers do simply puts us out on the long tail of loyalty programs; we may be unprofitable, but we don't cost more than the profit generated by the vast bulk of customers who behave according to expectations. For every $7.90 in profit a travel hacker makes buying $2.10 Ticketmaster tickets, how many people buy $50 tickets instead? $100 tickets? Of course they're saving money on tickets they would buy anyway, but they're also generating a profit for American Express that, ultimately, more than offsets ours.

Conclusion

Naturally, any individual travel hacking technique is subject to more pressure the more people who take advantage of it, and consequently there are techniques which travel hackers prefer to receive as little publicity as possible. But travel hacking as a whole is too diverse a spectrum of behavior for the banks, airlines, hotels, and merchants to decide to bring it to an end simply because of "too much exposure."

So as long as Ben Schlappig is "revealing" to the media that he books last-minute premium-cabin seats with his Ultimate Rewards points, I'm not going to lose any sleep over it.

How to glamp right. Hint: don't be me

I'm still recovering from a 3-night glamping adventure, so no serious miles-and-points analysis today. Instead, here are my thoughts on what you should keep in mind when going glamping for the first time.

Introduction

I grew up in Western Montana, which means I grew up camping. Camping meant driving (as kids) or hiking (as adults) as far as you could before sundown, leaving just enough time to throw up tents and start a fire before having a quick dinner, telling some jokes, and turning in for the night. Space and carrying capacity being limited, you packed exactly what you planned to eat for each meal, each day in the wilderness — plus maybe a few protein bars.

So when my friends invited me camping, that's more or less what I expected. It turns out Madeline Island is a fully-developed resort community that happens to have a state park where camping is permitted.

Things I did wrong

Here's a quick rundown of the things I did wrong on this glamping adventure:

• Pillows. When you're hiking into camp, you bring a sleeping bag with a padded top — a pillow would take up an impossible amount of space. When you're glamping, you drive right into the campsite, and can fill the whole car with pillows if you like. After the first night, I ended up sleeping in the car since it was more comfortable than lying flat on my back on the gravel ground of the campsite.
• Sports equipment. When you go glamping in a resort community, there are community amenities like tennis courts and softball fields. Since I've been teaching my partner tennis this summer, the trip would have been a lot more fun if we'd brought some rackets and balls. Check ahead of time what amenities are available near your glampsite.
• Bathing gear. Needless to say, when camping in Western Montana your only chance at a bath is a very quick dip in the nearest (ice-cold, glacier-fed) river. Our glampsite had running water and showers, but it didn't occur to me to bring towels. Or shampoo. Or soap. Remember: I thought we were going camping!
• Firestarters. On the night my partner and I got the campfire going, it took us hours to carefully coax the wood up until it was finally hot enough to cook on. When our friends started the fire, they put some prefabricated fuel cubes in the fire and lit them, which only took a few minutes. Do that instead.

Things I did right

Having said that, I got a few things right:

• Way too much food. Rather than planning each meal in advance, we went on a shopping spree beforehand buying both the stuff we wanted to cook over the campfire and a variety of snacks that we knew we'd eat eventually. This was a great move, since when glamping the urgency of coordinating meals is much lower, and you may end up needing more snacks between meals.
• Camping uniform. Since I wasn't planning to shower, I picked a pretty simple camping uniform: long underwear, a pair of shorts, and a long-sleeved, lightweight shirt. It kept me mostly bite-free from disease-carrying insects, and worry-free from getting dirt and grass stains, since they were basically my workout clothes.
• Reading material. Just like when camping, the days in camp are long and boring. Bring everything you can think of to read. Stock up on podcasts. Download movies. You may think you're there to enjoy nature's beauty, but when the sun rises at 5 AM and sets at 9 PM, it's unlikely you're going to spend every daylight hour communing with woodland creatures.

Conclusion

This trip was not exactly like anything I'd done before. I've stayed at relatively luxurious guesthouses in the national parks of California and Alaska, and I've gone camping in the wilderness areas of Western Montana. But the idea of combining showers and flush toilets with tents and sleeping bags on the ground positively baffled me.

Still, while I probably wouldn't drive 6 hours in each direction to do it again, I'll say I'm glad I gave it a shot.

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Triggering high-interest savings accounts

Last month I wrote about two high-interest savings accounts linked to the Mango and Union Plus prepaid debit card products. At that time, Mango was no longer available for new signups, and I speculated that Union Plus would soon be closed to new cardholders as well.

Doctor of Credit reported yesterday that, sure enough, that day has come, and it's no longer possible to open new Union Plus prepaid accounts.

If you were lucky enough to open accounts in time, however, you still have access to those accounts, including their linked high-interest savings accounts, and you may be wondering how to trigger those high rates.

Rêv gives detailed information on deposits

When you make a deposit to a Mango or Union Plus account, it appears in your transaction history with a fair amount of detail. Here are four different transaction types I tried in order to trigger my second Mango card's high-interest savings account (I did two of each):

An Amazon Payments transfer:

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A transfer from the Stripe account where my monthly blog subscriptions are deposited:

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A TopCashBack redemption:

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And a Chase Ultimate Rewards cash redemption:

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And sure enough, in June I earned 6.02% APY on my savings account.

The problem is, Mango doesn't tell you which transactions triggered the higher interest rate!

Narrowing it down to 2

That's where the process of elimination comes in, since I opened both a second Mango account and a Union Plus prepaid account. But I haven't made a TopCashBack or Amazon Payments deposit to my Union Plus account: I've only made Stripe transfers and Chase Ultimate Rewards cash redemptions.

But in June, I earned $0.27 on an average daily balance of $66.66 in the savings account linked to my Union Plus prepaid card. Since these savings accounts compound daily, that puts me right in the ballpark of the promised 5.10% APY. In other words, one or both of Chase Ultimate Rewards redemptions or Stripe transfers qualified as direct deposits for the purposes of triggering the high-interest savings account.

If I had an additional account, I would see if Chase Ultimate Rewards cash redemptions alone are enough to trigger the higher interest rate, as I suspect they are.

I'll be maxing out these accounts as quickly as possible

Now that new applications are closed for both products, it's unclear how long existing cardholders will be allowed to keep their accounts. With that in mind, I'll be maxing out these accounts as quickly as possible in order to earn the full interest rate for as long as possible before existing accounts are closed.

"The $100 Startup" is not a very good book

This is a review of "The $100 Startup," by Chris Guillebeau. For a previous book review, see "Pound Foolish" is a pretty good book.

Chris Guillebeau has a lot of interesting friends and acquaintances

The conceit of "The $100 Startup" is that entrepreneur extraordinaire Chris Guillebeau had a flash of inspiration: everywhere he went, he met people who shared their stories of achieving "freedom" (a concept we'll return to in a moment) through low-startup-cost enterprises: at its most basic, just a website, an e-mail address, and a PayPal account.

So Guillebeau, being an entrepreneur extraordinaire, decided to survey, compile, and analyze the experiences of those entrepreneurs to see if he could identify the general principles which led to the success of their micro-enterprises, and share them with the world.

Unsurprisingly, Guillebeau's profiles of entrepreneurs are the highlight of the book. It is genuinely interesting to read about a variety of ways people are getting by in an era where anyone can be paid by anyone for anything they feel like paying for.

Guillebeau is not a particularly effective storyteller

If that sounds familiar, it's because for the last 15 to 20 years, anyone with access to the internet has access to thousands of stories of entrepreneurs starting with virtually no capital developing successful online products. Many of those articles are well-written and informative for people considering starting their own online businesses.

This is a fascinating topic that has been treated extensively by the news media, which knows a good story when it sees one. But Guillebeau brings no particular expertise to this storytelling project. Rather, he roots around in his survey data until he finds a piece of Talmudic wisdom, like, "Offer an incredible guarantee, or don't."

Well, yes, Chris, those are the options.

For someone supposedly concerned with "freedom," Guillebeau is oddly obsessed with financial success

Guillebeau frames his book as a series of stories, including his own, of entrepreneurs who, often accidentally or via unexpected misfortune, find themselves forced to support their families through small businesses of their own design.

But the more you read, the more you find that he's talking about businesses that are so profitable they replace the income the entrepreneur was earning through traditional employment. In other words, this is a world much closer to traditional entrepreneurship than he lets on: it's ambitious, money-oriented, self-motivated people making middle-class incomes through sole proprietorship.

Here's one of his informants talking about her business philosophy: "Remember that the goal of business is profit. It's not being liked, or having a huge social media presence, or having amazing products that nobody buys...Business is not a popularity contest...There's nothing wrong with having a hobby, but if you want to call it a business, you have to make money" [165].

Needless to say, that philosophy is deeply ingrained in American society — yet Guillebeau appears to believe he can claim to have discovered the profit motive by cloaking it in the language of "freedom."

Of course anyone would be excited to discover that they can make as much money from a small business as they do from formal employment; it's no doubt an incredibly exciting thing to discover. But Guillebeau never gives a coherent explanation for why formal employment is "less free" than self-employment; why making wedding dresses at home is "more free" than making wedding dresses in a factory; why making award bookings for strangers (yes, Gary Leff is one of the case studies) is "more free" than running a North Carolina research center. More profitable, maybe, but that's a much less interesting claim than the one Guillebeau seems to think he is making.

"The $100 Startup" misses the trees for the forest

Guillebeau repeats variations on the following mantra throughout the book: "You can open a PayPal account in five minutes and receive funds from buyers in more than 180 countries" [xvi].

But astonishingly, his only anecdote from an actual entrepreneur using PayPal is devastating: "The problem was access to money. Because Naomi is Canadian but has lived in the United States, the United Kingdom, and elsewhere, she often has issues with her PayPal account being closed as she travels the world, leaving her with plenty of funds in the account but no way to access them" [181, emphasis in original].

Instead of turning this into a teachable moment about the vagaries of using PayPal for your online payments processing (which I'd be happy to tell Chris all about), he describes her borrowing money from a stranger to pay conference registration fees. I'm glad Naomi worked something out, but for your typical entrepreneur who foolishly depended on PayPal for worldwide payments processing, this situation would be simply devastating.

And indeed, the entire book is full of inspirational aphorisms rather than concrete advice on the mechanics of running a small business.

Guillebeau is either gullible or naive about the 1099 economy

Repeatedly through "The $100 Startup," Guillebeau refers to people "deciding" whether to work or employ workers as employees or independent contractors.

Regarding a designer who returned to work after leaving her job to start a small business, he writes, "Also, Tsilli now worked as a contractor instead of an employee, and that gave her an unexpected but important sense of still earning all her income 'on her own,' with roughly half coming from the studio and half from her business" [230].

Regarding a transcription service: "Then she made another key decision: not to hire employees but only hire contractors. By building the team on a contract-only basis, she had more flexibility to increase or downsize the numbers, depending on market needs...(The contractors all understand that the work is cyclical and future projects aren't guaranteed)" [222].

Let me be clear: a wide swath of the American workforce is improperly classified as independent contractors in order to reduce the payroll tax burden on their employers. Employee and independent contractor status is not properly a "decision" made by either the employee or the employer: it's a legal determination based on the facts and circumstances of their employment. And the default, absent a raft of mitigating circumstances, is for employee status.

Guillebeau's studied ignorance of this problem treats the classification as a "business decision." It's not, and he invites abuse by suggesting it is.

I run a $205 startup, and I'm glad I didn't read this book before I started

Over two years into this project, I've made a lot of mistakes, many of which I recognize in the stories in this book (can you say affiliate links?). But if I had in mind the mechanistic, profit-oriented vision this book proselytizes when I started, I don't think I would have made it to my one-year anniversary, let alone still be blogging over two years later.

Guillebeau's vision of entrepreneurship is deadening, profit-oriented, and capitalistic, red in tooth and claw. That's fine: American culture is deadening, profit-oriented, and capitalistic. But his attempt to reimagine that culture and the role of the entrepreneur within it as a lone voice crying out in the wilderness for freedom does a disservice to those who truly reject the relentless pursuit of wealth as the principle goal of life.

Use Amazon Allowance to meet monthly transaction requirements

[edit June 28, 2015: this post originally said Bank of America BBR cards pay $20 and $25 per quarter; in fact they pay $25 and $30 for non-BoA and BoA customers, respectively, as correctly indicated on the second mention. We regret the error.] 

Via Doctor of Credit, earlier this month Amazon introduced a service called "Amazon Allowance." With Amazon Allowance, you can configure recurring purchases of Amazon gift credit in denominations as low as $0.50, which are automatically deposited into the gift card balance of the recipient.

And yes, you can set yourself up as both the sender and recipient of an Amazon Allowance.

4 ways to use Amazon Allowance

Amazon Allowance simplifies and automates an aggravating problem: how to meet monthly transaction requirements while using the least possible cognitive bandwidth. Here are four use cases for Amazon Allowance:

• American Express Amex EveryDay and EveryDay Preferred. These two cards give a 20% and 50% bonus on all points earned each statement cycle you make 20 or 30 purchases, respectively. By setting up 15-25 recurring monthly Amazon Allowance transactions, you can automate those monthly transaction requirements and get back to manufacturing spend.
• Bank of America BankAmericard Better Balance Rewards. This card gives a $25 ($30 for Bank of America deposit account customers) quarterly cash reward for customers who both make a purchase that posts to each statement during the quarter and who make at least the minimum payment on each statement during the quarter. By automating a $5 monthly Amazon Allowance and payment of your balance each month, you can earn $120 each year without a second thought.
• Waiving monthly fees and triggering high interest rates. I recently opened a Wells Fargo checking account that carries a stiff $10 monthly fee each month I don't make at least 10 purchases with the linked debit card. By setting up ten $0.50 Amazon Allowance transactions, I'll never have to worry about that monthly fee being charged. Likewise, the high-interest checking account offered by Consumers Credit Union requires 12 debit and 12 credit card transactions each month to earn 4.09% APY on up to $20,000 [edit: see the comments for an additional, excellent idea].
• Microhacking! The only purchases I ever make with my Barclaycard AAdvantage Aviator Red card are $0.99 Amazon gift card purchases each month, which are then forgiven each time a statement cuts. I used to make those purchases manually; now it's automated.

Thoughts towards best practices for Amazon Allowance

While it certainly seems possible to simply create all your allowances for the same date, three risks to doing so suggest themselves.

• First, Amazon may have issues processing 50 small transactions on the same date.
• Second, your credit cards and banks may have questions about a flood of identical transactions on the same date.
• Finally, if any issues do arise, you may have trouble telling which same-day Amazon Allowance payments were processed and which were cancelled or otherwise affected.

That's why for now, I have each of my Amazon Allowance transactions set up to execute on different (sequential) dates each month.

Annual Twitter recommendations

At a reader's request, last year I wrote up a list of Twitter feeds that I follow, and consider essential to keeping my miles and points game in top form. Since the game is always changing, I thought I would turn it into an annual tradition.

• @FreequentFlyr. My Twitter feed! I'm always on there, mostly providing datapoints and commentary as I manufacture spend and deal with the inevitable complications. A must follow.
• @TheFlightDeal, @FlightFishing. These feeds post cheap flight deals as they become available. Can be useful when planning vacations and mileage runs.
• @KennyBSAT, @FrequentMiler. Always on top of short-term opportunities and increased gift card payouts, with some commentary and analysis.
• @Travel_Codex, @Drofcredit. A constant stream of deals and offers.
• @OffersBot. No longer automatically registers you for Amex Sync offers, but still broadcasts them so you can sync your accounts manually.
• @milestomemories. Occasional original content makes this feed worth skimming.
• @travelwithgrant, @travelisfree. I do not know the difference between these two. But both have frequent original content, sometimes game-changing.
• @Saverocity, @BigHabitatcom, @tmount, @ChasingThePts, @asthejoeflies, @TheDealMommy. The Saverocity crew. Follow them all for maximize effect, unfollow to taste.

When I wrote this post last year, I included a few of the biggest affiliate bloggers, simply as a way to keep your finger on the pulse of the mainstream. In the intervening year, those blogs have degenerated further into corporate advertising engines, and I can no longer recommend following them even purely for informational purposes. It's reached the point where I think they'd receive a stern warning if they ever did write something worth reading.

What do you think: are there any other essential Twitter feeds that belong in this list?

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.