Timeshares?

/

Everything I need to know about timeshares I learned from The Queen of Versailles. Still, it's the kind of product — complex, opaque, little-understood — that should be worth at least a passing glance from a travel hacker. Not least because it's travel-related!

Unfortunately, after spending a day researching this post, there's a simple answer: the numbers behind timeshares just don't work out.

Having said that, I already wrote the post, so keep reading if you're interested.

Never buy a timeshare from the developer

I know this goes without saying, but when you buy a timeshare from its developer, in addition to whatever value the timeshare itself has, you're also paying the salary of the salesman and overhead for the sales office. Don't do that.

When buying a timeshare, pay attention to the sales price, maintenance fee, and transfer fees

The Timeshare Users Group is one secondary timeshare marketplace where you can search and filter timeshares currently being offered by their owners, sometimes at a substantial discount, for example, free:

The sale price, however, is only the amount that is paid to the current titleholder. In addition, the developer collects an annual maintenance fee. You can also sort TUG by the amount of those maintenance fees, which can start quite low:

And end up astronomical:

The timeshare developer will typically charge a range of transfer fees as well, which may be paid by the seller, the buyer, or split between them depending on the agreement they come to.

So, what are these points?

If there were a deal in timeshares, this is where it would be: many timeshare developers are subsidiaries of the major hotel chains, and allow you to convert, each year, your physical timeshare (i.e. a week in Florida at a specific property) into that chain's loyalty currency at a fixed rate.

Unfortunately, those transfers are usually restricted by the kind of timeshare you bought and the channel you bought it in. For example, Marriott only allows transfers from their Marriott Vacation Club points to Marriott Rewards points for people who bought their timeshares through official Marriott channels. Everyone else is stuck with their Marriott Vacation Club points.

Hilton Grand Vacations Club is the only timeshare program I looked into which appears to allow more or less unlimited transfers of their HGVC points into Hilton HHonors points. They allow you to convert 1 of their points into 25 Hilton HHonors points. At a 0.35 cent imputed redemption value, that makes 1 HGVC point worth 8.75 cents.

If that's what these timeshare points are worth, the next question is what they cost. To run this test I had to devise a kludge. Since maintenance fees are higher at properties which give more annual points, and lower at properties that give fewer annual points, what we're interested in in the cost per point. But TUG doesn't let you sort by that value, so instead I calculated the cost per point for the 5 lowest and 5 highest maintenance fee properties currently for sale on TUG.

Here are those values for Hilton Grand Vacation Club:

In the very best case scenario, you can pay $80,000 upfront for the right to buy 600,000 HHonors points annually at 0.43 cents each. If, like one of my regular commenters, you're able to consistently get 1 cent per HHonors point in value on redemptions, you'd be earning a roughly 4.3% return on your $80,000 investment.

The much cheaper $23,500 property would give a 7.5% annual return, by the same measure.

Conclusion

This was a fun post to write, if for no other reason than to satisfy my curiosity: are timeshares ever a good deal? The short answer is that they are not, at least not as arbitrage opportunities.

If, on the other hand, some timeshare developer buys up a piece of land you're in love with, and the only way to visit your favorite beach or ski resort is to buy a weeklong timeshare, then don't let me stop you.

But please, buy it on the secondary market. Those salesmen are just terrible; let's starve 'em out.

Fun with award mapper and Hotel Hustle

/

There are two free, online tools designed to help make it easier to find the best values when searching for paid or award stays at chain hotels: award mapper and Seth Miller's Hotel Hustle. I use them both all the time, and want to share my thoughts on the strengths and weaknesses of each tool.

Award mapper cleanly shows all a city's loyalty program properties

There are two things I love about award mapper and one thing I hate about it.

First, what I love: the selection of hotel chains and range of points is persistent across searches, and it shows all the corresponding properties within your search area. That lets me select all the chains whose points I'm considering using, then plan a whole trip by simply changing the city being searched.

This is fantastic when you're planning something like our winter jaunt to Italy. I know which chains I have points in, so all I need to do is change the city being searched to see which cities have properties that are conveniently located and within my points budget.

What I hate about it is that it simply wasn't designed to show the actual points cost on a given night, so you end up with absurd results like this for the Hilton Prague:

All award mapper knows is that the Hilton Prague is in the Hilton category that ranges from 30,000 to 50,000 HHonors points per night; it's not interested in telling you the price you'll pay. To find that out, you'll have to use the HHonors Points Search Tool, or search for the dates you're actually interested in (only in June does the Hilton Prague cost 50,000 HHonors points; the rest of the year it costs 30,000).

Similarly, Category 1 and 2 Starwood Preferred Guest properties cost 1,000 fewer Starpoints during the weekend, but award mapper can't give you the actual points price on a given date.

Hotel Hustle shows your actual cost, but requires your actual nights

Before using Hotel Hustle, you should create a free account with Wandering Aramean Travel Tools. Then when you navigate to Hotel Hustle you'll be able to configure the value you assign to each hotel chain's rewards currency. Here are the values I use:

For Hyatt, IHG, and Marriott rewards I use 1 cent, since that's what my transferrable Ultimate Rewards points are worth when redeemed for cash, instead. Hilton's 0.35 cent value is based on a comparison of 6 HHonors points per dollar spent with the American Express Surpass card versus 2.105 cents per dollar spent with a Barclaycard Arrival+ card post-devaluation. The same logic applies to the Starwood American Express (1 Starpoint per dollar) and Barclaycard Wyndham Rewards (2 Wyndham Rewards points per dollar).

Once you've configured your values, you can search for the actual cash rates available at each property in a city, and the actual points cost of those same properties. You can also filter by rewards program (click the asterisk by a program to show only those properties), but those filters are not persistent across searches, unfortunately.

Finally, Hotel Hustle lets you filter your search by "Hustle Hotness." Seth is not fantastic about documentation, but here's how it works:

  • if you filter by 3 Hustle Hotness stars, you'll see all properties where a points redemption saves you more than 85% of the value you assigned to the points;
  • if you filter by 4 Hustle Hotness stars, you'll see all properties where a points redemption saves you more than 115% of the value you assigned to the points;
  • if you filter by 5 Hustle Hotness stars, you'll see all properties where a points redemption saves you more than 145% of the value you assigned to the points.

In other words, the more stars, the higher the revenue cost compared to the value of the points required for a redemption. Since I can usually bring down the revenue price by searching for AAA rates or using corporate codes, I always filter by 4 or 5 Hustle Hotness stars.

Conclusion

Award mapper and Hotel Hustle are complementary tools, and I use both many times each week, especially when I'm planning a trip to a new country or city.

I use award mapper to get a feel for what chains and properties are available in a city, then as my plans come together I use Hotel Hustle to narrow in on the specific dates and properties I'm interested in.

Finally, I go to the hotel's website to verify rates, see whether additional discounts are available, and to make my points reservations.

Earn the miles you redeem, redeem the miles you earn

/

While I didn't coin the aphorism, I repeat it every chance I get: the least valuable point is the one you don't redeem.

It doesn't matter how big the portal bonus, or how cheap the manufactured spend, if your balance in a single account never dips below 900,000 you have 900,000 worthless miles.

I'm not judging; we all make mistakes. But the first thing to do when you find yourself halfway up a mountain is to stop climbing!

Earn the miles you redeem

There are two typical strategies for an affiliate blogger promoting the flavor of the month increased signup bonus (or increased affiliate payout):

  • explain how great a loyalty program is and how valuable the signup bonus is;
  • or highlight specific destinations or properties that the signup bonus can get you to.

So you can find Bankrate.com employee Jason Steele discussing free one-ways on United award trips in order to sell Chase credit cards, or Summer Hull name-checking aspirational Marriott properties to promote an increased signup bonus on their co-branded card.

But if United miles aren't the miles you redeem and Marriott properties aren't the properties you stay at, you shouldn't be thinking about these cards at all!

Even if you do read a review of Lufthansa First Class and think to yourself that it wouldn't be too bad to try it sometime, you need to do a reality check first: are you going to learn the nuances of Lufthansa award availability? Are you willing to buy a tag flight to Lufthansa's US gateways if you can't find United award space? Are you able to plan your vacation time around those flights?

My point is that mere interest isn't enough to waste a credit card application on — you need a plan you're willing to commit to. Otherwise you risk ending up with a pile of worthless United miles or Marriott points.

Everyone's miles and points strategy is different, and I'm not going to tell you what miles and points you should be earning, or which are the most valuable, because you already know which loyalty currencies are the most valuable: they're the ones you're able to consistently redeem for the trips you actually want to take.

Redeem the miles you earn

So you got snookered into earning a bunch of miles and points that have been collecting dust and are slashed in value every 18-to-24 months. It's true they're worthless until you redeem them, but the good news is they're only worthless until you redeem them, and that's completely in your power.

So here are some suggestions for cleaning out those stuffy old accounts and finally turning your aging miles and points balances into real-world value.

  • Pay with points. I get e-mails a few times per month from readers who are frustrated that after earning a few hundred thousand Membership Rewards points, they find they're virtually unusable for the supposed "sweet spot" redemptions: Delta and Frontier are the only US-based airline transfer partners, British Airways is distance-based and imposes fuel surcharges, and the other airline programs have learning curves too steep to quickly master. But if you ever pay cash for airline tickets, you're in luck — you can simply buy those airline tickets with your Membership Rewards points and unlock one cent per point in value (more with the Business Platinum American Express)!
  • "Worse" transfer partners and rates. It's true that Membership Rewards points transfer to Starwood Preferred Guest at a 1000:333 ratio. It's also true that Starpoints are both more valuable and more flexible than Membership Rewards points. If Starpoints are the ones you're comfortable aggressively redeeming, 50,000 of them are worth more than 150,000 unredeemed Membership Rewards points.
  • Standard awards. I wrote about "standard" or "high-level" awards in a slightly different context last month, but they fit right in here. If you are sitting on hundreds of thousands of AAdvantage miles from multiple Citi Executive / AAdvantage signup bonuses because you can't find low-level Business or First award space, book an AAnytime award instead. Yes, between the US and Tokyo you'll pay 120,000 AAdvantage miles for Business or 170,000 miles for First class each way, but you'll also have your pick of dates and American-operated flights.
  • Hotel stays. You'll hear many bloggers tell you that airline miles are best redeemed for flights and hotel points for hotel stays. My question is, compared to what? If you're sitting on millions of miles while paying cash for hotel stays, you're missing out on an opportunity to save money, whether or not you're "maximizing" the value of your miles. Kenny at Saverocity wrote last week about redeeming AAdvantage miles for hotel stays and getting up to 1.6 cents per mile, but even getting 1 cent per mile in value is 1 cent more per mile than you're getting while they sit in your account unredeemed.
  • Give away and sell awards. Are your friends and family planning a trip? You may not be able to find award space for the dates you want to travel, but you might have better luck searching for their dates. Have them pay you for economy and book them into first. In my experience, people tend to like that.

Conclusion: remember why we play this crazy game

Everyone's motivation is different for travel hacking. Maybe you want to travel more. Maybe you want to pay less for the trips you were already taking. Maybe you want to travel in classes of service and stay at hotels you wouldn't be able to otherwise afford.

Whatever your motivation is — and no motivation is right or wrong — it's realized only at the moment of redemption, not the moment of earning!

I am not addicted to Amazon

/

Earlier today I pooh-poohed the Chase Freedom's earning of 5 Ultimate Rewards points per dollar spent at Amazon.com in the 4th quarter of 2015. While I do make purchases at Amazon.com occasionally, especially since I generate a small amount of Amazon gift credit each month using Amazon Allowance and microhacking, I don't consider myself a regular Amazon shopper. Since I know many of my readers are, I thought I might as well explain why.

"Free" shipping is now standard almost everywhere online

Obviously shipping is a cost of doing business for any online merchant selling physical goods, so it's not clear in what sense shipping can be "free:" it's included in the prices of the goods you order for delivery.

On the other hand, the included shipping that's now standard in online pricing makes those prices easy to compare, where they hadn't always been in the past, when Amazon first started offering free shipping on orders for their Prime members.

Amazon only occasionally has the best prices

To qualify for free shipping, orders have to be either sold or fulfilled by Amazon (although of course some Amazon Marketplace sellers also include shipping to compete more effectively with Fulfillment by Amazon sellers).

Here are some things I've purchased online in the last few months:

  • Dockers trousers. $35 on Amazon.com, $35 on Dockers.com;
  • Culligan Filter Replacement Cartridge. $12.67 on Amazon.com, $14.99 on Culligan.com;
  • Mr. Coffee 12-Cup Replacement Decanter. $10.97 on Amazon.com, $7.99 on Ebay.com.

In other words, sometimes Amazon is the same price as other merchants, sometimes it's more expensive, and sometimes it's cheaper. There's no inherent savings when shopping on Amazon.com.

Amazon restricts portal cash back

Last year I wrote that I was pleasantly surprised to earn cash back shopping at Amazon.com after clicking through TopCashBack, since at the time Amazon was paying 8% cash back for purchases in their "Men's Fashion" department, which happened to be where I was shopping.

The flip side of that is that Amazon regularly changes which departments earn portal cash back ("Star Wars Toys" is a current cash back category).

Actual online merchants like Dockers.com tend to have relatively stable, relatively high payouts: currently 5% cash back through Discover Deals, which rises to 10% cash back if you enrolled in time for the current 12-month double cash back deal.

Conclusion

Thanks to our brothers in the reselling game, every travel hacker has at least a general idea of how cash back portals can save money on actual purchases of physical goods. What they may not realize is that those portals can bring prices down well below the supposed savings offered by Amazon. Even better, sites like evreward and Cashback Monitor make it easy to compare the relative payouts from a wide range of shopping portals.

So by all means, shop at Amazon. But it's always worth a quick glance to find out whether you can save more money at one of the thousands of online merchants Amazon is competing against.

Thinking about ethics in travel hacking

/

I spent this past weekend in Austin hanging out with a friend who's heavily involved in travel hacking, and he mentioned a few techniques that he had used to manufacture spend, about which he was embarrassed since they seemed unethical to him.

Everyone has different things they’re wiling and unwilling to do, so I don’t blame him for observing different ethical lines than I do. But I also think it’s useful to interrogate why certain activities seem more or less ethical to different people.

Breaking the law is illegal

The clearest cases are when a technique is illegal. With the exception of laws that are themselves unethical, I believe most people, most of the time, in democracies have an duty to obey the law, and in exchange receive the protection of the law.

For example, since structuring transactions to avoid reporting requirements is illegal, and the law against it is basically reasonable, you shouldn’t structure transactions.

Program rules are often written elliptically

Here’s a thought experiment. Delta SkyMiles can be redeemed for passengers besides the account holder. So let’s say your grandfather redeems his SkyMiles for an award ticket for you, then passes away. The ticket is still valid, and I think virtually anyone would have a clear conscience flying on the ticket that had been “purchased” with their living (since deceased) grandfather’s SkyMiles.

But if the account has been closed, I don’t believe it would allow any changes to be made to the award ticket, since Delta’s system treats award changes as first a redeposit of the miles, then a new redemption. Just in case you need to make changes to the ticket, I would find it reasonable to delay notifying Delta that your grandfather had passed. After all, the ticket was purchased prior to your grandfather’s death, so we’ve already established that these are “guilt-free” miles — why shouldn’t you be allowed to use them?

But if you’re willing to keep your grandfather’s account open until your existing reservations have been completed, it’s a short hop to keeping the account open until his existing SkyMiles have all been redeemed for new reservations. If he earned the miles in good faith and gave you access to his SkyMiles account, then what could be unethical about using the miles he accumulated?

Why should you ever notify Delta that your grandfather is no longer with us?

Here's the relevant rule from Delta's online membership guide:

"Under the SkyMiles Mileage Expiration policy, miles do not expire. Delta reserves the right to deactivate or close an account under the following circumstances:

  • A member is deceased"

In other words, it's up to Delta to cancel your grandfather's SkyMiles account. This is sometimes sloppily referred to as miles "expiring when you do," but that's overstating the case. According to the published rules, miles don't expire. However, Delta reserves the right to deactivate or close dead members' accounts.

Whose responsibility?

The terms and conditions of every credit card I know of states that the purchase of cash equivalents is not eligible rewards-earning activity (although FIA Card Services recently send me a letter telling me I could buy lottery tickets with my Fidelity Investment Rewards American Express). And yet almost all cash equivalent purchases do, in fact, earn rewards. Is earning rewards in that manner unethical?

The key question for me is who carries the responsibility for the enforcement of the agreement. Remember that the credit card contracts you agreed to don’t prohibit the purchase of cash equivalents — they simply say that such purchases won’t earn rewards. Since the credit card companies are the ones running the rewards program, they are also perfectly situated to enforce that clause of the agreement.

In the thought experiment above, Delta can’t be expected to know whether its SkyMiles members are alive or dead. But in the case of the purchase of cash equivalents, the purchase is being run on the credit card’s payment network, being processed by the credit card company, and then being deemed eligible for rewards by the credit card’s rewards program. The customer is making a purchase that is not forbidden by the credit card agreement’s terms.

In other words, if it’s ethical to buy cash equivalents, I don't see how you can have an affirmative duty to notify your credit card company each time they erroneously grant rewards for the purchases.

Conclusion: find the right shade of gray for you

Unfortunately, the vast majority of the techniques we use fall into the vast gray area between the flagrantly illegal and the uncontroversial. If you make a purchase with a credit card, then return the goods for cash, is that ethical or unethical? Does it make a difference if you did so intentionally? How much of a difference? If you return something purchased through a shopping portal and are allowed to keep the points, is that ethical or unethical? If you do so intentionally, on a large scale, after being warned not to, you may end up with date with a US Attorney in Seattle.

Fortunately, man is a morally calculating animal, so the answers to those questions (and more!) are available to anyone willing to think about them.

On the other hand, there’s no guarantee we’ll arrive at the same conclusion!

That’s why the decision of what techniques to use is an essentially personal one. We can try to reason our way through these questions, separately and together, but at the end of the day the only advice that matters is not to do anything that you consider unethical, and try to give everyone else the benefit of the doubt that they’re doing their best to behave ethically as well.

Manufacture spend furiously

/

Yesterday Miles Per Day reported that US Bank Visa Buxx cards, which have been closed to new applicants for many months but have continued to work in the interim for existing cardholders, will no longer be loadable with new funds after October 24, 2015.

These cards are terrific, especially if you have access to US Bank ATM's, which allow free withdrawals of the $2,000 that can be loaded monthly to each card at a total cost of $10. If you used a card like the Barclaycard Arrival+ MasterCard, you could earn $40 in statement credits, per card, against travel purchases each month.

In other words, each US Bank Visa Buxx card you carried allowed you to purchase $480 in annual travel at a 75% discount.

I like small, isolated techniques

On the one hand, $480 in annual travel reimbursements is small fry compared to many other available techniques. But what I like about US Bank Visa Buxx cards is that the tool is isolated from all my other manufactured spend techniques: if you have access to US Bank ATM's, you don't need to cannibalize the liquidation bandwidth you're using with any other technique. It's $2,000 in "extra" manufactured spend per month — and cheap, too!

I do everything I can

Obviously, I don't use manufactured spend techniques I don't have access to (I sometimes hear from readers who can still buy Vanilla Reload Network cards!), and I don't use manufactured spend techniques I don't know about.

But to the extent possible, I pursue every avenue of manufactured spend available, because it's impossible to know when any particular technique will cease to be available. Since I do my best to redeem rewards currencies roughly as quickly as I earn them, I never want to find myself with empty account balances and no way forward to earn more.

Two ways to travel exclusively on miles and points

There are two ways to generate enough miles and points to fund the number of trips I want to take at deep enough discounts to make them affordable: be reimbursed by an employer for frequent business travel, or manufacture spend furiously.

While my takeaway from my point density charts is that paid hotel stays are an incredibly inefficient means of generating sufficient points for award stays, that only holds if you're paying for your own stays. A Starwood Preferred Guest elite paying for stays with the American Express co-branded credit card earns 5 Starpoints per dollar spent at Starwood properties, and would have to spend $2,000 on paid stays before they earned enough points for a single award night at a mid-tier property.

I don't think I've spent $2,000 on hotel stays in my entire life to date.

On the other hand, a Starwood Preferred Guest elite paying for stays with their co-branded credit card and being reimbursed by their employer for those stays wouldn't have to pay a penny for an award night at a mid-tier property; they'd just have to wait until their employer had spent $2,000 on their behalf.

Meanwhile, the same 10,000 Starpoints would cost someone manufacturing spend with their co-branded credit card perhaps $86 in fees, depending on the techniques used.

Manufacture spend furiously

If your reimbursed business trips generate enough miles and points to finance all the travel you're interested in, you're in luck.

Otherwise, you can research every technique you come across to find out whether it can be integrated into your miles and points strategy.

The stories affiliate bloggers tell about paying for travel with signup bonuses are "just so" stories, which is why I don't tell them. Of course if you work backwards from the signup bonus you're trying to sell, you can find trips that will be exactly covered by the points earned. But if you want to be in charge of your own miles and points strategy, rather than running off to the Maldives every time an affiliate blogger tells you to, you should be pursuing a robust, diverse miles-and-points-earning strategy.

And unless you're one of the lucky few, frequent business travelers, that strategy should include as many different manufactured spending techniques as possible.

Travel hacking when you've got plenty of money

/

Before I learned the first thing about travel hacking, I still traveled, and I was still broke. So for me, travel hacking straightforwardly allowed me to take the trips I was already taking — and more! — while paying far less out of pocket than I had been when all my trips were paid for with cash.

I don't have to fly Spirit anymore, either.

That sometimes leads to some crossed wires between me and my readers, since on the one hand I don't pursue "aspirational" redemptions with the same fervor (the Maldives are expensive!), but on the other hand I have much more time to spend earning miles and points every day than prominent bankruptcy attorneys do.

But that doesn't mean I actually believe travel hacking is just for poor people! In fact, there are some opportunities that are either exclusively available to, or more lucrative for, people with plenty of assets to sink into them. Here are three opportunities I'd pursue if I had a few hundred thousand spare dollars lying around.

Brokerage bonuses

Perhaps the only links on my site that haven't changed in the years I've been blogging are those to Fidelity's United, Delta, and American brokerage bonuses. Deposit $100,000 for 9 months, earn 50,000 miles.

You're eligible for one bonus every rolling 12-month period.

Note that you shouldn't do this if you're going to let a Fidelity salesperson talk you into an expensive, actively managed fund. But if you are willing to put in the effort to coordinate your Fidelity account with your other cash and assets, these miles can be very close to free.

The next-lowest hanging fruit here may be Scottrade, which currently offers tiered bonuses up to $2,000 for deposits of $1,000,000. As a percentage return, you're best off depositing just $200,000, however, and earning a $600 bonus.

See Doctor of Credit's list of current bank account bonuses for some other opportunities available to the well-heeled.

Bank of America Preferred Rewards

With a cumulative $100,000 on deposit in Bank of America, Merrill Edge, and Merrill Lynch accounts, you qualify for Bank of America Preferred Rewards Platinum Honors, which has one key benefit: a 75% bonus on rewards earned with the BankAmericard Travel Rewards credit card. Since the card earns 1.5 cents per dollar spent everywhere, the 75% bonus makes it a 2.625% cash back card, when redeemed against travel purchases made with the card.

That's the best return you're going to get on a Visa or MasterCard for purchases everywhere (the Discover it Miles card gives 3% cash back everywhere for the first year of card membership).

Kiva Loans

I've left the Kiva loan business for two reasons: first, my PayPal accounts have all been closed! But second, I couldn't justify tying up money in months-long Kiva loans when the same money could be turned over weekly at my local merchants, albeit with far higher transaction fees.

With access to much more liquidity but finite local avenues for manufacturing spend, I'd be thrilled to pour that additional liquidity into Kiva loans using super-lucrative US Bank credit cards.

Conclusion

Fortunately, virtually all manufactured spend and travel hacking techniques are available regardless of your income, let alone your net worth, as long as your credit score and income get you approved for the credit cards you want. I'm living proof of that.

But there are advantages to having a few hundred thousand dollars to throw around, as well. This is America, after all!

Personal finance digression: putting Mango in "time out"

/

I periodically write about high-interest accounts which I think are obvious choices for people with basically unlimited access to cash. In June I wrote that Mango prepaid cards had stopped accepting new applications. Shortly after that, the similar Union Plus Prepaid card was discontinued and cardholders were told that our accounts would be closed and a new prepaid card provider would contact us by September 16, 2015.

Reminder: why these cards were great

Although it was never advertised or clearly communicated, the Mango and Union Plus prepaid cards were great savings vehicles for two reasons:

  • the linked 6% APY savings accounts did not, in fact, require any employer direct deposits to have their well-above-market interest rates triggered;
  • the prepaid card balance allowed Automated Clearing House (ACH) "pulls" initiated by most credit cards and banks.

That meant that simply parking $5,000 (or $15,000 — cardholders were allowed 3 distinct accounts with a $5,000 limit on each 6% APY savings account) in the linked savings accounts allowed cardholders to generate a little over 5% APY (after a $3 monthly fee) on what were completely liquid funds: each month, the interest could be moved from the savings account to the linked prepaid card account and withdrawn as a transfer to most bank accounts or as a credit card payment.

The new Mango product is not the same as the old Mango product

In July, Mango announced that they would transition from their existing MasterCard prepaid product to a Visa prepaid product, and invited existing cardholders to apply for the new product.

I've now completely transitioned one of my accounts to the new Visa prepaid product, and am not impressed. Here's what I know so far about the new product, and about transitioning from the old product:

  • Once you activate your new Visa prepaid card, your prepaid and savings account balances instantly transfer to the account you access at my.mangomoney.com, rather than at rev.mangomoney.com;
  • You can continue to make ACH deposits to your new, Visa prepaid account using the First Bank & Trust routing number you used previously (114994196) using your First Bank & Trust account number;
  • You can no longer make ACH withdrawals using that account information;
  • You can also not make ACH withdrawals using the Sunrise Bank routing number (091017138) that comes with your Visa prepaid card.

The new accounts have been around for too little time to provide definite answers to the following questions:

  • Do you need to receive $500 in direct deposits to qualify for 6% APY on the new savings accounts?
  • If so, what direct deposits qualify?
  • Is the $2,500 daily purchase limit enforced?

The answer to these questions is essential since the principle benefit of using these accounts for your high-interest savings was their liquidity. If the $2,500 daily purchase limit is enforced, than it would take 2 full days to withdraw $2,500 from the prepaid account by buying, for example, money orders. If the daily purchase limit is not enforced, then while there would be a slight inconvenience, you could still withdraw a $5,000 balance by simply buying five $1,000 money orders at a cost of roughly $3.50.

Likewise, if a $500 direct deposit is required to trigger the savings account's high interest rate, that will require also finding the time each month to move that $500 back to cash using a method besides ACH pulls.

Neither of those are deal-breakers, but they're both far short of complete liquidity.

I don't trust this company enough to find out

I'm not planning to close my Mango accounts for now, but I am putting them in "time out:" I'm withdrawing all the money from my accounts and redistributing it. In the case of my "old" MasterCard account, that means simply making ACH withdrawals from the linked checking account. In the case of my "new" Visa account, it means buying cheap money orders, since ACH withdrawals no longer work. Since I haven't maxed out my Consumers Credit Union Rewards Checking account yet, I'll park the money there until the dust settles and earn a "mere" 5.09% APY on it.

I'll keep an eye on the situation and if the state of play evolves significantly I'll be sure to update my readers.

In the meantime, here are two invaluable resources regarding all things Mango (if you don't mind wading through the personal attacks):

Weekend Roundup Roundup for August 23, 2015

/

A lot of bloggers write weekend roundups of their own posts or posts from other bloggers they found interesting or helpful that week.

So many, in fact, that it can be hard to keep track of them all. To make it easier, here's the inaugural Weekend Roundup Roundup: your roundup of all the weekend roundups you may have missed:

How to get started travel hacking (hint: don't apply for any credit cards!)

/

A lot of people seem to treat my site as a space for "advanced" travel hackers, but I've never felt that way myself; in fact, I don't think of myself as an "advanced" travel hacker at all!

  • I don't know the first thing about fuel dumps (although I took advantage of one for my January trip to Italy).
  • I don't game voluntary denied boarding vouchers (although I was pleased as punch to take one last Sunday).
  • I don't pore over portal bonuses, buying and reselling gift cards and merchandise in order to manufacture spend (although I'll always use portals and bonus categories to buy the things I need at the steepest discount possible).

I consider myself a working travel hacker. This is my job: I love it, I have a lot of fun, and my readers are the greatest, but I'm no expert.

I wrote my (now quite outdated) ebook, and launched this site, not because I had any special insight into travel hacking, but because all the major existing blogs were so obviously taking advantage of their readers' ignorance.

In other words, I've always thought of this site as a resource to save beginners from experts, not to pile more expert advice on them. With that in mind, here is the best beginner advice I can muster from my experience in the travel hacking game.

Don't apply for credit cards (until you're ready)

Manufacturing spend with the right co-branded and proprietary credit cards is a fantastic way to generate miles and points that you can redeem for travel.

Manufacturing spend with the wrong co-branded and proprietary credits cards is a fantastic way to generate profits for the issuing banks.

There is a whole industry committed to convincing you that what's good for the banks' bottom lines is good for you. It isn't. The only way you'll ever be able to make the right decision about what credit cards should be in your travel hacking portfolio is taking deep dives into the earning and redeeming structure of each card.

A lot of that information is here. A lot of that information is on Google. And if it's not in either place, ask!

Your credit score is not even among your most valuable assets

Bloggers who are paid based on the number of successful credit card applications you complete are naturally game to figure out how to "goose" your credit score as much as possible.

If you're interested in applying for new credit cards, it's worth learning how to improve your credit score in order to ensure those applications are successful.

For example, once you figure out when your credit cards report their balances to the credit bureaux, you can pay off those balances ahead of time: that will ensure that however much you spend each month, other credit card companies will treat you as debt-free.

But unless you're applying for new credit, you should basically not care about your credit score month-to-month. Your credit score does not hover above your head while you go about your daily business.

Plan around (your!) actual travel

One particularly pernicious feature of affiliate blogging is picking random "aspirational" destinations and explaining how the credit cards the blogger is selling will get you there.

But if you weren't interested in traveling to Bali before you discovered travel hacking, why would some random credit card bonus encourage you to go there?

Once you've examined your actual travel plans, you'll likely find that a 2% cash back card serves your needs best.

And when you've come to terms with that, you'll finally be able to calculate how other signup bonuses and earning rates will allow you to save money by leveraging hotel, airline, and proprietary bank points.

Conclusion

My animosity towards the "Big 5" affiliate travel blogs is no secret. But there's no straightforward way to keep folks who are newly interested in the hobby from falling into the same expensive mistakes over, and over, and over again. There may never be.

And as long as that's the case, I'll keep writing.