Inside an application cycle: April 2013

ike many travel hackers, I sign up for rewards-earning credit cards periodically in order to secure high signup bonuses and add more tools to my miles- and points-earning toolbox. There are a few guidelines I typically follow:

• Wait at least 91 days between credit card applications;
• Apply for no more than 1 card per issuer;
• Apply for no more than 5 cards per application cycle.

This is a mixture of superstition and what I've learned from hundreds of hours studying people's experiences on the many popular credit card forums, but especially the ones dedicated to miles- and points-earning cards, like Flyertalk and Milepoint.  I don't recommend anyone else follow my guidelines, but they work for me.

This month I applied for exactly 5 cards, from 5 different issuers.  It had been a little over 100 days since my last round of applications.  I was waiting until my credit card statements cut for April, so that their low balances would be reported to the credit bureaus before I applied.  I always pay off all my credit cards before an application cycle, so that credit issuers see as low a "credit utilization" as possible on my report.

With that out of the way, the five cards I applied for were:

• Club Carlson Business Rewards Visa;
• Delta Business Platinum American Express;
• Barclaycard Arrival World MasterCard;
• Marriott Rewards Premier;
• Fidelity Investment Rewards American Express.

Today I want to discuss why I chose those cards, and the results of my application cycle.

Club Carlson Business Rewards Visa

• Annual fee: $60, not waived the first year of card membership.
• Signup bonus: 85,000 Gold Points after spending $2,500 in the first 3 months of card membership.
• Ongoing benefits: Club Carlson Gold elite status; 40,000 Gold Point annual renewal bonus; last night free on all award stays of 2 or more nights.
• Application outcome: instant approval.

Objectively speaking, I believe this is the most lucrative hotel credit card currently available.  The 85,000 Gold Point signup bonus, plus the last-night-free benefit means you have enough points for 2 free nights at any Club Carlson property in the world, since their top-tier Radisson Blu properties top out at 50,000 points per night.  The Hyatt Visa offers a similar signup bonus, of two nights at any Hyatt in the world, but offers less lucrative ongoing benefits.

dmittedly, Club Carlson doesn't have properties everywhere, and the ones they have aren't always conveniently located.  Their properties in Europe, where I travel frequently, are normally centrally located and high quality, so I'm confident I'll get more than $60 in value out of this card annually.

This is a card I plan on keeping indefinitely, thanks to the ongoing benefits, unless Club Carlson undergoes a massive devaluation, which is always a possibility in the world of hotel loyalty programs.

Delta Business Platinum American Express (see below for better offer)

• Annual fee: $150, not waived the first year of card membership.
• Signup bonus: 30,000 Skymiles, 5,000 of which count as Medallion Qualification Miles, after $500 in spending within 3 months.
• Ongoing benefits: Annual economy companion ticket n account anniversary. 10,000 bonus Skymiles and Medallion Qualification Miles after spending $25,000 and $50,000 each calendar year.
• Application outcome: instant approval.

The Delta Platinum business and personal American Express cards allow you to earn higher elite status with Delta without having to go on mileage runs, which cost time as well as money. Unfortunately I applied for this card after a higher signup bonus of 35,000 Skymiles and 10,000 MQM had already expired (the offer is still available for the personal card).

I plan on hitting the $25,000 spend threshold this year, and the $50,000 spend threshold in subsequent years.  The first year I'll earn 65,000 redeemable Skymiles and 15,000 MQM at a maximum cost of $348 ($150 annual fee and up to $198 to manufacture $25,000 in spending), or 0.5 cents per redeemable mile. In subsequent years I'll be able to earn 70,000 Skymiles and 20,000 MQM at a cost of up to $545, or 0.77 cents per redeemable mile, without taking into account the benefits of higher Delta Medallion elite status than I would otherwise qualify for.  The card also gives an economy class companion ticket on each account anniversary.

I'll keep this card as long as I continue to fly Delta regularly, since I'm getting such valuable ongoing benefits.  Starting in January I'll be keeping my eyes out for a good signup offer for the personal card, which has the same benefits as the business card, and which will allow me to almost reach Gold Medallion status each year without setting foot on an airplane.

Barclaycard Arrival World MasterCard

• Annual fee: $89, waived the first year of card membership.
• Signup bonus: 40,000 "miles," worth $444 in travel reimbursements, after spending $1,000 ithin the first 3 months of card membership.
• Ongoing benefits: none.
• Application outcome: instant approval.

This is a good example of a card that's only worth getting for the signup bonus.  I discussed it in detail at the end of this post in February.  I plan on using the signup bonus for paid hotel stays, since this card allows you to use your "miles" for a statement credit against charges made with the card, allowing you to earn points and stay and night credit with your hotel chain of choice, unlike hotel reservations made with points through the Ultimate Rewards travel portal.  If I don't end up using all of the card's signup bonus on hotel stays I'll use it to cover other travel expenses, like airline or rail tickets, which I buy constantly.

The Arrival World MasterCard's earning rate of 2 miles per dollar (worth 2.22 cents) spent on the card means that it may be worth manufacturing some spending on the card as well, if I don't have any higher spending priorities, like meeting the $25,000 spend threshold on the Delta Business Platinum card.

Marriott Rewards Premier Visa (see below for signup links)

• Annnual fee: $85, waived the first year of card membership.
• Signup bonus: 1 free night at any Category 1-4 Marriott property on account approval, and 50,000 Marriott Rewards points after spending $1,000 within 3 months of card membership.  $75 statement credit after first purchase.
• Ongoing benefits: 1 free night at any Category 1-5 Marriott property on each account anniversary.  However, the certificate expires 6 months after being issued. Additionally, the card annually gives credit for 15 nights towards elite status qualification, which is enough to qualify for Silver elite status every year without any paid stays.
• Application outcome: decision pending.  I called the Chase reconsideration line at 88-245-0625, gave the account representative my name and Social Security number, and was approved over the phone in about 90 seconds.

have an upcoming stay this summer in Portland, Oregon and I'd like to stay downtown. I'll use the free night certificate that comes with account approval and 40,000 points to book 3 nights at the Courtyard Portland City Center, which would cost $684 after tax, and leave me 10,000 Marriott Rewards points from the signup bonus left over, plus a $75 statement credit.

The biggest complaint people ave about this card is the 6-month expiration of the annual free night certificate. I travel to a lot of mid-sized cities which have Category 1-5 Marriott properties, so I'm fairly confident I'll be able to use the free night certificate to get enough value to justify paying the $85 annual fee after the free first year.

There are three slightly different offers currently available. This public offer is for 50,000 Marriott Rewards points and the free night certificate.  To get the offer that includes the $75 statement credit, begin making a reservation through the Marriott website, until you get to the "Review Reservation" screen, where you'll see a banner with the credit card offer:

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There is another, possibly better, offer of 70,000 Marriott Rewards points, a free night certificate, but no statement credit, which is available through this application page, although it doesn't have a landing page describing the offer, and I tend to avoid non-public offers out of an abundance of caution, so use that link at your own risk (there have been plenty of reports of success though).​

Fidelity Investment Rewards American Express

• Annual fee: $0.
• Signup bonus: none.
• Ongoing benefits: 2% cash back on all purchases.
• Application outcome: Decision pending.  Fidelity said they'd mail me the application decision within 30 days. I'm in no hurry to get this card (since there's no signup bonus, minimum spending requirement, or bonused spending categories), so I'm going to wait ​to receive their decision through the mail.

This is the card I recommend to anyone getting started in the travel hacking game, because it's the best no-annual-fee straight cash back card available.  Unless you're meeting a minimum spending requirement or have a specific redemption in mind, I think 2% cash back is worth more than a dollar of non-bonused spending on virtually any other card.  But in order to make that comparison, you first need to have a 2% cash back card, which is why I decided to apply for it as the fifth card of this application cycle.

I plan to keep this card indefinitely, since it has no annual fee and as it ages on my credit report it will increase my average age of accounts, thereby increasing my credit score overall.

Conclusion

After spending $5,000 on these cards, I'll have earned a total of:​

• ​97,500 Club Carlson Gold Points (almost enough for two 2-night stays at any Club Carlson property in the world);
• ​30,500 Delta Skymiles and 5,000 Medallion Qualification Miles;
• 42,000 Barclaycard "miles," worth $466 in travel reimbursements;​
• ​51,000 Marriott Rewards points and a free night certificate good at any Category 1-4 Marriott property.

Meanwhile, I'll have spend $210 in annual fees, and received a $75 statement credit. If I manufacture the entire $5,000 in spending at 0.79 cents per dollar (unlikely, but possible), I'll pay an additional $40, bringing my total cost to $175.

Does GoBank have a monthly swipe reload limit?

In the comments to my first post on GoBank​ and in this FlyerTalk thread, one recurring question is whether there is a monthly limit on free Walmart swipe reloads, which work exactly like reloads to the American Express Bluebird card, and if so, whether it's based on the calendar month or a rolling 30-day limit.

As a reminder, the Bluebird card has a $1,000 daily load limit and $5,000 calendar month load limit, which is shared between Vanilla Reload ​Network reload cards and reloads done at Walmart cash registers and MoneyCenter ATMs, which accept both cash and PIN-based debit cards.

GoBank, according to the product's Terms and Conditions, has a $2,500 daily load limit, but there is no specified monthly load limit.  It's possible that there is an unpublished calendar month or rolling 30-day load limit.

However, I can now report that the limit, if it exists, is definitely higher than $5,000 per month, whether it is based on the calendar month or a rolling 30-day period, since I've exceeded that threshold either way.

The next question I hope to answer is whether GoBank, like Bluebird, can be loaded using MoneyCenter ATMs, since like most people I find interacting with undertrained and rude Walmart employees a uniquely unpleasant chore.​

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Do this now: Starwood's spring promotion

Back in March I reported on Hilton's Quarter 2 promotion, which offers 2,000 bonus HHonors points for weekend nights during paid stays and 1,000 bonus points for weekday nights during paid stays (register for that promotion here, in case you forgot).  Also be sure to check out my post on two unrelated Hilton promotions offering bonus airline miles for stays of 2 or more nights.

​Registration is now open for Starwood's Spring promotion, which offers double Starpoints on paid stays between May 1 and July 31 at participating properties.  Additionally, you get 500 bonus Starpoints on all bookings made using the Starwood Apple or Android apps, or using Starwood's mobile site.

The long list of non-participating properties includes the Westin Portland, where I was actually considering making a paid reservation this summer.  That's too bad, since the property looks really nice, but I don't support excluding properties from quarterly promotions, which have gotten stingier as it is.  The lesson is, always check whether a property you're considering is on the list of non-participating properties to avoid an unpleasant surprise when your points post (or don't!), since there might be a suitable property nearby which is participating.

At any rate, even if you don't have any paid Starwood stays planned, you should register now, before you forget.​

What's the best way to book a paid ticket?

Travelling on international premium cabin award tickets is one of the most lucrative uses you can make of your airline miles and flexible credit card points.  The example I usually give is a 100,000 United MileagePlus award to Europe in Business Class.  If you manufacture those points at .79 cents each, you'll pay $790, plus up to a few hundred dollars in taxes and fees.  The point is that you aren't saving much money over a paid economy ticket, but you get to enjoy the comfort of flying in a premium cabin instead.

The downside is that you don't earn elite status-qualifying airline miles for the distance you travel on award tickets, which can be substantial on international flights.  If you value the benefits of elite status, then you'll need to make some paid domestic flights to reach the elite status threshold you're interested in.

That's why today I'm going to cover the most lucrative methods for booking paid airline tickets.

Booking Directly Through an Airline

he most obvious reason to book through an airline's website directly is to use a credit or certificate issued by the airline.  Airlines typically hand out these certificates in exchange for voluntarily giving up your seat on an overbooked flight.  Likewise, if you cancel a non-refundable flight you may have a credit available to use for a later flight (after subtracting any cancellation fees).

When you do so, it's best to use a credit card that gives bonus points on airline purchases.  For example, the Sapphire Preferred Visa and MasterCard issued by Chase give double flexible Ultimate Rewards points on all "travel" purchases.  The American Express Business Gold Rewards and Premier Rewards Gold cards likewise offer triple Membership Rewards points on purchases made directly through an airline.

In terms of fixed-value and cash back cards, the US Bank Flexperks Travel Visa Signature card offers double points on airline purchases, if that is the bonus category you spent the most in during a given statement cycle.  These points are worth up to 2 cents each, meaning you can earn up to 4% back in value on travel redemptions.

Otherwise, your best bet is a 2% cash back card like the Fidelity Investment Rewards American Express or Visa card, or a card you're meeting a minimum spending requirement on.

If you have elite status with Delta, you'll also earn 1 Starwood Preferred Guest Starpoint per dollar spent on airfare directly through the Delta website.  As you'll see below, that's not necessarily the most lucrative method of making paid Delta reservations.

Clicking Through Ultimate Rewards to an Online Travel Agency

If you have a Chase Ultimate Rewards-earning credit card, you have access to the Ultimate Rewards Mall, which allows you to earn bonus Ultimate Rewards points on purchases made through online travel agencies, or OTAs.  You can earn 1 bonus point per dollar spent at Expedia, Priceline, or Orbitz and 2 bonus points per dollar spent at Travelocity or Hotwire.  These OTAs can price out itineraries very differently, so it's always worth checking whether you can find a better price or more convenient itinerary on one OTA rather than another.

The Chase Sapphire Preferred bonuses all travel spending, including OTA reservations, so that's a reliable way to earn a total of 3-4 Ultimate Rewards points per dollar spent on airline tickets (depending on which OTA you use).  In my experience, when booking only an airline ticket (and not a package which includes a hotel, rental car, or cruise) through Travelocity, there will be two credit card charges, one from the operating airline which covers airfare, taxes, and fees:

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​With a second charge from Travelocity to cover their booking fee (up to $10.99):

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n these situations I believe the American Express Premier Rewards Gold and Business Gold Rewards cards will give triple points for the first, airline charge, for a total of 2 Ultimate Rewards points and 3 Membership Rewards points per dollar spent, a 5-10% rebate, depending on how you value those points.

Cash Back Portals

If you don't have access to he Ultimate Rewards mall, and you don't have a card that bonuses airline or travel purchases, and you don't have elite status on Delta (to earn 1 Starpoint per dollar), then you can still earn a small rebate on your flight purchases by clicking through a cash back portal.  All three of these cash back portals offer a fixed or variable amount of cash back when you click through to online travel agencies and make an airline reservation. 

• TopCashBack (Expedia: $2.25, Travelocity: $3.00, CheapTickets: $5.50, Priceline: $5-$7)
• BigCrumbs (Expedia: $1.75, Travelocity: $2.80, CheapTickets: $3.15, Priceline: $2.80)
• Fat Wallet (Expedia: $1.25, Travelocity: $1.50, CheapTickets: $20(!), Priceline: 1%)

Conclusion

As this analysis makes clear, the best method of making paid airline reservations depends heavily on what tools you have at your disposal.  The single best combination is using the Premier Rewards Gold or Business Gold Rewards card from American Express at Travelocity or Hotwire, after clicking through to one of those travel agencies from the Chase Ultimate Rewards shopping portal.  To get access to that shopping portal, however, you'll need at the least least a no-annual-fee Chase Freedom card.  To turn those fixed-value Ultimate Rewards points into flexible Ultimate Rewards points, you'll need either a Sapphire Preferred, Ink Bold, or Ink Plus card.  However, even if you just redeem your Ultimate Rewards points for cash back through your Freedom card, you'll still be earning a generous 2% cash back on all your paid airline reservations, in addition to whatever awards you earn through the credit card you ultimately make your purchase with.

Anatomy of an award trip: Spring break in Prague

​This March I spent my Spring vacation in Prague, my favorite city in Europe.  Every part of the trip had a miles and points component, so I thought it might be useful for readers to get some insight into my thinking when putting together an award trip.

Getting There: Star Alliance

This award ticket started as a summer reservation between Portland, OR and Prague, with a return flight to New England (PDX-PRG-BOS).  Since my preferred airline is Delta, however, I continually monitored Skyteam award availability until I was able to find a low-level Business award ticket on Delta and KLM.

Having booked my summer trip on Delta, I then had to decide what to do with my United award reservation.  It would have cost $150 to cancel the trip and re-credit the miles to my account, since I don't have elite status on United.  However, changing only the origin city cost just $75, and changing the date was free, so I decided to pay the $75 and turn the ticket into a Spring vacation.

My transatlantic flights were originally scheduled to be on Lufthansa on my outbound leg and Tyrolean Airways, an Austrian carrier, on my return flight.  However, my Tyrolean Airways flight was canceled due to a schedule change, and I was rebooked into United Economy for my return flight.  I hate flying United, and that goes double for flying United in Economy, and that goes triple for flying transatlantic flights on United in Economy.  The United reservation desk, however, was unable to rebook me on a partner airline, like Lufthansa, which operates a good international product, even in Economy, unless the partner airline had award availability.  Since the cancellation happened so close to my departure, no award seats were available and so I was stuck on United.

Total cost: 60,000 United miles, $181.80 ($106.80 in taxes and fees, $75 award change fee). Total value: ​$1,150-1400. Value per point: 1.61-2.03 cents per mile.

Staying There: ​Hilton, Club Carlson, PointsHound, Marriott

Hilton Prague Hotel

I spent two nights at the Hilton Prague Hotel, which is now a Category 6 hotel.  You can use the HHonors Points Search Tool to see that a standard room award costs 30,000 HHonors points every month except June, when it jumps to 50,000.  In March, when I stayed there, it was a Category 5 hotel, costing 35,000 points year round under the old award chart.  This is a good example of how the March 28 Hilton devaluation reduced the cost of some mid- and low-tier properties (while increasing the cost of top-tier properties).​  As a Hilton Gold member I was pretty sure I'd be upgraded to an executive floor, but to be sure I spent 4,129 points one night and 9,178 points the second night to guarantee an upgrade.  Since I value HHonors points at about .4 cents each, this was about $53 in points to guarantee the upgrade for two nights, which I found very reasonable, given how much value I got out of the Executive Lounge.

Total points: 83,307. Total value: ​$420.  Value per point: .5 cents per point.

​Park Inn Prague

Next, I spent three nights at the Park Inn Prague, a category 3 hotel costing 28,000 points per night.  Even as a non-elite "Red" member of the Club Carlson program, I was still upgraded to a "Residential Room" with a small sitting area, one full bathroom and one half-bath.

Total points: 84,000. Total value: $420. Value per point: .5 cents per point.​

PointsHound reservation at Hotel Aron

PointsHound is a relatively new online hotel booking portal.  Most online travel agents, or OTAs, pass along a portion of their commission on hotel reservations in the form of a rewards program like Expedia Rewards, or through cashback portals like TopCashBack. Instead, PointsHound passes along part of their commission in the form of airline miles in one of their partner programs, including all four of the major US domestic airlines.  The complete list of partners is:

• American Airlines AAdvantage
• Delta Skymiles
• United MileagePlus
• US Airways Dividend Miles
• Virgin America Elevate
• HawaiianMiles
• BalticMiles
• Etihad Guest Miles
• Club Premier KmP
• Best Buy Reward Zone

If you're staying at non-chain hotels, or hotels where you don't collect that chain's loyalty points, and you redeem your miles for high-value awards, like intercontinental premium cabin awards, you'll get more value by booking through ​PointsHound than through a traditional cashback portal.

I made a PointsHound reservation at a very small business hotel in the Žižkov neighborhood of Prague, Hotel Aron.  The hotel was horrible; my "non-smoking" room stank heavily of smoke, the reception insisted on keeping my key when I left the hotel, and there was no security worth mentioning.  However, my 431 Delta Skymiles did recently post to my account, which at 2 cents each is about a 7% rebate against the $122.50 I spent for two nights.

Courtyard Prague Airport

Since I was leaving early Sunday morning, I spent my final night at the Courtyard Prague Airport, a Marriott property.  As a Category 2 property, I spent just 10,000 Marriott points for the night.​  The hotel was located immediately across the street from both Terminals 1 and 2, the non-Schengen- and Schengen-zone terminals, respectively.  The convenience was incredible, but the morning I was leaving was the same night that the Czech Republic moved to "summer time," and since I had no idea whether my iPhone would automatically adjust, I ended up staying up all night anyway in order to make sure I made my 6 am flight.

Total points: 10,000. Total value: ​$79. Value per point: .78 cents per point.

US Bank Visa Buxx

One product that I didn't discuss in my first post about true PIN-based debit cards was the US Bank Visa Buxx card.  While I knew the card was similar to the Nationwide Visa Buxx card discussed in that post, I was hesitant to ​post about it because I didn't have one myself.  I'm happy to now be able to report that the US Bank version of the Visa Buxx product works as a true PIN-based debit card, and anyone can get one.

Getting the Card

The US Bank Visa Buxx card, like the Nationwide Visa Buxx card, requires you to register as a "parent" creating a card account for a "teen."  However, unlike Nationwide, which allows you to use the same information for both the "parent" and the "teen," US Bank requires at least ​a different Social Security number for the teen than the parent.

I'm now able to report that US Bank does NOT verify the information entered for the "teen" on their product.​

Activating the Card

To activate the card you'll need the Social Security number you entered for the teen during the application.  Once the card is activated you'll have two different logins to the US Bank Visa Buxx website: the "parent" login which allows you to load the card, and the "teen" login which only allows you to view the transaction history.​

Loading the Card

You can load potentially up to $517.50 per load (the website states $517.50, but the cardholder agreement states $500, so it's ambiguous what the actual limit is), using any Visa or MasterCard credit or debit card, at a cost of $2.50.  According to the cardholder agreement you can load up to $2000 per 30 days, although I have not been able to confirm that limit.

Unloading the Card

I'm now able to confirm that the US Bank Visa Buxx card can be used to reload Gobank and Bluebird at any Walmart register using the PIN you set up during the phone activation process.​

According to the cardholder agreement, you can withdraw up to $200 per ATM transaction and up to 3 ATM withdrawals per 24-hour period.

Conclusion

The US Bank Visa Buxx is a great addition to any points and miles earning strategy.  It can be used to reduce your cost per point by loading it using the Paypal Debit MasterCard, or used to manufacture spending at .48 cents per dollar.​

Lesser Known Hotel Redemptions

This week got off to an interesting start with my three-part series on Gobank, the new Bluebird competitor which can radically reduce your cost per point when manufacturing spend using a number of popular methods (part 1, part 2, part 3).  I'l be returning to that subject as Gobank increases their accessibility and we learn more about the product's capabilities.

Today I'll take a look at three hotel redemptions that are lesser known, but potentially lucrative redemptions of your hard-earned (or not so hard-earned!) hotel points.

Hyatt Upgrades

With Hyatt Gold Passport, you can use 3,000 Gold Passport points to upgrade to a Regency or Grand Club room for up to 4 nights during any paid stay.  Similarly, you can use 6,000 Gold Passport points to upgrade to a suite.  Moreover, you're able to guarantee these upgrade at time of booking, so you don't have to wait on pins and needles for an upgrade to become available.

These points upgrades can only be used when you're staying on a reservation that's at least the "Hyatt Daily Rate," the flexible, non-prepaid reservations business travelers and those making last-minute reservations tend to make.

Over at View from the Wing there's a great discussion of this feature, under the fitting subtitle, "Why Do I Ever Stay in a Regular Room at a Hyatt?​"

Hilton Award Upgrades

A similar benefit offered by Hilton HHonors is per-night point upgrades on award stays. Each property prices these awards out different, but there are some great values to be had here.  For example, in March I was able to book an executive floor room at the Hilton Prague, with access to what is arguably the best executive lounge in Europe for 39,129 Hilton HHonors points; that's just 4,129 more points per night, or about $17, for a self-serve open bar that runs from noon until late at night, every day.

You can spend your HHonors points on these upgrades after making your initial award booking, and the price can fluctuate quite a bit as the property gets a better picture of its upcoming reservations, so it's worth checking back periodically to see if the upgrade price has made it worth making an upgrade with your points (or if you've earned more points since making the original booking).

Marriott Instant Redemption Award

This next award needs the following caveat: if you are aggressive about redeeming your Marriott Rewards points for high-value award night redemptions, then Marriott Instant Rewards will not provide you with the same value per point as those redemptions.​  But as anyone who's read my book knows, the least valuable point is the one you don't redeem.  In that spirit, I think Marriott instant rewards can be a great redemption if you have Marriott Rewards points that you don't foresee a more valuable use for in the immediate future.

​So what is a Marriott Instant Redemption Award?  According to Marriott you can:

redeem points instantly at any participating Marriott across the US (except Hawaii), Canada and Europe (includes the United Kingdom, France and Germany).

You can only redeem your points for an Instant Redemption Award during an eligible stay, which is most stays that you book as an individual and have provided your Marriott Rewards number with the reservation.  When you redeem points for an Instant Redemption Award, you ​can apply a credit against charges made to your room during your stay, according to the following redemption chart:

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​As you can see, these Marriott Rewards redemptions give you between .2 and .53 cents per point in value.  Low compared to award night redemptions, but high compared to letting them expire.

Maximizing Gobank and Bluebird

Over the weekend I reported on Gobank (part 1, part 2), the new banking product ​from Greendot.  Today I'll discuss what this means for your miles and points earning strategy.

Points-Earning Debit Loads

Just like the Bluebird, Gobank can be loaded at any Walmart register with a PIN-based debit card.  If you have a debit card that earns airline miles on PIN-based transactions, this is an easy way to generate spending on the card.  

Unfortunately, there aren't very many remaining debit products that earn rewards for PIN-based transactions.  One, the Bank of America Alaska Airlines debit card, earns 1 Alaska Airlines mile per $2 spent on the card.  However, the card is no longer being issued to new customers.  If you already have an Alaska Airlines debit card, this is a great way to earn valuable Alaska miles while paying your bills each month.

A second debit card product, the Suntrust Delta Skymiles debit card, earns 1 Delta Skymile per dollar spent on the card, including on PIN-based transactions.  While Suntrust representatives claim that Bluebird (and, similarly, Gobank) loads at Walmart won't earn Skymiles, there are lots of reports of success receiving miles for these transactions.

Since online Gobank debit loads are ​treated as signature purchases by the issuing bank, you can earn your usual rewards on signature purchases, for example 1% cash back using the PayPal debit MasterCard, a great way to unload PayPal My Cash cards, similar to the technique I described in this post.

Prepaid Debit Card Loads

A slightly more involved technique is to use reloadable PIN-based debit cards to load your Gobank account.  For example, as I reported on Saturday, I was able to load my Gobank account using a MyVanilla Debit card which I had loaded using Vanilla Reload Network cards I purchased at CVS using a rewards-earning credit card.  Similarly, you can load your Gobank account with a Nationwide Visa Buxx card you've loaded using a rewards-earning credit card.

If you dont have access to Vanilla Reload Network cards, or your local merchants won't allow you to use a credit card to purchase them, beginning this month another opportunity has become available: ​many, although still not all, prepaid gift cards sold at grocery stores, drug stores, and gas stations have begun to work as true PIN-based debit cards.  Since this is a rapidly developing situation, I strongly recommend you first buy a small-denomination gift card in order to see whether it can be used as a PIN-based debit card.  The fees can be somewhat higher than Vanilla Reload Network fees, but those fees can be offset if you're able to use a credit card that gives bonus points for that type of merchant.

Comparative Advantages of Gobank and Bluebird

If you're like me and have both a points-earning debit card and access to Vanilla Reload Network reload cards, then each month Bluebird posed a dilemma: every dollar of Vanilla Reloads I used to fund Bluebird was a dollar of points-earning debit load I couldn't do.  With the introduction of Gobank, that dilemma disappears: Bluebird can be funded directly with Vanilla Reloads, and Gobank can be funded with my points-earning debit card.

Meanwhile, instead of expensive money orders and cash advances, I can easily and cheaply ($0.50 per load) unload up to $2,500 per day from my MyVanilla Debit cards, which I've likewise loaded with ​Vanilla Reloads.

Gobank vs. Bluebird

[Updated 4/15/13: ​Since writing this post I have tested and confirmed that Gobank, unlike Bluebird, allows ACH pulls.  In other words, you don't need to initiate bill payments from Gobank, you can initiate the payment from your account with your bill payee.  However, Gobank account numbers are several digits longer than traditional checking account numbers, and some of my credit card companies were not able to accept the entire account number.  Nonetheless, this somewhat mitigates the shortcomings of Gobank's bill pay feature which I identified below.]

Yesterday I reported on the capabilities, fees, and limits of the new Gobank product from Greendot.  I compared it to the similar, groundbreaking Bluebird card from American Express.  Today I'll make that comparison in more detail, and in tomorrow's post I'll take a look at some of the opportunities created by this new product.

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• Direct Deposit: Both Gobank and Bluebird allow direct deposit of paychecks, and accept incoming ACH transfers from other banks and payment services like Paypal.
• Prepaid Reloads: Gobank is reloadable using Greendot Moneypaks, which can be purchased using cash at many drug and grocery stores.  Bluebird is reloadable using Vanilla Reload Networks prepaid reload cards, which can be purchased using rewards-earning credit cards at many, but far from all, drug stores, gas stations, and grocery stores.
• Walmart Register Reloads: Both Gobank and Bluebird can be reloaded at any Walmart register using cash or PIN-based debit cards.​  Gobank has a $2,500 daily reload limit, and it's unclear whether there is a monthly limit on these reloads.  Bluebird has a $1,000 daily limit and $5,000 monthly limit, which is shared with reloads done with Vanilla Reload Network cards.
• Online Debit Card Loads: both products allow $1,000 in monthly debit card loads online.  However, Bluebird charges $2 for online debit loads, with a daily $100 limit, while these loads are free using Gobank, with a daily load limit of $200.

Winner​: the two products are very evenly matched on the load side, with Bluebird having the advantage of accepting more flexible Vanilla Reload Network cards, while Gobank has higher daily Walmart load limits and free online deposits, which can save you trips to Walmart.  I call this a tie.

ATM Withdrawals

When it comes to ATM withdrawals, the two cards are very evenly matched since they both use the same third-party network of free MoneyPass ATMs.  However, Bluebird technically requires you to have a monthly direct deposit in order to use these ATMs for free, while Gobank doesn't have that requirement.​

Likewise, both products have a daily ATM withdrawal limit of $500, but Bluebird also imposes a monthly ATM withdrawal limit of $2,000, while Gobank doesn't have a published ATM withdrawal limit.

Winner: Gobank​ by a hair.

Bill Pay

One of the most obvious advantages of Bluebird over Gobank is that Bluebird's bill pay interface is so effective, while Gobank has a handsome but comparatively clunky bill pay tool.  Additionally, Bluebird allows multiple pay-to accounts per payee, while Gobank doesn't, a major limitation if you have multiple accounts with a single company: it essentially forces you to have a backup banking product with which you can pay your other accounts.​

Winner: Bluebird​

Fees

​Most users will never pay a fee for using either of these cards.  The exception is when using the cards abroad: Bluebird has no foreign transaction fee, while Gobank charges a 3% fee for foreign transactions (no matter what currency they're conducted in).  Since I use my Bluebird card as a safe alternative to carrying my credit and debit cards while traveling abroad, this is a major shortcoming of Gobank.

Winner: Bluebird​

Conclusion

As you can see, ​these products are very evenly matched.  Since Gobank is still in its beta testing stage, it's certainly possible that some of its problems, like foreign transaction fees and a clunky bill pay interface, will be fixed by the time the product is ready for open enrollment.  In the meantime, there's no reason not to have both, since the slightly different configuration of features allows them to be used in different ways to maximize your points and miles haul.  Come back tomorrow, when I'll discuss precisely that.​

Gobank's Launch Challenges Bluebird

For the last week I've been experimenting with ​the beta version of Gobank, the new simplified, smartphone-centered bank product from Green Dot, the same people who sell cash-only Moneypaks at retailers all over the country, which can be loaded to many prepaid products, as well as PayPal accounts.

​I'm happy to report that Gobank is a true competitor for American Express's Bluebird banking product.  Unsurprisingly, as a product in beta release, Gobank is still very poorly documented.  That's why I'm here to walk you through all the features I've explored so far.  There's a lot of information here, so read this post carefully, and if you want to know more about Gobank, post your questions in the comments section of this post and I'll do my best to answer.

Getting an Account

Since Gobank is still in beta, you first need to sign up to receive an invitation​.  After a few weeks of waiting I reached out to their extremely active social media team on Twitter @Gobank and asked if they could help.  A day later I was able to create an account (although strangely, I didn't receive my invitation until a day or so after that).  This seems to be the main function of their Twitter team, so don't hesitate to tweet them and ask for an invite once you've signed up to receive one.

The best way to get a Gobank account, however, is to have someone who already has an account send a nominal amount of money to your e-mail address.  The notification gives you the option of receiving the money in a newly ​set-up Gobank account.

Online Debit Card Loads

The first, most obvious feature of Gobank is the ability to load your account online using a debit card.​  In principle this is limited to $200 per day and $1,000 per month.  Based on my limited experience (5 successful loads) of unsuccessful and successful debit load attempts, I believe that either the Gobank servers are located on another continent in a different time zone, or the $200 limit is a rolling 24-hour limit.  My unsuccessful load attempts returned an error that only one load "per day" is possible, even if the first load was the previous calendar day.  Later in the evening I was then able to make the load successfully.  This needs to be explored further in order to use this service consistently.  My tentative recommendation is to either leave 2 or more days between loads, or wait 24 hours between loads.

According to some reports on Flyertalk​ the account can also be funded using credit cards, by ignoring the "debit" prompts throughout the process.  I personally won't be using this option, since I think the risk of having the charge classified as a cash advance outweighs any marginal benefit.  Having said that, this does appear to be a viable option for now.

ATM Withdrawals

One of the most exciting aspects of Gobank is their promise of free ATM usage at over 40,000 ATMs nationwide.  According to the Terms & Conditions,

You may only withdraw up to $500 from an ATM in a single day.

​Yesterday I visited one of the ATMs the Gobank iPhone app directed me to, and was able to withdraw $400 without any ATM fee or fee from Gobank.  I only withdrew $400 since that was the ATM's transaction limit, though I do suspect that Gobank would allow a withdrawal of up to $500.

This is in contrast to the Nationwide Visa Buxx card, which is a great product, but which charges $1 per ATM withdrawal (even at their "free" ATMs!), and limits ATM withdrawals to $200 per week (7-day rolling period).​

Walmart Rapid Reload Network Loads

Today I visited my local Walmart and loaded my Gobank account with about $800 from a MyVanilla Debit Visa card, one of the true pin-based debit cards I discussed in one of my very first posts.  I was not charged any fee by Gobank or Walmart (although I was charged a $0.50 transaction fee by MyVanilla, one of the reasons it's among the worst prepaid debit card products on the market).  Just like with Bluebird, you can load the card at any Walmart register, even at stores that don't have a dedicated MoneyCenter.

The ability to load cash from a PIN-based ​debit card is game-changing, since it allows you to avoid the high fees imposed on cash advances, money orders, or ATM withdrawals, and use the money to pay anyone in Gobank's bill pay database.  Be aware that some users have reported having their MyVanilla Debit cards closed by Incomm, the company that issues them, for using their accounts too aggressively.

Bill Pay

Bill pay is one area where Gobank falls short, so far, of American Express's Bluebird banking product.  Bluebird allows you to create multiple "pay to" accounts for a single payee: for example, if you have multiple Chase credit cards, or multiple bills through a single utility company (gas and electric), you can clearly separate each account number as a separate "bill pay" account, and even give each account a different nickname.  

As of now Gobank's bill pay feature doesn't allow multiple account numbers for a single payee.  While this may not seem like a big deal, for those of us with multiple credit accounts at one bank this radically decreases the usefulness of the bill pay feature, since only one account per payee can be paid from the Gobank account, and the others need to be paid through other banking products like Bluebird.

Person to Person Transfers

​Like Bluebird, Venmo, and Paypal, and as mentioned about Gobank allows you to send money to a person's e-mail address, cell phone number, or Facebook account, and fund the transaction with your available Gobank balance.  If the recipient doesn't have a Gobank account, they can deposit the money instantly into their Paypal account

Limits

• ATM withdrawals: $500 per day.  Self-explanatory.
• Deposits: "The most you can deposit to your account in any day in cash is $2,500."  I interpret this to refer to the sum of online debit card loads ($200 per day) and in-person Walmart Rapid Reload Networks loads ($2,500 per day).  So, if you load $200 online, you should only be able to load $2,300 at Walmart.
• Person to person transfers: ​$500 per day ($2,000 starting April 17, 2013), $5,000 per month.

Fees

• Monthly fee: $0.  Like the Bluebird, Gobank doesn't charge a monthly fee, although they do allow you to pay up to $9 per month voluntarily.
• Foreign transaction fee: 3%.  Unlike the Bluebird, which charges no foreign transaction fee, Gobank charges 3% on foreign transactions.  This is not a foreign currency fee, so it will still be charged even if the transaction is conducted in US currency.  Additionally, it applies to all transactions, not just purchases, so foreign ATM withdrawals are also assessed this fee.
• Out-of-network ATM withdrawals: $2.50.  Fortunately Gobank has a very large network of ATMs, and you can get cash back at most grocery stores, so you should be able to ​avoid this fee.

Summary

Gobank is an exciting new development in the rapidly changing market of alternatives to traditional brick-and-mortar banks, which has so far been dominated by American Express's well-designed and well-implemented Bluebird product.  Gobank has a lot of promise, and a lot depends on the continuing implementation of their product.  Over the next few days I'll be giving some more analysis and suggestions of ways to maximize the value proposition offered by Gobank, as well as a bit of a refresher on the granddaddy of these products, Bluebird.