AccountNow can supplement Bluebird and Gobank

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[edit 6/18/13: It looks like I have an affiliate link for the basic AccountNow card as well. If you are interested in using AccountNow, and want to support the site and the work I do here, feel free to use this link. See the comments below for some of the risks of the technique described here.]

Regular readers of this blog know that one of the simplest ways to manufacture spending on rewards-earning credit cards is by loading Vanilla Reload Network reload cards directly to a Bluebird account, which can then be used to pay bills, including credit cards. This has the advantage of being simple, predictable, and low cost - many rewards currencies are worth manufacturing at 0.78 cents each, and that's before taking bonuses into account. However, Bluebird loads are limited to $5,000 each month, which led travel hackers to seek out similar products.

A slightly more expensive technique that I discovered and reported out is loading a Gobank account with a reloadable debit card, like the MyVanilla Debit Card. This raises (but doesn't eliminate) the limit on the amount of manufactured spending you can do each month, but also raises the cost, since MVD cards charge $0.50 per swipe transaction. Still, at 0.84 cents (a $1,000 load, for simplicity's sake), this is still a great way to earn rewards.

A third, even more expensive version of the same technique uses AccountNow, a reloadable, prepaid debit product (not a checking account). Jason Steele over at The Points Guy reported on AccountNow in the context of Green Dot MoneyPaks – if you're able to buy those using a credit card, then AccountNow is only slightly more expensive than Bluebird (since MoneyPaks have a $4.95 load fee, rather than Vanilla's $3.95).

If you don't have access to MoneyPaks, you can still load your AccountNow account at Walmart using their Rapid Reload Network. However, there is a $3.74 load fee for swipe reloads of AccountNow. The maximum daily load is $1,500 and monthly maximum on total loads is $9,500.

Using my technique of loading MyVanilla Debit Cards with Vanilla Reload Network cards, then unloading them to AccountNow, your total out of pocket cost will be $16.09 ($11.85 in Vanilla Reload fees, $0.50 MyVanilla transaction fee, $3.74 in Rapid Reload Network load fees) for $1,511.85 in manufactured spending, or 1.06 cents per dollar.

On the one hand, that's much more expensive than other existing techniques to manufacture spending. Other than free techniques like Amazon Payments, my cheapest manufactured dollar is 0.185 cents (using the technique I pioneered here).  So the question isn't whether it's worth manufacturing every dollar at 1.06 cents each; the question is whether it's worth manufacturing your last dollar at 1.06 cents each.

That will depend on your specific situation, and especially on whether you have access to Vanilla Reload Network cards at merchants that are bonused categories for your rewards-earning credit cards. All that said, I think there are certainly situations that can make this technique worth using, and I wanted to make sure my readers were aware of it.

 

Gobank calls again

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Yesterday I received a voicemail from a "Christie Smith" in Gobank's fraud department,  who left her direct phone number and asked me to call to talk about the activity on my Gobank account.

When I was finally able to reach her today, she explained that:

  1. My level of account activity was "very unusual;"
  2. She was not allowed to tell me the level of deposit and bill pay activity that was allowed, but;
  3. I was exceeding it.

To her credit, she sounded apologetic about the absurdity of the situation. Still, she told me that unless I drastically reduced the amount of deposits I was making, my account would be closed (although she couldn't tell me what a "safe" level of activity would be).

The obvious explanation for this is that Green Dot, the prepaid card company which also operates Gobank, pays Walmart for each cash register load there. For most of their prepaid card products, Green Dot then charges the customer some amount (typically $3.74) that covers the fee they pay Walmart plus whatever their margin is.

In order to compete with American Express's groundbreaking Bluebird checking account alternative, which allows free cash register loads at Walmart, Green Dot decided not to charge Gobank customers for cash loads at Walmart. I suspect, however, that Green Dot still has to pay Walmart for those transactions, which means heavy users of that feature like myself are costing Gobank some serious money.

For now I don't think I'll change my usage pattern very much. Gobank is a remarkably valuable tool, but it's only valuable if you use it. I'll cut down my loads to less than $2,500 per week and less than $10,000 per month (I loaded considerably more than that last month).

And as always, I'll continue to report on every ongoing development with my Gobank account here on the blog.

 

Do this now: Priority Club summer promotion

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It's hard to stay up-to-date on all the promotions run by Priority Club (the massive loyalty program behind omnipresent chains like Holiday Inn). The single best way is to follow Priority Club Insider, who does the Lord's work maintaining the ever-changing list of Priority Club promotions. Before you stay at any Priority Club property, you owe it to yourself to check out Priority Club Insider and make sure you're registered for all the relevant promotions.

That's where I learned about Priority Club's summer promotion, which allows you to earn double points or double miles starting with your second stay between June 1 and July 31, 2013 (starting with your first stay at Candlewood Suites and Staybridge Suites properties). 

Register for the promotion now, before you forget. 

Delta's latest devaluation, and why I'm relieved

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If you feel like spending 15 minutes you'll never get back, read these four posts about the changes to Delta's partner earning rates, effective for flights flown on or after September 1, 2013.

Frankly, my reaction was one of relief. Why? Because I have a 20,000 MQM-earning first class trip, from New England to Hawaii, booked for Christmas and MQM earning on Alaska Airlines is not affected by the current devaluation.

No one (except Rene at Delta Points) would be crazy enough to defend this devaluation. But whether you're personally affected by it will depend on your specific travel plans. As always, check the partner earning rates of your preferred airlines before crediting miles to any program.

Does anyone that knows anything..still fly Delta? Yes.

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In the middle of my 18-hour Delta mileage run, in a case of particularly egregious linkbait Gary at View from the Wing asked today:

Does anyone that knows anything about travel, miles, and elite status — that doesn’t live in Atlanta or the Upper Midwest — still fly Delta?

Well, I live in New England, and whether I know anything about travel, miles, and elite status is an exercise I'll leave to the reader .

And I fly Delta almost exclusively.

As I confessed earlier this week, in the 20 years I've been flying more or less constantly, I've only spent about 11,000 miles on airlines operated by oneworld alliance carriers (and my recollection is that the majority of those were earned on a single cheap Aer Lingus flight to Dublin in the early 2000's. So I'm prepared to believe that American Airlines is a world class airline, with comfortable seats, good loyalty recognition, on-time departures and arrivals, and courteous flight staff.

On the other hand, due to a serious of unfortunate career decisions, I was forced to fly a hundred thousand miles or so on United Airlines over the course of a few years, both domestically and internationally. 

And that's why I fly Delta almost exclusively. 

A lot of digital ink has been spilt over the consequences of the merger between United and Continental. The loyal flyers of each airline were shocked - shocked! - by the terrible flight experience they found on flights operated by their new crews.

Since I was never a loyal flyer of either airline, I can say with complete equanimity that every flight I've flown on pre-merger Continental and pre- and post-merger United have been absolutely abysmal. The cabins are dim and unpleasant, the flight attendants are apologetic at best and rude at worst. I'm graciously leaving unmentioned the libertarian capitalist fantasies expressed by United CEO Jeff Smisek in almost every issue of their inflight magazine.

 United MileagePlus miles are still the most valuable traditional airline miles (with Alaska's Mileage Plan a close second).

As much as I value the inflight experience offered by Delta, the fact is that United offers more award seats, with more partners, to more destinations I need to fly than any other carrier. And that's why I use United miles regularly for award seats, for example on my spring break trip to Prague earlier this year.

But I earn those United miles through manufactured spending on my Chase Freedom and Sapphire Preferred cards, not by flying on paid United and US Airways flights. 

So tell me, does anyone that knows anything about travel, miles, and elite status — that doesn’t live in a United hub — still fly United?

The 5 best cards for manufactured spending at 7-11

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[updated 7/25/13: see this post for the results of my experiment earning bonus points with American Express cards at 7-11. Long story short: it doesn't work, which takes options 3 and 4, below, off the table.]

As I reported yesterday, at least some 7-11 store locations that are coded by Visa as gas stations now allow Vanilla Reload Network reload cards and PayPal Cash cards to be purchased using credit cards. While the cost per dollar of manufactured spend is the same as reload card purchases made at CVS ($3.95 for up to $500), the ability to earn bonus points on Vanilla Reload and PayPal Cash purchases drives the cost per point earned down into even more lucrative territory.

Here are the cards that I believe offer the best return on manufactured spending at store locations coded as gas stations, in order of value to the average travel hacker: 

  1.  US Bank Flexperks Travel Rewards Visa Signature. As I explained in Chapter 2 of the Free-quent Flyer's Manifesto and in this blog post comparing fixed-value rewards points, the Flexpoints earned by this card are worth between 1.5 and 2 cents each when redeemed for paid airline tickets. The card has a somewhat confusing earning structure, whereby you'll earn 2 Flexpoints per dollar on purchases at whichever one of gas stations, grocery stores, or airline tickets you spend the most on each billing cycle. Using this card to purchase Vanilla Reload Network reload cards at a gas station, you can buy 3-4 cents in airfare for .79 cents, a 74-80% discount on mile-earning airline tickets. Once you account for the value of the frequent flyer miles you'll earn flying these tickets, this makes airline travel very close to free or even profitable if spent on 3-4 cent per mile mileage runs.
  2. Chase Ink line of small business credit cards.  These cards earn either fixed-value (Ink Cash) or flexible (Ink Bold and Ink Plus) Ultimate Rewards points. All three cards earn 2 points per dollar spent at gas stations on up to $25,000 (Ink Cash) or $50,000 (Ink Bold and Ink Plus) in purchases per year. If you have an account that earns flexible Ultimate Rewards points, you can then transfer the points to Chase's airline or hotel partners at a 1:1 ratio. If you have a Chase Sapphire Preferred card, you can also redeem these points at a value of 1.25 cents each for paid, mile-earning airline tickets, giving a total discount of 68% on paid airline travel.
  3. American Express Premier Rewards Gold/Business Gold Rewards.  Both of these cards earn 2 Membership Rewards points per dollar spent at gas stations. These points can be redeemed for paid airline tickets at 1 cent each, or transferred at various ratios to American Express's transfer partners.
  4. American Express Hilton HHonors Surpass. In the very early days of Vanilla Reload Network cards, many people (your humble blogger included) signed up for the no-fee American Express Hilton HHonors credit card, which at the time earned 6 HHonors points per dollar spent at drug stores. We earned hundreds of thousands of points buying reload cards at CVS until American Express eliminated drug stores as a bonus category with our May statement closing dates. However, gas stations are still a bonus category.  Using the standard "no-fee" HHonors card you'll only earn 5 points per dollar spent at gas stations, but the HHonors Surpass card still earns 6 points per dollar at gas stations, the same earning rate that attracted people to the Hilton cards in the first place. The Surpass card does have a $75 annual fee, so you'll need to make an individual decision on whether the additional HHonors point per dollar spent will be worth more than the cost of that annual fee.
  5. Bank of America Bankamericard Cash Rewards.  In terms of cash value, this card is second only to the US Bank Flexperks card, earning 3% cash back on gas station purchases. The reason I place it fifth on this list is that the 3% cash back is limited to $1,500 per calendar quarter. While $300 per year at a cost of $47.40 is a perfectly good deal, it's not possible to leverage it to the extent possible with the 4 options I've described above.

 

 

Reminder: free Gogo inflight wireless on Delta

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Delta was one of the first airlines to roll out inflight wireless internet to the overwhelming majority of their domestic fleet, and still has an advantage over their competitors in terms of fleet coverage.

I'll be blogging all day from 30,000 feet since I'm mileage running until tomorrow morning and taking advantage of free inflight wireless on all 4 of my Delta flights. It occurred to me that I hadn't passed on to my readers the easy trick I'll be using to get free Gogo wireless access on Delta flights until the end of the month.

Delta is currently running a promotion with the smartphone brand Blackberry to offer free inflight wireless access to anyone with a Blackberry device. If you don't have a Blackberry, then you can still take advantage of this promotion by "faking" the user agent of Blackberry's built-in browser. Via Lucky at One Mile at a Time, this post on Slickdeals explains how to do this easily with a Chrome browser or smartphone.

The trick works (I use user agent "blackberry"), and inflight internet access is truly amazing.

Happy hacking! 

 

New Vanilla Reload Opportunities

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In the comments to one of last week's posts, reader A wrote:​

I've been buying Paypal reloads at 7-11 with a CC. Now that 7-11 carries Vanilla Reloads I'll be running tests to see if the purchases code correctly for 2x.

Having seen 7-11 on the list of "Reload Locations" on the Vanilla Reload Network site, I naturally checked my local stores about 6 months ago. Since they weren't carrying them, and I had easy access at CVS, I didn't think about it any more. However, the opportunity for double points at gas stations drove me back to my local 7-11, where sure enough, both Vanilla Reload Network reload cards and PayPal Cash cards were for sale by credit card.

Now, I haven't seen a 7-11 location with actual gas pumps​ in a long time. However, Visa has a publicly available database of the "merchant codes" used by every merchant in the country. It's these codes that determine how a purchase transaction is coded by credit card companies for the purpose of awarding bonus points.

​And sure enough, my local 7-11 store locations are entered into that database as:

GAS STATIONS/FUEL/SUPPLIES-5541

This means that credit cards which bonus gas station purchases will almost certainly award bonus points for Vanilla Reload purchases at these locations, at least for Visa cards, which use Visa's supplier code database. 

My credit card statement hasn't closed yet, so I ​cannot guarantee bonus points will be awarded. ​However, I'm very confident that they will, since I used a Visa card, which means a new front has been opened in the use of the Perpetual Points Machine I outlined here.

​I'll discuss the implications of this discovery in the coming days. For now, a good place to start is Frequent Miler's chart of credit cards which bonus gas station spending. That chart is somewhat out of date, but still useful for getting a general picture of credit cards which will make this development such a lucrative opportunity.

Gobank Customer Care calls the Free-quent Flyer

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This afternoon I received 3 missed calls a few seconds apart (like everyone I know, I don't pick up my phone for unknown numbers), before the caller finally left a message on my voice mail. It turned out "Cassie" from Gobank Customer Care was calling to check in with me.

When I called back (not a simple process - I've never been told by an automated system that it was having "technical difficulties" before), I eventually was able to speak with Cassie, who explained to me that ​my account usage was unusual compared to their other customers, and invited me to explain how I was using the account. Not having anything to hide, I told her I was loading the account at Walmart, and then using it to pay my utilities, credit card bills, etc.

Cassie then told me clearly that ​"there was no effect on my account usage" and that she was calling to make sure that there wouldn't be any future effect. She didn't say what behavior might have triggered the call, or what I could do to avoid "any future effect." We thanked each other and hung up.

I haven't noticed any effect on my account access so far, so I'm going to attribute this, for now, to an overabundance of caution from Gobank's fraud department as they roll out their new checking account alternative.

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