2013 End-of-Year Accounting

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Yesterday I asked my readers what they're curious about in my 2013 year as a travel hacker and blogger, and got a ton of terrific questions.

Meanwhile, I've been counting beans and came up with the following data to share with my readers. There are a few things that need a little explaining, but first, the data:

That's a lot of information. There are a few obvious questions, but let me get the asterisks out of the way first:

  • * I redeemed all but a few hundred of my Ultimate Rewards points as transfers to my United Mileage Plus, Amtrak Guest Rewards, and Marriott Rewards accounts where I earned well over 1 cent per point in value. However, since they're technically redeemable for cash I thought they should be included here. Additionally, 40,000 of these points came from my Sapphire Preferred signup bonus;
  • ** I received a 10% rebate on my Barclaycard Arrival redemptions and received a 40,000 mile signup bonus;
  • *** Almost all my Flexpoints were redeemed for up to 2 cents each for flight redemptions. However, like Ultimate Rewards points, they can be redeemed for cash at 1 cent each, so I included them here;
  • **** Here's the really tricky stuff. For all the rest of my spending related to manufactured spend, I was able to just divide the total fees I paid by the cost of one "unit" of manufactured spend. For example, I paid $67.50 in manufactured spend fees to US Bank Visa Buxx. Since one load costs $2.50, I knew that I had manufactured exactly $13,567.50 in spend using that technique. At Walmart, there are 3 different price points for manufactured spend: $0.70 for $1,000 money orders, $1.00 for bill payments to American Express and Discover, and $1.88 for bill payments to Visa and MasterCard. While it may be theoretically possible for me to figure out how much I manufactured using each technique, in practice, I'm just not willing to go there, since I had so many split transactions: I would literally have to reconstruct every transaction of manufactured spend I made at Walmart this year.
  • **** Likewise, MyVanilla Debit transactions at Walmart cost $0.50, but cash advances at banks cost $1.95. It's knowable how much I spend on each technique, but it would simply be a nightmare putting in the work to find out.

Finally, my Bank of America Alaska Airlines debit card poses one final problem: if I buy a $1,000 money order with a MyVanilla Debit card, deposit it in my Bank of America checking account, then make a bill payment with my Alaska Airlines debit card, I earn 500 Alaska Airlines Mileage Plan miles. But what technique gets the credit for that? The credit card I bought the Vanilla Reload cards with, MyVanilla Debit, or should there an additional category for purely excessive profit (500 Alaska miles for $1.88)? That's not a question with a definite answer, so I'm not going to attempt to venture one here.

Conclusion

Frankly, it was a good year. I took a lot of risks, made a lot of money, traveled a lot of miles, stayed in a lot of great hotels (and one disaster!) and had a really good time learning from my readers.

I hope I helped my readers have a little bit more lucrative and little bit more interesting year than they would have had otherwise.

And I'm looking forward to an exciting new year!

Changes to Ultimate Rewards Mall earning

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Last April I wrote about one of my favorite double dips when purchasing paid airline tickets:

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.

Unfortunately, both Travelocity and Hotwire, the two online travel agencies I cited as earning 2 bonus Ultimate Rewards points per dollar, have decreased their earning rate to 1 point per dollar, at least through my Chase Freedom and Sapphire Preferred Ultimate Rewards portals (the different Ultimate Rewards portals can have different earning rates at the same merchants, although it isn't that common).

Whether this changes your flight-booking calculus depends on your situation:

  • If you book your paid tickets through Travelocity using the Barclaycard Travelocity Rewards American Express card, that's still probably your best bet since it earns a 6% rebate on purchases made through Travelocity, and the 1 Ultimate Rewards point is just icing on the cake;
  • If you don't have a Travelocity Rewards credit card, then you may want to book through Expedia, who operate their own rewards program. Unfortunately, that program is not very lucrative;
  • Finally, now that all the online travel agencies earn just 1 bonus Ultimate Rewards point, you may want to consider booking using the Ultimate Rewards booking engine. While you'll still only earn 1 bonus Ultimate Rewards point per dollar, you're much more likely to actually receive that point without having to fight Chase for it.

That last point is worth considering if you've had trouble getting bonus Ultimate Rewards points to post correctly, as I have occasionally in the past when clicking through to Travelocity.

Hacking is an chance to travel; travel is a chance to hack

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One of the most frequent e-mails I receive is from readers who complain to me:

"That technique sounds great, and it's too bad that CVS/7-Eleven/grocery stores in my area don't accept credit cards!"

Trust me, I feel for you! Over the last year 7-Elevens and grocery stores in my town have stopped accepting credit cards, which is a real pain since those are two of the most lucrative categories in which to manufacture spend, for example using Chase Ink cards for gas, the American Express Premier Rewards Gold for groceries, and US Bank Flexperks Travel cards for either.

Fortunately, what I do is more than extreme couponing. I'm a travel hacker, and that means the opportunity to regularly visit lots of different cities, where stores have different policies. There is no national policy on the acceptance of credit cards at 7-Eleven store locations, for example, so while it's becoming harder to find locations willing to accept credit cards, it's still possible, and it's still worth it.

For example, just in the last month while visiting Chicago and Portland, OR I was able to find 7-Eleven store locations that accepted credit cards for PayPal My Cash cards (I'm happy to share those locations by e-mail with anyone interested).

Likewise, while AAA offices here in the Southern New England division sell only American Express gift cards, in Chicago they sell PIN-enabled Visa gift cards you can use to buy money orders, make bill payments, or load prepaid cards at Walmart.

Now, I'm not saying you should visit Chicago just to pick up a few thousand dollars in manufactured spending. But I am saying it's worth knowing all the techniques that are available, even if you can't apply them on a day-to-day basis – you never know when your travels will take you to a city where they'll pay off, hopefully in a big way.

What are my readers curious about?

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I'm putting together a year-end summary of my mile-and-point activity, scouring my rewards accounts for data that might be interesting to my readers. So far I've put together a collection of data on the cost of my manufactured spend, my fixed-value points redemptions (i.e. Citi ThankYou student loan rebate checks), and airline and hotel redemptions.

But I can't help but think that there must be specific questions my readers are interested in. What do you want to see included in my year-end summary?

Here's a quick glance at some preliminary data:

  • Minimum measurable manufactured spend: $189,755 (for information on why I call this the minimum measurable MS, check back for the complete dataset);
  • Cash spent on manufactured spend: $1,554.70;
  • Maximum cost per dollar of manufactured spend: $0.0082 (0.82 cents per dollar)
  • Value of fixed-value and cash redemptions: $5,435.81;
  • Fixed-value and cash balances remaining at EOY: $1,041.89;
  • Annual fees paid: $259;
  • Minimum cash profit this year: $4,664.

So, what do you want to see included in my year-end summary?

Quick update: my impromptu January application cycle

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[update 1/11/14: I never got around to calling Chase about my British Airways application, but today I saw that it had been added to my online accounts with a $2,000 credit line.]

Yesterday I announced that in honor of the 5% cash back "old" Blue Cash card still being available, I was moving my next round of applications up from the beginning of February. That meant scrounging around for the best, currently-available, signup bonuses. Unfortunately, the Alaska Airlines offer I wrote about in my "perfect storm" post is no longer available. Here's what I ended up applying for:

  1. American Express "old" Blue Cash. No signup bonus, no minimum spend requirement, no annual fee. 5% cash back at drug stores after spending $6,500 each year. Result: immediate online approval, $1,000 credit limit.
  2. Citi Platinum Select / AAdvantage World MasterCard. 50,000 miles after spending $3,000 within the first 3 months. Result: approval after calling the "status check" number, (888) 201-4523, $3,000 credit limit.
  3. Barclaycard US Airways MasterCard. 35,000 miles after first purchase. Result: immediate online approval, $1,000 credit limit.
  4. Chase British Airways Visa Signature. 100,000 miles after spending $20,000 within 12 months. Result: application pending. I called into the application status line today, (800)-436-7927, but have still been unable to get a decision or shuffle my credit limits around to secure approval. I'll wait and call back on Monday.

As you can see, because this application cycle was impromptu, I didn't have a chance to massage my credit by making sure all my credit card statements closed with a low or zero balance. My day-to-day high utilization rate negatively impacts my score between application cycles, making me look less credit-worthy (even though I always pay off my balances in full).

However, this doesn't bother me. I intend to only use the US Airways card once, to secure the signup bonus, and spend just $3,000 on the American Airlines card, so those low credit limits aren't a problem.

The $1,000 credit limit on the Blue Cash card, on the other hand, would be an issue except for the fact that American Express makes it easy to shuffle your credit limits between cards, so I'll be able to move all but a small part of my $10,000 Hilton HHonors American Express credit limit over to my new Blue Cash card (this is only possible within personal and business cards, not between them). That'll give me more than enough room to manufacture spend on my new 5% cash back card.

All in all, I'm pleased with the results of this application cycle, and hopefully I'll get approval for my British Airways application in the next day or two, possibly after moving part of my credit limit over from my Chase Sapphire Preferred card.

5% cash back is back (for now)

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I wrote early last month about my search for a new "workhorse" card to replace my Citi ThankYou Preferred card which, during my first 12 billing cycles, earned 5 ThankYou points per dollar spent at grocery stores, gas stations, and drug stores. With just a week left in that promotional period, imagine my excitement in seeing this FlyerTalk thread.

By opening this link in a new browser, "private browsing" session or "incognito" window, it's still possible to apply for what people are calling the "old" Blue Cash card. This "old" card has a totally different earning structure than the "new" Blue Cash Everyday and Blue Cash Preferred:

  • On your first $6,500 in purchases made with the card: 1% cash back at gas stations, grocery stores, and drug stores, and 0.5% everywhere else;
  • after spending $6,500: 5% cash back at gas stations, grocery stores, and drug stores, and 1% cash back everywhere else.

In other words this card is roughly comparable to the Citi ThankYou Preferred offer that's expiring for me, and I plan on applying for this card later today (after I decide on some additional cards for this impromptu application cycle).

Here are a few things to keep in mind:

  • Your net annual earning rate will be slightly less than 5% because of the lower earning rate on your first $6,500 in spend;
  • but unlike ThankYou points, which must be redeemed for mortgage checks, student loan rebate checks, or travel through the ThankYou booking tool in order to get a full 1 cent per point in value, Blue Cash "reward dollars" can be redeemed directly for cash;
  • 5% cash back is only awarded on gas purchases of up to $400;
  • and in my experience American Express does not code 7-11 store locations as gas stations and does not award gas station bonus points for purchases there.

Here on the blog I tend not to make explicit recommendations, since every reader's travel goals and application timelines are different.

In this case I'm inclined to make an exception and say that if you are able to take advantage of these bonus categories, you should strongly consider applying for this card right now. This offer will not last forever, and you will regret not carrying this card when you start reading about how much cash back other members of the community are earning.

Reminder: Alaska's Baggage Service Guarantee

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I've written before that I think most hotel "best rate guarantee" policies are a hoax: as great as they sound in theory, in practice the hotel has every incentive to respond as slowly as possible, almost always ensuring (in my experience) that the better rate is no longer available. When it is, they'll comb through the rate details to find minor differences in room type or cancellation policy.

I say that just as preface to the fact that today I had the chance to take advantage of Alaska Airline's Baggage Service Guarantee, and it was a really great customer service experience. Flying into Boston's Logan airport this evening just ahead of the winter storm crashing down on the East Coast, I headed to baggage claim and waited for 10 or 15 minutes with no sign of our bags.

Remembering that upon arrival in Lihui back on December 23rd the flight attendant had announced that our bags were guaranteed to be on the baggage carousel within 20 minutes of arrival, I checked the Alaska Airlines iPhone app to see what our official time of arrival was. We had been recorded as arriving at 6:11 pm, and since 6:31 had just ticked by, I walked over to the Delta baggage services office (which also handles Alaska Airlines baggage issues at Logan), and asked the woman behind the counter if she handled Baggage Service Guarantee cases. She said yes, checked the flight's arrival time, and handed me 2 vouchers, each good for a $25 Alaska discount code or 2,500 Mileage Plan miles (I took the miles, natch).

Now, because of the inclement weather, I wouldn't have been at all surprised if the baggage services attendant had refused to give me the vouchers, since the terms and conditions state:

Alaska Airlines reserves the right to suspend the Baggage Service Guarantee in the event of airport baggage system malfunction, severe weather, or other conditions out of the airlines' control that prohibit timely baggage delivery.

So I thought it was terrific that she didn't make a fuss about handing them over. When I returned with them in hand my travel partner told me, "now I understand: travel hacking is just knowing stuff other people don't know."

One last note on these vouchers: I was able to redeem both my own and my partner's voucher for miles into my Mileage Plan account, so you aren't restricted to one voucher per person, per qualifying event.

netSpend: easy come, easy go, easy $5,000 in manufactured spend

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Today's post comes thanks to reader Tim, who convinced me to finally look into netSpend and shared with me his findings based on numerous conversations with their Customer Service department. While netSpend is no secret, I thought it would benefit all my readers to know what to expect if they decide to take advantage of it.

I had never bothered previously since, frankly, I didn't need to: I had MyVanilla Debit cards which could more than handle the volume of manufactured spend I was generating, and I knew netSpend had a bad reputation for account closures.

With my recent MVD shutdowns in hand, and the upcoming expiration of my 5% Citi ThankYou Preferred card offer, I decided to put netSpend through its paces.

Signing up for netSpend

The best way to sign up for netSpend is through a referral link, which gives both you and your referrer $20 after making your first deposit into the account (of $40 or more). There's a "conga" line set up for this purpose on Flyertalk.

Adding Money to the Account

Once you receive your permanent card in the mail, you can add money to the account using Vanilla Reload Network reload cards, subject to the following limits:

  • $2,000 per rolling 24-hour period;
  • $3,500 per rolling 168-hour (7-day) period;
  • $5,000 per rolling 30-day period.

The point is, the time of day you load the Vanilla Reload Network reload cards to your account matters. If you load $2,000 at 5 PM on Monday, you can load another $1,500 at 5:01 PM on Tuesday, and another $2,000 at 5:01 PM the following Monday.

Withdrawing Money from the Account

Here's the best part of this card, and what hasn't been widely reported elsewhere: netSpend is set up to allow free ACH pulls out of the account, using the same routing and account information on the direct deposit form you can access from your online account. That means that there are no additional costs to manufacturing $5,000 in spend per month using this account, after you've bought your reload cards. That makes it in some ways superior to Bluebird, the mainspring of manufactured spend for those with access to CVS or Walmart store locations.

Getting Shut Down

Unfortunately, netSpend aggressively shuts down the accounts of customers who aren't generating the extortionate fees they charge for transactions made with the card. That means that there is only one safe way to use netSpend: immediately empty your account after loading it, and never leave money in the account. This does guarantee that you'll be shut down, but it also minimizes the amount of money netSpend will have to mail you by check (generally up to 20 days later).

Doing it Again

Interestingly, there's another almost identical product offered by netSpend, the PayPal Prepaid MasterCard. The PayPal Prepaid MasterCard is essentially the same as the "premium" netSpend account: it has a $5 monthly fee, no fees for purchases, and comes with a linked 5% APY savings account (5% APY paid on balances up to $5,000). It also has the same $2,000/$3,500/$5,000 load limits.

But there's a wrinkle: if you have both a netSpend account and PayPal Prepaid MasterCard, your load limits are shared between the two cards. That means there's no reason to have an active netSpend and PayPal Prepaid MasterCard at the same time: you can start with one, get shut down, then open the other.

Finally, while reader Tim reported that his netSpend and PayPal Prepaid MasterCard accounts were shut down simultaneously, that wasn't my experience: I haven't loaded or unloaded anything to my PayPal Prepaid MasterCard account, and it's still open, while my netSpend account was shut down a few days after finishing my first month's $5,000 in loads. That means I'll be able to put another $5,000 through the PayPal Prepaid account once my netSpend load transactions roll off my 30-day load history.

I'd love to hear from my readers: have you used netSpend? Have you already been shut down? If not, what's your strategy for avoiding unwanted attention to your account?