Is the Marriott Rewards Premier Visa free night certificate worthless?

It's perfectly natural, when you're deeply involved in a hobby like travel hacking, to develop some intuitions that guide your decision making, shortcuts that let you quickly decide whether a given award redemption actually saves you money compared to other obvious alternatives.

One thing I love to do here on the blog is to dig into those intuitions and make sure the numbers behind them really do make sense.

Since this week I've been hammering on the Chase IHG Rewards Club and Hyatt Gold Passport co-branded credit cards, and the value of their annual free night certificates, I thought I'd finish out the week discussing a card I actually have (against my better judgment): the Chase Marriott Rewards Premier Visa card.

The card has an $85 annual fee, and each year cardholders receive one free night certificate, valid at Marriott properties in Category 5 and below. The certificate can be redeemed for any room that has standard award availability.

What I want to know isn't whether the free night certificate is worth $85, but rather whether it's worth anything at all. That is to say, based on the actual distribution of hotels within Marriott's reward categories, can I consistently expect to redeem my free night certificate at properties I actually want to stay at?

The release of Marriott's 2015 hotel category adjustments provides a good occasion to apply some data to this question.

Methodology

I travel primarily for leisure, primarily to cities, and want to stay as close to those cities' downtowns as possible. Marriott has a huge footprint of downtown hotels in cities around the world, so the question is how many of those hotels will be in Category 5 or below for reservations made after March 19, 2015.

Marriott Rewards divides the globe into 11 regions. For each region, I picked the 5 largest cities by population, and simply noted whether there was a single downtown hotel in Category 5 or below.

Results

This is the answer to a very specific question: how many of the top five cities by population in each Marriott region have a downtown Category 5 or lower property? In two cases, the definition of "downtown" is clearly disputable, which earned Seoul and Paris 0.5 points each.

• United States: 1/5 (Houston)
• Africa: 2/5 (Cairo and Alexandria)
• Asia: 3.5/5 (Shanghai, Karachi, and Beijing. Seoul is a megalopolis which earns the Courtyard Seoul Times Square half a point)
• Australia and Pacific Islands: 0/5
• Canada: 3/5 (Toronto, Montreal, Ottawa)
• Caribbean: 1/5 (Santo Domingo)
• Central America: 1/5 (Tegucigalpa)
• Europe: 1.5/5 (Madrid. Paris is a megalopolis which earns the easily accessible Category 4 and 5 properties half a point)
• Mexico: 2/5 (Mexico City and Puebla)
• Middle East: 2/5 (Riyadh and Ankara)
• South America: 1/5 (Bogota)

Of 11 regions, and 5 cities per region, only 18 have Category 1-5 Marriott Rewards properties, or roughly 33%.

On the one hand, that's preposterously low to speculatively pay $85 on the off chance that a free night certificate in such a city will prove valuable.

On the other hand, if one of those cities is one you regularly need to stay at, you're in luck: the Chase Marriott Rewards Premier card will give you a free night there.

Round two of Chase IHG Rewards Club vs. Hyatt Gold Passport credit cards

My post on Tuesday comparing the annual free night certificates of the Chase IHG and Hyatt credit cards elicited a lot of well-thought-out responses in the comments section.

The responses fell along 3 lines:

• Commenter JEM: "I generally travel solo, and don't usually stay more than one night in any one location."
• Commenter Shawn Coomer: "Hyatt's chart is more reasonable and those points are an easy transfer. In my mind, this cements the IHG card as the better of the two since high-end stays in their properties are harder to come by."
• Commenter Kenny: "Hyatt has a laughably small footprint, and may be an option (although usually not the best one) for 1 or 2 out of ten of our stays. I often can't get a room for four at the top properties of either chain, but IHG has many more possibilities."

The wonderful thing about this hobby is that all three commenters are absolutely right — and I still "disagree" with all three for my own miles and points strategy! But I want to carefully consider each of these points, so readers can decide which view corresponds most closely to their own travel hacking strategy.

Hotel Hopper

If you enjoy hotel hopping, or if for other reasons you tend to stick to one- or two-night stays, then the cost-per-night analysis I use doesn't make any sense for you. There are a ton of hotel co-branded cards that offer the equivalent of one or two free nights per year:

• US Bank Club Carlson Premier and Business Rewards: 40,000 bonus Gold Points each year and last night free on award reservations (up to 50 free nights per year).
• Chase Marriott Rewards Premier: free night certificate good at Category 1-5 properties.
• Chase Hyatt Gold Passport: free night certificate good at Category 1-4 properties.
• Chase IHG Rewards Club: free night certificate at any IHG Rewards Club property worldwide.

This strategy doesn't have anything to do with manufactured spend, or even travel hacking per se. Get all four cards and enjoy their 4-5 annual free nights in good health!

Aspirational Redemptions

IHG does have some aspirational properties, and if you have your heart set on one of them, it makes sense to build such a redemption into your credit card application timeline. That means convincing your partner/roommate/child to apply for a card at the same time as you, gaming expiration dates, and basically making sure you're able to make the top-tier IHG Rewards Club redemption of your dreams.

Save money on family vacations

IHG Rewards Club has a vast worldwide footprint, their properties are often reasonably priced and, overseas, can have a more generous approach to packing parents and kids into a single room. So when you're planning a trip that you're certain will involve an IHG Rewards Club property, you can save hundreds of dollars by using free night certificates — something that's vanishingly unlikely with a Hyatt Category 1-4 free night certificate.

My strategy: filling out vacations

As regular readers know, I travel a lot. For example, I have five and a half vacations planned in the next 9 weeks (what's half a vacation? I'm flying directly from San Diego at the end of one vacation to Milwaukee to start another). But I'm not a hotel hopper: my preference is for longer stays. Here's my agenda:

• Two nights in Reno, NV
• Four nights in Boston, MA
• Seven nights in New Orleans, LA
• Two nights in San Diego, CA
• One night in Milwaukee, WI
• Five nights in Lexington, KY

I take a lot of vacations, and IHG free night certificates don't make a lick of sense for any of them! Reno doesn't have any rooms that cost more than $40, I'm staying with a friend in Boston, in New Orleans I'm staying too long and IHG properties are too expensive, in San Diego I actually am staying at an IHG Rewards Club property (but burning some spare points from previous promotions), in Milwaukee I could redeem 8,000 Hyatt Gold Passport points (although I actually redeemed 25,000 random Marriott Rewards points I had lying around), and in Lexington I redeemed 40,000 Hyatt Gold Passport points transferred from a flexible Ultimate Rewards account.

For my strategy, substituting out 8,000 Hyatt Gold Passport points (transferred from a flexible Ultimate Rewards accounts) for a $75 annual fee makes perfect sense. For the strategies of my three commenters, free IHG Rewards Club nights make more sense.

But not one of us is wrong: we just have different goals and different travel styles, and understanding them is key to making the right decisions when it comes to both credit card applications and annual renewals.

Do this now: Hilton Double your HHonors promotion

Registration is now open for Hilton's Double your HHonors promotion. Between March 1 and May 31, 2015, earn double base HHonors points or double partner airline miles on paid stays at participating properties (the list of non-participating properties isn't yet available).

To take advantage of this promotion, you'll want to select "Points and Points" as your earning style if you choose double base HHonors points, or "Points and Miles" if you select double airline miles.

I don't have any paid Hilton stays planned during the promotional period, but I registered and selected double HHonors points in case something comes up in the next few months.

In any case, register now, before you forget, and find the list of non-participating properties here (once it becomes available).

As always, you can always find my most up-to-date list of promotions on my dedicated hotel promotions page.

Chase credit cards: IHG versus Hyatt (and current rebate offer)

I've recently mentioned that I've lost interest in chasing credit card signup bonuses. These days, when I periodically reevaluate my miles and points strategy, I decide which cards I want to apply for based on their usefulness for manufactured spend (Chase Ink Plus), their ongoing benefits (Barclaycard US Airways), or both (US Bank Club Carlson Business Rewards).

Once I make up my mind, I naturally prefer higher signup bonuses over lower ones, but I won't typically apply for a card just for its signup bonus. A good illustration of why is the Chase British Airways 100,000 Avios signup bonus from last January. That was a uniquely high signup bonus, but I still have almost 53,000 of those Avios lingering in my British Airways account!

The card doesn't have any ongoing benefits (besides an incredibly expensive companion ticket) and is useless for manufactured spend (which is why I canceled it last month). Even worse in my mind, however, is that by applying for the card without a specific plan for the miles, I've allowed a significant chunk of them to sit in my account unredeemed.

In other words, worthless.

Chase's IHG and Hyatt co-branded credit cards both seem to have decent recurring benefits

Now that I've pared my total number of Chase cards by one, I've been considering two of Chase's co-branded hotel credit cards: IHG Rewards Club and Hyatt Gold Passport. While both are useless for manufactured spend, they both have recurring benefits that might make them worth holding onto:

• The IHG Rewards card offers an annual free night at any IHG property in the world;
• The Hyatt Gold Passport card offers an annual free night at any Category 1-4 Hyatt property.

Taken at face value, the IHG Rewards free night seems immeasurably more valuable than the Hyatt free night certificate.

Not so fast

The problem with the IHG Rewards night is that it can only be redeemed at IHG properties, and this creates a curious dilemma: while IHG has a good range of properties, from Holiday Inns to InterContinentals, their rewards program is a disaster. You can easily see this illustrated with one of my imputed redemption value charts:

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In other words, IHG is not a program it makes any sense to manufacture spend with, and it only very occasionally makes sense to transfer Ultimate Rewards points to IHG Rewards Club.

That leads to the problem I have with the IHG credit card annual free night: you have one free night at any IHG Rewards Club property in the world, but in order to get the most value out of that free night, you need to redeem it at an expensive property.

But expensive properties are also the most expensive places to manufacture free nights at!

That leaves you with two bad options: move after one or two nights in your aspirational property, or stay and pay thousands of dollars out-of-pocket or in foregone cash back.

Unsurprisingly, affiliate bloggers tend to resolve that problem in the following way: not only should you apply for IHG's co-branded credit card, you should also convince your significant other to apply for the card, so you can take advantage of the cards' overlapping annual free night awards to book up to 4 consecutive free nights (Frequent Miler ably demonstrates this sleight of hand here).

When you see a scheme that complicated attached to a pitch to sign up for a credit card, you should go ahead and assume you're being sold a bill of goods.

Hyatt's annual free night certificate is worth up to $187.50

Hyatt Gold Passport, on the other hand, has an eminently reasonable award chart:

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While it theoretically goes up to 30,000 points, in my experience the vast bulk of properties I've looked at are at the 8,000 point level. The Chase credit card's annual free night certificate can be redeemed for a night at a property up to Category 4, worth up to 15,000 Gold Passport points. Assuming those points are transferred from a premium Chase Ultimate Rewards account (Sapphire Preferred, Ink Bold, or Ink Plus), they're worth up to $187.50 in paid, mile-earning airfare.

A more reasonable value based on my own experience with Hyatt is 8,000 Gold Passport points, worth $100 in premium Ultimate Rewards point redemptions. Since the annual fee is just $75, this is a card that is likely to be worth hanging onto year after year. If you save just $80 (the cash redemption value) in Ultimate Rewards points, you're making a free-and-clear profit of $5 each year.

Hyatt's current award rebate sweetens the pot

For both current and new Hyatt Gold Passport cardholders, Hyatt will rebate 20% of all Gold Passport points redeemed through July 31, 2015, as long as they register their card for the promotion by March 31, 2015 (Frequent Miler has the details here). I've already made 40,000 points in award reservations during the promotional period, which would add up to an additional 8,000-point signup bonus in my case.

I'll agree it doesn't sound like much, but it is certainly icing on the cake.

Conclusion

Over the very long term, Chase's IHG Rewards Club and Hyatt Gold Passport co-branded credit cards both can offer a good value for their $49 and $75 annual fees, respectively.

But if you're the sort of person who would let the "anywhere in the world" IHG free night certificate trick you into booking an expensive stay at one of their properties, instead of one that's far cheaper using Hyatt, Club Carlson, or Hilton points, you may well decide you'd be better off staying away.

Personally, I find the Hyatt Gold Passport card far more convincing, and will be applying for it early next month.

One more reason to love Alaska's MVP Gold status

Until January 1, 2015, the key benefit of Delta Platinum Medallion status was free award changes and redeposits (up to 72 hours before departure). That was for two reasons: Delta would only price and issue award tickets as round-trips, and Delta released agonizingly few low-level award seats. Free award changes meant you could book each leg at the low level as it became available.

For the two years I had Platinum Medallion status, I used this benefit constantly, saving hundreds of thousands of SkyMiles in the process.

In 2015, the benefit lost most of its value, for two reasons. The first reason is that Delta award tickets can now be booked as one-ways, meaning there's no need to "lock in" low-level seats as part of a round-trip award. But additionally, Delta appears to have begun systematically increasing the cost of award tickets booked fewer than 21 days in advance:

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That means it's become less likely, rather than more likely, that additional low-level award seats will open up as your travel dates approach.

Free award changes are also a benefit of Alaska MVP Gold status

In the fall I requested and received a status match to Alaska Airlines MVP Gold 75K status. The key benefits for me are:

• Crediting paid flights on Delta and American Airlines to Alaska, earning a 125% bonus;
• Free checked bags on American Airlines;
• Earning valuable Alaska Airlines Mileage Plan miles, which can be redeemed for travel on American, Delta, or their other airline partners.

What hadn't occurred to me until last week is that Alaska Airlines also offers free award changes and redeposits for their MVP Gold and Gold 75K elites.

Restrictions on Alaska Airlines partner awards

While you can use Alaska Airlines Mileage Plan miles to make award reservations on Alaska, American, or Delta flights, there are a few nuances to be aware of when doing so:

• Naturally, to book partner award flights there must be low-level availability in the partner's own loyalty program. For American, that means SAAver award availability, and for Delta it means "Tier 1" availability.
• You can combine Alaska Airlines flights with flights operated by their partners, but each direction (outbound and return) can only include one partner (and optionally Alaska Airlines).
• Finally, Delta award flights are priced as one-ways only when booking round-trip awards. Put differently, if you book a Delta one-way with Alaska Airlines miles, you'll pay the round-trip price, whereas if you book a round-trip award (whether the other leg includes Delta or not) you'll also pay the round-trip price.

It's that last issue that makes free award changes and redeposits so important.

Book seats opportunistically, change and cancel as necessary

The fact that Delta award seats only price properly if booked as part of round-trip awards means that, just as with the pre-2015 SkyMiles program, it's necessary to "lock in" low-level seats as they become available, or pay double the one-way award price.

Unlike when redeeming Delta's own SkyMiles, Alaska Airlines still imposes relatively strict routing rules, so you can't tack a Delta flight onto an unrelated award in order to secure one-way pricing — you actually need to book a more-or-less round-trip award.

Free award changes and redeposits mean that once you've found one available award seat, you can book it immediately along with whatever flights happen to available for your other leg. Then you can periodically check award availability and, if seats become available, change your itinerary for free. If they don't, you can cancel the entire award, also for free.

Conclusion

There's no way to guarantee you'll find low-level award availability for the cities, dates, and times you want to fly. But free award changes and redeposits make it risk-free to lock in Delta award seats as they become available.

More weird Hilton HHonors pricing

I've written before about "odd" pricing of Hilton premium room awards. Based on my research, I concluded that irregular pricing occurred when a hotel has a high enough fixed value assigned to HHonors points redeemed for premium rooms and, for whatever reason, the best available rate for premium rooms is low enough to drop the price in cash, after conversion to HHonors points, below the HHonors point cost for a standard room award.

As I wrote last July, it's not predictable when this will occur, although I tentatively suggested that large currency fluctuations might make it more likely.

That being said, I recently discovered another example, and thought I'd pass it along.

Here's the standard, 50,000 HHonors point price for a "2 DOUBLE BEDS" room at the Hilton New Orleans/St. Charles Avenue:

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A "premium" corner room costs $10 more, but the premium room HHonors award cost is actually lower, at 44,519 HHonors points per night:

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This is because the property uses a fixed premium room rewards conversion rate of 0.357 cents per HHonors point. Indeed, if you could book a standard room at the premium room award conversion rate, it would cost just 41,719 HHonors points per night!

Unfortunately, that's not possible, but booking cheap premium night awards is a good next-best alternative (unless you're booking 5 consecutive nights, in which case the nightly rate drops to 40,000 HHonors points)!

How important is diversifying manufactured spend?

I often highlight a concept I like to call "imputed redemption values:" the dollar cost of a hotel night (after taxes and fees) that makes it worth redeeming that hotel's rewards currency instead of Barclaycard Arrival+ miles earned by manufacturing the same amount of spend and earning the equivalent of 2.22% cash back, when the miles earned are redeemed against travel purchases.

These imputed redemption values are an attempt to synthesize three values: the earning rate of a hotel chains's co-branded credit card; the number of hotel points required for each property in that hotel's portfolio; and the amount of cash you would earn putting the necessary manufactured spend on a 2.22% cash back card instead.

For example, here are the imputed redemption values I generated for a Hilton HHonors member manufacturing spent with an American Express Surpass card at gas stations and grocery stores:

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It's important to note these are break-even values: if a hotel room costs 40,000 HHonors points or $148 after taxes and fees, then the exact same amount of manufactured spend is required, whether it's on a Surpass American Express or Arrival+ MasterCard. As a 40,000 point room gets more expensive, HHonors points become a better value, and as it gets cheaper, Arrival+ miles become a better value.

At the exact imputed redemption value, your decision will depend on your own balances: if you have been inadvisedly stockpiling HHonors points, you should be eager to cut your loses and redeem them, while if you're saving up HHonors points for a future high-value redemption you might lean towards redeeming Arrival+ miles instead.

Should you strongly prefer cash over loyalty currencies in general?

I've been thinking about this question lately in two contexts.

In the comments to my recent post on using American Express gift cards, reader Brown wrote:

"However the most important thing is it shifts away my spending on Arrival+.

"I have a long list waiting to be redeemed on my Arrival+, like car rentals and hotels using points& cash. I believe Barclay cannot allow huge spending on their card, unlike Amex. I try to keep it below 12k each month."

Meanwhile, on February 4 Frequent Miler reflected on the opportunity cost of manufacturing elite status instead of cash back. He wrote:

"Unless you value Diamond status at more than a few hundred dollars, or you value Hilton points more than I do, I don’t see manufacturing Diamond status as a great opportunity. In this analysis, the value of the earned points and status are maybe equal to the opportunity cost. That’s not enough, in my book. As a rule of thumb, I believe that you should value the earned points and benefits much more than the opportunity cost, to make it worth doing." [emphasis mine]

These are directly opposite conclusions based on the same set of facts:

• All else being equal, cash is usually preferable to hotel points;
• But all else isn't equal — different cards are used to earn each, and there's an inherent value to spreading manufactured spend over more cards rather than fewer (within reason).

Is there a way to thoughtfully resolve this contradiction?

Why use less lucrative cards to begin with?

I think Frequent Miler is begging the question when he insists that cash is better than airline or hotel rewards currencies. He says you should prefer cash, but you already prefer cash. The only reason you'd find yourself earning hotel points or airline miles is that you've already exhausted all your most-rewarding cash-back-earning credit cards.

After all, the "new old Blue Cash" only earns 5% cash back on up to $50,000 in purchases per year — that's just over $4,000 in spend per month. Assuming you have access to more manufactured spend than that, at some point you're going to have to decide which cards you want to put the rest of your manufactured spend budget on.

In other words, you're going to run out of supercharged cards to manufacture spend on. You'll hit annual spend limits or, failing that, realize that your card issuers aren't going to let you run up multiple times your credit limit each month forever. But unless you want to stop manufacturing spend, you're going to need to dig deeper into your credit card portfolio.

That's the point where you'll need to make a conscious decision about which cards to put additional manufactured spend on, and it's at that point metrics like imputed redemption values can aid in your decision making.

For that marginal manufactured spend, whether it's $10,000 or $100,000, you should try to put spend on the cards that most closely approximate (or, ideally, exceed!) your highest-earning, unlimited cash back credit card (in my analysis the Barclaycard Arrival+ MasterCard), while not drawing additional attention from any one card issuer.

Conclusion: diversify purposefully

You shouldn't manufacture spend on a Hilton HHonors Surpass American Express just because I do, or just because it has, along with the Club Carlson Premier card, one of the most favorable imputed redemption value structures.

If you decide to manufacture spend on those cards, and others, you should do so because you find the value you receive from redeeming those rewards currencies competitive with the value you receive from your Barclaycard Arrival+ card, and you've reached your comfort level with Arrival+ spend.

More good news: Barclaycard Arrival+ no longer rounds up redemption amounts

Barclaycard is the undisputed master in my mind of the marketing technique of "underpromise and overdeliver." It seems like every month they're making small, positive changes and adjustments to improve their flagship proprietary rewards card, the Arrival+.

When the card launched, it had a great earning rate and rewards structure, but the limitations on qualifying "travel" purchases were arbitrary and frustrating.

Since then, they've introduced the following changes, all positive:

• Increased redemption period from 90 to 120 days;
• Widened eligible "travel" purchases, importantly to include taxis and services like Uber;
• Started providing free Transunion FICO scores;
• Improved their smartphone app, including the addition of in-app Arrival+ mile redemptions;
• Issued Arrival+ cards as "chip and signature cards with PIN capability," which can be used at unattended kiosks abroad.

With absolutely no publicity, as far as I can tell, Barlcaycard has made another positive change: Arrival+ mile redemptions for irregular amounts are no longer "rounded up" to the nearest dollar (100 miles).

Previously, a redemption against a travel purchase of $35.50 would cost 3,600 Arrival+ miles. You'd receive the full 10% mile rebate of 360 miles, but you'd still be losing 45 Arrival+ miles.

And I do mean losing: you'd pay 50 "extra" Arrival+ miles for the redemption but wouldn't receive an extra $0.50 as a statement credit. The $25 in purchases required to generate those miles was well and truly wasted.

Sometime in the last month or two Barclaycard removed this penalty for uneven redemption amounts. Now you can redeem Arrival+ miles "to the penny" for all travel redemptions, like this train ticket I bought at an unattended kiosk in Milan:

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Conclusion

Is this a small change? Tiny. But it's also more unabashedly good news, and I want to give Barclaycard all the credit they deserve for making ongoing, positive changes to such a popular and lucrative credit card.

Just remember, don't pay the annual fee unless you spend more than $44,500 on your Arrival+ card each cardmember year; that's the point when the 10% mileage rebate makes up for the $89 annual fee compared to a no-annual-fee 2% cash back card like Fidelity's or Citi's.

And in any case, call Barclaycard and ask for that annual fee to be waived when it comes due. I've seen increasing reports of such requests being denied, but it's absolutely free to ask.

Three notes on gift card purchase and liquidation

There have been a couple developments around gift cards percolating around the travel hacking community for the last week or so. Here's a quick roundup, so readers can use this post to share their own experiences and ideas in the comments.

American Express lowers maximum gift card denomination eligible for cash back

American Express gift cards are a powerful (though not, as some argue, all-powerful) tool for manufacturing spend through the alchemy of adding 1.5% cash back to unbonused spend, in exchange for only being able to liquidate the cards at merchants that will accept American Express gift cards.

As an astute reader pointed out almost immediately when I brought up the subject two weeks ago, cash back portals like TopCashBack have added language eliminating cash back on gift card denominations above $2,000. Since there's a $3.95 purchase fee for each card anyway, I now split my $2,000 cards into separate orders, which also makes transactions easier for me to track.

On the plus side, the total amount of personal and business gift card purchases eligible for cash back remain unchanged at $10,000 and $100,000 per 14 days, respectively. Additionally, I've recently found my American Express gift card orders to be approved almost 100% of the time, a huge improvement over my previous track record and a welcome development.

Staples Visa gift card activation code funny business

As other bloggers have exhaustively documented, the Gift Card Mall Visa gift cards sold by Staples online, and which are shipped out unactivated, have been accompanied much less consistently by the activation codes necessary to activate them.

Sometimes the activation codes arrive days later, sometimes they arrive by e-mail, and sometimes they don't arrive at all. Even worse, the phone numbers that come with the cards no longer direct you to a GiftCardMall representative who can manually activate the cards.

Instead, as reported by Shawn at Miles to Memories, you need to call this number: 1-877-426-2551. The customer service agents there can easily submit an activation order for your cards, and they'll be up and running within a couple hours (sometimes much sooner). For my recent orders, I haven't bothered waiting for the activation codes: I just call the number above as soon as I receive the physical Visa gift cards.

What's the best way to unload American Express for Target cards?

I get asked all the time what I think about various Rube Goldberg methods of buying and liquidating prepaid card products, and I normally have the same response: if you do that, you're cannibalizing methods of manufactured spend you could use to generate additional volume, instead.

Here's a simple example: let's say you have a credit card that bonuses spend at grocery stores, and you have access to PIN-enabled Visa prepaid debit cards at a local grocery store. Once you've purchased a $500 prepaid debit card, you could then register it, click through a cash back site, and buy an American Express gift card to earn an additional 1.5% cash back. This would naturally increase the total value earned on your initial $500 in spend.

The problem is that instead of using a prepaid debit card, you could just buy the American Express gift card with a different, rewards-earning credit card. If that card earned the equivalent of 2% cash back, you'd be earning 3.5% cash back on the transaction rather than 1.5%.

Don't get me wrong: I understand the impulse to earn rewards on both ends of a transaction; indeed, I invented one of the great triumphs of the genre. But the reason such techniques are so few and far between is that the numbers generally don't add up.

An example that came up the other day is the question of the best way to liquidate funds on American Express for Target cards: whether it's shopping through a portal to buy gift cards (see this Doctor of Credit post for vital information about online gift card orders), Simon Malls, or any of the other liquidation methods we have available.

Here's where I find those suggestions ultimately break down: American Express for Target funds are already liquid. You can make ATM withdrawals with the card, up to $400 per day and costing $3 per ATM withdrawal. In other words, American Express for Target loads are the last step in a chain. Whether or not they're also the first step is up to you: if you can load the card directly with a card that rewards bonus points for purchases at Target, that can be a great option. If instead you load them using American Express gift cards, or the many other options available to us, you can get good value that way as well.

But if the problem is that ATM withdrawals are too expensive to make American Express for Target withdrawals profitable for you, the lesson is that the costs and benefits of the technique simply don't work for you, not that you need to add more moving pieces. After all, every one of those moving pieces could simply be funded with a more lucrative, rewards-earning credit card.

A good run: AAA Visa gift card axe falls

I periodically write about AAA Visa gift cards: they're cheap (or free); they're PIN-enabled and thus easily liquidated; and they're available in many, though not all, parts of the country.

For those with access to AAA branches selling Visa gift cards, the problem has always been one of volume: those who bought and liquidated too many Visa gift cards in too short of order were inevitably and permanently blocked from buying any more. I thought I had avoided that outcome by buying slow but steady amounts at regular intervals.

Until yesterday, when I went into a local branch and was told, politely but firmly, that I needed to call Metabank to find out why I wouldn't be allowed to buy any more gift cards.

Back in January I wrote about new purchase limits in my AAA region:

"If the new limit is instead designed to slow people down so their accounts can be blacklisted before they can reach the total purchase numbers that were previously possible, it'll be a net negative."

That now appears to be prescient. After a single, $1,000 purchase under the new limits, my account was immediately blacklisted for future purchases.

Conclusion

During the periodic fee-free promotions, typically around graduation and the winter holiday season, I still think those who haven't yet been blacklisted should consider loading up on PIN-enabled AAA Visa gift cards. If you can then liquidate the whole haul over the course of 3 or 4 hours, you can still make off with a nice profit before your account is flagged.

But as far as I'm concerned, AAA Visa gift cards are no longer a viable avenue for consistent manufactured spend.