Possible point-of-sale update rolling out to Family Dollar (nothing to worry about)

This seems like it's been a week of minor updates, but during a promotion as lucrative as the one we're currently living through I don't consider that a vice.

I ran into an extremely minor hiccup while liquidating some deeply-discounted Vanilla Visa gift cards at Family Dollar yesterday, and wanted to pass along a heads up in case any readers run into a similar problem.

Vanilla Visa gift cards should be automatically detected as debit cards by Family dollar registers

Until yesterday, every time I used a OneVanilla prepaid Visa debit card or Vanilla Visa gift card at Family Dollar (as long as the card was activated properly, and I waited a sufficient interval before using it) the card was automatically detected as a debit card, asking me only how much cash back I wanted (none) and for a PIN number (any 4 digits, selected the first time the card is used).

Yesterday, at one store, they weren't

I have two relatively convenient Family Dollar store locations, which is terrific since, due to still-poorly-understood velocity limits, any one store is of only limited use each day.

Yesterday at the first store I visited, swiping either of two $200 Vanilla Visa gift cards generated an on-screen error message of "Visa tender not allowed." Fortunately, it occurred to the cashier helping me to press the "F2" key on her register before I swiped, which directed the terminal to treat my Vanilla Visa gift card as a debit card. After that, I was prompted for my PIN and the transaction was successful.

At the second store I visited, an identical card (indeed, one that had generated an error at the first store), went through without the "F2" intervention.

Conclusion

I have absolutely no reason to believe Family Dollar won't continue to be an avenue for liquidating PIN-enabled Vanilla-branded Visa cards for the foreseeable future.

However, slightly different point-of-sale software may be rolling out in waves that will require additional input from cashiers before Vanilla Visa cards are recognized as debit cards.

Waiveable annual fees

Preface

I'm not going to write about any changes to the Target Prepaid REDcard until tomorrow. For all the wailing, lamentations, and gnashing of teeth you could possibly want, go read boardingarea.com or something. We'll all know everything there is to know, soon enough.

Waiveable annual fees

As I've written before, signup bonuses play a trivially small role in my miles and points strategy. Instead, I focus on cards that offer either valuable ongoing benefits, like the US Bank Club Carlson Business Rewards credit card (at least until the last-night-free benefit is discontinued at the end of this month), or sufficiently high returns on my manufactured spend, like the Barclaycard Arrival+ MasterCard, which earns a functional 2.22% cash back on all purchases.

Unfortunately, those cards and several others I carry come with annual fees and the requisite (after a quick call to see whether threatening to cancel will earn you a worthwhile retention bonus) annual soul-searching about whether those annual fees are worth paying.

Two cards I carry waive that annual fee for high spenders, but in two very different, very roundabout ways.

US Bank Flexperks Travel Rewards high-spend bonus

After spending $24,000 in a cardmember year on the US Bank Flexperks Travel Rewards Visa, you earn a bonus in your anniversary month of 3,500 Flexpoints.

Additionally, roughly two months before your anniversary month, the Flexperks Rewards site enables the option to redeem 3,500 Flexpoints against your annual fee of $49.

Now, that's a pretty screwy system. First of all, 3,500 Flexpoints are worth up to $70 in paid airfare, so at first glance it seems like a rotten deal to redeem them for a statement credit of just $49. But second of all, if they wanted to waive the annual fee for cardholders spending $24,000 on the card, you'd think they could just waive the damn annual fee (interestingly, that's precisely how the FlexPerks Business Edge Travel Rewards card works)!

Squaring that circle is easy once you remember my maxim that the least valuable point is always the one you don't redeem, as well as its corollary, that the most valuable point to your bank is the one you don't redeem. Seen in this light, their high-spend bonus scheme is a win-win from US Bank's perspective:

• If you hoard your Flexpoints and refuse to redeem them for a paltry $49 annual fee, you have to pay that annual fee, which goes directly to US Bank's bottom line;
• If you redeem 3,500 Flexpoints against the annual fee, you'll be further away from your next award ticket, increasing the amount of time you sit on worthless, unredeemed Flexpoints, and decreasing the chances they'll ever be redeemed.

In my opinion, the least bad option, unless you actually need the bonus Flexpoints for an upcoming, high-value flight redemption, is to redeem them against your annual fee and forget about them. That turns this up-to-4%-earning product into the most valuable, year-round, no-annual-fee credit card out there.

Barlcaycard Arrival+ World MasterCard's redeemable annual fee

Never having paid an annual fee on my Arrival card, until Frequent Miler wrote about his experience downgrading his card I hadn't realized that the card's $89 annual fee counted as a redeemable "travel" expense.

I often say that the $89 annual fee of the Arrival+ is only worth paying if you manufacture more than about $44,500 on the card each year. That's the amount where the 10% rebate on travel redemptions will generate $89 in Arrival+ miles.

But if the $89 annual fee is a redeemable travel expense, that calculation doesn't hold precisely true, since you can redeem 8,900 Arrival+ miles against the fee and earn an 890 mile rebate, worth at least $8.90 in future redemptions.

Remember, our goal is to find the amount of manufactured spend which justifies keeping the Arrival+ MasterCard, and with that $8.90 rebate against the annual fee, you need spend a maximum of just $40,050 on the card to offset the now-miraculously-lower $80.10 annual fee.

Unconvinced? Here's a quick proof: spend $40,050 and earn 80,100 Arrival+ miles. Redeem 8,900 miles against the annual fee and earn an 890-mile rebate. Redeem 72,090 miles and receive a 7,209-mile rebate. Redeem 7,209 miles and receive a 720-mile rebate. You've now received $88.19 in rebates from $40,050 in spend and just 3 redemptions (one of which – the annual fee – didn't even require an eligible travel purchase).

Obviously, the proof above also illustrates that the more redemptions you make, the closer you'll come to achieving the theoretical maximum return on manufactured Arrival+ spend of 2.22%, which is one reason to privilege small redeemable transactions over larger ones.

Conclusion

Credit card companies earn money from cardholders in 4 main ways: interchange fees on purchases, annual fees, cash advance and interest charges, and selling customers' personal information to their marketing partners.

If a bank has a target for the profitability of each cardholder, it seems only right to me that high-spending customers (earning the bank higher interchange fees) should receive a break on annual fees.

But few credit card products have explicitly adopted that philosophy yet, hoping instead to earn both swipe fees and annual fees from the same customers.

Quick update: Vanilla Visas and "Delayed Redemption"

In my post yesterday I forgot to mention an occasional problem that arises when manufacturing spend with Vanilla-branded prepaid Visa debit cards. This oversight is especially unfortunate since it actually occurred to me yesterday: the dreaded "Delayed Redemption."

The problem

Sometimes, but not always, attempts to liquidate Vanilla-branded prepaid Visa debit cards soon after purchase using a PIN (any four digits, selected the first time you use the card), whether they're marketed as "gift" cards or not, are declined.

When that happens, when you frantically call the number on the back of your card from the parking lot of whichever store you're visiting, you'll be relieved to know the funds are still there on the card. But when you go back inside, the card will still be declined.

When you get back home, or log onto vanillavisa.com from your smartphone, you'll see this message in your transaction history: "Denied : Delayed Redemption."

View fullsize

When does this happen?

I won't venture a guess as to why this happens, but I can share a few datapoints from my own experience about when it happens:

• The first time this happened to me it was with a $500 OneVanilla Visa prepaid debit card purchased at Walgreens;
• This has never happened to me with any OneVanilla Visa prepaid debit card purchased at a 7-Eleven or CVS store location (although I did have a OneVanilla Visa improperly activated at CVS);
• The second time it happened was yesterday, with two $200 Vanilla Visa gift card purchased at Office Depot.

The solution: patience

If you're taking my advice from yesterday, you might be buying thousands of dollars of deeply-discounted Vanilla Visa gift cards in the next 12 days, and you might run into the problem of your PIN-based transaction being denied shortly after purchasing a card.

If that does happen to you, wait.

It's not glamorous or fun, you just need to wait. I recommend 24 hours, although you may be able to liquidate your cards sooner than that.

Conclusion

Vanilla Visa prepaid debit cards will sometimes reject PIN-based transactions shortly after cards are purchased, even if they've been properly activated. Wait 24 hours and they'll be fair game.

Liquidating deeply-discounted $200 Vanilla Visa gift cards

As most of my readers no doubt know, through May 16, 2015, you'll instantly receive $20 off every $300 in Visa gift cards purchased at both Office Max and Office Depot. The discount is instantly calculated against every $300 in Visa gift card purchases in each transaction, regardless of the denomination (so three $200 Visa gift cards receive $40 in instant savings).

The offer is supposed to be limited to two rebates per customer. What that means in practice is that the register will only award two $20 rebates per transaction. It's possible to evade this limit by:

• visiting multiple stores;
• bringing multiple "customers" with you (each with their own authorized user card, of course);
• visiting on multiple days;
• having indifferent cashiers.

The math

Since variable-value gift cards can no longer be purchased with credit cards, the two obvious options are purchasing six $100 Visa gift cards or three $200 Visa gift cards. After applying the instant discount, those transactions will ring up as $595.70 and $580.85, respectively.

Metabank versus Vanilla

The key difference between the two sister chains where this deal is available, Office Depot and Office Max, is that the former offers only Vanilla-branded Visa gift cards, while Office Max offers Visa gift cards issued by MetaBank.

Vanilla-branded Visa cards can no longer be used at Walmart for PIN-based transactions exceeding $49.99 (using any four digits on the first use of the card), while MetaBank-issued Visa cards can be liquidated for their full value using the last four digits of each card's number as its PIN.

Liquidating Vanilla Visa gift cards

For those lucky enough to have access to friendly grocery stores willing to sell money orders without a second thought, there's no particular reason to privilege MetaBank over Vanilla prepaid Visa debit cards.

For others, Vanilla Visa cards are a sheer nuisance. For my own monthly Vanilla liquidation needs, I load Serve cards at Family Dollar, which is free, although faces still-poorly-understood velocity limits (multiple identical loads at the same store are rejected as fraud, but up to 3 sequential loads of different amounts seem to be allowed).

Another obvious option for those with access to the Target Prepaid REDcard is using Vanilla Visa cards to load funds to the REDcard at any Target register. Since the cards aren't personalized, however, your success will depend entirely on the willingness of your Target cashiers to oblige you (mine insist on seeing any card I use to load funds to REDcard).

Liquidating deeply-discounted Vanilla Visa gift cards

The problem with all three of the above options is that they don't increase the amount of spend you're able to manufacture during this deal, they cannibalize the time and techniques you were already using to liquidate prepaid cards. Every $200 in Vanilla Visa gift cards I load to a Serve account is $200 in OneVanilla prepaid Visa debit cards I can't load to the same card.

For me, the essential fact about this deal is the deeply-discounted nature of the $200 Visa gift cards we're able to buy, paying just $193.61 for a card with $200 in spending power.

That deep discount means you shouldn't consider yourself throttled by the free and cheap techniques I described above; save those for your more expensive manufactured spend techniques, where every penny matters to the profitability of the technique.

This deal is about volume, and even more expensive methods of liquidation are profitable under these conditions.

Evolve Money

For many people, Evolve Money lost its luster when they started charging 3% for bill payments made with prepaid debit cards.

But guess what: if you've purchased $200 Vanilla Visa gift cards at a 3.18% discount, you can liquidate an unlimited number of them through Evolve Money and turn a profit on every single one, before even taking credit card rewards into account!

Specifically, you can make $194.17 bill payments with cards you purchased for $193.61.

So if it's been a while, or if you're new to Evolve Money, I recommend searching through their biller database for any bills you're already planning to pay.

Tuition bills

Although not found in Evolve Money, many school from kindergartens to universities are willing to accept payment with debit cards, often tacking on a similar fee to Evolve's 3%. If you're able to make multiple partial payments, this is a terrific way to liquidate deeply-discounted Vanilla Visa gift cards without cannibalizing other avenues.

Tax payments

Since these are debit cards, they should qualify for discounted debit card pricing when making payments to the IRS (and find way, way more information here).

Conclusion

When this deal comes around, as it does a few times each year, the key to maximizing it is volume. You'll be making money even at unusually high liquidation costs, so as long as you have a plan to liquidate them, you should consider buying as many $200 Visa gift cards as possible, whether they're backed by Vanilla or MetaBank.

But remember: the logic above applies only to deeply-discounted $200 Vanilla Visa gift cards; I won't personally be buying any of the much less-discounted $100 Vanilla Visa gift cards (although $100 MetaBank-backed cards will be fair game).

I love last seat availability

I've written before about the lie of "no-blackout-date" policies at major hotel chains. By guaranteeing access to any standard room at a fixed redemption rate, hotel loyalty programs stave off open revolt from their most desirable properties by refusing to enforce those guarantees.

The US domestic air carriers avoid a similar problem by employing various forms of variable award pricing on flights operated by their own aircraft (partner awards are typically only available at the lowest level). With United Mileage Plus, American AAdvantage, and Alaska Mileage Plan that takes the form of a award chart with one price for a limited number of seats released, and then the ability to purchase all or some of the remaining seats at a higher rate.

Delta SkyMiles chooses not to publish an award chart, so award redemptions on Delta-operated flights cost whatever their website or phone agents say they cost.

Why I love last-seat availability

Many travel hackers seem to make it a point of pride that they will only book award tickets at the lowest award levels. I do not.

I travel hack for two reasons: I love to travel, and I cannot afford to travel as much as I would like to (thanks to all my monthly subscribers — you're doing your part to help!). I square that circle with travel hacking: if I can earn points cheaply enough, then I can redeem them for flights I want to take without paying anything close to the retail price of those flights.

The phrase here is "flights I want to take." If I'm traveling to the Western Montana Fair to catch the rodeo, then I sure as hell better get there in time to see those cowboys. If I want to attend a brother's graduation, I need to get there before he walks, whatever award availability happens to be (usually not great around cap-and-gown season).

Last seat availability on the domestic carriers allows me to take the flights I want to take to get where I want to go, when I want to go there.

I traveled before I travel hacked

What informs my attitude is that I traveled almost as much before I started travel hacking as I do now that I write a slightly popular travel hacking blog.

And it was horrible!

I once flew on Spirit Airlines between Los Angeles and Chicago because that was the cheapest flight when I hit "sort by price" on Kayak. No Big Front Seat, no assigned seating at all, in fact, and my knees drawn up so close to my chest for the 3-odd hours I'm still slightly surprised I survived.

Now I can pick the flights I want, and either pay for revenue tickets at a steep discount thanks to the miracle of price compression, or book award tickets, whether it's at the lowest award pricing level or not.

Know your trade-offs

Now, many readers no doubt object that booking at anything but the lowest award level is a "waste" of miles. After all, booking a 30,000 AAnytime one-way award ticket instead of a 12,500 SAAver award ticket costs an extra 17,500 AAdvantage miles — almost enough for a one-way award ticket to Europe during low season. If you don't have enough miles to pay for your award trip to Europe, you'll have to (insert gasp) pay with cash!

Those might be your trade-offs, but they aren't my trade-offs. When I run out of miles (God forbid, but let's entertain the possibility) and money, then I'll stop traveling until I have more. I have to prioritize the trips I really want to take, then use my leftover miles to jaunt around the world. Fortunately, I have a lot of leftover miles. But when I run out, I won't regret the fact that I took the flights I wanted to take, at a fraction of the price I would have had to pay in cash.

Earn cheaply

Ultimately this comes down to earning your miles and points as cheaply as possible. If you're earning 1 SkyMile per dollar spent with a Suntrust debit card, or 1 AAdvantage mile per two dollars spent with a UFB debit card, every flight operated by Delta or American will always be cheaper with miles than with cash.

By all means, book the cheapest flights that work for you! But what travel hacking has made possible for me is to have a slightly more expansive definition of what "works" for me (that was my last Spirit Airlines flight — and good riddance).

Bonus last-seat availability: I love Amtrak Guest Rewards

No discussion of last-seat availability would be complete without mentioning the wonderful Amtrak Guest Rewards program, which (besides some rather inconvenient blackout dates seeming mostly to do with the school year and national holidays) allows points to be redeemed for every single seat, every single roomette, every bedroom, and every family bedroom on every single train (and connecting Thruway Motorcoach) offered by Amtrak. There is no such thing as "award" availability; if you can buy it with cash, you can buy it with points.

Should US Bank product changes be a part of your game?

When I wrote yesterday's post, I wasn't planning to make this a series! But ever since a US Bank representative told me it was possible to request a product change from a Club Carlson Business Rewards card to the Business Edge Cash Rewards card, I've been pondering the possibilities that would open up.

I haven't requested a product change yet (in anticipation of the June 1, 2015, change to the free domestic award night bonus) but there are some strong theoretical advantages to working regular US Bank product changes into your game.

Examples of strategic product changes

A good example of integrating product changes into a strategy is offered by Chase, with their personal Sapphire Preferred and Freedom cards and business Ink Plus and Cash cards. After receiving a signup bonus on the premium, $95-annual-fee card you can request a product change to the free version, wait a suitable amount of time, and apply again. With this method you can accumulate a stable of Freedom and Ink Cash cards, allowing you to increase bonused spend as a proportion of your total manufactured spend.

Does US Bank offer similar opportunities?

As I explained in an update shortly after yesterday's post went live, the US Bank representative I spoke to offered me a product change from the Club Carlson Business Rewards card to the Business Edge Cash Rewards card, which offers 3% cash back at gas stations (redeemable in $25 increments) and an annual 25% bonus on all cash back earned, for a maximum of $250 in bonus cash back.

While gas station manufactured spend isn't available to everyone, or in every part of the country, that theoretical 3.75% cash back is extremely competitive with the $95-annual-fee Citi ThankYou Premier card — but with no annual fee.

If a product change were also possible from the personal Club Carlson Premier Rewards card, you could request a product change to either the Cash+ or Flexperks Travel Rewards card. Two Flexperks Travel Rewards card would let you earn double Flexpoints at both gas stations and grocery stores each month (and both annual fees would be waivable if you spend $24,000 per cardmember year).

Beyond that, additional Cash+ cards would let you earn 5% cash back on up to $2,000 in charitable spending per quarter, per card.

Why start with Club Carlson?

After June 1, 2015, Club Carlson credit cards will no longer offer the last night free on award stays of two or more nights.

But starting June 1, 2015, they will offer a free domestic award night each cardmember year you spend $10,000 or more on the card, and there's no reason to believe their extremely generous signup bonuses will change: up to 85,000 for both the Business Rewards card and Premier Rewards cards after spending $2,500 in the first 90 days of card membership.

There's no small business credit card offered by US Bank with a similarly generous signup bonus. On the personal side, the Flexperks Travel Rewards card has long offered 20,000 Flexpoints as a signup bonus, worth up to $400 in paid airfare. That's a strong candidate as well, depending entirely on your own air travel and hotel needs.

But most importantly, on June 1, 2015, the Club Carlson Premier Rewards and Business Rewards card will begin to offer a free domestic award night after spending $10,000 on each card each cardmember year. In other words, the signup bonus will change from 85,000 Gold Points after spending $2,500 to 85,000 Gold Points plus a free domestic award night after spending $10,000 (of course, you'll continue to earn 5 Gold Points per dollar spent as well). In my mind that slightly edges out the Flexpoint signup bonus.

So, is it possible?

There are a lot of moving parts to this scheme, any one of which would bring down the whole:

• My representative might have been wrong: product changes from Club Carlson cards to proprietary rewards cards may not be allowed.
• It may not be possible to receive Club Carlson signup bonuses more than once. I was able to receive a Flexperks Travel Rewards signup bonus twice in extremely short order in 2012, but that may have been a temporary glitch or a bug that has since been fixed.
• US Bank representatives may balk at allowing you to request a product change to a credit card product you already have.

Conclusion

On the business side, I'll be trying this in June or July, after I spend $10,000 on my Business Rewards card and my free domestic reward night posts to my Club Carlson account. I don't have a burning need for additional personal cards from US Bank, but if this technique works on the business side, I'll be more confident that it will work on the personal side as well.

If any readers decide to try it out, be sure to share your results in the comments!

Deciding between, applying for, and changing between US Bank credit cards

[update 4/29/15: I just called into US Bank to ask for compensation for the loss of the last-night-free benefit on the Club Carlson Business Rewards card. Instead, the representative offered me a product change, including to the Business Edge Cash Rewards card, which earns an uncapped 3% cash back at gas stations and a 25% bonus on all cash back earned during the calendar year, which is capped at $250. A quick calculation shows that you can maximize the value of that card by manufacturing $33,334 in gas station spend annually ($2,7778 per month), yielding $1,000 in cash back and a $250 bonus, for a total of 3.75% cash back. That's a phenomenal deal.

Additionally, the offer of a product change to a proprietary rewards card from a co-branded credit card is contrary to what I reported below from the myFICO fora. I don't know whether such changes are only possible for small business credit cards, or whether personal credit cards can also be changed from co-branded to proprietary rewards programs. YMMV.]

I currently carry all three of the US Bank-issued credit cards which I consider the most valuable for my current miles, points, and cash back strategy:

• Cash+. Has historically offered 5% cash back on up to $2,000 spent in the "charity" category each quarter. If you don't have ethical problems with Kiva (many of my readers do!), you can strategize to find high-quality, short-term loans, and earn 5% cash back each quarter on loans that last 3-7 months. That can work out to quite high annualized interest rates, although you will take on the risk of your borrowers defaulting.
• Flexperks Travel Rewards Visa Signature. I write about this card all the time, since it earns two Flexpoints per dollar spent at gas stations or grocery stores each month (wherever you spend more), worth up to 2 cents each for airfare and up to 1.5 cents each for hotels.
• Club Carlson Business Rewards. Until May 28 (or May 31 — reports are mixed) offers the last night free on award reservations. After that it will continue to earn 5 Gold Points per dollar spent everywhere, and a free domestic award night after spending $10,000 on the card each year.

Getting started

Back in May, 2013, I first shared my experience freezing my IDA and ARS credit reports. In March, 2015, Kenny over at Miles4More described his experience achieving the same result through the mid-20th century magic of the telecopying transmitter-receiver (for some reason Kenny insisted on called this "the easy way").

There's no reason to believe the fundamental situation has changed: if US Bank has access to your IDA and ARS credit reports when you apply for credit through them, they will take into account factors that those agencies use and that the major credit reporting agencies do not. If US Bank does not have access to those credit reports, they'll rely on your credit report with a major credit reporting agency.

Whether that matters to you depends on your overall credit profile, but if you apply for new credits cards several times throughout the year, you'll want to freeze your IDA and ARS credit reports before applying for a US Bank credit card.

Deciding on cards

The most important thing to know about applying for US Bank credit cards is that you're eligible for as many signup bonuses as you're able to get approved for. They have somewhat vague terms and conditions prohibiting this, but my experience was those conditions are not enforced, and I haven't seen a single report to the contrary (of a signup bonus being denied for previously carrying the card).

For example, I applied for the Flexperks Travel Rewards card for the first time in the Spring of 2012, just before US Bank announced their promotion connected to the 2012 Summer Olympic Games, under a 17,500 Flexpoint signup bonus. When the promotion was announced, I applied again and was approved for what ultimately turned out to be a 33,150 Flexpoint signup bonus.

In other words, you should apply first for cards with the most valuable signup bonuses, regardless of your ultimate plans, since the total amount of credit US Bank will extend you is limited while the number of signup bonuses you can receive is not.

Applying for cards

Doctor of Credit has noted that credit reporting agencies combine same-day credit pulls that appear to them as duplicates, which US Bank credit pulls appear to do. That means there's no risk to your credit score in applying for multiple US Bank-issued credit cards in a single day (there may be a risk to your relationship with US Bank, of course).

Requesting product changes

[Please see the update at the top of this post.]

The good folks at the myFICO fora report that It appears that US Bank, like Chase but unlike, for example, Citi, will not do product changes between co-branded credit cards and proprietary rewards cards.

So product changes between Cash+ and Flexperks Travel Rewards cards are possible, while product changes between a Club Carlson co-branded credit card and either of the former are not.

Analysis

Your overall US Bank credit card portfolio has to depend on your goals.

For example, in the near term I intend to keep the Club Carlson Business Rewards credit card despite its devaluation since I take at least one weekend trip to Chicago each year; I'll certainly be able to use the free domestic award night and 40,000 Gold Point anniversary bonus at the Radisson Blu Aqua in downtown Chicago, where my partner and I have enjoyed our 3 stays so far.

If you're more interested in using credit card rewards as a way to generate cash back, redeemable each statement cycle in any amount, the Cash+ is a terrific card.

But the Cash+ card is even better if you get it through a product change from the Flexperks Travel Rewards credit card, where you'll receive a more valuable year-round signup bonus — and an even more valuable one if US Bank renews their Summer Olympic promotion in 2016.

Finally, if you tend to travel on domestic economy flights, the Flexperks Travel Rewards card gives you an opportunity to buy those tickets at a very steep discount by manufacturing spend at gas stations or grocery stores, or by making Kiva loans, which earn 3 Flexpoints (worth up to 2 cents each) per dollar lent.

Conclusion

Of course, no post about US Bank would be complete without noting that dealing with US Bank is never a walk in the park. Forewarned, forearmed, etc., etc.

Pro tip: Did Uber turn off "Gifts" in your account? Ask them to turn it back on!

Back in November I wrote about a trick I like to use now that the Barclaycard Arrival+ card allows Arrival+ miles to be redeemed against taxi purchases: buying Uber credit in "redeemable" $25 chunks, so that Arrival+ miles can be redeemed against Uber rides even when a single ride doesn't exceed $25 (which is fairly common in my experience).

A few weeks ago I noticed that the "Gifts" link had disappeared from the top-left corner of my Uber homepage. I remembered that back when American Express was offering $10 off any Uber purchase of $25 or more, many folks didn't have the option of buying gift cards, but that they were able to e-mail Uber to turn the feature on.

While I'd never heard of anyone losing the option to buy gift credit, I passed along that information to a curious reader, who reported back that Uber was able to re-enable the "Gifts" option in his account.

So yesterday I sent an e-mail to support@uber.com from the e-mail address linked to my account, writing:

"I used to have the option of buying electronic gift cards in my Uber account, but the option seems to have disappeared in the last week or so. Can that option be re-enabled?"

About 10 minutes later, I received the following reply:

"Thanks for writing in! I'm happy to set you up with gift card access so you can give the gift of Uber to someone special.

"If you log into your account on our website you will see a link at the top that says Gifts. From there you can purchase Uber credits in increments of of $25, $50, $100, and $250. You'll be able to purchase gift cards in USD that can be redeemed and used in the US. Please be careful to only hit the Place Orderbutton once."

So there you have it: if you're interested in buying Uber credit in "redeemable" chunks, but the option has disappeared from your account, just drop a line to support@uber.com and they seem more than willing to re-enable it.

Should you use super-premium cards to pay for airfare through manufactured spend?

A few months back I wrote a breakdown of three cards which earn bonused flexible points currencies at gas stations: the Chase Ink Plus (and Bold), Citi ThankYou Premier (as of April 19, 2015), and American Express Amex EveryDay Preferred.

While flexible points are terrific for short-haul Avios redemptions and long-haul premium cabin redemptions, I also like to remind readers that sometimes it makes sense to fly on revenue tickets. With the announcement of a new, 30% rebate on "Pay with Points" tickets purchased through the American Express Business Platinum card (via Twitter user @LoyalUA1K), I thought I'd revisit the subject with gas station manufactured spend squarely in mind.

Four ways to buy cheap plane tickets at gas stations

There are four methods I want to consider for buying revenue airline tickets using points earned at gas stations (four methods, and not four cards, for reasons that are about to become clear):

• Chase Ink Plus/Bold. Earns 2 Ultimate Rewards points per dollar spent at gas stations, on up to $50,000 in annual gas station purchases. Points can be redeemed for paid airfare at 1.25 cents each. $95 annual fee.
• US Bank Flexperks Travel Rewards. Earns 2 Flexpoints per dollar spent at gas stations, if you spend more at gas stations than at grocery stores or on airline tickets during that statement cycle. $49 annual fee, which can be waived if you spend $24,000 during the cardmember year.
• Citi ThankYou Premier and Prestige. Earn 3 ThankYou points per dollar spent with the ThankYou Premier, and redeem them through the ThankYou Prestige for 1.6 cents each for tickets issued by American Airlines and US Airways or 1.3 cents each for tickets issued by other carriers. $95 annual fee for ThankYou Premier and $450 annual fee for Prestige (a $350 annual fee version may be available in-branch, although getting it sounds stressful).
• American Express Amex EveryDay Preferred and Business Platinum. Earn 3 Membership Rewards points per dollar spent with the EveryDay Preferred (as long as you make 30 purchases per month), and redeem them through American Express Travel using the Business Platinum card for roughly 1.43 cents each on the same airline you designate for your $200 annual fee reimbursement. $95 annual fee for EveryDay Preferred and $450 annual fee for Business Platinum.

Now I know what you're thinking: "Free-quent Flyer, can't you show the same information in a simple chart?"

As a matter of fact, I can:

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How much paid airfare makes premium card annual fees worth paying?

Anyone who's followed my blog for long knows what I think about annual airline fee credits: they're a way for affiliate bloggers to downplay preposterously high annual fees and move more product.

Since I'm not an affiliate blogger and don't have a dog in that hunt, I treat credit card annual fees the same way I suggest my readers do: as upfront expenses that have to be justified by the concrete value delivered by a card.

By concrete value, in this case I mean the actual surplus delivered by a premium card compared to a workhorse like the Flexperks Travel Rewards card.

As the chart above shows, the minimum value of a dollar of gas station manufactured spend with the Citi ThankYou Premier and Prestige combination is almost as much as the maximum value of a dollar manufactured with the Flexperks Travel Rewards card, and assuming you're loyal to American Airlines and US Airways, you'll receive a minimum of 0.8 cents more per dollar.

With the American Express Amex EveryDay Preferred and Business Platinum combination, you'll only want to redeem Membership Rewards points for airfare on your preferred carrier, since almost all other "Pay with Points" redemptions (except for sub-$300 airfares) will be worse values than a Flexpoint redemption.

On the other hand, those card combinations come with hefty annual fees, meaning that any surplus value earned on the redemption side compared to cheaper cards has to exceed the difference in upfront costs in the form of annual fees.

To arrive at that breakeven point, first we need to find a reasonable valuation for Flexpoints, which can be redeemed in bands at 10,000 Flexpoint intervals. While it's tempting to take a simple average of the top and bottom of each redemption band (i.e. 1.67 cents per Flexpoint), in my experience it's possible to consistently land closer to the top of that range. That being the case, let's use a point three quarters of the way from the bottom, or 1.83 cents per Flexpoint (e.g. a $367, 20,000 Flexpoint redemption).

Here's how much paid airfare you need to fly annually in order to justify $545 in annual fees, compared to the waivable $49 annual fee of the US Bank Flexperks Travel Rewards card:

• Citi ThankYou Premier and Prestige. $2,294 at American Airlines and US Airways ($47,807 in annual gas station manufactured spend)
• Citi ThankYou Premier and Prestige. $8,856 at other airlines ($227,083 in annual gas station manufactured spend).
• American Express Amex EveryDay Preferred and Business Platinum. $3,711 with your designated airline ($86,508 in annual gas station manufactured spend).

Conclusion

I'm perfectly aware that these cards offer redemption options that can be more lucrative than redeeming points for airfare at privileged rates. In fact, I wrote a whole blog post comparing their transfer partners in each alliance.

I'm further aware that the super-premium $450-annual-fee cards offer benefits like lounge access, airline fee credits, and Global Entry fee reimbursement.

So any readers who are inclined to hash out the value of those benefits are welcome to do so in the comments.

But I am also certain that simply purchasing paid airline tickets is the single most common method of flying domestically for travel hackers and civilians alike, and an analysis of these cards along those lines was overdue.

Manufacturing Chase Freedom's second quarter bonus categories

A reader recently wrote to me asking if there were any super-secret hush-hush methods of manufacturing the $1,500 in 5% cash back offered by this quarter's Chase Freedom bonus categories. As a reminder, those bonus categories are "Restaurants, Bed Bath & Beyond, H&M, and overstock.com."

I sent along to that reader, but also wanted to share with any other readers who may have missed Tagging Miles' post that Bed Bath and Beyond sells $200, PIN-enabled Visa gift cards with an activation fee of $6.95.

As I explained in a guest post at Doctor of Credit's website back in December, earning 5 Ultimate Rewards points per dollar on $200 PIN-enabled Visa gift cards isn't a great deal in terms of outlay ($6.95) versus income ($10.35). Rather, it's a good deal precisely because they're $200 Visa gift cards, so you can cram a lot more of them into a Bluebird or Serve card's $5,000 monthly load limit, or into a bank or credit union's without worrying about a high-volume "fraud" tripwire.

My experience at Bed Bath & Beyond roughly mirrors Tagging Miles': not all stores carry Visa gift cards, not all stores carry $200 cards, and stores that do may be extremely reluctant to sell large volumes. Yesterday I had trouble buying just $600 in gift cards, requiring a manager to slowly walk the cashier through the process, since she was sure she would be fired for letting so many cards walk out the door!

In any case, while I know many of my readers won't have any trouble spending $1,500 at restaurants this quarter, I'm as a rule extremely reluctant to use cards for both manufactured spend and "real" purchases. So if you're like me, go ahead and take 3 trips per Chase Freedom card down to your local Bed Bath & Beyond and buy no more than $600 per visit. Then you can get back to putting your actual restaurant charges on a 2% or 2.22% cash back card.