On the Justice of Squeaking Wheels: made whole by filling out an automated survey

Anybody who knows me knows, the only thing I hate more than driving is renting cars. It combines all the worst features of the travel experience: you’re charged a constantly fluctuating price (thanks Autoslash!), with ambiguous requirements (do I qualify for a USAA rate as a member, or is that for employees of USAA?), face unlimited liability for anything that happens on the road in an unfamiliar car, and are upsold at every single step of the transaction. It’s a terrible experience for customers, and I imagine an even more terrible experience for the cashiers who have to deal with a stream of furious customers all day every day.

I’ve tried to eliminate as many of these variables as possible over the years. In 2020, I bought non-owner car insurance from USAA for the first time to cover personal liability while driving a rented car. I naturally pay for my rentals with a credit card that includes insurance for the value of the car itself. And I fuel rental cars before returning them to avoid paying their extortionate fuel charges.

But that leaves one pain point: picking up and returning the car itself. Different rental car companies have tried to address this in a variety of ways: elite check-in desks, “choose your own car” gimmicks (National’s “Emerald Aisle,” Budget’s “Fastbreak,” etc). But I’m not actually that annoyed by waiting in line for a rental car. After all, I just waited in line to check my bags, waited in line to board, waited to get off the plane, waited to collect my checked bags, and waited to take a shuttle to the rental car lot. What do I care if I have to wait another 15 minutes to get the car keys?

No, what drives me nuts is how car rentals are so completely unlike any other element of the travel experience, and no lesson you learn anywhere else can be applied to understanding how rental car companies operate:

• an airline schedules a set of flights, some of which take off late and some of which land early. But one flight landing early (besides giving the pilots and flight attendants a little more time to use the bathroom or get a bite to eat) doesn’t make any other flight take off any earlier, and in fact realistically is more likely to clutter up the taxiways and gates.

• a hotel sets a check-in time and check-out time, which they’re typically willing to be flexible about if your room is ready early or you want to keep it a bit longer, assuming there isn’t another guest about to check in.

Car rental companies operate more like private jet services or love hotels. You can show up early, or check-out late, but you’re definitely paying for every minute you have possession of the car.

Getting charged for showing up early

Over the New Years holiday my partner and I flew to Hawaii where we met up with my mother-in-law (yes, I know this is also the plot of the Netflix limited series “White Lotus”). Our flight was scheduled to land around 1 pm and hers around 3, so I booked a weekly car rental at the only-slightly-off-airport Budget Car Rental site, with a pickup and dropoff both scheduled for 1 pm on Wednesdays, a week apart.

Then our flight got in early — very early. We were scheduled to arrive at 12:50 pm but were already at the Budget office at 11:30 am. We didn’t have anything else to do (the Kona airport is kind of in the middle of nowhere) so we decided to pick up the car and drive into town to explore for a couple hours.

I popped in to see if the car was ready yet, and after a few minutes in line, was asked “when are you returning the car?” I naturally replied, “I have it reserved until 1 pm,” and the cashier responded, “but you’re picking it up early. That means you need to return it early.”

And she was right!

After stressing about it for 7 full days, I managed to get the car back at 12:20 pm the following Wednesday — 40 minutes before the end of my original reservation, but 50 minutes after my 7-day “week” expired.

They stuck me with a fee that was, for one hour, a full 14% of the cost of the week-long rental.

But then they gave me my money back

On January 5, in what must have been just a few minutes after returning the car to the lot in Kona, I received one of those thousands of automated e-mails asking for feedback on my experience renting from Budget. Like any normal person, I never complete these surveys unless something is obviously amiss or an employee goes above and beyond. But since I was still steaming about this stupid “late” return charge, I went ahead and filled out the survey.

Shockingly, 5 days later, I received another message from the same generic survey provider:

Thank you for taking the time to tell us about your recent experience. We appreciate your feedback since it helps us improve our service and your rental experience.

I deeply regret that we were not able to meet your expectations regarding your previous rental. We will send in an adjustment for the extra hour charge. Please allow 7-14 business days for this to reflect on your end.

I wasn’t exactly convinced this would actually happen (the e-mail address’s domain was “app.medallia.com”), but was willing to watchfully wait. Then, as much to my surprise as yours, on January 26, 21 full days after I returned the car, Budget refunded me almost $100, which seems to actually be slightly more than they charged me for the extra hour, even accounting for taxes and fees.

Conclusion

I know this was a long way to go to complain about how terrible rental car companies are, which is why I’m trying to make a slightly different point: sometimes, somebody actually reads those surveys you submit after flying, staying at a hotel, or renting a car, and if they do, then making as specific, particularized complaints (or praise!) as possible seems likeliest to get the most favorable results.

When did content creators get to be such big whiny babies?

I have a very boring origin story as a blogger: when I was in grad school, I got into travel hacking. After travel hacking for a few months, I realized that virtually all the existing blogs were dealing misinformation to their readers in order to sell credit cards, so I wrote an eBook laying out how travel hacking really works, and launched this website to promote the book (hence the clunky URL which we have all come to know and love).

Well, the book was a dud (thanks to all hundred of you who bought and borrowed it from Amazon over the last decade!), but the site took off, and I’ve been writing here ever since. So blogging for me has always been a case of learning by doing, and the same is true when it came to “monetization.” All the blogs I followed had Amazon affiliate links, so I signed up for Amazon affiliate links. All the blogs I followed had Google Adsense widgets, so I installed Google Adsense widgets. All the blogs I followed had credit card affiliate links, so I applied for credit card affiliate links. And, just in case, I also added the option to subscribe to the blog (originally through PayPal “recurring payments” of all things) and receive occasional subscribers-only newsletters.

It turns out, just like my book sales, Amazon, Google, and credit card affiliate links were all a bust. I don’t write about random crap on Amazon so I have nothing to link to. I don’t write about any high-value Google keywords, so Google only pays me once or twice a year when I crack the $100 payout threshold. And my credit card affiliate link provider immediately shut me down when they realized I was scraping the underlying links from their “preferred” ad copy.

Subscriptions, it turned out, were a model that worked great for me. Even after PayPal shut down my account (for unrelated hijinx), over 90% of my subscribers voluntarily migrated over to my new subscription manager, which I thought was very cool of them.

All of which is a roundabout way of getting to my point: even if it’s true your users are your product, rather than your customers, doesn’t it still seem awfully rude to throw a big fit when they don’t behave as you demand?

The travel blogger crybaby lost his bottle

All these thoughts came to me as I read Gary Arndt’s elegy on leaving text-space for voice-space. Gary lays out an incredible story arc:

• “I was writing for an audience of real people who knew who I was and had made a decision to follow me. My website was an attempt to entertain and inform them about my travels.”

• “…as social media began to take off, I like many other people jumped on that bandwagon.”

• “This gave rise to clickbait and doing anything possible to grab eyeballs and clicks in competition with every other website on the internet.”

• “This meant a slavish devotion to Google and writing articles optimized for bots and algorithms, not actual people.”

• “My income dropped by 95% within a few weeks in March 2020. Traffic to my website dropped. Affiliate sales went to zero and still haven't really recovered for me. All the contracts I had lined up were canceled. An in-person event I had in the works was canceled. Reader tours I had planned were canceled as well.”

What’s astonishing about this story is the complete lack of agency Gary sees in his “downfall.” His website started off as a passion project for interested readers, but then he was forced to jump onto the bandwagon of social media by the “takeoff” of social media, forced to write clickbait to grab eyeballs, forced to slavishly devote himself to Google, and then forced to confront a sudden pandemic drop in his income.

But nobody did this to Gary. It’s not Amazon’s fault nobody uses my affiliate link, it’s not Google’s fault I don’t use high-value keywords or optimize my website for search engines (although Google also is apparently committing a lot of fraud through their Adsense auctions), and it’s not credit card companies’ fault I refuse to use their prewritten copy. My lack of affiliate income is a consequence of my own choices: that I write for the benefit of my readers.

Nobody ever stopped Gary from attempting to entertain and inform his audience about his travels! Everything that took that initial satisfaction away from him was the entirely predictable consequence of his own choices.

Matthew 6:24

Obviously I’m exaggerating a bit for comic effect. After all, I’m not a “personal responsibility” guy — after his income crashed in 2020, I hope Gary applied for EIDL and PPP loans, I hope he applied for Pandemic Unemployment Assistance, SNAP, Medicaid, LIHEAP, and I hope he got all the social assistance he needed to pay his bills and stay safe throughout the pandemic.

But nobody made him reliant on social media, nobody made him reliant on search engine rankings, and nobody made him reliant on affiliate revenue. I don’t know Gary, I’ve never read a word he’s written before today, maybe he’s been doing dynamite work as a travel blogger for decades. But at the end of the day, he chose to sell his readers to advertisers, instead of selling his content to readers. That’s a choice millions of people make every day, rightly or wrongly, wisely or unwisely. But please, don’t pretend he or any other affiliate marketer is a martyr for facing the obvious, inevitable consequences of their own actions.

What you need to know about the Hilton Honors Gold and Diamond food and beverage credits

Back in December Hilton Honors announced an extension and increase of the daily food and beverage credit Gold and Diamond elites receive at their “full service” and “lifestyle” brands, e.g., the properties where breakfast isn’t automatically included for all guests.

If you didn’t read the e-mail or already deleted it, here’s the chart they attached to explain the change:

There are two changes being announced here: first, the food and beverage credit is being extended through 2022. Second, in “select markets” the food and beverage credit is being increased by $6 per person per day in the designated markets.

“Free breakfast” has never meant the same thing to everyone

Since I have seen some people complain about this change as “devaluing” the breakfast benefit, the most obvious thing to point out is that long before the pandemic, different properties around the world have interpreted the Hilton free breakfast benefit in very different ways. Four in particular stand out to me, although each has its own subtypes:

• access to the executive or club lounge. This is my favorite version of the benefit, and I’ve encountered it most frequently in Europe, where lounges will often have full buffet spreads in the morning, and then snacks, hors d'oeuvre, and sometimes cocktails in the evening. Keep in mind Hilton’s odd rule that Gold elites only have access to executive lounges if they’re upgraded to a lounge floor, while Diamond elites have lounge access regardless of their room type.

• the “continental breakfast” or “cold buffet.” I’ve seen this breakfast benefit most commonly at Hilton and DoubleTree properties in the United States. The restaurant will typically be laid out as a buffet, but separated into sections so that your “free breakfast” voucher only entitles you to pastries, fruit, cereal, etc., while the “hot breakfast” area with omelettes, bacon, pancakes, and things of that nature is monitored to make sure you’re upcharged in case you cross the cordon.

• the “full breakfast.” I don’t remember the last time I encountered this at a Hilton in the United States, but I’ve run into it multiple times in Europe, where they seem to make less of a fuss over the technical differences between a “cold” and “hot” breakfast.

• the “breakfast credit.” Far from being a response to COVID-19, I’ve seen the breakfast credit used to replace the elite breakfast benefit for years. It was typically “pegged” to the price of a continental breakfast or “cold buffet” on the menu, but properties routinely told me I could order anything and just use the value of the credit. During my 2019 stay at the Grand Wailea Resort in Maui I was explicitly told “you’ll just get a $250 credit at the end of your stay,” and we were glad to spread the credit across multiple meals and venues throughout our stay.

The “COVID” food and beverage credit is better in 3 out of 4 cases

Once we’ve broken down like this, it’s obvious that the food and beverage credit being offered through 2022 is better is all but one case. If a hotel has an executive lounge, then you’ll still be able to have breakfast, snacks, and cocktails there, depending on the property. If a hotel previously offered a continental breakfast or cold buffet, then the food and beverage credit should cover that cost, but with the added flexibility of being able to use your credit for lunch, dinner, or drinks, instead of just during breakfast. And if a hotel already offered a breakfast credit, then you’ll see one or both of added flexibility and increased value (in the “select markets”).

Only in the case of “full breakfast” properties are you likely to come out seriously behind, downgrading from either the hot buffet to the cold buffet or from your selection from the breakfast menu to a fixed continental option.

Of course, that is based on a static, short-term equilibrium of the system. Both travel hacking and hotel management are dynamic and iterative, so it’s more than possible that some “winners” will be shunted over time into the “losers” box.

Most obviously, properties that currently offer executive lounges may close them and switch to a food and beverage credit. If the general idea of hotel executive lounges was to keep down staffing costs by having a minimally staffed space to serve business travelers who didn’t want to wait for a full breakfast service, then hotels may decide they were too successful, and sending guests through the restaurant ends up more profitable.

Similarly, to the extent lounges allow families to save money feeding their kids in the morning, offering free breakfast to adults and charging for whatever the kids order is one option at least some properties will surely explore.

The “continental breakfast” or “cold buffet” is a way to cheaply finesse the elite benefit and I assume that practice will continue, with prices in select markets simply rising accordingly, and properties coming out somewhat ahead after taxes and tips.

Relevant questions going forward

There’s something inherently bizarre about the process of interrogation that happens when you’re checking into a hotel. Wifi? Parking? Late checkout? Airport shuttle? Breakfast?

Nothing about that changed with the new Hilton Gold and Diamond food and beverage credits. You still have to ask: what can you spend food and beverage credits on? Do you have to use them every day, or are they cumulative during your stay? Are any locations on the property excluded?

I think Hilton Honors food and beverage credits will prove more valuable than the previous breakfast benefit because I don’t think very many people were getting much value from the original breakfast benefit. Having a benefit, known in advance, that I can use for anything on the menu, any time of day, is simply more valuable to me than a croissant I can pick up at the breakfast bar between 7 and 10 am.

How I think about hotel free night certificates

I gather from my RSS feed reader that American Express has launched an aggressive campaign to move more Hilton co-branded credit cards in the new year, with the highest bounties naturally being paid to those who sell the most of their ultra-premium Aspire cards. And if you’re selling Aspire cards, you naturally need to play up the value of the annual free weekend night certificate. I like free nights, I like free flights, I like free car rentals, I like free groceries: I like everything free. But that doesn’t mean everything free is created equal, and free night certificates are one of the easiest, and most expensive, traps to fall into.

A free night certificate is worth its opportunity cost…

This is the commonsense idea that you should not value any award based on the retail price of its paid equivalent, but rather the amount you yourself would actually pay under the same circumstances. This is best illustrated in cities where multiple “reasonable” booking options exist.

Take, at the high end, New York City, where the Conrad New York Midtown, a Hilton property, is located about a third of a mile from the Park Hyatt New York. On a random day in mid-June, the Conrad is charging 95,000 Honors points per night, while the Park Hyatt charges 30,000 World of Hyatt points. The equivalent flexible paid rates are $945.30 and $1,202.63, respectively.

First, let’s state the obvious: these are great redemptions! If you became a travel hacker to get a taste of luxury you could never otherwise afford, then manufacturing about $15,000 in grocery store spend on a Hilton Surpass card, or $6,000 in office supply store spend on a Chase Ink Business Cash card, for a night in the lap of luxury in the heart of the metropole is just what you’re after.

…properly understood

But that’s not a strategy, because a strategy needs to take into account your overall travel preferences and needs. Even though it’s precisely what I was looking for, I admit I was still a bit surprised when I realized that 5 nights at the “DoubleTree by Hilton New York Times Square South,” about a mile from the Conrad, is going for just 40,000 Honors points per night, or 160,000 points for 5 nights after the 5th-night-free is applied for Hilton Honors elites. A flexible paid reservation in the same period runs about $1,658 (another great Honors redemption!).

Adding a 6th night to your stay at the DoubleTree using a free weekend night certificate will only save you $332, or 40,000 additional points, a much worse value than redeeming it at the Conrad. However, the redemption allows you to avoid changing properties 1 or 5 nights into a 6-night stay. In other words, maximizing the value of your free night certificate may cost you more in wasted vacation time and family disharmony than any cash savings your mental accounting conjures up.

Free night certificates have different value as different parts of a strategy

The key to integrating free night certificates into your travel hacking strategy is to ask yourself, “where do I stay, for how long, and why?”

Over the New Year holiday, my partner and I flew to Hawaii and stayed at the Grand Naniloa Hotel Hilo, where award nights cost 50,000 Honors points. Our initial plan was to spend 7 nights there: 6 nights for the price of 5 thanks to the 5th-night-free benefit, and the seventh night using my Hilton Honors Surpass free night certificate from spending $15,000 on the card in 2021. I don’t have the cash cost in front of me, but I remember it worked out to “roughly” a 1 cent-per-point redemption.

About halfway through our stay, we decided to spend the last night closer to our departure airport, Ellison Onizuka Kona International Airport at Keahole, so I cancelled our 7th night in Hilo and made a reservation with the same certificate at the 65,000-point Hilton Waikoloa Village.

The essential thing I want to highlight is that this did not save me any money! Moving our last night from a 50,000-point property to a 65,000-point property was an absolute wash, and did not increase the value of the certificate in any way. I even got an identical $30 daily food and beverage credit at both properties.

And this is the case more often than you would imagine. Since most experienced travel hackers have lots of booking options all the time, you should not expect any one booking instrument to consistently provide outsized value. Rather, having multiple instruments available allows you to select the one that serves your needs the best in any given situation.

Are Hyatt free nights more valuable than Hilton free nights?

I’m an unapologetic defender of the Hilton Honors program and especially the American Express Surpass card. Earning 6 Honors points per dollar on grocery store manufactured spend, combined with the 5th night free on award redemptions, makes it an outstanding play for my particular travel hacking strategy.

But I’m also not an idiot: transferring Ultimate Rewards points to Hyatt is a fantastic way to get 3 or more cents per point in value from the Ultimate Rewards points I manufacture at office supply stores, and on Freedom cards during this quarter’s 5-point-per-dollar grocery store bonus category.

While World of Hyatt free night certificates can only be redeemed at category 1-4 properties, World of Hyatt also doesn’t offer the 5th-night-free benefit Hilton Honors (and Marriott Bonvoy) does, meaning I’m never “wasting” points by redeeming a Hyatt free night certificate: each free night corresponds to the exact number of points I would have had to spend on that exact night.

A Category 1-4 Hyatt free night certificate can be swapped in at any place in a trip at its exact points value, without jeopardizing the value of the overall redemption. On the other hand, a 4-night Hilton points redemption can always be extended for a fifth night, either at the beginning or end of the reservation, without incurring any additional cost.

Hilton free night certificates are therefore most valuable if you find yourself consistently making short term, expensive stays, or extending award reservations beyond 5 nights. Under those conditions, the sweetest spots will always be one-night stays and adding 6th nights to stays you’ve already redeemed points for at the most valuable properties in the system.

Conclusion: Surpass earning versus Aspire certificates

For folks with multiple players in their household, this circle is easily squared, by combining one partner’s earning ability with the Surpass and the other partner’s annual statement credits and free night certificates with the Aspire. That’s a great way to play the game. But if you’re playing solo or with a reluctant (or bored) partner, the flexibility of the Surpass’s earning ability and the value of the World of Hyatt credit card’s free night certificates far outstrip the one-off gimmicks of the ludicrously expensive Aspire.

Matching Hyatt Explorist or Globalist status to MLife Gold status in 9 words

1. Click here

2. Log in

3. Click “OPT IN”

4. Log in

Your MLife status will be matched in 10-15 minutes, in my experience, although you do need to log out and log back into MLife to see your updated status.

I’m offering these 9 words as a public service, because I don’t do any “search engine optimization” or care about the amount of traffic my site gets, and every other blog I’ve seen write about this status match takes up to 560, 713, or in one particularly extreme case, 1,088 words without describing the actual actions required to match status.

How I would (and might) maximize the current Series I Savings Bond deal

There’s an interesting deal available right now for folks who have extra cash lying around they are sure they won’t need for a least one year, and ideally won’t need for five.

Fixed-rate inflation-adjusted Series I Savings Bonds

When I first learned about this deal at Doctor of Credit I admit I scoffed. The high interest rate he described is on an annualized basis, but you’re only guaranteed the reported rate for 6 months, meaning you don’t even get a full year at that rate; it could drop to 0% for the second half of the year before you’re eligible to redeem your bonds, meaning you froze up to $10,000 in cash in a security earning nothing for 6 months of the year!

But, the more I thought about the deal, the more I came to appreciate the potential possibilities. So let’s take a closer look.

Series I Savings Bonds have 4 curious features:

• When issued, they have a fixed rate of interest that is known at the time of issuance and lasts for 30 years or until the bond is redeemed;

• added to that fixed rate is a variable, inflation-adjusted rate of interest that is calculated in November and May of each year and applied to outstanding bonds every 6 months (so a bond purchased in January has November’s rate until July — this will become relevant shortly);

• bonds earn interest starting from the first day of the month they’re purchased, so bonds purchased November 30 will earn interest from November 1;

• with limited exceptions, they must be held for 1 year, and redemptions are penalty-free after 5 years (you sacrifice 3 months of interest if redeemed between 1 and 5 years after purchase. I’m genuinely unsure whether the 1-year holding requirement is to the calendar date or to the calendar month of purchase — if you know, leave a comment!)

Finally, you’re limited to $10,000 in purchases through Treasury Direct per calendar year. You can purchase an additional $5,000 in I bonds through your tax refund, although which fixed and inflation-adjusted rate you get will depend on when Treasury transmits the order to the “Treasury Retail Securities Site in Minneapolis,” so you may not be able to get November’s rates if you file for an extension or your refund is delayed for any reason.

Why do I keep talking about November’s rates?

The fixed rate on Series I Savings Bonds, the minimum rate you’re guaranteed to earn for 30 years, is 0% APY, and has been for most of the last decade. But due to the method Treasury uses to calculate the inflation component of the interest rate, bonds purchased from November 1, 2021 through April 30, 2022, will earn a guaranteed interest rate of 7.12% APY.

Now be careful to understand what’s happening here: APY is calculated on an annualized (that’s the “A”) basis, but you’re only guaranteed to earn that rate for the first 6 months you own the bond. After 6 months, the inflation-adjustment will change to May’s rate, and 6 months after that (when the bond is eligible for redemption with a 3-month interest penalty) it will change to the November, 2022, rate.

Series I Savings Bonds are a highly optioned contingent bet on future inflation rates

One way of assessing a bond investment is to look at its “yield-to-worst,” which refers to the yield you would receive if, for example, a corporation or utility exercised a call option at its face value on a bond to refinance its debt at a lower interest rate before the end of the bond’s term. For a fixed-rate, zero-risk, United States Treasury bond, the yield-to-worst is simply the yield on the bond.

The inflation-adjusted interest rate and possibility of early redemption essentially means Series I bondholders are making a bet on the future of inflation rates, but one in which they have all the power.

You may believe, as I do, that May, 2022’s inflation adjustment will be sharply lower than November, 2021’s. So, what’s the yield-to-worst? Since the inflation adjustment is never less than 0%, and the fixed-rate is 0%, you would earn 0% in interest during the second 6-month holding period. In that case, your yield would be 3.56%. That’s not a shoot-the-lights-out great investment, but it’s a solid return on a completely safe investment. After 12 months, you can pull the money out (sacrificing 3 months of 0% interest) and do something else with it.

But however much you think inflation (technically the CPI-U measure of inflation) will fall between now and May, 2022, it probably won’t fall to 0%. Say it falls to 1.9%, which was fairly common prior to the pandemic — now you’ve earned 4.035% on your investment (after sacrificing the last 3 months of interest), which suddenly starts to look pretty comparable to the rewards checking accounts I regularly write about and use.

Optionality is very valuable

When you take this exercise a bit further, you can see the possibilities are even more lucrative than I’ve suggested, since after one year, you always have three options: “letting it ride,” “trading up,” or “cashing out.”

Every November and May, when the fixed rate and inflation adjustment are announced, you can see what the composite rate will be for the next 6 months:

• Let it ride: if the inflation adjustment remains higher than your other investment opportunities, you can leave the money to earn for another 6 months until the next adjustment, bringing you 6 months closer to the 5-year penalty-free redemption threshold;

• Trade up: if fixed interest rates soar and inflation crashes, then you can redeem your current 0% fixed-rate bonds and buy new, higher fixed-rate bonds;

• Cashing out: if fixed interest rates stay low and the inflation adjustment crashes, you can redeem your bonds and do anything you like with the money.

Obviously this is just another way of saying money is fungible and Series I bonds can be redeemed after one year. What makes this interesting is that this series of options continues every 6 months for 30 years!

What’s the optimal strategy to maximize optionality?

Due to the $10,000 Treasury Direct and $5,000 tax refund purchase limits, I believe the optimal strategy looks something like this:

• buy $10,000 in bonds by December 31, 2021 through Treasury Direct;

• in April, 2022, when the March CPI-U data is announced and the May, 2022, inflation adjustment is finalized, you’ll know the total annualized interest rate you’ll earn (6 months at November’s rate, and 6 months at May’s rate), and can decide whether to purchase another $10,000 through Treasury Direct based on that composite annualized rate;

• finally, by April 15, 2022, decide whether to lock in an additional $5,000 in bonds at the November/May composite rate, or file a tax extension and wait until October, when the November 2022 rate will be finalized, and decide then.

Obviously this represents a lot of corner cases and attention to detail, so it’s not for everyone. November’s rate is so high it would be perfectly rational to just lock it in with $10,000 this year and next year through Treasury Direct, and $5,000 next year through a tax refund. But since the genius of these bonds is their optionality, this is one way you can maximize that value.

Advantages to getting more involved in the travel hacking community

A few weeks back I wrote about some reasons why most people don’t have much interest in the travel hacking game, and why they’re mostly right: if you don’t have the bug, then it’s mind-bendingly boring to keep track of dozens of credit cards, loyalty programs, booking tricks, routing rules, etc.

Nevertheless, I’m quite involved, and if you’re reading this you probably are as well, so I thought I’d explore some of the obvious advantages of not just playing the game, but getting involved in one or more groups, following folks you respect on Twitter (or Instagram or Facebook, if you’re one of those people), and in general building relationships with other people who share your passion.

The most obvious advantage of making friends with other folks in the community is that it allows you to optimize your earning and redemptions over time. This can sometimes be purely transactional, and there’s nothing wrong with that: when I won a Bose sound system through an IHG sweepstakes, I sold it to a reader for a few hundred bucks lower than the list price, so he got a cheap sound system and I didn’t have to go to the trouble of listing it on Amazon or eBay, or dealing with a stranger through Craigslist or Facebook.

Folks like Vinh at Miles per Day have scaled this up a huge degree, going so far as to connect buyers and sellers of in-demand US Mint coins, but you don’t need to go that far to simply get to know people who might have miles and points you need, or might need the miles and points you have but don’t have immediate plans for.

Swapping referrals and signup bonuses

This option is talked about enough that I don’t think I need to go into it at any length, but when large credit card offers come around you may find that you’re not eligible (for example due to Chase’s 5/24 rule or Bank of America’s 2/3/4 rule) but someone else you know in the community is. Instead of sitting on the sidelines, you can ask your friends if they’d like to swap signup bonuses — maybe they’ve been banned from Citi for money order shenanigans and you haven’t, but you’re over 5/24 and they aren’t.

Expiring or useless free nights

Most folks don’t have too much trouble redeeming the free anniversary night that comes with the Chase World of Hyatt or American Express Hilton Honors Aspire credit cards, but might run into a problem when it comes to free night certificates with worse loyalty programs:

The IHG Rewards Club Premier Credit Card comes with a free reward night (at properties costing up to 40,000 points) on every anniversary, which is certainly worth more than the $89 annual fee to someone, but it might not be worth it to you because of how much more valuable the required Ultimate Rewards points to “fill out” an IHG award redemption would be if transferred to a different partner. Cancelling the card saves you $89, but it also means that no one gets to use the award, while you may be able to sell or trade it to someone who can get hundreds of dollars in value from it.

Likewise the Marriott Bonvoy Boundless (Chase) and Brilliant (American Express) cards come with annual free nights worth up to 35,000 and 50,000 points, respectively. Those aren’t worth their $95 and $450 annual fees to me, but especially in the case of the Brilliant card, you could easily wipe out your annual fee by selling or trading those rewards, when combined with the $300 property credit (Marriott properties used to sell physical gift cards you could resell or trade, although it’s been too long for me to know whether they still do).

Companion tickets

Another annual benefit you might not be able to personally use is airline companion tickets, like those offered by the Bank of America Alaska Airlines credit cards and the American Express Delta Platinum and Reserve cards.

The Alaska Airlines companion fare is the easiest to exchange with comrades because of a curious feature: when booking the companion ticket, any cash component of the reservation has to be paid for with an Alaska Airlines credit card, unless it is covered by funds you already have in your “Wallet.” This provides a simple way to book companion tickets without needing any information from the cardholder: just book a ticket that costs slightly more than the companion ticket, refund it to your Wallet, then pay with that balance.

Meanwhile, the Delta companion tickets have to be paid for in full with the credit card that generated the companion ticket (previously, any American Express card could be used, but that’s now changed in my experience). This makes the ticket slightly less transferable, since you need to place more trust in the person booking the ticket, which is another way of saying it’s good to make friends and connections in the community!

Transferable points and status

Another advantage of having friends in the community, especially ones that do things slightly differently than you, is the ability to pool points and status between programs. My two favorite examples of this are World of Hyatt and Hilton Honors.

World of Hyatt members can send and receive points by filling out the “Point combining request form,” which allows you to make award reservations out of the most advantageous account, and without contaminating either person’s relationship with Chase (there are strict limits on the number and frequency of Ultimate Rewards point transfers to non-household-members). Besides topping up a low balance, the main reason to do this is to make a Guest of Honor booking from an account with Globalist status, giving the guest the potentially valuable benefits like complimentary breakfast, lounge access, and waived parking fees, plus late checkout.

Hilton Honors has an even more streamlined system, with (in my experience) instant transfers after completing the online "transfer points” form. Their terminology is a little bit curious, but you “gift” points when you want to buy someone points with cash, and “transfer” points when you want to reduce your balance and increase their balance. Besides sharing Hilton’s fairly limited status benefits like potential upgrades, late checkout, and the dining credit that replaced their breakfast benefit, combining points in a single account allows you to take advantage of the very valuable 5th-night-free benefit on award stays (for elite members, including Silver elites, so pretty much everybody). This technique recently helped me book 7 nights in Hawaii for the price of 5 by combining 6 award nights and an annual American Express Surpass free night certificate.

Conclusion

Like any community, we’ve got our fair share of jerks, creeps, and affiliate bloggers, but overall I’ve been impressed by how warm and welcoming I’ve found the community to be, both at in-person events and online. There are obvious exceptions to be avoided, but if you’ve got the travel hacking bug, I think the advantages of getting more involved in the community swamp the pain of talking to the occasional jerk. And it always helps to remember that however small fry you think you are (and they don’t get much smaller than me), there’s almost certainly something you know that almost nobody else does, whether it’s a merchant coding error or a bank error in your favor: almost everybody has something to contribute.

The strangest thing about losing your appetite

As long-time fans of the Free-quent Flyer extended universe know, I got pretty sick last year and was diagnosed with “community-acquired pneumonia,” treated with some kind of breathing mask, and sent home with a week’s supply of antibiotics. Then I got fired. I’m fine, I recovered, this isn’t a GoFundMe post or something. But of all the lingering symptoms I’ve had since then, the strangest one is loss of appetite.

A well-known symptom of COVID-19 is loss of smell and taste. But I only briefly lost my sense of smell and taste. I can smell scented candles, food tastes more or less like food again. But what never came back was my appetite. I think of myself as a big eater, always happy to finish somebody else’s plate if they leave anything on it, things of that nature. But since my bout with pneumonia I haven’t had a desire to eat. I put it off as long as possible, then eat as quickly as possible so it’s over as soon as possible.

Loss of appetite is different from hunger in a curious way. I know when I’m hungry; I just don’t want to eat. Of course, our tech overlords call this “intermittent fasting,” which I suppose it is, but I don’t do it in order to perfect my body’s rhythms or whatever they’re aiming for. I’m just annoyed and disgusted by the concept of eating, however hungry I am.

But the strangest thing about losing your appetite is the odd, intermittent bursts of desire. What made me even think of writing this post was that I was walking back home the other day, not having eaten in 16 hours or so, and was suddenly struck by the desire for a cheeseburger from Shake Shack. I headed straight there, with my order entirely planned out, and there was a customer fighting with the cashier about how many burgers she had ordered, how many she paid for, how many she received.

And I immediately lost my appetite.

Get vaccinated, stay safe, don’t get COVID-19.

The history and present of the au pair scam

On this week’s episode of The Manifesto I had a long conversation with a reader who has a decade or so of experience legally bringing in au pairs from abroad to care for his children (who sound delightful, although thanks to the magic of editing software you don’t get to hear their cheerful babble in the background of the episode).

I’ll let the episode stand on its own with respect to the mechanics and economics of hiring au pairs, which we cover in great depth and detail, but throughout the episode I kept coming back to the same question: how is this legal?

After all, every day the newspapers are full of stories about shortages of foreign workers, leaving meat unpacked, fruit unpicked, and lawns unmown. But there’s one weird trick to bring in an unlimited number of workers to care for the children of our economic elite?

There sure is.

The origins of the scam

The year is 1986. Ronald Reagan has swept to re-election, Mike Ditka’s Chicago Bears have crushed the New England Patriots in Superbowl XX, and just a few years earlier women’s formal labor force participation edged past 50% for the first time (male labor force participation was 76% the same year). It would continue to soar until topping out above 60% in the final years of the Clinton boom.

Two-earner households provided desperately-needed labor to firms anxious to expand as interest rates fell from their Volcker highs (for the purposes of this story you have to understand that a 7% risk-free interest rate was considered low in 1986). Just a few years later, Blondie Bumstead would enter the workforce after 58 years as a homemaker.

Of course I’m being a bit droll, but the point of this frame story is to express a genuine change in material circumstances experienced by an increasing number of Americans. Adding a second wage-earner to the household made up in part for falling unionization rates and the end of the “family wage” earned by the (stereotypically) male “breadwinner.”

This tidy solution came with its own complications. As Baumol taught us, rising productivity and incomes in one area of the economy increases the wages that have to be paid in sectors with stagnant or falling productivity as long as workers are free to move between low-productivity and high-productivity sectors.

But what if, you ask, for some reason workers weren’t free to move between jobs or sectors?

Congratulations, you just invented the au pair scam. In 1986, the United States Information Agency approved the creation of a “cultural exchange” program to bring in an initial 1,000 childcare workers on non-immigrant J-1 visas. The initial program, with its tight cap on entrants and limited geographical scope, cost families $149 per week, of which $100 went to the au pair, which is both insultingly and truthfully referred to as “pocket money.”

I suggest considering these figures in 3 distinct ways:

• Using the Department of Health and Human Services guideline that childcare is considered “affordable” when it costs less than 7% of household income (no one bothers to specify whether this is gross or after-tax income), $7,748 would be “affordable” to a family making $110,685 per year in 1986 (277,000 2021 dollars).

• $5,200 in annual income is roughly 75% of the 1986 minimum wage of $3.35 per hour, calculated on a 40-hour, 52-week basis (au pairs are in fact expected to work slightly longer hours than this).

• But both of these figures need to be adjusted by an essential consideration: au pairs receive room and board, which both increases the cost for host families, primarily by requiring them to own or rent slightly more “house” than they might otherwise (e.g. 3 bedrooms instead of 2), and decreases the out-of-pocket expenses of the au pairs.

Everyone involved knew exactly what they were doing

It’s difficult, living through an era of bipartisan political amateurism, to examine periods of American history when politicians knew what they were doing. If the au pair scam were invented today, you’d say it was just an unfortunate accident, some sloppy wording in a hastily-written statute that was passed through a special budget procedure in the middle of the night.

Not so, as these hilariously prescient quotes show.

In February, 1986:

Some experts said the plan was likely to cause controversy. ''This could be a terrific program for the students,'' said Eugene Goldstein, a Manhattan lawyer who takes many immigration cases. ''But it could sound like a highly imaginative subterfuge, in bringing someone to work as a baby sitter under an educational program.''

He added that it may be criticized as a way to import ''cheap labor under the guise of an educational exchange'' or be faulted by those ''who don't think it complies with the spirit or purpose of the exchange visit program.''

In June, the first au pairs arrived:

Yesterday, some of the au pairs met their host families. ''We vowed we'd never have an illegal au pair, even though it's so difficult to find child care in our area,'' said Susan Garthwaite of Stamford, Conn. She, her husband, Richard, and their children, Craig and Dina, were introduced to their au pair, Nicola Adams, 22, from Hampshire, England.

The next year:

''You can't get Americans for $150 a week,'' said Betty Richardson, proprietor of Betty's Nannies, a Houston-based recruitment agency that places au pairs nationwide. ''If they took all the unauthorized nannies away we'd all come to a screeching halt.''

…

Many of the au pair agencies and parents are resentful over a special new program under which 3,100 foreign au pairs are legally brought to this country each year by a private company, the American Institute for Foreign Study, under a cultural exchange program sponsored by the United States Information Agency and the Experiment in International Living.

The au pair scam today

If you were paying attention, you might have noticed something jarring in the above quotes. The au pair J-1 visa was introduced in 1986 with a hard cap of 1,000 entrants, but by May of 1987, less than a year later, there were 3,100 being admitted “each year?”

With all the clues in hand, you already see where this is going: in 2019 (the fairest “pre-pandemic” comparison year), 21,551 au pairs were admitted on J-1 visas!

What’s remarkable is that if the working conditions of these au pairs has changed in the last 35 years, it’s only been for the worse. The $100 the first au pairs received weekly in 1986 is worth about $250 on a CPI-adjusted basis today, while au pairs today receive just $196 in 2021 dollars! This despite the increased share of women’s labor force participation and corresponding demand for childcare, and the galloping productivity gains of the intervening 1990’s.

The wealthy got their special pleading; now what?

If you’re thinking of commenting that I’m being too harsh on the au pair scam, and that it’s “all perfectly legal,” save your keystrokes. I know it’s perfectly legal; I’m the one who did the research.

The point is to invite you to consider the consequences when the economic elite are allowed to buy their way out of the constraints everyone else in society faces. Not enough childcare centers? Hire an in-home nanny. Not enough American nannies? Bring in a foreigner. Not enough visas? Create a special visa program just for in-home nannies. This is the logic of a class that simply considers itself removed from the obligation to participate in the shared obligations of society.

Of course it’s all perfectly legal. They wrote the laws. What about the rest of us?

Can you win playing by the rules?

Last month I spent a lovely Saturday afternoon in the Minneapolis-Saint Paul International Airport conference center for the long, long, long-delayed Milenomics Second Planned (MSP, get it?) Meetup. Sam and Robert, the brainiacs over there, did a lovely job and I got to kick back and relax all day with a few dozen members of their Patreon community, and see some old friends from all around the country for the first time in much too long.

Over the years I’ve attended quite a few gatherings like this (and hosted a fair share of my own), and my overwhelming impression is simply how different they all are. All the way back in 2014 I covered the gauzy Frequent Traveler University event in Seattle and came away equal parts bored and annoyed. When Saverocity was more active, I found their Phoenix and Charlotte events were well-run and great opportunities to meet more like-minded members of the community. I haven’t made it to the Chicago Seminars or Ann Arbor Art Fair meetups, but have heard rave reviews of them from their own diehard fans.

The point of all this is not to recommend or even criticize one sliver of the travel hacking community over another, but rather to point out that different slivers are different! If you don’t fit in in the first group you join, that doesn’t mean everybody else in the community is a boring loser and you’re the only one who really gets it. It means you had bad luck — that group wasn’t right for you, but it might be perfect for people who aren’t like you.

What I found most interesting about the Milenomics meetup was not how similar everyone was, but how different they were, and I’ve been turning over how to express what, if anything, passionate travel hackers have in common.

The rules describe everything that has already been thought of

Like lots of kids, I grew up playing the board game “Monopoly,” with its iconic instructions:

“GO TO JAIL.
“Go Directly to Jail
”DO NOT PASS GO
“DO NOT COLLECT $200.”

This is a wonderful manifestation of the general principle that you can only write rules around situations that have already occurred to you. Monopoly is a game of randomized clockwise movement around a rectangular board. If the Jail square is between your token and the GO square, there’s no question that you have to move your token there without passing GO. But if the GO square is between your token and Jail, what are you to do? You are to go “directly” to Jail, without passing GO, violating the game’s main rule of one-directional, clockwise movement.

Playing by, around, and against the rules

The question, then, is do the rules describe every possible situation? Of course not. A few years back IHG Rewards ran a promotion that allowed you to enter into a sweepstakes up to 94 times by mailing hand-printed pieces of paper to some P.O. Box in Kalamazoo. But the rules didn’t say who had to hand-print the pieces of paper, so there was nothing in the rules against enlisting some kids with neat penmanship to fill out your 94 entries for you.

And this, I think, constitutes one of the many divides in the travel hacking community:

• Should you play by the rules, and only do the things explicitly laid out by the companies we interact with;

• Should you play around the rules, identifying the “Air Bud” holes where some action is neither explicitly permitted nor explicitly prohibited;

• Or should you break the rules, counting on sloppy implementation or enforcement?

Most people do some of each, and that goes beyond the specific domain of travel hacking. Take the case of vaccine mandates:

• the overwhelming majority of people subject to vaccine mandates simply comply and receive the mandated vaccines;

• some people observe the possibility of “religious exemptions” or “conscientious objection” to vaccine mandates and fabricate those exemptions or objections;

• and some people go further and fabricate the documents themselves in order to violate vaccination requirements.

The scarcest resource is not time, but focus and attention

One of the strangest arguments in the travel hacking community is about the “value” of your “time.” It’s certainly true that hourly workers are compensated for their time on an hourly basis, and that a small subset of salaried workers are paid overtime when they work more than 40 hours per week, but my extremely literal viewpoint is that when you’re not being paid for your time, it’s yours. It’s free, God-given, to do with what you please.

The manufactured spending I don’t do online, I do on foot. In other words, I go for a walk. In every other context, “going for a walk” is treated as a leisure activity. In my case, I also make money doing it. But the time is free: I exchange pleasantries with my neighbors, breathe fresh air, and enjoy all the benefits of daily light cardiovascular exercise.

Where I see the biggest divide between affiliate bloggers and travel hackers is in how seriously they take the shortage of focus and attention, not time. Participating in a buyers group doesn’t take much time at all, compared to going for a long walk. But keeping track of shipments, deliveries, and payments requires focus and attention that could be used elsewhere, even if it consumes just a minute or two per day. This is not a criticism: if you find participating in buyers groups fun, then that’s what you should do. But don’t make the mistake of thinking the resource you’re expending is your time.

If you want to play by the rules you have to stay even more focused

The error I see affiliate bloggers promoting most consistently is that it’s worth playing by the rules (the only rules affiliate bloggers are allowed to tell you about) and getting dragged deeper and deeper into the travel hacking community. To me, that’s an either/or proposition.

A perfectly reasonable way to go through life is to sign up for a Chase Sapphire Preferred card, put all your purchases on it, and each month transfer your entire balance of Ultimate Rewards points to World of Hyatt. Then whenever you need a hotel stay, see if there’s Hyatt award availability. If there is, book the Hyatt. If not, pay cash. The same logic applies to an American Express Gold card with transfers to Delta.

Likewise, I’ve happily written about a basic credit card strategy consisting exclusively of cards with annual companion tickets (Alaska and Delta) and hotel nights (Hilton and Hyatt).

But if that’s your strategy then you need to log off, not read any blogs at all, not follow any travel hackers on Twitter, and not listen to any travel hacking podcasts. Not because they’re a waste of time, but because they’re a waste of focus and attention.

The reason to get engaged in the community is to find out what rules can be bent and broken

The rewards of getting involved in the travel hacking community can be enormous, but they’re not free. Learning how to search for partner award availability across multiple airline alliances is a huge undertaking. Tracking signup bonuses and transfer partners isn’t particularly time-consuming, but it does consume focus and attention that you’re otherwise free to expend elsewhere.

Fortunately, travel hacking has the same safety valve built into it that all hobbies do: if you don’t find it fun, you don’t have to do it! Whenever my friends or family approach me to ask how to get started I tell them the same thing: do one thing, anything, and see if you enjoy it. See if it captures your imagination. See if you want to do more, faster, more aggressively. And the simple fact is, no one has ever taken me up on it, because the overwhelming majority of people find it mind-bendingly boring.