Miles Earn and Burn – Lots of signal, little noise

One of my favorite sayings is “there’s always somebody hitting a deal harder than you”. Of course logically this can’t be true because there’s a heaviest hitter for everything, but it’s right for all but one of everyone so it’s close enough, the same way that in physics, π = 3 is close enough for most estimates and assuming the shape of a cow is roughly spherical is usually good enough.

I’d like to offer a corollary to the heavy hitter hypothesis:

There’s always a better version of deal than the one you’re hitting.

You can sometimes find these deals by stacking things in a line, like by earning 2% for buying something with a Citi Double Cash and earning additional spread by paying your bill using a spread on a payment service or by getting even trickier. Other times, you can find these deals at your local credit union; they may offer a grocery card that earns better than an American Express Personal Gold card, which would be enough at face value. Bot sometimes the credit union also lets you pay your bill with a HELOC, and lets you pay your HELOC with a profitable bill pay service, and maybe has a transfer bonus too.

Always be probing!

There’s always better pizza than the one you’re eating too. Not pictured: Literally any other pizza.

  1. Citi ThankYou Points has a 50% transfer bonus to Turkish Miles&Smiles through June 15. The best use of this program since the Spring devaluation has been for travel on Turkish metal, but there’s still plenty of other opportunity with a 50% bonus, like flying to Hawaii or Alaska on United in coach for 10,000 miles in coach, or 15,000 miles.

    What’s the catch this time? Finding partner award space on United metal is currently a bit like finding a $100 bill on a street – it’s not like it’s never happened, but I don’t like your odds. (Thanks to OK-Anywhere6998)
  2. Discover, in a move that shows it’s still proud to be in last place in the major card networks, has a $100 referral bonus for both the referrer and the referred on its quarterly bonused IT card. The referred also gets one year of double cash back paid out in a lump sum. (Thanks to DDG)
  3. As of May 4th, the Chase Modified Double Dip is double dog dead. I’d hoped we’d find a workaround, but that seems unlikely at this point.

    The MEAB preferred double dip of a Sapphire card combined with an Ink Preferred card is still alive and well.

Have a nice Tuesday friends!

Another May 4th double dip.

  1. American Express’s promotion for 10x on dining for up to $25,000 in three months for the referrer after referring someone else to AmEx ends on Wednesday. To make this last a little longer, remember AmEx referral hacks:

    – One 10x bonus per account number
    – Referral links saved before Wednesday will have the 10x bonus attached even if the referred applies for the card after Wednesday
    – If the referred is denied on first application but later approved after reconsideration, the 10x bonus will activate for the referrer, even after the expiration

    Combine several of the above to extend 10x even further, and remember you can always chat with American Express to confirm that a referral bonus is attached after three days.
  2. Giftcards.com has new codes for 10% off of $100 Visa egift cards. Codes to try:

    – VISASUMMER10
    – SUMMERVISA10
    – SUMMER10

    These codes don’t appear on major shopping portals so probably won’t payout, but you miss all the shots you don’t take. If you’re having tracking issues with this site, see this post and also note that all Safari desktop transactions may also currently not track with giftcards.com.

    These are Pathward cards. Several online liquidation channels for these dried up in the last couple of weeks, but there’s always a play and there’s always Kiva as a last resort if you don’t have other options.
  3. The Citi Shop Your Way Rewards Mastercard sent out mid-month offers late last week, we’ve seen:

    – 200,000 Shop Your Way Rewards points for $750+ in online shopping
    – 250,000 Shop Your Way Rewards points for $1,000+ in online shopping
    – $70 statement credit for $1,000+ in online shopping
    – $50 statement credit for $750+ in online shopping
    – 10,000 ThankYou Points with $1,000+ in online shopping

    (Thanks to MVC, Brandon F, irieriley, and Brooke)
  4. Giant, Stop & Shop, and Martins stores have 10x points on Uber and airbnb gift cards through Thursday, limit $2,000 per account. Of course with Pepper Rewards you can get effectively the same deal from home, but probably only for a couple more weeks.
  5. American Express offers has $300 back on $750 or more at Holland America through August 31. (Thanks to FM)
  6. In case you’re wondering how bad the Ultra Low Cost Carrier (ULCC) airlines are doing at meeting the current traveling public’s needs, two pieces of news will tell you: (1) On Friday Frontier eliminated change fees on non-basic economy tickets and added Euro-Business style blocked middle seats on some tickets. Then this weekend, (2) Spirit eliminated both change fees and cancellation fees on all tickets.

    Of course, you could look at Frontier’s earnings or Spirit’s earnings for Q1 2024 earnings and see it in number form. [Spoiler alert] They’re both great at losing money, and they’re both good at using accounting tricks to make the losses look less grave.

ULCC post-COVID economic models in a nutshell.

  1. American Express offers has a new card linked offer for $75 back or 7,500 SkyMiles on $200+ in cumulative Delta airfare purchased by August 15. So far these have only been seen on Delta co-branded cards.

    Delta makes this offer easier to game than most airlines.
  2. Do this now: Register for 3x United miles at IHG properties through August 31 for stays booked by June 30 for up to 15,000 earned miles.

    IHG points convert to United miles at 2 miles per dollar normally, which means 6x under this promotion.
  3. Kroger.com has 5% off of most third party e-gift cards with promo code MAYMADNESS through Saturday, including travel favorites like Delta, Uber, and airbnb. You’ll also earn 4x fuel points on these purchases.

    1,000 fuel points is worth between $15 and $25 on average, though you can get up to $35 in value. The Daily Churn has a great episode on maximizing Kroger fuel points. So, you can think of those as an additional ~7% off on average.
  4. Kroger has a 4x fuel points promotion today only on third party gift cards excluding Amazon. Pepper Rewards continues to depress the market, but there’s a growing sentiment with several data-points suggesting that Pepper’s insanity will end before June does.
  5. Staples purportedly has fee free $200 Mastercard gift cards starting Sunday and running through the following Saturday, limit five per transaction. I can’t actually find this offer in the weekly ad so double check before buying, but they did run the promotion last year for the same week so it’s likely real. (Thanks to GCG)
  6. The American Express Morgan Stanley Platinum card has a 125,000 Membership Rewards sign-up bonus after $8,000 spend in six months, which matches the previous high offer for this card. There are a few reasons to care about this card, principally:

    – It’s historically been more churnable than other Platinums
    – It offers an authorized user Platinum card with no additional fee, including lounge access

    You need a Morgan Stanley account to be eligible. Current accounts that should qualify include Platinum Cash+, AAA, Access Investing, or a company retirement account.

Have a nice weekend friends!

Good news on two fronts for Lubbock Holiday Inn guests: (1) It’s not the worst Holiday Inn, and (2) you’ll earn 3x United miles.

Background

Behind most FinTechs is one of a handful of partner banks, common ones include: Evolve, Stearns, Sutton, Cross River, and Celtic, but there are others. Somewhere between an average FinTech and a partner bank you’ll sometimes also find a Banking-as-a-Service player, and there are even fewer of those. Common BaaS names that you may have heard of are Solaris Bank, Green Dot, and Solid.

NOTE: In case you’re wondering, Banking-as-a-Service is nicknamed BaaS because the finance industry often lacks creativity and tries to hide it with focus group generated names designed by committee to appeal to millennials on paper, but the names they arrive at don’t actually appeal to millennials in practice.

April Showers

Synapse, a somewhat popular BaaS platform, filed for bankruptcy in April and for the most part no-one noticed because everything seemed ok for FinTech platforms built using Synapse, because TabaPay (yet another BaaS) struck a deal immediately to buy Synapse’s assets and assume its business operations.

May Gray

A few days ago though, TabaPay announced that it was terminating its purchase agreement of Synapse because of issues with TabaPay’s partner bank, Evolve, funding accounts related to the transaction. Of course, just like a reality TV show, Evolve says that it’s not true because of course they did. Then, Evolve froze the assets of multiple FinTechs built on the Synapse platform because of course they also did that.

After the agreement was called off on Tuesday, a bankruptcy judge went on record to say that up to 20 million FinTech depositors are at risk due to Synapse’s bankruptcy and the failed deal. What does at risk here mean? It’s not fully clear, because typically a BaaS’s partner bank holds custodial accounts for customers and those are FDIC insured, but if they’re frozen and you can’t withdraw them, then FDIC insurance doesn’t mean anything for access to your cash. Additionally, depending on the financial structure of the custodial account, FDIC insurance may be insufficient too.

The Effect on FinTechs

Since Evolve froze FinTech accounts worth $114,000,000 related to Synapse this week, we’ve seen ripples through multiple FinTechs including Juno and Yotta, each of which have had their customers’ accounts frozen by Evolve. My personal, uninformed opinion after watching the Silicon Valley Bank drama is that the federal government won’t let FinTech users lose this money, but of course my opinion tends to have no bearing on reality.

The Advice you didn’t Ask For

Juno had been an interesting tool for manufactured spend at multiple points in the past, but that’s changed recently even without the Synapse drama. Some manufactured spenders still have significant funds on deposit that’s no longer accessible though, and there are indications of issues at other FinTechs too, including but not limited to Yotta. So, while the Miles Earn and Burn way is “always be probing”, I’d sit back on probing any FinTechs that might be involved with Synapse for the time being.

Good luck out there friends!

The finance community’s premier product and industry name committee.

  1. Wyndham points can now be redeemed for all-inclusive resorts in the Caribbean, Central-America, and Mexico. Resort prices are either 15,000 or 30,000 points per night for two guests.

    Don’t forget that the Wyndham Business Earner Barclays card earns 8x and gives a 10% rebate on points bookings, which makes this a very solid deal. (Thanks to DoC)
  2. TheGiftCardShop.com has fee-free Visa gift cards with promo code GRAD2024, though you’ll still pay for shipping, and it seems to work for up to $10,000 in purchases per order too.

    These are Incomm gift cards. Incomm cards have sporadic liquidation issues in recent history which can largely be summed as: (1) sometimes full value transactions are blocked, and (2) usually you can’t do more than three back-to-back transactions with the same type of card.

Have a nice Wednesday!

This week’s blog posts.

  1. Office Depot / OfficeMax stores have $15 off of $300 or more in Visa gift cards through Saturday. For best results:

    – Try for multiple transactions back-to-back
    – Try and get even multiples of $300 for better discount stacking
    – Link your cards to Dosh

    In theory these are limit 10 per transaction. These are Pathward gift cards.
  2. Giftcards.com has 10% off of $100 virtual Visa gift cards using promo code SUMMER10. The code only applies to three per order, but multiple orders work fine because rules only matter sometimes.

    These are Pathward gift cards too. (Thanks to SPX)
  3. Bank of America has a small business checking account bonus of $1,000 for bringing $30,000 in new funds within 30 days of opening the account and keeping an average balance of $30,000 or more between days 31 and 90. Depending on how well you play timing, it’s an effective APR of between 13.5% and 20.3%. The account must by open by July 31.

    You can also register for a fast track to Preferred Rewards through the same funds and promotion, which frankly is a better deal than it probably sounds. (Thanks to DoC)
  4. The Citi Strata Premier card has a meaningful update: It now includes travel insurance for luggage, delays, and common carrier cancellations and interruptions. Just like everything Strata related, Citi botched the rollout though. This time, they posted the terms and conditions and a FAQ, but then pulled them a bit later. I did read through them while they were up, and the summary for trip delay insurance is (was?): UPDATE: Benefits guide here

    – Trips must be paid in full with the card for revenue tickets for coverage
    – Taxes and fees must be paid in full with the card for award tickets for coverage
    – Round-trips required, one-way bookings may not count [needs to be re-verified]
    – Trip delay insurance requires a 6 hour delay
    – Maximum $500 per incident

    The Sapphire Reserve and US bank Altitude Reserve have better travel insurance than the Strata Premier, especially because you only need a partial payment with those cards for eligible coverage, and one-way trips are covered too as long as you’re away from your home city.
  5. Finally, personal American Express Platinum cards have changed the criteria for at least some authorized user bonuses, requiring that the authorized user card be a Platinum version which has an additional annual fee. That is, the free version of the authorized user cards don’t count for a bonus.

    We haven’t seen this on other cards or business cards yet. (Thanks to Xero Clarity)

Happy Tuesday!

Another rule that only matters sometimes.

Introduction

It’s been a couple of weeks since we talked about thinking about the velocity of money as an APR. As a quick reminder, when you make a spread for moving money around, you can think of the profit in terms of simple APR as:

APR = spread * banking_days / settlement_time

In the example from last time, a spread of 0.65% gave an effective simple APR of 54.6%.

Making it More Complex and Accurate

But, when you’re earning a spread, you’ve got that spread to invest after it’s paid out too which makes simple APR tell an under-optimistic story: Basically, if you earn $650 for moving $100,000, next time you’ll have $100,650 to move, so you’ll earn a bigger payout if you reinvest your earnings. Assuming you’re paid on some frequency we’ll call payout_frequency, we’ve got effectively a compounding APR (APRc) formula that tells a more complete story (editor’s note: if the formula isn’t rendering properly, check the web site here):

{APR}_C = \left(1 + \frac{{spread} \times {banking\_days}}{payout\_frequency \times {settlement\_time}}\right)^{payout\_frequency} - 1

As my super annoying physics and math professors used to say in college, the derivation of that formula is left as an exercise to the reader. Of course it’s not super annoying when I do it, it’s cute right? Right?

Putting that all together with the numbers from last time, spread = 0.65%, banking days = 252, settlement time = 3 (avoid kiting), and payout_frequency = 12 (monthly), we get a compound APR of 70.6%. If you find a spread that pays out every time you move money, payout_frequency becomes 252 and, you’ll net even more with an effective APRc of 72.5%.

Conclusion

A small spread can look unappealing and make your brain flash a 🤏 emoji, but a small number compounded together a bunch of times can still turn into a big number. Obviously if you can do better than 0.65% on your spread of profit – fees (which you often can), then things look even better.

Happy Monday friends!

MEAB in a few decades; just like present MEAB, except older.