EDITOR’S NOTE: I still have several guest posts from the holiday break that will go live on Fridays or Saturdays in the coming weeks. If you’d like to contribute a guest post, please reach out!

Also if you wrote to me over the holiday and I haven’t responded, it’s not you, it’s me. I’m still catching up.

  1. Staples stores have fee-free $200 Visa gift cards starting Sunday and running through the following Saturday, limit nine per transaction.

    These are Pathward gift cards.
  2. Hyatt elites can now buy “AA elite status for a day”, up to a whopping two times a year in the Hyatt mobile app. The prices:

    – Gold status for 5,000 Hyatt points
    – Platinum status for 8,000 Hyatt points
    – Platinum Pro status for 12,000 Hyatt points

    The best use cases are probably for checked bag benefits, main cabin extra seating for the account holder and maybe companions, and for international lounge access on economy tickets. You’ll earn bonus miles and you’ll end up on the upgrade list too, but your changes of an upgrade clearing are approximately the same as your chances of being involved in a plane-crash while you’re on a sail-boat moored in a bunker. (Thanks to blinyellow)
  3. American Express has a targeted offer 10,000 Membership Rewards for adding a no-fee Gold card to an existing personal Platinum account and spending $2,000 within six months on the new card. There’s an alternative link too which has different targeting.

    The authorized user card will show up on the user’s credit report, which is great if you’re trying to build credit for a minor, but less great for everyone else. (Thanks to DDG)

AA bag tag for when your status for a day is in transit.

Happy New Year, and thanks to everyone who put together a guest post over the break! I still several posts left that’ll go live on Fridays or Saturdays starting next week. If you’d like to put a post together, please reach out! Also, if you reached out to me over the break and never heard back, I promise I wasn’t just ignoring you – I was ignoring everyone. I’ll be playing catchup this week.

Now let’s dive in:

  1. The Chase Aeroplan card’s 1.25 cents per point cash-out limit was set at 200,000 points annually for 2025. Practically speaking there wasn’t a hard limit before this, but there was a soft limit of about seven figures after which you’d probably get a Chase shutdown.
  2. The Citi Shop Your Way card sent offers for calendar year 2025 that mirror those sent at the beginning of 2024. The credits are for spend in gas, grocery, or restaurants and reset monthly. We’ve seen:

    – $200 per month for $2,000+ spend
    – $150 per month for $1,500+ spend
    – $100 per month for $1,000+ spend

    For those who can’t math, that’s $1,200-$2,400 annually in statement credits on a no-annual fee card, and those will stack other offers too. It’s pretty big I guess. Also, apparently there’s another offer for travel and entertainment purchases monthly through 2025, with 5% back up to $80 monthly. Some have both offers. (Thanks to birt and tkpoints)
  3. The US Bank Leverage Visa business card has a sign-up bonus of $750 after $7,500 spend in 120 days and the annual fee is waived for the first year. This card is typically easy to get if you have an existing US Bank Relationship, and often even if you already have the card.
  4. Staples in store has fee-free $200 Visa and Mastercard gift cards through Saturday, limit nine per person per day, though in practice it’s actually limit nine per transaction.

    These are Pathward gift cards.

MEAB seen celebrating New Years Day 2025.

Introduction

It’s time for MEAB’s annual New Year tradition! Before we jump in to the regular short-form blog posts that litter the ground like glitter in a stadium after a Taylor Swift concert: A recap of travel hacking and manufactured spend in the last year with the most sophisticated, Shakespearean, high-brow form of story telling known to the modern world (checks notes, furrows brow): Animated GIFs.

Previous versions of the New Years special:

The GIFening

Is it “GIF” with a hard G like “girl”, or with a soft G like “jiffy”? Obviously there’s a right answer, anyhoodles, let’s dive in with the intensity of the Spirit airlines stock price dive in November.

We started out January 2024 wishing for a Technotronic inspired aircraft livery at KLM, which frankly set the stage for 2024 in so many ways; 2024 was poised to be the best year yet, and Technotronic was bound to break the top 40 again.

Reality came fast and dashed our dreams though, with American Express telling us in January that 40 products would be retooled in the coming year, and that Technotronic hadn’t done anything new for over 15 years.

United raised the cost of Lufthansa First and ANA First redemptions, the latter doubling in price. That’s ok though, we can just fly business class, right?

Then we tried flying Lufthansa Business Class, and well, uh, this P2 says it best.

The Justice Department decided to block the JetBlue and Spirit merger.

Spirit Airlines executives react to the blocked merger, get ready to get back to work.

Southwest had its own crisis when Elliott Management became a majority shareholder and demanded major changes and new fees at Southwest. Probably in the name of altruism?

In the credit card space, the shrewd Goldman Sachs reacted to its massive Apple Card losses.

Based on language in the Terms and Conditions, it looked like the American Express Business Platinum $400 annual Dell credits would be going away at the end of 2024.

Then, we, uhhh, “celebrate” that they’re coming back in 2025.

On the other hand, churning Business Platinums and getting 99 employee cards with sign-up bonuses kept going all through 2024, marking more than three consecutive years of the employee sign-up bonus game.

American Express dropped a December surprise with the addition of $50 quarterly credits at Hilton properties on the Business Platinum card. It doesn’t move the needle, but hey, it doesn’t hurt.

Synapse collapses, leaving Yotta and Juno accounts in limbo and ultimately costing consumers than $85 Million in lost deposits.

In the first days after the Synapse collapse, community “experts” come out of the woodwork to tell us that no one is going to lose money based on solid evidence and “something something FDIC”.

Meanwhile, Bilt accidentally sent shutdown notices to many of its card holders, even though they weren’t shutdown.

Then Bilt’s VP of Rewards provided some of the best clues for a manufactured spend technique that many of his followers knew nothing about.

Chase opened new Sapphire Lounges which are some of the best lounges in the US, but then blew the goodwill by removing its Priority Pass restaurant benefit.

The biggest Buyer’s Group spenders spent 24 hours straight, awake in front of the computer on Black Friday.

Travel hackers made their first transfer of Membership Rewards to Alaska MileagePlan via the Hawaiian airlines integration.

American Express sees massive restaurant spend after floosies learn to cycle millions while dining out, decides to take action.

The American Express Gold card gets a $50,000 annual dining 4x spend capacity, and AmEx executives rejoice.

They also instituted a one million Membership Rewards cash-out annual cap at 1.1 cents per point on the Schwab Platinum card, and they called us names while doing it.

SideshowBob233 (pictured in costume) reacts to churners on his flight that have Chase deposit accounts.

Mesa executives wait for sufficient time to pass between a bad MEAB post and their impending launch.

MEAB (pictured on the right side) at a travel hacking conference meets other bloggers.

A churner finds a way out of pop-up jail.

And after getting out of pop-up jail, the churner realizes it may be repeatable.

MEAB does another math post (or two), tries to show off.

We rode high on cash-back debits in early 2024.

A few of those plays died, but we found workarounds, we just needed to think outside the box.

Kudos raced with shopping portals for payouts.

Virgin Atlantic became relevant with the introduction of the Virgin Credit card and its perks, some payment fun, and the introduction of dynamic pricing.

Critics review MEAB.

SAS announces a promotion to earn a million miles for flying on 15 different SkyTeam partners in Q4, travel hackers react.

SAS realizes people are taking their promotion seriously, and races to build its SkyTeam integration with quirky airlines.

Readers try and follow the hints in MEAB wisdom posts.

Botting several key deals made the money flow.

Tallying Carl’s 2024 earnings, prolly.

MEAB’s P2 flies Lufthansa First class for the first time.

Pepper Saga Part I:
Getting unlimited 10% off of Walmart, BestBuy, and Sam’s Club cards (Q1-Q2).

Pepper Saga Part II:
Unlimited 10% stops working, but new, daily targeted promotions start working after a hiccup or two.

Pepper Saga Part III:
Gift card resale rates fall in slow motion due to oversupply.

Pepper Saga Part IV:
A pitch deck for new investors claiming a total addressable market of $6 trillion, approximately 23% of the US GDP.

Pepper Saga Part V:
The company gives unlimited 20% off of Amazon and Walmart gift cards for a day and is probably nearly out of money.

Pepper Saga Part VI:
A Q1 2025 preview (Probably)

Pepper Saga Part VII:
(space left intentionally blank)

“Seat 21A? I didn’t know first class went back this far.”

“Oh no.”

[4 and 1/2 hours later after touchdown in seat 21A]

2024 finally redeems itself when Technotronic rewrote “Pump Up the Jam” for Bob’s Burgers in late 2024, proving to us that Belgium’s flagship band still has a chance at a KLM livery.

Happy 2025 friends!

EDITOR’S NOTE: I’m on an annual blogging vacation for the last two weeks of the year. To make sure you still have content, some of the smartest members of the community have stepped up with guest posts in my absence. Special thanks to today’s author, MEAB’s P2, for writing this followup to last year’s diary while I’m on vacation. I’ll see you tomorrow on January 1!

I’m a simple girl with simple needs. Like many of us, I like coffee in the morning, yoga in the evenings, and since I teach middle school, I always hope that a day will go by without hearing the words ‘skibbidi toilet’ or ‘hawk-tuah’. It’s not a lot to ask for, and most days two of those three things are usually accomplished. I’ll let you wonder which two. Anyway, as I said, simple.

At least I thought I was simple. Then my husband took me to Europe over the summer. 

It was not my first trip to Europe, in fact not even my first trip to Europe this year. And, since I’m married to MEAB, it probably won’t be my last. However, traveling with him has slowly chipped away at my “simple girl” aesthetic, and now I’ve surpassed the scale of “simple girl” to “passenger princess” and I fear I’ve landed firmly at “Bougie Bitch.” Because, my friends, this was the summer I flew Lufthansa First Class. 

I’d like you to imagine for a moment, if you will, this school teacher wearing thrifted pants and a Taylor Swift Eras Tour t-shirt arriving to Munich Airport with MEAB. We check in, and the ticketing agent at the counter said “You’ll go to the lounge this way. They’ll take care of you there, and you won’t have to board with all the other people.” I look at MEAB with my eyebrows shooting off my face as I mouth “other people”? He chuckles, because he knows what’s in store. 

We are two of four in the entire first class lounge. I’m brought a specialty margarita and given delicious food to eat. There are no babies crying, no jostling for space, none of the hundreds of minor inconveniences that might plague other people when flying. Just simple relaxation.

When the time comes for us to board, we are taken down a secret elevator and passage to our gate (though I’m told in Frankfurt it could have been a ride in a Porsche), where we board our A380. I’ve got my carry on luggage and pink backpack on and looking very much like a thrifty swifty. But no. This girlie goes UPSTAIRS (you guys, planes have stairs!) and I find my seat. A wildly comfortable window seat in first class. 

Immediately I’m given the best sparkling wine I’ve ever had. I’d like to call it champagne, but I think it was a sparkling Rosé. Either way, delectable. For the next ten hours I’m feted like a MFing princess. Caviar – check. Alcohol – check. Some of the best food (that’s also gluten free because life) – check. Lay flat bed – check. Pajamas – check. 

I’d be remiss if I didn’t discuss the bathroom. It’s literally larger than our main bathroom in our house. Not only that, but stocked with goodies. Mouthwash, facewash, toothpaste, Evian facial mist…I opened all the drawers, took all the pictures. You get the gist. All in all, it was life changing. Exceptional. Luxe. Bougie. 

Now, I won’t lie. It wasn’t my first time in international first class. However, the time before had been on American Airlines with a grumpy stewardess who thought gluten free meant I couldn’t have ice cream and an airline meal that was the worst chicken I’ve ever had. It was a truly disappointing experience on AA…not so on Lufthansa. 

The Lufthansa flight was my Nexus event. If Loki hadn’t fixed the sacred timeline, it’s very possible that the timekeepers would have popped right out and culled me right there. Because, my friends, this is when I went from a simple girl with passenger princess tendencies to a Bougie Bitch with uppercase Bs. 

Don’t get me wrong. I’m still a nice person. I still teach 8th graders American History, I scrape gum off my carpets, learn all the new teen lingo, and yell MAKE ROOM FOR SANTA when two kids start the weird, slow hug that tweens do. I’ll still fly Southwest to get to Mexico, and EasyJet to get to Munich if I need to. But the fact is that I don’t want to. The process of becoming a Bougie Bitch has been slow. So slow that you may not have even noticed if you weren’t looking for it. But that all came to a head this past week. Let me lay the scene.

For Christmas, MEAB took me to Europe. Why? Because this Bougie Bitch loves Europe and I love Christmas and so he took me on a quick tour of Christmas Markets. We went to London, Munich, Salzburg, and Vienna. It was a wonderful trip that culminated in a stay at the Park Hyatt Vienna and some of the most amazing coffee I’ve ever had in my life. We flew Air France home, and had a three hour layover in CDG. Easy right? Should have been. Except…our gate was in the K concourse in 2E. 

There’s nothing wrong with the K concourse. It’s perfectly fine by airport standards. Pretty, brightly lit, easy to access. No problems there. Except when we went to the lounge. The first sign of trouble was when we had to go downstairs to access the lounge. But, it’s fine, no worries. Our legs work, so we checked in and got a seat. That’s where it went off the rails. 

There was a family entirely spread out in one section. Parents, grandparents, small children. Food everywhere, on the floor, on the kids’ faces. They were very loud, and I’m not talking about the children. The grandparents were practically yelling a conversation. The Dad was walking around the lounge with no shoes…it’s a mess. Then, a very drunk guy sits next to us and is just…smelling of alcohol. There’s people milling about coughing over the food, people talking on Facetime without headphones. If the boarding area for Southwest Airlines was turned into a lounge…that’s what this was. 

And that’s when I knew. I didn’t want to be with the other people, I wanted to be in a first class lounge, sipping champagne. Because I’m no longer a simple girl. I’m a Bougie Bitch. 

*disclaimer: Please don’t think less of me, dear reader, I know that what I experience is exceptional and I’m grateful every day to MEAB for providing me with such elegant experiences. I run a silly little blog about historical postcards at myhipstory.com, I’m a history nerd who wears mostly thrifted clothes and still pays out of pocket to buy pencils for my classroom. I just also really like caviar and champagne.* 

Evolution of a P2: Post Bougie Bitch transformation.

EDITOR’S NOTE: I’m on an annual blogging vacation for the last two weeks of the year. To make sure you still have content, some of the smartest members of the community have stepped up with guest posts in my absence. Special thanks to TeddyH for writing a thoughtful contrarian post to the conventional wisdom in the community. I’ll see you on January 1!

Introduction

Oh, the 5/24 status. In a sea of rules that we have to keep track of in our game, 5/24 is without a doubt the most well-known churning rule. Even CNBC has an article (EDITOR’S NOTE: A terrible, awful article) on it as an excuse to dump TWENTY-FOUR affiliate links!

Perhaps because of this, most churners don’t even consider what could happen if you did decide to go over 5/24. You’ve probably decided to stay under 5/24 years and years ago—when you first found out about credit card SUBs prolly on The Points BlogTM brought to you by Chase® SapphireSM Reserve®. Since then, you probably have never thought about going above 5/24. Like how you also always stop the microwave one second before it beeps or if your name ends with 233 how you always step on every rake you see.

I’m here to present my unpopular opinion today that if you are reading this blog, you almost definitely should go over 5/24. Here’s why.

The Current State of Churning Chase Cards

Based on my scientifical survey of all of my imaginary friends, people who stay under 5/24 do so mainly because going over would lock you out of the Ink Train every 3 months, the Sapphire MDD every 48 months (which has been patched), and most importantly, stop the flow of oh-so-valuable Ultimate Rewards points which you need for all those Hyatt redemptions you are going to make. Oh, and did I mention the coveted Southwest Companion Passes?

To these people’s credit, the plays I just mentioned above are cult classics and they are so easy and straightforward! Buying VGCs at Staples with a CIC and turning them into MOs is usually the first thing I will talk about if one of my non-imaginary friends happens to get curious about

MSing. Unfortunately, though, it’s starting to look like these straightforward plays are becoming a thing of the past, and with it the Chase landscape has changed significantly even just over the past year.

The Ink Train

In the past, it was possible to open a new Ink card roughly every 3 months. With sign-up bonuses around 90,000 points, that would net you 360,000 points if you opened an Ink every 90 days for the whole year. Unfortunately, Chase has tightened up approvals for new Ink cards significantly, and reports show that it’s essentially impossible to get a fifth Ink card if you hold four, and even if you hold just three your approval odds would only be at 18%.

On top of that, Chase halved the referral bonus cap on the Ink cards to 100,000 points, significantly limiting two-player mode as well.

And the cherry on top? You can’t even product change Ink cards until 3 months after you open the card nowadays.

These new changes reduce the 5x Office Supply capacity, invite more application scrutiny, as well as reduce the referral cap, making the Ink Train significantly less appealing than what it once was.

What should I do instead?

Like I was saying previously, the modern MS landscape is quite different from the traditional Staples runs of the past. Consider the key differences:

  • High multipliers are more important than the multiplying category
  • In fact, the category being bonused is no longer important.
  • It is more important than ever to consider cards that can phone a friend

There are Amex cards out there that give you 475,000 points instead of 90,000 points for an Ink. Why stop there? Apply twice in a row and now you can phone a friend on this card too for another set of 475,000 points.

Those Hyatt Points

But Teddy, where am I going to stay if I don’t get a fresh Ink SUB every three months? You may ask. Here is where I would argue that the microwave logic is coming back into play. With four Ink cards a year you are earning 360,000 points in sign-up bonuses. Once you maximize the office supply spend on these cards you’ll end up with 875,000 points. If you did the same thing with the aforementioned Amex card, you’d end up with 1.9 million points, netting you over 2 times more than you would get with the Inks.

Yes, Hyatts have good redemptions but I can tell you straight away that if I told you to double the points price on any of the rooms you would start to reconsider. Those 45,000 URs you used for Park Hyatt New York could have been 97,650 MRs; and with 97,650 MRs even if you decided to transfer MRs to Hilton (shudder) and book the newly devalued (second shudder) Waldorf Astoria, you’d still have a decent chunk of change left to put a mother-in-law (third shudder) you hate in the adjacent Doubletree.

Treat Points like a Currency

And currencies can always be exchanged.

Remember that many airlines sell miles at a discount very frequently. That cash back card that can phone a friend can be used to make an Aeroplan redemption.

Better yet, you can even trade with friends instead of dealing with the airlines/hotels themselves to make it even sweeter. Yes, you can always find a buddy that will buy Amex points from you at 1.35cpp; just like how you can also find a buddy that will sell Hyatt points to you at the same price. Does that mean you’ve transferred Amex points to Hyatt? I’ll leave you and your new Guest of Honor booking to decide for yourselves.

These jet bridge advertisements are getting… oddly specific.

EDITOR’S NOTE: I’m on an annual blogging vacation for the last two weeks of the year. To make sure you still have content, some of the smartest members of the community have stepped up with guest posts in my absence. Special thanks to Cashback Cowgirl for authoring this post and for her alternative viewpoints on churning. I’ll see you on January 1!

* Disclaimer: I am not a financial advisor and this is not financial advice whatsoever. These are just my own opinions and personal preferences I am sharing. Tax implications vary by individual.

Most of us agree how important it is to have an emergency fund — it’s often one of the first recommendations from financial planners along with tracking all of your spending each month. A three to six month emergency fund recommendation is common. Some of us, including myself prefer a one to two year emergency fund, or more. It depends on a lot of factors: risk level, type of employment, number of dependents, personal preference, etc.

In the recent past, many of us who prefer a larger emergency fund have been concerned because that money was not getting much interest — just sitting there eroding. Just a couple years ago it was hardly getting anything as interest rates were near zero. So many of us opted to just put all we had into the S&P 500.

Today, at this time of writing 4%+ APY is fairly common — around 5% just a few months back. So things have changed quite a bit.

Well even better, is that if you are in the bonus hunting game, that emergency fund can also serve as a bankroll for the bonus hunting. It then becomes dual purpose: both a bonus hunting bankroll as well as an emergency fund. I call this the BHEF — the Bonus Hunting / Emergency Fund.

Bonus Hunting. For the purposes of this article, let’s define bonus hunting as any income activity related to:

  • Deposit account sign up bonuses
  • Brokerage account sign up bonuses
  • Credit card sign up bonuses
  • Cashback rewards — both credit and debit cards
  • MS related activities

Beating the Market. Personally, I am finding that I am beating the average market returns with the money in my BHEF — by quite a bit actually — often at 10-28% APY for large bank sign up bonuses and solidly 16-33% with MS related activities (IYKYK).

Size of BHEF. I have enough of a BHEF right now that in addition to it functioning as a bonus hunting bankroll it also functions as a 31 month emergency fund. My goal BHEF will perhaps end up functioning as 75 month emergency fund.

I am currently making my 31 month BHEF work for me getting 10-33% APY with it.

My BHEF is not too large, but large enough to simultaneously take advantage of the larger juicy bank account sign up deals — e.g. invest $20,000 for 60-90 days and get $1,000 (BofA Business Advantage Checking) & invest $30,000 for 60-90 days for $1000 (BMO) — along with plenty of MS.

So for me there is no penalty having this large of an emergency fund, since I am beating the average market returns handedly, tax implications included*. It’s very satisfying that no matter how the market performs or if I lose my income, I am good for several years.

BHEF Formula. I don’t count credit card float as part of my BHEF — whether that be introductory 0% APR float or the monthly 30-50 day float. However, even though I don’t count float as part of my EF, I still use it as a tool when I can as part of my bankroll gaining 10-33% APY on it.

For me my BHEF is the following simple formula:

Current Assets – Credit Card Debt = BHEF

Current Assets for the most part are very liquid and spans dozens of accounts. My Current Assets include Accounts Receivable, Certificates of Deposit, Checking accounts, Gift & Store Card Balances, Investments (Brokerage Accounts etc.), Money Market accounts, Online Payment Systems balances, Rebate App balances, Rewards Points, Savings accounts and Wallet Cash.

The following is a screenshot of my Gnucash bookkeeping tree. It shows the breakdown of Current Assets and Credit Cards. The credit card debt is divided into two sub-trees: business and personal. [It’s handy to separate the credit cards into these two sub-categories since only the personal credit cards show up on the personal credit report allowing me to quickly observe my total personal credit utilization (PCU).]

Accounts Receivable is never more than say $1500 (in short term loans only) and Accounts Payable is never really more than say $100 which I pay off each month — e.g. reimbursing boyfriend for buying something for me with his cash like at a grocer which only takes cash (Winco).

I can quickly see what my current BHEF is by looking at the two circled numbers below in my Gnucash software — a simple subtraction.

Security. This bonus hunting game for me has been a blessing. Not only do I beat the market, I have multiple years of security. I am good if I need to replace the roof or do some other major home repair. I am good if I have to replace a vehicle, etc. — paying for them in full, no financing.

Low Risk. In my opinion, there is virtually no chance for me to lose money with the BHEF unlike with investing in the stock market, which could have gigantic losses / corrections at any moment. 10-33% year over year annual returns with very little chance for loss on an EF is quite appealing! *

Too large of BHEF. At some point though the BHEF gets large enough to where it makes sense to perhaps use the excess to say fast pay a mortgage or perhaps invest in something like an S&P 500 ETF. It all depends on one’s financial goals. After I have reached my BHEF goal, I’ll be investing the excess into S&P 500 ETF. We’ll see after I reach my 75 month BHEF goal how well I can make it work for me — if it beats the market handedly who knows I may increase the size of my target BHEF.

Plans. I plan on never having to touch the money I put in the S&P 500, having my BHEF to fall back on. My personal plan is to keep my BHEF topped off, continue bonus hunting for the rest of my life, and put all the monthly excess blindly into the S&P 500 completely ignoring the market news and never selling it unless I need to harvest capital gains (or losses) to reduce tax liability.

I might consider buying dips in the market, if I am feeling cute and my BHEF is maxed out, but I’d have to weigh the risk of reducing my emergency fund during a recession in that moment. I personally will not risk more than say one third of my maxed out emergency fund when buying a large dip.

Summary. A large emergency fund perhaps isn’t a bad idea at all if you can make it work for you, for example with the bonus hunting game. (I also plan to max out my 401k/IRA as well each year.) A BHEF also perhaps makes MS a bit easier having a bit more flexibility when managing float.

Afterthoughts. A portion of a very large maxed out emergency fund could also be useful sometime in the future as part of a down payment on a home — if the occasion arises and there is real need for it.

Clarifications. When I say I am getting 10-33% on my BHEF with bonus hunting, I am referring to the large chunk of assets that would of otherwise gone into say the S&P 500.  I am not including the gains from say very active MS loops which alone (with just float) can result in obscene amounts of % annual return.

– Cashback Cowgirl

EDITOR’S NOTE: I’m on an annual blogging vacation for the last two weeks of the year. To make sure you still have content, some of the smartest members of the community have stepped up with guest posts in my absence. Special thanks to shredder05 for a compelling origin story. I’ll see you on January 1!  If you’re interested in writing a guest post, please reach out!

I stumbled into the world of credit card churning almost a decade ago while still in grad school. My partner and I were strapped for cash, but I wanted to travel. With minimal expenses, I had to quickly learn how to manufacture spend.

My first big play was getting two SPG cards at the same time, each with a $7,500 spend requirement. Back then, Visa gift cards easily loaded to Venmo, and my genius plan was to run all $15,000 through them in $500 increments. I was quickly banned. I wasted those points as a grad school graduation present to myself at Atlantis in the Bahamas. But those SPG points and a shutdown from Venmo marked the start of realizing the potential of credit card churning.

I finished the SPG spend requirements by grinding out one $500 money order at a time, when I probably should have been studying. I realized it was a viable way to generate cash. After graduating, I decided to focus on churning full-time. Over the years, I’ve managed to turn it into a respectable income. Throughout those 10 years, I have lost many “plays,” but I have continued to find new ones.

I moved on from money orders and figured out ways to mostly manufacture spend (MS) from home, even with shutdowns from multiple banks. RIP Chase, Barclays, SoFi, PNC, and Capital One. And I’ve survived the death of many plays, including buying money orders with credit cards, honeymoon funds, Plastiq, PPK, credit card debit codings, and countless others. Every time a play dies or I get shutdown, I think it’s the end. But after those few days of grief, I think I love the pressure and search of finding a new play the most. Those are the best days in this hobby. There is always something else.

Sometimes I get insecure about doing this full-time. It’s easy for people to question and judge, and it’s not a job my parents can brag to their friends about. I’m grateful for my partner who provides my health insurance and has always been my biggest supporter of doing this. And I’m grateful for the friends who have helped me along the way; there have been many. Through hitting milestone statuses and plays dying, I’ve learned that the key to success in credit card churning is resilience, creativity, and fostering relationships. There’s always a new opportunity around the corner, and the thrill of finding the next great play keeps me motivated. Most importantly, there is always someone who is willing to help you. I don’t recommend sharing plays with large groups of people, but message that person you occasionally talk to and brainstorm together. This might not be a conventional career path, but it’s one that brings me joy and has led me to have meaningful, lasting relationships. And ultimately, that’s what matters most.

– Shredder05

Screenshot of Shredder05’s phone, circa 2017.

EDITOR’S NOTE: I’m on an annual blogging vacation for the last two weeks of the year. To make sure you still have content, some of the smartest members of the community have stepped up with guest posts in my absence. Special thanks to Graham, the author of the TC Tailwind Blog, who candidly shares his story on the dark side of credit card churning for writing this post. I’ll see you on January 1!

tl;dr: If you have multiple players with different tax situations, being smart about who earns taxable referral or bank account bonuses could more than double your post-tax earnings. Or it could make no difference at all. Calculate the difference it would make for you, by punching in a fake 1099 to last year’s TurboTax file.

Credit card sign up bonuses and points from spend aren’t usually considered taxable, but referral bonuses, checking account promos, and plenty of other kinds of rewards are. This tax treatment means that if you’re a high earner, you could be paying up to half of the bank-assigned value of your points in taxes. For some pathologically high points valuations, this could even result in owing more in taxes than what you think your points are worth. These facts make it worth doing what you can to optimize the tax treatment of your points.

In investing, Asset Location is the concept of putting assets with poor tax treatment into tax advantaged accounts (eg. holding bonds in your 401k to avoid paying annual taxes on the dividends). In the churning world, those of us with multiple players can practice a similar concept, by locating our taxable earnings with the player with the most favourable tax situation.

How much of a difference can this location strategy make? Let’s run a few scenarios. In each scenario, we’ll assume that:

  • We’re going for a $900 Chase checking bonus (while SideShowBob233 howls faintly in the distance).
  • It is equally convenient in our churning plans for P1 or P2 to receive the bonus.
  • There are no special tax situations, such as ample capital losses that one player or the other could use to balance out their earnings.

Here are a few scenarios:

  • The Best:
    • P1 is a very high earner in California and would be subject to a 37% Federal, 3.8% NIIT, and 12.3% State tax on the bonus, for a total of 53.1%.
    • P2 has no income, can take the standard deduction, and will be subject to no state or federal tax.
    • Results: P1 would pay $477.90 in taxes, keeping only $422.10 of the bonus. P2 would pay $0 in taxes, and keep the full bonus. Earning the bonus with the right player would more than double your earnings from $422.10 to $900.
  • The OK:
    • P1 and P2 live in Florida, and would be subject to only a 24% and 12% Federal tax respectively on the bonus.
    • Results: P1 would pay $216 in taxes, keeping $684 of the bonus. P1 would pay $108 in taxes, keeping $792 of the bonus. Earning the bonus with the right player would moderately increase your bonus earnings by $108 from $684 to $792.
  • The Wash:
    • P1 and P2 are married and file their taxes jointly, meaning they share a tax rate.
    • Results: It doesn’t matter who gets the bonus, it will increase their joint taxes.

Does taxable bonus location matter to you? Taxes are complicated, so it’s hard to know for sure. You might be able to eyeball the impact by looking at the above scenarios and seeing which looks closest to your situation. For an even more exact estimate, boot up last year’s TurboTax (or other tax software of your choice). Try punching in a fake 1099-INT with $900 in Box 1, for P1 and then for P2. That will tell you how much more each player would have paid in taxes last year, if they’d gotten this Chase bonus.

P.S. If you’re interested in more nitty-gritty financial optimization content like this, check out my blog. There’s a subscribe box at the bottom of every page, if you’re interested in seeing new content as it comes out. And if you think I’ve missed something, gotten something wrong, or should write future posts on a particular topic, please drop me a line.

– Graham

SideShowBob face-planing while howling in the distance.