Author: matt

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 who is infamous enough to not need an introduction but get one anyway, SideShowBob233. I’ll see you on January 1!  If you’re interested in writing a guest post, please reach out!

So it’s been about a year since my Chase post, which has been mostly well received.  I’m a year older, a year wiser (really you’re thinking, are you wiser SideShowBob233 – and yes you’re still saying the 233 part), have a lot more rakes behind me (but still too many in front of me) so do you still think Chase deposit accounts are a bad idea?  

The answer is yes.  After my post I continued to hear many people report shutdowns with deposit accounts, including quite a few shutdown within a couple of weeks of opening the account for a bonus.  Each one makes me want to put a rake in front of them and watch gleefully (which is how I do all my watching, sometimes with only my clown shoes on – get that image out of your head!) as they step on it.  Why people risk their Chase relationship over less than $1,000 is a mystery to me, as is how to walk past a rake without stepping on it.  

What really gets me mad (about this – I’m not talking about my anger over Bart and definitely not about my anger over people who spell “lose” as “loose”) are the people who argue with me that it’s fine and that I’m making a big deal over nothing.  Some people took issue with my characterization that you are more likely to get shut or that you will get shutdown, which is a fair argument if you take my posts as fully serious, which is something only a clown would do.  

When I say you will get shutdown I’m talking odds, but with odds there’s never a guarantee.  However, my trusty buddy Chad ran the numbers for me and there is a 420.6969000000000012% increased chance of being shutdown by Chase when you have a deposit account (I believe Chad had some assistance with his calculations from the Fluz interns).  Now that doesn’t mean you will be shutdown, but I don’t like those odds (OK maybe I like parts of the odds, but not all together).  And again $1,000 is nice (I could get a gold-plated rake!) but you can get that from a single Ink card bonus so why risk it?  Not to mention Chase deposit accounts report every penny to Early Warning System (EWS).  

“So SideShowBob233” you’re thinking (let’s face it you’re not thinking that you’re saying it out loud and your family is wondering whether your meds have worn off and you’re talking to your imaginary friends again), what if I haven’t heard of a single Chase shutdown ever caused by this?  To that I say you need to get out more, especially out of the rubber room they keep you in because it happens often, both to people who know better and to people who don’t know better but should (and even to random people who don’t churn at all, because Chase really doesn’t care if they screw you over for no reason).  Even if you don’t hear about them, I hear about them, and if you dig enough you will too (or they’ll restrain you for trying to dig in your rubber room, if that happens definitely don’t mention the clown with the orange hair and rakes, it won’t help your case).  

I’d like to end this by pointing out there are tons of banks and credit unions (and I weighed them all to confirm there are in fact tons, not just metric tons) all of which are not Chase, do not report to EWS, and also have bank bonuses.  So please stay away from Chase (and Citi) bank bonuses.  There are even some lovely fintechs that are not banks and for a fee (but often for free!) will lose your money for good.  

Now I’d really like to end this (and I can hear you muttering SideShowBob are you ever going to really end this, but you left off the 233 this time because the elf on the shelf told you to stop saying it because it makes you sound crazy) by suggesting you use a business bank account for anything you can, especially one that does not report to EWS (some do, like BOA business checking for some sole prop businesses). Stay tuned for more.

– SideShowBob233

SideShowBob233 (pictured) dictating this article to MEAB (pictured?)

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, a hilarious demi-whale with a penchant for writing, irieriley for writing this post. I’ll see you on January 1!  If you’re interested in writing a guest post, please reach out!

If you’ve managed to find your way to this little corner of the Internet full of award hackers, manufactured spenders, degenerate gamblers, and various other scallywags, chances are you’re drinking from an uninterrupted firehose of information. 

There is just so much content and media to consume (and that was even true before the era of AI slop), even in the churning space, that it can be difficult to stay on top of what’s going on.

Between public blogs, private groups, reddit, neverending Doctor of Credit comments sections and hundreds of pages of Flyertalk discussion on the proper Maldives soundtrack when flying to Conrad Rangali, it’s impossible to read everything.

I don’t think you should, either. If you only get your share of churning news from one source, you’re in the right place. Matt is very good at getting the point across succinctly (unfortunately, I am not), and understanding some references here requires reading between the lines. Some of the plays shared here and elsewhere aren’t spelled out 100%, whether for brevity, sensitivity, or both.

Due to this (and the general deluge of noise in the space), you likely find yourself skipping past posts and comments talking about cards you don’t have, airlines you don’t fly, and plays you aren’t playing. 

In some cases, that makes sense. I care much less about Kroger than someone in Ohio. But when there isn’t a clear geographic or similar barrier to something, you’re likely making a mistake by not taking the time to understand the play. And sometimes, even geography doesn’t matter – as long as you “live, work, or worship here”. 

Pictured: Vincent “irieriley” Adultman explaining his local business to a CSR at a credit union in Twin Falls, Idaho

Things change really fast in manufactured spending, and some of the most profitable things don’t last long*. The amount of plays I decided to ignore over the years because I wasn’t already doing it are up there with my penchant for calling my very-not suave self  “Rico Suave” in high school in the annals of irieriley’s regrets. 

While I believe you should do your best to understand an angle, there are definitely levels to it. If the DQ thread on reddit is delving into a trivial change to an Amex coupon benefit or Doctor of Credit comments are discussing free Hawaiian BBQ sauce, you can probably safely skip learning more, unless you really like Audible (or BBQ sauce).

But if you’re in a smaller community and someone is discussing the intricacies of how to complete a fuel dump mistake fare or how a new fintech fits into a liquidation strategy and you don’t understand the conversation, you should be trying to figure out why. 

It may not even be a conversation – it could be an observation that you make yourself as part of probing and think to yourself why on earth does this need to be spelled out as company policy?

Some examples of things I’d probably want to look deeper into if I came across them and didn’t understand them:

  • Why, oh why is MEAB’s favorite credit card a Sears store card?
  • Why does a cash back fintech not pay out on certain vendors? And for that matter, why do they not pay out on a subscription to a churning podcast?
  • Why does the Android app store say everyone who downloaded a different fintech’s app downloaded the app of a random credit union in Lubbock?
  • Why are people talking so much about the timeframe for the 35% rebate on cash business fares booked with MRs via an Amex Business Platinum? I thought transferring was always the best value?
  • Why does the new group I’ve joined talk so much about Costco gold?

It might not necessarily even be some big, hidden secret. If the blogosphere is to be believed, the slowdown on Amex NLL offers and continued prevalence of pop-up jail was probably one of the biggest negative trends of the year for the hobby. 

But I’d argue that the most negative news of the year, especially for our friendly cetacean population, is the cap on Schwab cash out and subsequent cap on 4x dining MR points on the Amex Personal Gold. There’s not much to parse through here – no need for a SUB when you’re a whale that’s gonna whale. 

Ultimately, it’s up to you how much time you want to spend on this hobby. It can be like a full time job, but with the right knowledge, it can pay like one too. Sharing finds and data points and making friends in the community can go a long way towards finding your like-minded group of maximizers.

– ireriley

Pictured: a whale with a mentee regaling on the days when you could cash out $50k $44k of Membership Rewards points per week. No, I don’t know why it has both legs and a tail, and yes, I am extremely afraid of it.

*Footnote: While I am advocating for you to put more effort into understanding plays, I am not advocating for you jumping into a new play without doing your due diligence and assessing your personal risk tolerance. I regret missing a lot of plays, but I don’t regret missing Hardbody, The Plastic Merchant, etc.

MEABNOTE: I’ll be going on a blogging vacation at the end of the year and there won’t be any daily posts between December 18 and December 31. After that, we’ll ring in the new year on January 1, 2025 with the 2024 version of Travel Hacking as Told by GIFs though, so no need to be up in arms, but I guess it’s ok if you’re up in legs.

By popular demand we’ll have at least a few guest posts during the break. If you’d like to write one, please reach out, I’d like to find guest posts for the whole break!

Echo Chambers

The internet is full of echo chambers in which opposing viewpoints mostly don’t exist because of something like: selection bias, moderation, “the algorithm”, or another reason. Because I know you need some examples, there are a few you may already be familiar with:

A recent FlyerTalk post titled “Any Success Stories of Living Off [Manufactured Spend]?” is a perfect illustration of how we can get stuck in echo chambers without realizing it. The thread itself is rather short, and if you read it in its entirety you’d think that maybe a couple of people lived off of manufactured spend in the past but it’s probably not happening much anymore and might also have weird tax consequences. Everyone in the insulated forum is reinforcing what they already believe, and it makes sense because it’s aligns with their world views.

On the other hand though, I personally know at least a couple of dozen people that live off of manufactured spend, and I’m sure there are plenty more that I don’t know of. Also, I’m not a tax guy and I’m definitely not your tax guy, but it’s not hard to account for and to pay taxes on your manufactured spend based earnings. Based on my personal experience, the FlyerTalk thread is naive at best and gate keeping at worst, and it illustrates a lesson that can take you a long way in churning and manufactured spend:

Sometimes the prevailing discussion in your echo chamber is wrong, and you can use that to your advantage.

– MEAB

Or, to rephrase in Michael Scott form:

“Trust but verify – Ronald Reagan“

– MEAB

Happy holidays and I’ll see you next year!

(I think it was actually John Quincy Adams, but ok)

MEABNOTE: I’ll be going on a blogging vacation at the end of the year and there won’t be any daily posts between December 18 and December 31. After that, we’ll ring in the new year on January 1, 2025 with the 2024 version of Travel Hacking as Told by GIFs though, so no need to be up in arms, but I guess it’s ok if you’re up in legs.

By popular demand we’ll have at least a few guest posts during the break. If you’d like to write one, please reach out, I’d like to find guest posts for the whole break!

Introduction

We’ve talked several times about the Pepper Rewards gift card selling platform, which seems to have been explicitly designed to transfer money from Venture Capitalist bank accounts to our wallets at lighting speed. In the most recent MEAB post on the subject, I included a toy model based prediction that there’s a 50/50 chance that the company fails by the end of 2024. I’m now updating the timeline for the 50/50 failure scenario to be March 23, we’ll see why later.

Recent Changes

First, let’s discuss how Pepper has changed in the last month:

  • Bonus offers are now targeted to specific accounts
  • Many of the best offers are now limited to one per account per day
  • New accounts get low bonus offers until they spend five-ish figures
  • Account limits are either $5,500, $7,000, or $10,500 spend per rolling 24 hours
  • Most of the rebates are now floated for 14 days
  • Pepper has effectively stopped responding to most support requests
  • Pepper is moving merchant accounts from Stripe to PayArc

The first two bullets seem to be Pepper’s attempt at preventing a few whales from taking all of the best deals’ capacity through botting. The third and fourth bullets seem to attempt to separate gift card resellers from regular users and to separate resellers into tiers. The last two bullets are almost certainly about saving money and lowering reserve capital requirements.

Recent Deals

As degenerate churners are well aware, Pepper has pushed the resale market for high value gift cards down to decades-long lows by offering almost daily:

  • 17-20% discounts on Kohls gift cards
  • 12-16% discounts on Amazon gift cards
  • 12-16% discounts on Walmart and Sam’s Club gift cards
  • 15-18% discounts on Nike gift cards

Let’s get something out of the way about these deals: There’s no world in which Amazon or Walmart are giving gift card sellers a discount in the double digit percentages on millions of dollars of inventory. There’s also no world in which Pepper isn’t paying merchant processing fees of at minimum 2.7%, but more realistically 3%+ on each of these transactions too. Pepper is losing on each of these bulk gift card transactions, period.

Pepper’s Vision

Pepper has started a new funding round a month or two later than I expected based on the toy model, but still within the general time frame. Fortunately for us, their pitch deck and story is on YouTube so it’s easy to see what they’re telling investors. My favorite bits from the video:

  • Pepper is going to be a single shopping portal and remove the need for all the others
  • “Pepper earns a 6% commission on every transaction”
  • Pepper somehow will know your favorite color and shoe size with AI, and this isn’t MEAB snark
  • Their Chief Revenue Officer was a DoorDash sales executive
  • Pepper believes that their total addressable market is $6 trillion (almost 23% of the US GDP, seems legit)

There’s definitely a fair amount of slippery language in the video, but I want to call out the most slippery statement, that “Pepper earns a 6% commission on every transaction”. Look, I actually believe they earn an average of 6% commission on every transaction, but the slippery language is undoubtedly that their 6% is a gross commission on the face value of gift cards, not a profit margin. (I think Pepper is lucky if their current profit margin is -6%; it’s definitely not +6%.)

Side note: I think that 6% number is realistically the discount that they earn on face value for the aggregate of all the gift cards that they sell, making it a really interesting number for any future models.

The Pepper Future

Alright, we’ve buried the lede. Based on my toy model I expected a 50/50 failure by the end of 2024, but I’ve revised that to 50/50 by March 20. Why that date? It’s silly, but there’s a metric that’s more accurate than any toy model in my mind: Almost all high-growth, high-spend VC backed companies start raising their next round of funding 3-4 months before they run out of the cash from their last round; it’s almost universal for companies like this.

Given the above and that Pepper posted their investor presentation on December 8, three months is March 8, and four months is April 8, the expectation value for running out of money is March 23. If they haven’t run out of money by then, it’s probably for one or both of two reasons:

  • They’ve raised more cash successfully
  • They’ve restructured their expenses, including employee and boost costs

I’m sure Youtube is the way to most investors hearts though, right?

My Action

I still use Pepper, and I have pending rebates well into the thousands of dollars floated with them too. My goal is to scale that back gradually as March approaches to limit my exposure in case of a Pepper failure. If this was a public company, you can be completely sure I’d be buying out of the money puts. I also expect that I’ll end up losing some money when they eventually fail, but I can more-or-less control how much and take profits in the mean time.

Good luck and happy Tuesday friends!

The Pepper Chief Revenue Officer’s prior work gives a glimpse into Pepper.

MEABNOTE: I’ll be going on a blogging vacation at the end of the year and there won’t be any daily posts between December 18 and December 31. After that, we’ll ring in the new year on January 1, 2025 with the 2024 version of Travel Hacking as Told by GIFs though, so no need to be up in arms, but I guess it’s ok if you’re up in legs.

By popular demand we’ll have at least a few guest posts during the break. If you’d like to write one, please reach out, I’d like to find guest posts for the whole break!

  1. Do this now: Register for 5x categories on quarterly cards:

    – Chase Freedom and Freedom Flex: Grocery, fitness, gyms, hair, nails, spas, and Norwegian Cruises (welcome to the world of sponsored 5x categories friends)
    – Discover IT: Restaurants, home improvement, and some streaming
    – Citi Dividend: Amazon and some streaming
    – US Bank Cash+: I choose utilities and electronics stores

    I try and knock these out on the first day or two of the quarter so I don’t have to think about them after.
  2. The Citi Shop Your Way Rewards card sent new mid-month targeted spending offers for online spend through January 14, 2025. We’ve seen:

    – 250,000 Shop Your Way Rewards points with $1,000+
    – 200,000 Shop Your Way Rewards points with $750+
    – $70 statement credit with $1,000+
    – $50 statement credit with $750+

    As usual, these stack with other offers. (Thanks to birt, Adam, Lindsay, and Tyler)
  3. Giftcards.com has 10% off of its own gift cards through December21. These cards can be used to buy other, third-party fee-free gift cards on the site with promo code EPICGIFT. These probably won’t track on shopping portals when you buy them, but when you use them on another purchase that’ll probably track. There are several credit cards that earn 3x on giftcards.com.
  4. Answering a few of the questions we asked on Friday with American Express’s new Business Platinum $50 quarterly Hilton credit:

    – Will this work with HiltonGiftCards.com? Yes
    – Will this work buying gift cards at a hotel? Yes
    – Will this work at Hilton restaurant? Usually, watch for a 15% extra hold for tip
    – Will this work for a regular hotel to pay your bill? Yes, depending on the front desk’s skillset
    – Who is John Galt? I dunno; or if I do, I don’t want to talk about it here, why do you ask?

    Also, orange-you glad I didn’t say banana? (That’s called a “long con” friends, at least on internet time scales.)

Yes, I know I deserve this.

  1. Do this now: Enroll your American Express Business Platinum cards in the new $50 quarterly Hilton credit. A quick Q&A:

    – Will this work with HiltonGiftCards.com? Probably
    – Will this work buying gift cards at a hotel? Yes
    – Will this work at Hilton restaurant? Probably, stick to resorts to be sure
    – Will this work for a regular hotel to pay your bill? Yes
    – Is AmEx going to raise the annual fee? Probably not in 2025, but yes
    – Is Dell going away in 2H2025? We can only pray
    – What’s America’s favorite fruit? Banana
    – Did anyone make it this far? Yes

    If you’ve got a bunch of business Platinums, just make sure that you get an email for each card. Sometimes the site enrolls the wrong card, or reenrolls a card that you didn’t select.
  2. Avianca LifeMiles can be purchased for as little as 1.27 cents each with a sale running through the end of December.

    Conventional wisdom in the hobby says “never buy miles except to top-off your account for a redemption.” The wisdom is showing its age when transferable points are cashed out easily into interest bearing accounts, and points costs have dipped below 1.3 cents. For example, yesterday I was looking at an ANA First Class redemption that was 114,000 LifeMiles. I could have paid about $$1,447 to buy those miles directly rather than transferring miles in. Obviously, there’s more to come on this topic in the future.
  3. Southwest has extended its schedule for fall travel including Labor Day weekend through October 1. Booking a cheap flight that’s far out and within two weeks of a more expensive flight that you actually want to take is a great way to hedge booking costs, assuming flight schedule change between then and now.
  4. AA is retooling its AAdvantage program for 2025. The quick summary:

    – New million-miler tiers at four (Platinum Pro) and five (Executive Platinum) million miles
    – Systemwide Upgrades will last through the end of the elite year after March 1, 2025
    – Redeem miles for inflight food, probably at a terrible rate
    – New Loyalty Point awards, all low value

    You still can’t earn million-miler tiers with Loyalty Points, only with flown miles.
  5. Giant, Giant Foods, Martins, and Stop & Shop stores have 8x-10x points on Lululemon and Barnes & Noble gift cards, depending on chain through Thursday, December 19.

$50 breakfast at a Hilton Garden Inn in Lubbock (prolly, I can’t be bothered to fact check).

MEABNOTE: I’ll be going on a blogging vacation at the end of the year and there won’t be any daily posts between December 18 and December 31. After that, we’ll ring in the new year on January 1, 2025 with the 2024 version of Travel Hacking as Told by GIFs though, so no need to be up in arms, but I guess it’s ok if you’re up in legs.

By popular demand, we’ll have at least a couple of guest posts during the break. If you’d like to write one, please reach out!

  1. H-E-B Stores have a $20 H-E-B gift card with the purchase of a $100 Home Depot, Lowe’s, and some other, stupider brands through Tuesday. Scale with multiple H-E-B accounts. Side note: H-E-B is one of the most annoying things that I have to type somewhat regularly.
  2. Chase Offers has 10% back on Frontier Airlines on up to $420 in spend through January 23. Watch for refund policies on Frontier. Side note: Frontier is one of the most annoying airlines that I never have to fly.
  3. The Bank of America Alaska card’s 75,000 miles after $3,000 spend in 90 days bonus is still around. Side note: Yesterday, some bloggers started pushing a 70,000 mile Alaska sign-up bonus instead because it pays them affiliate revenue, and based on the coordinated timing, it’s likely a higher than usual payout too; caveat emptor.
  4. Breeze has a 50% off fare sale with promo code GOALS for flights booked by tonight. Evidently, they saw that the other second tier US airlines had a fare sale yesterday and didn’t want to be left out.

Happy Thursday!

Even this brand of soda is easier to type than H-E-B.

MEABNOTE: I’ll be going on a blogging vacation at the end of the year and there won’t be any daily posts between December 18 and December 31. After that, we’ll ring in the new year on January 1, 2025 with the 2024 version of Travel Hacking as Told by GIFs though, so no need to be up in arms, but I guess it’s ok if you’re up in legs.

  1. Do this now: Register for the upcoming Alaska Airlines premium card’s waitlist and earn 500 miles instantly. You’ll also earn a bonus 5,000 miles if you apply for the card when it comes out using your waitlisted link. Apparently the premium card will have an annual fee of $395 and:

    – Earn 3x on foreign currency transactions and foreign USD transactions
    – Earn 3x on dining
    – Have a “Global Companion” pass for award tickets
    – Have free WiFi vouchers and reduced award ticketing fees

    The card arrives this summer. (Thanks to Esteban)
  2. Many US Airlines are running a holiday fare sale:

    – Alaska award and paid through Monday
    – JetBlue paid through tonight, 25% off with promo HELLO25
    – Southwest award and paid through tomorrow night
    – Avelo $40 off round-trip paid travel through tomorrow night with promo FLY40

    My tea leaves suggest it’s going to be a rough Q1 for second tier airlines, especially Spirit which couldn’t even afford to run a sale.
  3. Two of the three main Incomm gift card sites have new promos (the third one’s promo is still in effect):

    – VanillaGift.com: No purchase fees on $150+ with promo code VGHOLIDAY24
    – TheGiftCardShop.com: No purchase fees on $200+ with promo code HOLIDAY24

    Ok fine, the third one is MasterCardGiftCard.com with promo code NOFEES24. I don’t like repeating a deal, but I guess I can’t leave you hanging.
  4. American Express has a targeting offer for 75,000 Membership Rewards after $6,00 spend in four months on Blue Business Plus no annual fee card, available via your dashboard if targeted.

Happy Wednesday!

A typical MEAB reader left hanging, probably.