Category: Whomp whomp

The last week of November saw groups of shutdowns from three major banks: Discover, Wells Fargo, and Chase. If you were affected, sorry – that sucks. But even if you weren’t, we can learn from what happened. Let’s go bank by bank:

Discover

Summary: Repeated negative balances pushed the risk team over the edge.

Explanation: One of the tricks of the trade in high volume manufactured spend is to prepay your credit lines, creating a negative balance on your account in order to be able to spend more than your credit line. Some banks don’t care when you do this, but Discover isn’t one of those banks.

Lesson: Be cautious about overpaying credit lines. Discover isn’t the only bank that doesn’t like it.

Wells Fargo

Summary: Non-standard payment methods spooked the risk team.

Explanation: Sometimes paying a credit account directly via ACH isn’t the best way to pay; as a /r/OldSchoolCool inspired example, CheckFreePay at Walmart Money Centers used to be a great way to pay your Visa and Mastercard bills using Visa and Mastercard gift cards. In the case of recent shutdowns, a payment method that a regular customer wouldn’t normally use was advantageous, at least until Wells Fargo decided it wasn’t.

Lesson: Consider the source of payments to your credit accounts, often banks don’t like abnormal payment methods, and side note: that’s especially true with anonymous payment methods.

Chase

Summary: Prior chargebacks related to fitness club associations finally caught up to bag holders.

Explanation: There was a private manufactured spend group a few years ago that imploded, leaving hundreds of people with outstanding money that wouldn’t be paid back (no, this isn’t Synapse). Some people initiated chargebacks on that money, occasionally well into five figures or more, and Chase finally decided that those chargebacks made account holders personae non gratae.

Lesson: If you ever need to use chargebacks to bail yourself out, make sure the value of the chargebacks exceeds the value of your relationship with the bank.

Good luck out there, and happy Wednesday friends!

Another potential shutdown affecting all churners: Failed identity verification.
(Thanks to Vince for the unfortunately real screenshot)

About two weeks ago, several popular travel bloggers dropped hints about visiting a corporate sponsored affiliate meeting from a company named Mesa. Since then I’ve been expecting a deluge of articles about their newly launched card, but for the most part nothing has appeared. Why? I assume news is embargoed until Mesa says it’s ok to write about it, preferring to soft-launch in relative quiet with a waitlist and then go big at just the right time™. On the other hand though, you know what they say about assuming.

Anyhoodles, since I’m under no embargo and I guess I don’t care about soft versus full launch, let’s discuss the rewards system and the waitlist credit card in a no-quid-pro-quo kind of way. It’s a lot like Bilt in that there’s a way to earn points whether or not you have the card, but you can earn more with the card. It’s unlike Bilt in that its VP isn’t telling people how to game their own company, or seemingly lying about being an industry-first program to launch earning on mortgages.

Earning

Whether or not you get the card, you’ll earn a point for each dollar when you originate a new primary loan or a refinance an existing primary loan, as long as you use a “The Mesa Mortgage Marketplace Lender”, which I guess we’ll abbreviate as TMMML because reasons. You can do that up to five times per account too.

But, how good are those TMMMLs? Well, when I put in my address, I got a single option: Swift Home Loans Inc which is apparently a mortgage broker based out of Birmingham; but not that Birmingham, it’s the Michigan one. So I guess there’s exactly one TMMML (at least for my state) and they’re rated 2.8 out of 5 on Facebook. I dialed their main contact number to ask about which banks they work with and what sorts of mortgages they can handle, but it just rang for a good minute so I hung up. Looking pretty great guys!

How about the credit card? It’s a Visa issued by Celtic bank and carries no-annual fee. The earning structure:

  • 3x on HOA fees, contractors, homeowners insurance, property taxes, home decor, and other “home-related” charges
  • 2x on gas, groceries, EV charging, and utilities
  • 1x on a linked mortgage, but only on up to $100,000 in mortgage payments annually
  • 0x on other spend, as far as I can tell
  • Free Sam’s Club membership

Like with Bilt and rent, you don’t need to put your mortgage payment on a card to earn points on mortgage payments.

Burning

There are two options for redeeming Mesa points: booking travel through their portal, and gift cards. The cash value of each, based on my sampled searching:

  • Travel: 1.0 cents per point, but also a fixed 400 point extra surcharge per flight
  • Gift cards: 0.7 cents per point

Everything Else

Here’s how I’d look at this card, considering that if you’re booking travel through a portal you’re not going to use Mesa because Chase and AmEx have much better value propositions:

Gift card options include popular bulk brands like BestBuy and Apple, and assuming a resale rate of 93%, that means you can cash-out your points through gift cards at 0.65 cents per point 🤏. So:

  • You earn 0.65-0.70% back on mortgage payments just by holding the card
  • You get a 0.65-0.70% rebate on new mortgages, but those are probably baked into the fees of the one member of the TMMML
  • You’ll do better for other spend, manufactured or real, with other credit cards.

Finally, I extracted the full terms and conditions of the rewards program from the mobile app in case you’re curious, and it’s just this webpage.

tl;dr: It’s ok I guess, but you can probably skip the dozens hundreds thousands of affiliate articles when they come out in (probably) the next couple of weeks.

Happy Wednesday!

Kick-off party for current members of TMMML.

  1. There’s a new public link on the front page of Delta.com for increased sign-up bonuses on American Express cobranded cards. There’s a second link buried at creditcard.delta.com too, so try both if one doesn’t work. Unlike most times when the blog-o-sphere is saying “more people targeted” because someone said so on reddit, this time it actually appears to be true; No, I’m not bitter, you’re bitter! Anyway:

    – Reserve: 100,000 miles after $5,000 spend in six months
    – Platinum: 90,000 miles after $3,000 spend in six months
    – Gold: 70,000 miles after $2,000 spend in six months
    – Reserve Business: 110,000 miles after $10,000 spend in six months
    – Platinum Business: 100,000 miles after $6,000 spend in six months
    – Gold Business: 80,000 miles after 4 $4,00 spend in six months, waived annual fee

    If you get the popup, try the other link which often has different popup criteria.
  2. If you have money locked up with Yotta or Juno thanks to the Synapse FinTech collapse, check your email for a payout link from one of the underlying banks that was servicing accounts, Evolve. There are multiple reports of payments being correct and several where people are short, at least one by over $94,000, though it’s not clear whether that money was put at Evolve by Synapse or put somewhere else. To find the email, look for one of:

    – Email: [email protected]
    – Subject: Return of Synapse Brokerage’s End User Funds

    Don’t forget to add “in:anywhere” to your search to look through spam and other folders in your inbox. If you don’t have your email yet, there’s a completely unverified rumor that it may take until the 16th to send all emails.

    In related news, apparently Evolve’s CTO and CEO/President have been terminated. I’m not saying that’s unjustified especially after Evolve leaked customer information in a data-breach, but it’s strange to see everyone going after Evolve leadership instead of Synapse leadership.
  3. Capital One has a 20% transfer bonus to British Airways Avios, and by extension all airlines that use Avios through December 1. (Thanks to jtevy)
  4. The American Express Centurion Business card will have a cap on its 50% airfare booking rebate at 3 Million rebated points annually starting on February 1.

You can’t hold someone accountable if they can’t account I guess?

Let’s focus on news from a few banks today:

  1. Bank of America’s Preferred Rewards status was removed from many business accounts on September 6, and it seems related to early enrollment during new account setup. If you’re affected, there are two action items:

    – Consider whether you want to pause spending on Bank of America cards until it’s fixed
    – Consider contacting Bank of America and opening a case

    Generally speaking, calling a bank as a manufactured spender about missing rewards isn’t the best idea, it’s kind of up there with betting in Vegas on John McCain winning the 2024 Presidential Election; but in this case I think the team you’ll be working with (Preferred Rewards) is sufficiently distant from the rest of banking that the risk is low and reward is potentially high. You’re all adults, so make your own judgement call.
  2. If you’ve given full, non-Bank of America card numbers to Bank of America representatives recently, consider locking or replacing those cards; there are multiple correlated reports of fraudulent charges that surfaced yesterday stemming from Bank of America.
  3. Bloomberg reports that Barclays is nearing completion of a deal to purchase the Marcus GM portfolio of credit cards in a few months. If you’re banned from Barlcays, getting a GM card now could be a way back in. UPDATE: This didn’t work for people banned by Barclays when they acquired the Banana Republic card, so adjust your calculus as necessary.

Have a nice Thursday!

Bank of America’s vault mirrors the rest of their technology stack.

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. Albertsons, Safeway, and Vons stores have a promotion for $10 off of a future purchase good for seven days with a $50 purchase in several third party gift card brands through October 10. Lowe’s is the best one for resale rates, currently averaging somewhere around 89%.

    It’s possible that this is a regional only deal so double check your ads, though I suspect it’ll work everywhere. (Thanks to GCG)
  2. Shoprite stores have $10 in grocery credits $150 or more in Mastercards through Saturday, limit one per account. The credit is valid starting Saturday and running for a week, and recent reports suggest Shoprite stores putting $7.95 fee cards on the rack, because of course they are. (Thanks to DoC)
  3. Do this now: Sign-up for the waitlist for the future TAP Portugal American Express card. Getting on the waitlist means you’ll get a bigger bonus if you decide to apply for it when it launches, but doesn’t obligate you to anything.
  4. Do this now: Check chase.com/mybonus for targeted offer of 5x-10x on spend on grocery, utilities, fitness, internet, and/or phone services on your personal co-branded cards.
  5. In a move that should surprise no-one, Delta devalued partner awards to and from Mexico, the Caribbean, Central, and South America. Award prices for business class have risen by approximately 40%, and economy prices have risen more modestly by approximately 15%. When asked to comment on this change, Delta again used a single word response: “Budgeting”, but this time they played the wah-wah trombones while speaking.

    As of this devaluation, the rule of thumb for non-expert travel hackers is that Delta SkyMiles are mostly only good for US economy awards. There is slight value to be had outside of that paradigm, but it diminishes regularly.

Delta’s PR team discussing the most recent award ticket redemptions.

We’re in an extended period of Chase shutdowns that started a week ago, and while we don’t know the complete causes, related factors might be:

  • Heavy use at a manufactured spender fitness club
  • Earning a sign-up bonus at a manufactured spender fitness club or popular rebate site, even with light spending
  • Using Chase Ink card links that bypassed backend business approval logic

If you’re caught up in shutdowns, there are options to squeeze Chase back, not all is lost:

  • Call or write the Chase Executive office and open a case
    This is only likely to be fruitful if you’re shutdown for rewards abuse and don’t have heavy manufactured spend, or if you’re shutdown due to bust-out risk. For body builders, I don’t expect a ton of success here
  • Exercise the arbitration clause in your account agreements
    I’m not an attorney and I’m definitely not your attorney, so don’t take this as legal advice. I imagine that having a manufactured spend friendly attorney on your side couldn’t hurt though
  • Wait seven to ten years and you may find yourself back in
    Yes it’s a long time, but it’s not forever
  • Find new players
    Isolate addresses to avoid any contagion spread through
  • Try and open a Chase Private Client account in branch
    Wait six months to do it, and you’ll need $100,000 or more in assets typically
  • Pivot to other banks for cash, United, and Hyatt
    Bilt is an option. You weren’t using Ultimate Rewards for much else, I assume?

Fortunately there are thousands of banks and credit unions out there that offer credit cards that still want your business. Always be probing!

Squeezing Chase if Chase were a GM car.

Introduction

Lest you have any misplaced notions about whether or not I know what I’m doing when it comes to travel hacking, let me clear the air: I don’t.

What Happened?

Yesterday I was booking a set of partner business class award tickets on United for flights from London, which if you’ve ever played “figure out how to avoid the world’s biggest airport award surcharge”, you’d know that this is one of the only good, above-board ways book a ticket from Heathrow airport without paying hundreds of dollars in cash with your miles. (Yes there are also less above-board ways, but this isn’t that kind of trip.) Anyway, this was the situation:

  • The award cost was 80,000 points plus $5.00
  • I wanted two tickets, so the net cost was 160,000 plus +$10.00
  • I had 128,000 MileagePlus miles

I got partway through the booking up to the payment screen and realized I’d need another 32,000 miles. Which takes us to what happened next:

  • I transferred 32,000 Ultimate Rewards to United
  • I reloaded the booking confirmation page and saw that my balance was as expected in the header
  • I clicked buy

Later, I checked my MileagePlus account and saw that it had approximately 32,000 miles hanging out. It took a couple of minutes to unravel what happened, but the punchline is:

If you don’t have enough miles to complete an award booking, United will sell them to you without making it obvious that it’s happening.

The net cost was $800 for 32,000 miles, oof. This was completely my fault and I should have looked more closely at the checkout screen before clicking buy instead of just noting that my balance had updated in the upper right corner, but (just kidding, there is no but – mea culpa).

Sometimes you beat the award surcharge, and sometimes the award surcharge beats you.

The PSA

When you’re transferring points to an airline or hotel currency as part of a booking, look at everything closely. Especially so if it’s United, and especially so if it isn’t United.

Happy Tuesday!

UPDATE: By chatting with a United’s MileagePlus team supervisor over SMS, I was able to get the charge reversed and the miles deducted. Thanks to everyone who offered their own experiences in being MileagePlused.

Stay tuned for a future post on how I accidentally paid another $800 to use fast-track security at Heathrow 💪 (probably).