Category: Wisdom

Memorial Day, like Labor Day, Mother’s Day, Christmas, National Bubble Bath Day, and a few other favorites, typically presents a great opportunity for one-off manufactured spend and travel hacking deals. We’ll see opportunities like:

• Gift cards for sale under spot resale prices
• Travel packages priced at relative minima
• Extra inventory for award redemptions
• Old apple products for really cheap

Broadly speaking, if you play the game today, you’ve got two choices:

• Stick with what you know and can earn on any other day
• Follow slickdeals, deal blogs, chatrooms, reselling slacks, and everything else to find great quick hits like those mentioned above

Either works obviously, but when you’ve built a war chest of manufactured spend volume, you’re probably going to earn more by sticking with what you know then you’ll earn or save by staying in front of a computer looking for today’s deals all day. So, unless you’re in this for the chase and the thrill of the new deal, consider spending your time today either doing what you normally do or learning more about how to build your war chest.

Or, we can summarize this post simply as:

Try and get the expected value of what you know bigger than the expected value of today’s quick hits.

Happy Monday friends!

Not all $15 apples are a good deal, even today.

The Whoop fitness tracker famously had an offer on personal Chase Sapphire cards for (effectively) a free device and year of service. Buyer’s groups were paying above $230 for sending them your free device, usually straight from Whoop which worked well for early adopters. Later though, Whoop realized what was happening, put together a list of known buyer’s groups addresses, and then instantly banned any credit cards used one of those addresses for shipping for that order and for all future orders.

There was a way around the ban though, and it should give you an object lesson in probing:

• Buying with Apple Pay side-skirted the ban

Why did this work? Well, from Apple’s lips to your eyes: “The card number from your credit, debit, or prepaid card is not provided when you use Apple Pay.” In other words, Whoop didn’t have the actual card number used for purchase to reference with their ban list.

When your card is the issue, try:

• PayPal
• Google Pay Android Pay Google Wallet
• Apple Pay
• Curve Pay
• Kasheesh
• Even more obscure options

Good luck friends!

The Apple Terms and Conditions, err, apple.

Grizzled churners who’ve been around the hobby for a long time have a well defined Krebs cycle-esque cycle:

• Newbie: “I can get $300 from this Disney card if I put all my bills on it for a few months”
• Beginner: “Look, ma, I bought a money order”
• Intermediate: “$20,000 minimum spend? I got that”
• Advanced: “I could probably turn this in to a full time gig”
• Chaos: “I ran nine figures through Big Bank #2 for 0.25% profit, and now my accounts and the plays are donezo, it’s time for a long break”

The best ones in the hobby get stuck somewhere between Advanced and Degenerate. The worst ones blow up a good thing for a lot of people and end up as beginners in a few years when the spoils are all consumed. At least they skip the newbie stage.

Whats the point of this discussion? Strive to be stuck between Advanced and Chaos – it’s ok to stop short of the birthplace of creation.

Have a nice day friends!

Degenerate manufactured spenders, but as road painters.

Different deals look differently, but those involving a credit or debit card usually involve a loop like:

• Buy a virtual or physical thing
  • Earn rewards (probably)
  • Pay fees (probably)
• Liquidate the virtual or physical thing
  • Earn on sale (rare)
  • Pay commission or fees (probably)
• Use the money to pay your credit card
  • Earn rewards (rare)
  • Pay fees (rare)

Your profit is (probably) obvious: Add up all the rewards and sale price, then subtract all the fees or commissions and purchase price. Assuming the deal scales, you’ve probably got a nice play.

But, let’s get to the real point: what’s the limit of how hard you should abuse your card to complete this loop? Wander there with me friends by asking a roundabout question: How much would the issuer need to pay you to close your relationship with them?

For a small credit union, you’d probably severe a relationship ]for a few (tens of?) thousands. For someone who loves staying at Hyatts and routinely books points boost outsized value fares through Chase Travel, you might theoretically need six figures or more to close that relationship. And that brings us to the answer, sort of:

Don’t push a card so hard that you’ll lose it, unless you’re going to make more than the issuer would have to pay you to terminate your relationship.

At least we got there. Have a nice weekend friends!

Helpful tip: This excel formula can also help you answer a question.

Churning and manufactured spend is easy when every electronic payment lands, every cashier is cooperative, category multipliers multiply, Toby’s too bogged down with lawsuits to look at you, and none of your accounts meet the almighty axe. Building plays, forming loops, and increasing velocity is child’s play when everything works.

The problem is that in churning and manufactured spend, Gene Kranz’s edict of “failure is not an option” is, uhh, not an option. Something will fail and it’ll probably take multiple phone calls and multiple people to get it fixed, if it’s even fixable. To build longevity in the hobby, have a backup plan for when:

• Your bill payments get lost in the ether
• A FinTech decides to hold your $200,000 in deposits
• A credit union shutdown causes a bounced payment to American Express
• Your loyalty points end up in an orphaned account

What does that backup plan look like? It really depends on the failure mode, but at minimum you should have the funds to sustain everything if an account is closed or frozen, you should have more than one account set up for making payments to your credit cards, and you definitely shouldn’t wait for things to fix themselves instead of getting on the phone and straightening things out as soon as you can.

Happy Wednesday!

Backup plans don’t always look the way you think they should.

Plays are always evolving and as plenty of us have learned, they can vanish in the blink of an eye. That’s especially true if you’re a believer in axe-everything-Saturday, but I digress. When a play inevitably dies for you, you’ll need to pivot to a new play. If you’re like many of us, that takes time with roadblocks like:

• Analysis paralysis, like “what’s the best way to get money into that new account?”
• Fear of another shutdown, or “but what if this new play gets me shutdown at my credit union?”
• Setup friction, or “I need a new EIN and some micro-deposits, I’ll do that later”
• Opportunity cost, or “I could just run over to Kroger instead”

I’m sure you’ve got a few more to add to the list too. The punchline here should be obvious, when you let roadblocks get in the way, you’re not earning money on a new play. Since plays can die in weeks or months, getting six to seven figures through them in a short time can be the difference between earning lunch money or earning a new SUV.

Good luck friends!

Then there are the plays that earn “lunch” money instead of lunch money.