Category: Wisdom

I alluded to some of the weekend train-wreckage that was happening in private groups on Monday, but now that the situation is public and many in the community are affected, I think we should go over a few points:

  • A semi-well known /r/churning Redditor, JonLuca, allegedly examined Chase’s source code last summer and manufactured or found links that bypassed Chase’s backend business intelligence rules (it’s unclear to me what is meant by “source code”, perhaps just looking at the HTML/JavaScript at chase.com, or perhaps something else).
  • This weekend in private groups there was a discussion about leaking the JonLuca hacked no-lifetime-language, pre-approved Chase business credit card links to the greater community as an attempt to shield a few heavy hitters from potential shutdown by overwhelming Chase’s fraud team with sheer numbers, allowing them to blend into the noise.
  • After a long discussion, the links were shared in several private groups, then at a semi-public event, and finally on Reddit. To be clear, I think the motivations were different for each case, and disclaimers ranged from none at all to very cautionary/”this might get you shutdown”. Certainly not all actors were malicious but some probably were and the cat jumped way out of the bag.
  • Yesterday, a wave of Chase shutdowns came and according to several other private groups, they keep coming. There are mixed data points, but it seems like if you used at least three of those links, or perhaps just two, you’ve been shutdown or you shouldn’t be surprised if you get shutdown over the next couple of days.

In the end, I think a fair number of shutdowns happened to people who probably weren’t going into the links with their eyes wide open or with full information, and that sucks. This game can be very caveat emptor and you should always be slightly weary.

Where do I stand in all of this? I didn’t use the links or share the links because I didn’t think they were safe, so I’m fine and I hope you’re right there with me. What’s the difference between these links and the American Express links I shared yesterday? The main difference is that the American Express links are low risk to me because they are semi-public, they don’t bypass any American Express backend eligibility checks, and they’re widely targeted.

My advice for you: Don’t use backdoor applications that bypass eligibility checks unless they’re public links you can find at the bank’s website, or if the links are widely targeted. Definitely never, ever use links that were hacked out of an examination of a bank’s source code, whether or not that source code was public. If you don’t know where a link came from, research it, ask around (feel free to ask me if you don’t know who else to ask), and do some diligence. Stay safe out there!

A stuffed cat emerging from a bag.
A freeze frame capture of the actual moment the cat jumped out of the bag.

In this hobby we’re really good at moving money around from bank a, to credit card b, to debit card c, then maybe back to bank a. We’re also good at parking money in accounts for a $750 bonus at Bank of the West or a $600 bonus at HSBC. If you’re like me, that means large sums of money are occasionally sitting in bank accounts, partially as a cushion for lax record keeping in order to avoid overdrafts in case you forget about a pending ACH or charge, and partially as a holding pen for sign-up bonuses or other perks. (And let’s not talk about the stack of gift cards waiting to be liquidated on my desk on any given day.)

When you’re letting money sit you’re subject to the opportunity cost of what that cash could earn if you didn’t leave it parked in some rando bank account. That money could instead be invested in high interest checking accounts (3-5% APR can be had with just a little bit of effort and some scheduled Plastiq $1.00 payments or with Debbit), maybe in US Treasury bills, perhaps you could be putting your money into buying Playstation 5s or graphics cards for resale, or you could be actively or passively investing in the stock market. All of those things will (hopefully) earn you money, and it’s quite likely that you’ll earn more money in those vehicles than the almost nil interest rate your bank probably pays. You’ll potentially earn more than you’re getting with sign-up bonuses too.

MilesEarnAndBurn Case Study: I’m a 90% passive index fund investor (VTI and VEU if you must know) with the other 10% being my own active stock picking based on fundamental market value and a very small smidge of speculation. I’m often right enough about my active stock picks that my 10% allocation grows to be 12% or 14%, so I rebalance back to the 90/10 split and keep going. What does that tell me? If I had a smaller cushion in my bank accounts and better record keeping about money flowing around, I’d have more money for investing, which will almost certainly outperform my stupid 0.005% APR checking account returns in the long run. I’m costing myself real money with my current strategies. I can and will do better.

Takeaway: Pease take a few minutes this weekend to think about your cash, how it sits and how it flows, and whether you’re using it in a way that you’re happy with. Don’t discount that there’s inherent value in simplicity too, if it’s just easier to let an extra $10,000 sit at a bank account to avoid the mental load of more strenuous record keeping, so be it. To be sure, I’m not suggesting any one particular investment vehicle or investment strategy — do what works for you, but please make sure what you’re doing is intentional.

A picture of quite a few US Dollar bills frozen in a large cube of ice.
A representation of how I’ve failed my bank account.

I have a travel hacking thought for you to mull over during the weekend: Inertia kills. Inertia kills deals, accounts, stores, good cashiers, loopholes, and redemptions. It’s easy to fall into a rut and ignore this but you really shouldn’t. What do I mean?

First a little refresher: Inertia is the tendency for something to continue as it has been, to avoid change*. In travel hacking, having big inertia means hitting the same technique over and over again. If your game is just buying a gift card every day and turning it into a money order, you’re in the rut I’m talking about. The same goes for singular focus on sign-up bonuses, or focusing on just gift card reselling, or sticking to cell phone burners. Or it could be using the same bank account for every single money order deposit.

When you’re singularly focused you’ve got massive inertia. The means you’re not:

  • Diversifying risk
  • Diversifying earning
  • Spreading spend
  • Exercising new techniques
  • Preventing burnout

If your bank decides they’ve had enough of your shenanigans, a shutdown there could cause a grinding halt to everything if you don’t have other bank accounts. If you visit the same grocery store every single day you’re going to stand out and you’ll be remembered. All it takes for the grocery axe to come down is a decision from an assistant-manager having a bad day that they don’t like what you’re up to. They may hold a store meeting to tell everyone to not sell to you, call the police, or you may even find your picture on the wall behind the customer service counter. Believe me, it happens.

When you’re constantly changing your game by switching your activities, stores, and techniques, you’re less likely to be noticed. As an added bonus your credit card company is less likely to be suspicious over buying “$506.95 worth of gas” every day when you call for a retention bonus after the annual fee posts. Frankly you’ll earn more and play more in the long run.

The same principle applies to the whole community; when everyone pounded uncle Tio, he passed away. When Plastiq‘s compliance team figured out why nearly every single account was sending $500 payments, they put a quick end to it. When Kroger awarded fuel points on variable load gift cards and watched their profit and loss statement explode, they stopped it. When the community collectively pounded the British Airways 4,500 mile partner redemption in the US for city pairs less than 650 miles apart, the chart changed.

Moral of the story: Keep your accounts, your methods, and your targets diverse and changing, and they’ll all live longer. You’ll probably end up earning and burning more too.

An unfortunate self-commentary.

* Yes, there’s a scientific definition too, you may have heard of it. It’s called “Newton’s First Law”. However my very real physicist hat is off right now and yours should be too.

The Gift Card reselling market usually sucks during the first couple of months of a year, prolly because consumers are detoxing with a hangover from holiday shopping and aren’t sick of their new toys (yet). The hangover is ending now though and the gift card secondary markets are really starting to pick up. A few of my observations for April:

  • Consignment sale holding time has shortened considerably, with the turn-around time dropping to one to three weeks for big retail brands (exceptions: Home Depot, Target)
  • Appetite in private markets for volume gift card sales is soaring, kinda like PLBY stock
  • BestBuy gift card resale rates are creeping back up (I’ve seen 1-2% higher in the last couple of weeks, and break even deals when grocery rewards are included)
  • Capacity for immediate/non-consignment sales in gift card clubs is growing

Retailers are also starting to offer big discounts for Easter, and usually this trend just continues to pick up steam until mid-Summer.

If you don’t have any gift card reseller relationships, there are a few good exchanges out there. Stick with something reputable, good volume, and a good reputation in the community. There are a couple of gift card sellers that I have gotten to know personally and that I trust with bigger volume. That said, always keep your outstanding float in gift cards no higher than the dollar amount you’d be willing to lose if everything went wrong, and spread out your reselling amongst as many reputable sources as you can so if one fails, your whole portfolio isn’t gone. (c.f., The Plastic Merchant, which went bankrupt in 2019 and left resellers holding the bag)

MS note: In the right circles, you can easily do $30-60k of gift card reselling per week after you’ve developed relationships and moved into inner circles, so don’t ignore this technique. Do start out with something really small and slowly ramp over time though, so if you make newbie mistakes they don’t cost you much. As always — don’t push this beyond the amount you’d be willing to lose if something goes wrong. It can happen and has happened.

The worst part of gift card reselling: having a bunch of plastic cards floating around that you can’t get rid of (“just in case”), but serve no useful purpose.

In the last couple of years American Express has punished people that used their own referral link in various ways, like clawing back points, removing the ability to generate referral links for bonuses, or in the worst cases with a shutdown. They’ve widened the net in the past few days too. (To be clear, this isn’t for you referring your partner and vice-versa, it’s for you applying for a new card using your own referral link.) This isn’t just a problem with American Express either: AA has done it, Chase has done it, Stripe and Paypal will ban you for running your own credit card, etc.

My bit of weekend wisdom: Never charge your own cards directly, never refer yourself directly, never send money to yourself directly; always use a P2 as a firewall (such as a spouse, sibling, parent, or similar). Most of the time you can get away with it for a few months or possibly even years, but the axe almost always comes down.

Weekend hint: There are ways to send money directly to yourself with online payment processors, and a prominent, very old processor will let you send money directly to your self with a credit card. Say it with me though: “If you’re gonna do it, use a P2.”

Have a great weekend!

An old video game screen with pixelated white text on a black background and the words: "Player 2 Start!"
Twice the players is twice the fun, but also a way to avoid shutdowns.