Category: Wisdom

Bank of America, Wells Fargo, Chase, Citi, and plenty of your favorite credit unions offer premium (or sometimes even fee-free) cards that offer annual credits tied to the calendar year. Most issuers also let you refund an annual fee up to 30 days after it posts too. Combined, that means December is often the best time of the year to get a card because:

  1. Your first statement is usually issued 30 days after getting a card
  2. Your annual fee posts on the 12th statement around 360+30 days after opening
  3. Most issuers give you an annual fee refund if requested within 30 days of posting pushing that to 360+30+30 days
  4. 12 statements will straddle three calendar years: 2024, 2025, and 2026

Let’s take the American Express Business Platinum. Annually, you’ll earn (amongst other things, like I dunno, prolly a $1.50 monthly credit to Dollar Tree):

  • $200 airline incidental credit
  • $400 Dell credit ($200 in the first half and again in the second)
  • $199 Clear credit

So if you apply for a card in late November or December, your 12th statement won’t generate until between mid-December 2025 and mid-January 2026. Once that happens, you’ve still got another 30 days for games and an annual fee refund. You’ll get:

  • $600 in airline incidental credits (2024, 2025, and 2026)
  • $800 in Dell credits (2H2024, 1H2025, 2H2025, 1H2026)
  • $450 in Adobe credits (2024, 2025, and 2026)
  • $597 in Clear credits (2024, 2025, and 2026)
    (though you should discount those Adobe and Clear credits significantly)

There are a few gotchas to watch for: Bank of America’s annual fee refund after it posts isn’t guaranteed; Capital One’s is guaranteed, but the guarantee is that they definitely don’t offer fee refunds; or how the stupid Dell credits may be going away from the American Express Business Platinum in July, 2025.

Happy Tuesday!

Next time: The Halloween triple dip?

The Stunt

Sometimes travel hackers get stuck with a ticket that’s got a cancellation fee (I’m looking at you and your stupid $75 award ticket redeposit fee FlyingBlue) or a ticket that simply isn’t cancellable for any fee even if you’re Steve Buscemi (actually, especially if you’re Steve Buscemi). You’ve got two choices if your plans change and you’re not going to take one of those flights:

  • Pay the fee to cancel if you can, or just eat the ticket cost if you can’t
  • Play the odds and hope that you don’t need to do either of the above

Playing the odds means waiting for the airline to offer free changes or refunds due to one of:

When one of those things happens you won’t be taking off for Lubbock, but instead you’re headed to refund-town (but you’ve probably got to request the refund from the airline, and in some cases before departure). The odds aren’t great though; at best the chances of this working are somewhere between 1/6 and 1/10, unless you own a pregnant turtle.

The Gotchas

There are a few ways this can malfunction:

  • You forget to cancel before the cancellation window expires after the game didn’t work, which matters especially with programs like Virgin Atlantic that require you to cancel before the check-in window opens
  • You don’t request a refund in a timely manner from the airline
  • The airline disagrees about what a significant delay is (but 2+ hours is usually sufficient)

Personally I put a reminder in my phone for an hour before the flight or cancellation window, whichever comes first, to figure out whether the stunt is going to work and to pay the cancellation fee if I can and it didn’t.

Good luck!

AA’s new Flagship First catering meal concept: “playing chicken with an airline”. They’ll end up cutting the ketchup at launch for cost savings though.

Introduction

One of my favorite travel tools is seats.aero, a site that shows you inventory for award flight redemption availability across about a dozen mileage programs. It’s got limitations in that data is only available for certain routes, award discounts for elites and card holders aren’t included, data isn’t refreshed for hours or days depending on which searches have been run, and plenty of other small things too. But the tool is perfect for illustrating a concept in churning and travel hacking: By finding your perfect redemption, sometimes you also find someone else’s perfect redemption.

Background

I was looking for space to open on an international First award, and while I generally knew about when award space opened up on the potential routes that I wanted to fly, I wanted to fine-tune the timing with fresh data-points. So, a few weeks before when I thought the route would open:

  • I looked for where inventory was opening up on the routes I might take, using seats.aero and a couple of airline partner’s mileage programs
  • I saw that the routes I wanted usually opened up the morning US time, and usually 3-5 days out
  • I also saw that seats.aero wouldn’t see inventory right away, exactly as expected given how it works

My takeaway was that at five days out, I needed to search for the inventory I wanted every couple of waking hours, but especially in the morning.

The Ouchee

Starting five days out, here’s what happened:

  • T-5: No inventory
  • T-4: No inventory
  • T-3: No inventory

I did have a backup flight booked on British Airways, so there wasn’t a concern about getting home, but it’s British Airways. So late on the evening of T-3, let’s call it approximately T-2.5, I used seats.aero to look at business class availability on major routes from Europe to my preferred US airport to see what my best options were that weren’t British Airways.

Seats.aero showed plenty of cached results for my search, and I began investigating those on different airline websites. While I was exploring, seats.aero was running a real-time search in the background in another browser tab. I kept exploring and saw a notification from seats.aero pop-up, but because I’d just looked for space and it wasn’t there, I assumed the alert was for some other route that I was also monitoring.

Fast-forward a few minutes later to when I looked at the alert. It was for the flight and route that I wanted! So, I confirmed the space with a partner airline’s award search, then started to book it. But, the space vanished before I could complete the booking.

What happened? I’m certain that someone else had a seats.aero alert for the same route that I did, and they got the same alert after my real-time search showed that space had opened. Because I delayed by a few minutes, they got the flight before I did, and they found out about the flight because of me too.

The Band-Aid

I was annoyed at myself for a couple of minutes, but in my research I found that when one route had award availability open up, other routes usually did too. Since I’d only searched for one airport, seats.aero had only refreshed its inventory for that airport. No other alerts for other routes had likely gone out.

I searched my second best airport option, and First space was open there too. I booked that instead and got (mostly) the redemption I wanted.

The Takeaway

When you use a tool like seats.aero, PointsYeah, point.me, or Award Tool, that alerts based on the results it finds, you might trigger alerts for your competition too. When space really matters, consider skipping those tools and use airline award sites directly.

Of course the concept applies to manufactured spend, churning, and other branches of travel-hacking too, the implementation is just slightly different.

Happy hacking!

The magnitude of my ouchee.

I have two favorite old-school niche travel blogs, TravelBloggerBuzz and The Free-quent Flyer. One of the interesting insights from the latter, from way back in 2016, was about manufacturing small transactions with Plastiq. At the time, Plastiq’s transaction fees were percentage based and didn’t have minimums so you could send a very small payment and pay a $0.01 fee for it, a perfect way to manufacture transactions.

Plastiq fixed the small payment nearly zero-fee transaction years ago, but Gideon at The Free-quent Flyer set up scheduled transactions through the year 2026 before the minimums kicked-in and those transactions are still going under the old fee structure.

There’s a lesson here, especially because we just had another niche payment method go away this week: Whenever you can schedule your games to continue into the future, you probably should find a way to do so. If you played your cards right, you may have years of shenanigans ahead of you even after something dies.

Good luck, and remember: I’m only cryptic and Machiavellian cause I care.

Warning: You can go too far with manufacturing transactions, but on the other hand I never saw a Plastiq hat.

When you’re traveling internationally, carrying a debit card that doesn’t charge foreign transaction fees or currency conversion fees, and that offers reimbursements on ATM operator fees is the second chapter of travel hacking 101. I conducted a non-scientific poll to see which card travel hackers prefer, and tallied the results from 10 probably made up respondents:

  • 8/10: Charles Schwab debit
  • 1/10: Random credit union debit card
  • 1/10: MEAB always spills too much or never enough

If you run a survey of popular travel blogs, you’ll find the same general distribution. The Schwab debit card is generally considered the gold standard, but regularly you’ll find stories about the card being fraud locked while you’re trying to use it. Those fraud locks require a call to Schwab to iron out, and while they’re quick, the friction is real.

There’s a better way though: Enable Schwab SMS account alerts, and rather than getting a fraud lock, you’ll get an SMS alert when an ATM transaction happens and you’ll be able to respond and clear the alert when Schwab suspects fraud. To enable:

Enable SMS and/or Push-notifications at Profile → Alert Settings. Just don’t confuse this with Profile → Alerts which is different somehow, duh.

Happy Wednesday!

Kermit demonstrates a different hangover recovery technique.

For the sake of illustration, let’s hypothesize that there’s a bank in america that supports payments through several different methods. Let’s also assume that the bank’s IT is bad and unpredictable. (That’s crazy, right?) Given that, it’s not to hard to imagine that different payment methods lead to different results; For example, the hypothetical bank refuses release credit lines on one payment method for up to 10 business days, but only sometimes. Using another payment method though, the same hypothetical bank releases its credit line within a day or two. Succinctly:

  • The credit line isn’t released for up to 10 business days using payment method A
  • The credit line is released 1-2 business days later using payment method B

Let’s add a further rub to this real-life hypothetical scenario: Assume payment method B might earn 50%-75% less than payment method A.

What’s the right thing to do in this situation? Remember the velocity of money. If you’ve got the spend to effectively use freed credit line quickly, earning half as much but being able to do it three to four times more often is still the higher earning play, because 50% * 4x > 100% * 1x.

Even though A pays more than B, B might earn more than A. Now, we just need to figure out C, I guess, or maybe just figure out what MEAB is driveling on about this time?

Have a nice weekend friends!

Let’s not even start with how to play with this beauty.

One of the hardest transitions between casual churning and becoming a heavy hitter is the switch from earning miles and points to earning cash back.

The transition should happen when you’ve earned all the miles and points you can spend cover your travel for the next 12-18 months, because:

  • Miles and points devalue by 30-50% in the span of years
  • The programs with the best redemptions change over time
  • Points don’t earn interest
  • The value of an unredeemed point is zero
  • Most of us don’t travel as much as we think we will (even if we travel a lot)

When you earn more points and miles than you can burn in a short time, the risk that excess points eventually become worth much less than when you earned them grows bigger than James’ Giant Peach from the famous historical documentary that I think is called “A kid finds a big fruit and someone wrote about it”.

Why do we fail to transition to cash back, even when we know analytically that it’s not the best option? The common answers I hear and that I’ve thought are:

  • Points and miles are fun, pennies aren’t
  • I’m motivated by travel, my job covers my cash needs
  • What if me and six of my closest friends need to fly Lufthansa F on last minute notice to Frankfurt and I don’t already have the miles banked, and my 800,000 Membership Rewards won’t post for another week?

They’re all valid reasons, but seeing them written can help prevent you from falling into the same trap. Trust me, you don’t want to be down 100,000 Hawaiian miles that expired a few years ago because you didn’t ever have an actual use for them and weren’t active in the program; $1,000 would have been a lot better. #askmehowiknow

Happy Wednesday!

Nerds gonna nerd.

Introduction

The Pepper gift card platform, seemingly created as a conduit for moving money between venture capital bank accounts and gamers’ wallets, warrants discussion based on recent developments and crowd think.

Background

Moochoo, the company, the company behind Pepper, raised $23.05 million on December 21, 2023. Is it auspicious that they closed on a pagan holiday? Probably not, but it’s funny. Pepper’s go-to-market strategy started shortly thereafter with effectively unlimited 10% back (in Pepper coin currency) on new accounts for the first 15 days of the account’s existence, along with bonuses for the referrer. They appeared to want new users at all costs and turned a blind eye to gaming with zero due diligence on new accounts. (Have a new device? That’s a new person, obviously. It’s not possible to have more than one, duh. Just make those charts go up and to the right!)

Seven months later in July, Pepper pivoted its rewards scheme away from unlimited new account cash-back, almost certainly because at its then current burn rate, it wouldn’t survive long in the face of unlimited purchases of Walmart, Home Depot, Amazon, and other high value gift cards at ~90% of face value. Pepper replaced the new-user sign-up bonus with double base points on gift cards for the first 15 days, which wasn’t useful for bulk resale and caused volume to plummet. How do I know volume plummeted? Pepper order IDs are sequential, naturally.

The Now

Pepper took a few weeks, but they’ve settled into the new normal. Now, they release “Daily Boost” merchants once, twice, or three times a day. Boosted merchants earn much more than regular, like 12x on Amazon or 20x on Columbia Sportswear. Boosted merchants have a total capacity before the boost goes away, which sometimes happens in 30 minutes for popular brands and sometimes doesn’t happen at all.

The Warning Lights

There are a few recent developments that could be taken as warning lights:

  • Boosted merchant rewards payouts are now delayed by several weeks (is this related to cash-flow concerns?)
  • New accounts now require ID scans, but only as of a few weeks ago (why now, maybe because they’re trying to raise money and VCs want real user verification?)
  • Boosted merchant deals are getting better brands and higher payouts daily (why offer bigger than 10% discounts on high-volume bulk resale gift cards like Amazon, Walmart, and HomeDepot, which were probably burning Pepper’s cash reserves down like a dry Christmas tree on fire? Maybe to build temporary operating revenue?)
  • The capacity for boosted merchant deals seems to be increasing steadily (again, is this for cashflow reasons?)
  • Boosted merchant deals seem to be shifting to the brands that sell-out quickly from the brands that don’t (why push for more volume on cards you’re probably taking a loss on?)

To answer these questions, I think it’s time to build a simple quant-model for Pepper’s cash reserves.

The Pepper Doomsday Countdown

Let’s come up with a model for how much cash Pepper probably has left. The formula is really just $23.05 million, minus burned cash, plus earned profits. Let’s make some data-driven assumptions:

  • Monthly operating expenses, salaries, and benefits for 37 employees, assuming an average overall employee expense of $65,000 per year (this is likely a rather low estimate): 37 * $65,000 / 12 = $200,416 / month
  • Number of transactions through September 30, 2024 (order ID’s are sequential): 857,000
  • Average transaction size (bulk brands are usually between $750 and $1,500 in max size): $1,000
  • Monthly profit from regular discount gift card purchases for non-boosted accounts and users, assuming 3% profit: 3% * $500,000 = $15,000 / month
  • Per order losses on boosted transactions, assuming 3% loss: $1,000 * 3% = $30
  • Percentage of transactions that are boosted, in a new user sign-up bonus, or otherwise money losing: 80%

Now, let’s run the America-Loves-Math-o-tron-5000:

2024 losses = $200,416 / month * 9 months + $30 / order * 857,000 orders * 80% – $3,000 / month * 9 months = $22,236,744

So, ~$23 million raised and ~$22 million in expenses by my simplistic toy model. You can play with the numbers and come up with your own conclusion, but you have to get pretty far below a 3% per transaction loss to make things look rosey for Pepper, or really far above $500,000 per month in profitable transactions.

Where does that leave me? I think Pepper is about 10% likely to die in the next 30 days, and maybe 50% likely to die by the end of 2024; unless of course they find another VC that wants to shoot money into a toilet. I’m still playing the Pepper game but only at a small level. If they fold and I lose my floated Pepper rewards, I’ll live without much regret.

Happy weekend I guess?

The result of the last round of Pepper’s VC money cannon.