Category: Wisdom

When you talk to a bank to change something, ask for something, appeal something, or to close something, you’ll often be asked some form of “Why are you doing this?” Usually customer service is asking for two reasons: first, because they’ve got metrics and they need to keep track of reasons that people call, and second, they’ve got practiced responses and rebuttals for common objections.

There’s a simple answer to “Why?” that almost always ends the conversation without any further discussion and you should add to your repertoire: “Budgeting”

For example:

[Q] Why do you have so many AmEx cards?
[A] Budgeting

[CS] This card offers thousands of dollars in savings for a small annual fee, why would you want to close it?
[Churner] Budgeting

[Q] Why do you have 27 checking accounts at our bank?
[A] Budgeting

[Q] Why are you downgrading this card two weeks after you upgraded it?
[A]: Budgeting

[Q]: I see a bunch of back-to-back charges for $49x.xx. Why didn’t you just run a single big charge?
[A]: Budgeting

[Q]: Why did you receive nearly a hundred envelopes from American Express with your name and Roman numerals?
[A]: Budgeting

[Q]: How come your American Express Business Platinum card is stored on your daughter’s Delta SkyMiles profile?
[A]: Budgeting

[Q]: Why did you open a teen spending debit card when you don’t have kids?
[A]: Budgeting

[Q]: Why does MEAB exist?
[A]: Budgeting

Good luck, and happy Tuesday!

For bonus points, send template dashboards showing your “budget” to customer service.

In scientific circles we occasionally discuss the “epistemic gap”, which refers to things that are knowable in principle but for whatever reason we still don’t know them.

In manufactured spend there’s a favorite epistemic gap of mine: How much spend can you possibly generate in a day? You can of course ask related questions too, such as:

  • How much spend in a day if you spend only from home?
  • How much spend in a day with a grocery category multiplier?
  • How much spend in a day with a single card issuer?

I could tell you what my records for the above are, but assure you that my records aren’t world records. I can confidently say that the world records for each of the above are beyond an average American annual household’s income though.

What’s the point? If you’re not shutdown, you haven’t filled the epistemic gap, so consider whether bigger scaling makes sense or whether you’re exactly at the level you’re comfortable with.

The epistemic gap, illustrated for visual learners.

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.

An unfortunate side-effect of manufactured spend and churning is that sometimes you’ll have a bank account or credit card shut down. We saw an unusual spike in shutdown reports from Chase starting Wednesday for a group of spenders going bigger than Chase liked (all tied directly to dealings with a private manufactured spend supplement group, so don’t stress that you’re on the chopping block if you don’t know what I’m talking about). The shutdowns weren’t exactly unexpected, but it still sucks for anyone involved.

Let’s talk strategies to protect yourself in case you’re ever staring at the business end of a bank’s shutdown pistol.

Strategy One: Apple Pay

In nearly all bank shutdowns, the first indication of something gone pear-shaped is a notification from Apple Pay that your card was removed from your wallet, and this week’s shutdowns were no different. So an obvious strategy is: add at least one card from each major bank to your Apple Wallet to serve as a shutdown early warning system.

Sorry Android fans, I don’t know of an equivalent early warning on that platform.

Strategy Two: Transfer Points Out

Different banks have different policies for how long you can use or transfer your points after a shutdown (Chase is the most generous here at 30 days, but plenty of other large banks will forfeit your points the day of shutdown). Then, the strategy here is: transfer your points out immediately at the moment your early warning system triggers. And a bonus, secondary strategy: with many banks you can transfer points over the phone with a customer service representative even if the online transfer functionality is disabled.

Strategy Three: The Strike Back

Usually banks are lumbering, decades or centuries old, dysfunctional entities with disparate systems all tied together through an unholy combination of voodoo prayers, Cobol, and Javascript, and as a result when one part of a bank starts a shutdown, other parts of the bank and other computer systems won’t know about it for hours or days. That leads to another strategy: if an early warning system triggers and a card is shutdown, call the bank immediately and close all of your accounts, also known as the strike back.

When you preemptively close all of your accounts, you’re often preventing bank systems from running any business logic on your profile because they’re designed not to operate on closed profiles. So, instead of a system updating a database to mark your social security number as banned, the system moves on and you’ve probably got another shot at being in the bank’s good graces after the dust settles and you open new accounts in the future.

Good luck, and have a nice weekend!

Bank pneumatic tube to ethernet adapters, used as a communication gateway between legacy and modern banking systems.

Saying American Express’s IT is quirky is like saying Lady Gaga’s outfits are slightly outside of normal; it’s basically the understatement of the year. The quirks are great for us because they open up opportunities, or quirkitunities if you prefer, for all sorts of shenanigans. Today we’ll focus on a single quirkitunity: American Express Offers.

American Express Offers come in a couple of different varieties. You’ll see great ones that are only presented to you if the stars align and American Express likes you, like “50% off of up to $1,000 in spend at FedEx”. You’ll also see, err, stupid ones that are available to anyone with a pulse like “3% back on up to $250 in purchases at Urban Outfitters” (sorry to all my BDG jeans fans). If American Express’s systems see you as a gamer, you won’t get the good ones but you can have 3% off of BDG jeans to your heart’s content, provided that your heart’s content doesn’t exceed $250.

Fortunately for us, there’s a way to bypass the “stars align an American Express likes you” algorithm: Confirm your card again. That is, one of the quirks of American Express’s system is that you can confirm a card as many times as you like, and the best offers will show up during card confirmation. So, it’s a good idea to visit americanexpress.com/confirmcard periodically and look for offers, that’s where the good stuff hides.

The “stars align and American Express likes you” server rack crashing when you (re)confirm your cards.

Introduction

I’m not a financial advisor and I’m definitely not your financial advisor, but I get questions almost every week about my investment strategies for reasons known only to Betty Badluck. My best advice: seek a low cost total market index fund and HODL. Of course this isn’t that kind of blog though, but there is a travel hacking angle here so: Hey, how you doin? Let’s chat!

My Strategy

My investments fit a simple allocation strategy, and I rebalance my portfolio every three or so months to make sure that the allocation stays proportional:

  • 45% VTI
  • 45% VEU
  • 10% MEAB special

What’s the MEAB special? It’s stocks that I pick individually for some particular reason, but proportionally allocated in a way such that a catastrophically bad pick won’t be able able to wipe out the majority of my holdings. Historically that 10% generally outperforms the rest, but I attribute that to luck moreso than skill and don’t expect that it’ll continue that way.

The Travel Hacking Angle

There’s always a travel hacking angle, right? Well, as frequent flyer hackers we get an inside view into the operations, rise, and fall of airlines in both a specific and general sense. For me, that means that I have an insider view into how an airline performs that goes above and beyond the information in a 10-Q, and if I’m going to be choosing an airline to hold in the 10% MEAB special, that information may or may not give me an edge.

To be clear: investing in airlines is a tough business and I don’t recommend it, but if you do it, augment the public filings with information you’ve got from your inside view.

Finally, to answer the question that exactly none of you asked: When I invest in the airline industry I short one airline stock and long another airline stock to try and earn based on relative performance while avoiding losses from general industry crapluence. Sometimes it works too, probably just like sometimes a broken analog clock is right.

MEAB’s investment skill.

In the last day there’s been a wave of Chase shutdowns that have swept through very specific parts of the community. All of the data-points I have suggest everyone shutdown has had two things conspiring against them in tandem:

  • An account on their credit report listed as “Closed by issuer”
  • A negative Ultimate Rewards balance (largely related to chargebacks)

From my perspective the likely timeline was: A negative Ultimate Rewards balance led to an analyst getting involved, the analyst soft-pulled a credit report and saw derogatory marks and applied a two-strikes rule, then the analyst queued the account for closure.

Some unsolicited advice when dealing with banks and rewards, Chase or otherwise:

  • Don’t let your points balance or card balance go negative at statement close
  • If one of those does go negative, transfer points and/or spend as necessary to get it non-negative
  • Dispute away any derogatory remarks from your account (persistence will eventually pay off)

If you’re shutdown, know that a shutdown at Chase is generally better than a shutdown at other banks because with a little luck and good timing, you’ve got a points machine.

Have a nice weekend!

Pictured: The Chase shutdown wave hitting some unlucky manufactured spenders.

We’ve talked before about getting out of the various American Express penalty boxes, which is when AmEx won’t give you referral links or gives you a pop-up telling you that you’re not eligible for a welcome bonus on new applications. Despite some noise to the contrary that keeps surfacing, the main way out still exists and it remains the same:

Spend a lot on your existing AmEx cards

What’s missing seems to be what “a lot” means, so let’s clarify based on what we know:

  • $30,000 – $40,000 a month for three months on a co-brand card almost always gets you out
  • $40,000 – $50,000 a month for three months on a Membership Rewards or cash-back earning card will probably get you out

Of course neither of these are fool-proof but based on data-points I’ve worked with, this volume of spend will work about 80% of the time. It’s also even worked even after a past bankruptcy write-off with AmEx.

What if you don’t have a co-brand card? Apply for one even if you get the pop-up with no bonus, then start spending. There are a few no-annual fee co-brand cards like the Delta Blue and the Hilton Honors card so you’ve got options.

Good luck!

Now we just need to have AmEx send these when someone spends their way out.