EDITOR’S NOTE: Yes, today’s post has a lot of words (for MEAB), but there’s good stuff in there, or if not good stuff, there’s at least stuff. I promise.

  1. JetBlue has a status match challenge for elites of all major US airlines except Southwest, which I can only assume was excluded out of spite. The matched status is Mosaic 1 or Mosaic 2, which are low-tier and mid-tier statuses and don’t include Mint upgrade certificates.

    Status lasts three months and can be extended through the end of 2025 by receiving 10-25 tiles within the same timeframe.
  2. Bilt Rewards, the purveyor of fine food and dining to travel bloggers, the program founded by a gamer who hates gamers, has removed Hawaiian Airlines from its transfer partners page with no notice, apparently because contract negotiations didn’t lead anywhere fruitful for Bilt.

    Richard Kerr, the a VP of Travel at Bilt, “[is] confident the partnership [will] return shortly“. I like the confidence, but I don’t completely share it. My actionable take from this news is that I’m going to assume Bilt partners could disappear at any point without notice and act accordingly. For me that means never hold more than 50,000 Bilt Rewards, since the last transfer bonus was capped at that level and I expect future ones will be too.
  3. Kroger has a 4x fuel points promotion on third party gift cards other than Amazon and fixed value Visa and Mastercard gift cards in-store tomorrow through Sunday, again. They’ve also got a single use coupon for $8 off of two $100 gift cards through September 3 which pairs nicely with the fuel points promotion, in the same way that politics pairs nicely with scandal.

    The bulk resale market for gift cards is currently wildly volatile largely due to Pepper; if there were a VIX for gift cards (GIX?), it’d probably be approaching historic highs. (Thanks to GCG)
  4. The merger of Alaska Airlines and Hawaiian Airlines won’t be challenged by the DoJ, but the DoT may still put up road blocks. A few notes:

    – Alaska says they’ll “preserve the value of HawaiianMiles at a one-to-one ratio when they become Alaska Mileage Plan miles“
    – There’s a 20% Membership Rewards transfer bonus to Hawaiian in August
    – Hawaiian miles aren’t worthless, but they’re worth much less than Alaska miles

    I’ve seen the question “should I transfer miles to Hawaiian with the bonus?” in about a dozen places since the news dropped. My opinion that no-one asked for: Wait until August 30-31 to decide and see if we get any indication of the DoT’s feelings in the meantime. And also how many Alaska MileagePlan miles have you redeemed in the last 18 months? That should probably play into your calculus.
  5. Southwest opens its schedule this morning for travel through April 7, 2025. Booking tomorrow gives you, statistically speaking, the best random choice odds for gaming schedule changes during Spring Break, 2025.

    Fair warning on these flights: Southwest will have some form of assigned seats in early 2025, so you may find yourself paying for a seat assignment in the new booking window. (Thanks to JR76)

Happy Thursday!

More calculus, but put to evil. Also the answer is π because mathematicians hate society.

EDITOR’S NOTE: If the math formula doesn’t render correctly in your reader, check the website at this link.

Introduction

In advantage play (gambling with an edge over the house), the Kelly Criterion or Kelly Formula gives a simple calculation for the best amount to bet to maximize earnings. We can draw an analog for resellers, whether it’s the buyer’s group kind or the gift card arbitrage kind.

The Propeller Head Part

The generalized Kelly formula, rewriting a bit to express terms familiar to resellers, is:

\%_{float} = \frac{(1-p_{loss})}{\%_{loss}} - \frac{p_{loss}}{\%_{gain}}

Where:

  • %float = The percentage of your budget to float
  • ploss = The probability that you’re going to lose your profit
  • %loss = The percentage you’ll lose if a loss happens
  • %gain= The percentage you’ll gain if you don’t lose

A Simple and Specific Example

Let’s look at Pepper, which may or may not pull the rug out from under you at any point in the next year. With Pepper, you’re probably earning about 3.9% from your credit card (4x Membership Rewards, worth 4.4% cash back, times 90% due to Pepper’s convoluted redemption). Assuming your buy rate equals your sell rate after rewards are paid out (buy at 90%, sell at 90%), then we’ve got a simple calculation:

  • ploss = 10% (pick your own number here, but let’s say there’s a 1 out of 10 chance of Pepper failure)
  • %loss = 10% (worst case you lose all of the discount Pepper gives)
  • %gain= 3.9% (the percentage you’ll gain if you don’t lose, in this case Membership Rewards)

Then run the numbers and get:

  • %float = (1-0.10)/0.10 – 0.10/0.039 = 644% (when probability of loss = 10%)

What the hell, you might ask? Why is that number over 100%, and how do I invest that much? Well, the answer is either (1) you should float all of your bank roll to maximize profit because you’re much more likely to win than lose, or (2) you need 5.44 other players to help you.

Increasing the Chance of Failure

What if you think there’s a 30% chance of Pepper failure though? The calculation is again simple:

  • %float = (1-0.30)/0.10 – 0.30/0.039 = -692% (when probability of loss = 30%)

What the double hell, you might ask? Why is that number over 100% and also negative? The formula is telling you that if you think Pepper’s got a 30% chance of failure in the next 30 days, you shouldn’t invest anything; “kill it with fire” says the formula.

Finding the Middle Ground

So, what’s the cut-off at which the formula switches from LFG to hells-to-the-no? I’ll spare you the algebra, but it’s easy to find by setting %float=0 and solving for ploss. Doing that gives:

  • ploss (cutoff point) = 0.2806 = 28.06%

In other words, if you think Pepper is < 28% likely to fail before you can cash out your rewards, you’ll maximize your profits by playing the resell game. If you think Pepper is ≥ 28% likely to fail, stay away. (I generated a boring graph illustrating how float percentage varies with the probability of loss for turbo-nerds here).

Conclusion

The Kelly criterion is surprisingly insensitive for churning problems, switching from above 100% (1.0) to below 0 very quickly. But, if you’re 3/4 certain that Pepper isn’t going to fail before your rewards are paid out, keep going.

Special thanks to John Reeder for poking me on the subject, and another special thanks to John for the idea for a follow-up piece on the subject: what if you know they’re gonna steal your money, but not when? Stay tuned, or, like yesterday, don’t; you do you.

Another helpful MEAB plot.

  1. Do this now: Register for 6,000 bonus Aeroplan miles on “select” Air Canada flights to Canada. Based on the terms and conditions, it looks like “select” flight mostly means paid non-basic economy flights booked after registration, and for travel through March 31, 2025 at 11:59 PM.

    What happens if your flight is delayed past 11:59 PM on March 31, 2025? I dunno, but I image it wouldn’t be fun to clean up. (Thanks to Vince for sending me the correct promotion end date)
  2. Meijer MPerks has $10 off of the purchase price of $150 or more in Mastercard gift cards through Saturday. A few tips:

    – There are Chase Offers and BankAmeriDeals for Meijer currently floating around
    – You have to clip the coupon in your MPerks account
    – This looks like the kind of deal that you can reclip after buying to repeat
    – Sometimes Meijer gas stands also sell gift cards

    Meijer sells Pathward and Sunrise gift cards.
  3. Delta Stays and Delta Car Rentals have a promotion for MQD earning on hotels and car rentals booked directly through the portal by September 30 for travel by October 31, earning at one mile per dollar spent. A few random thoughts:

    – You can book VRBO bookings through Delta Stays
    – You can list things on VRBO, and sometimes VRBO runs promotions
    – Delta Platinum and Delta Reserve American Express cards have a Stays credit
    – For upcoming travel where status doesn’t matter, you might as well earn MQD
    – Delta Stays is not the same thing as Delta Vacations, don’t confuse them
    – Delta gift cards do not work at Delta Stays

    Always be probing. Am I playing this one, asked no-one? No, because I have Diamond through 2030 thanks to prior shenanigans and as a result MQDs are effectively worthless for me until then.
  4. Delta Vacations has a tiered $75-$250 off of a flight+hotel booking promotion that seems available for all Delta Medallion members using promo code SMMED2024 booked by January.

    Again, remember that Delta Vacations is different than Delta Stays even though they’re technically the same company, so your AmEx credits won’t work here because I guess late-stage capitalism, or something.
  5. Stephen Pepper at GCG has a thoughtful opinion piece on Pepper Rewards. As usual, my strategy with Pepper is to avoid floating more (rewards in this case), than I could stand to lose.

    Side note: John Reeder challenged me once on my position about “floating what I could afford to lose”, and his counter-point is that in advantage play, the Kelly betting method governs your bets (or as an analog, money at risk) in order to maximize potential profit and indirectly minimize the risk of loss. There’s something there for churners; stand-by for a future post on the topic. Or don’t; you do you.

How to deal with chronic messy room? Its atrocious. Details in comments. : r/CleaningTips

AirCanada Aeroplan’s customer service center, but as a bedroom.

  1. Clear has a promotion for a $75 Uber voucher with a new membership and also some existing expired memberships. In the past, these have been an ok-ish way to cash out American Express Clear credits. Note the following from prior promotions:

    – The voucher doesn’t does work outside of the US, but ymmv
    – The voucher can be used on multiple orders
    – The voucher works for Uber and Uber Eats
    – You’ve only been able to apply one voucher per Uber account per promotion

    The vouchers typically come about a month after the end of the promo. (Thanks to nutella)
  2. Radisson Rewards has a promotion for a one year upgrade to its highest level of status, VIP. The main benefits of VIP status are free breakfast for two and access to suites for complimentary upgrades.

    Remember that Radisson Rewards covers properties outside of the Americas, and Choice covers properties inside the Americas.
  3. Staples has fee free $200 Visa gift cards through Saturday, limit eight per transaction. For best results:

    – Try for multiple transactions back-to-back
    – Look for lower fee versions of the card

    These are Pathward gift cards. (Thanks to GCG)
  4. American Express offers released new offers for:

    – $90 off of $450 or more in airfare at Delta
    – $20 off of $200 at Viator

    The first one is easily gameable. The second one might be if you’re creative and have a penchant for shenanigans.
  5. Southwest has a code for 25% off of award bookings booked today for travel between September 4 and December 18 with promo code SAVE25NOW. The blackout days and cities paragraph is too lame to summarize, so just assume that the sale only applies on days that you don’t want to travel from cities that you don’t want to visit.

    I repriced ten upcoming reservations and only one was eligible for the discount.

Happy Monday!

The answer to the question: What happens if you combine bad Monday jokes with Uber Eats?

  1. Do this now: Register for Hilton’s Q4 promotion for 2,500 bonus points on every stay between September 3 and December 31.
  2. Do this now: Link your Virgin Atlantic account to your Virgin Red account on the Virgin Red account page for 4,000 bonus points, which you’ll receive via an emailed code after linking.
  3. The Citi AAdvantage Platinum Select personal card has a heightened offer for 75,000 AA miles after $3,500 spend in four months and the annual fee is waived for the first year too.

    Citi makes it easier than a lot of banks to pay your bill in less orthodox ways.
  4. American Express has a targeted upgrade offer for Business Green to Business Gold cards with 70,000 Membership Rewards after $10,000 spend in three months. Assuming you can hit that spend in 4x categories, that’ll net you 11x on $10,000 spend. (Thanks to joghi)
  5. The Citi Shop Your Way Rewards card, the Yusuf Dikec of credit cards, has sent new, targeted spending offers for August for online spend. We’ve seen:

    – 200,000 Shop Your Way Rewards points with $750 spend
    – $70 statement credit after $1,000 spend
    – $50 statement credit after $750 spend
    – $30 statement credit after $500 spend

    For the first time in forever, there’ll be music, there’ll be light Citi is now showing (some) registered offers on the Offers tab after logging in; in my case, two of four are showing, which is divide by zero times more than before. (Thanks to con_man101, Brandon F, Jon, and Ben)
  6. The RebatesMe shopping portal has a new member cash back bonus of $40 for new accounts that spend $10 or more through the portal in the first year. Rather than signing up directly on the site though, use a friend’s referral and they’ll earn $45 if you earn more than $10 in cash back in the first 90 days. Lots of numbers there, right?

    Typically RebatesMe requires only a new email address for sign-up, but may also do phone number text verification for redemption. (Thanks to FM)

Have a nice weekend friends!

Friendly weekend activities reminder.

EDITOR’S NOTE: I flubbed the math in yesterday’s post. My only excuse is that I was using a cyrillic Soviet-era LED driven calculator and forgot to carry the Д when performing the Ж. I’ve updated the math and promise to learn Cyrillic before trying this again.

  1. The Chase Hyatt Business Card has a new heightened, tiered sign-up bonus matching the previous best offer:

    – 60,000 World of Hyatt points after $5,000 spend in three months
    – 15,000 World of Hyatt points after another $12,000 spend in six months

    This one runs through September 26, and almost certainly won’t bypass 5/24. (Thanks to Parts_Unknown-)
  2. Qatar Avios has devalued award redemption rates on AA and Alaska short and medium haul flights. The lowlights:

    – Economy prices went up between 23% and 58%
    – Business prices went up between 35% and 63%

    This is of course the same kind of trash that you find in a junkyard after a tornado; but also we should expect that different carriers’ Avois point values are going to converge on one another eventually so it’s predictable trash. In the mean time, DansDeals has a great chart on the cheapest currencies for booking AA flights post Qatar’s devaluation.
  3. Kroger has a 4x fuel points promotion on third party gift cards and fixed value Visa and Mastercard gift cards in-store tomorrow through Sunday. Amazon gift cards remain excluded and will only earn 2x points.

Happy Thursday!

The calculator used for yesterday’s post.

UPDATE: Corrected off by 10 math. 🤦‍♀️

I usually try and order these items based first on how interesting I think they are, and second to try and group like things together(-ish). That was harder than normal today.

  1. The Capital One Spark Cash Plus has one of the more whale friendly sign-up bonuses that I’ve ever seen. The card’s bonus:

    – $2,000 statement credit after $30,000 spending three months
    – $2,000 additional statement credit after every $500,000 spent during the first year
    – $150 statement credit to waive the annual fee after $150,000 spend

    The base card earning structure is 2% on everything. Ignoring the annual fee credit, the sign-up bonus effectively adds: 6.67% extra on your first $30,000 spend and 0.4% extra on exact $500,000 spend increments after. For the math challenged, that’s 8.67% back and then 2.4% back on all spend with proper optimization. The second level hack is to pair it with a miles earning Capital One card to transfer the outsized earning into mileage programs.
  2. The Capital One Venture X Business card has a heightened sign-up bonus:

    – 150,000 miles after $30,000 spend in three months

    Including the normal 2x earning, this card a 7x card for the first $30,000 spend. The $395 annual fee is not waived, but the card does include a somewhat gameable annual $300 travel credit.
  3. Avianca LifeMiles has devalued and retooled award redemption costs. The major changes:

    – US East to the United Kingdom is slightly cheaper in all cabins
    – The rest of US to Europe awards are up 17% for Y, 11% for J, and 50% for F
    – Continental US to Asia is up 33%

    The booking engine and pricing engine both remain quirky and the typical weirdness largely still persists. (Thanks to AwardWallet)
  4. The Citi BestBuy credit card, a future Unsung Hero (thanks to prodding by Derthsidious), has a few recent developments:

    – There’s an uncapped 15% back in rewards on your first day through September 13
    – You can redeem points for non-expiring BestBuy gift cards

    The card has no-annual fee and it earns 3x on gas, and 2x on grocery and dining. If the landing page for the card looks familiar to another weird card, that’s because it’s a cousin to another Unsung Hero.
  5. VanillaGift.com has fee free Visa gift cards through Saturday for back-to-school funzies with promo code VGBTS24. Purchase limits are $10,000 per account per rolling 24 hours, and note that American Express first party cards won’t earn rewards on this site. But that’s one of the many reasons we have non-first party AmExes, right?

    These are Vanilla / Incomm cards which have liquidation throttles at most major chains for in-person transactions.

Rejected design for the Capital One Spark Plus card (sadly).

EDITOR’S NOTE: If you’re viewing this on a platform that doesn’t properly render the math formulas, pivot to the website for this article.

Introduction

When calculating the cash value of points redeemed for a free night at a hotel, a surprising number of blogs ignore the parking fees and resort fees charged by most programs. That disingenuously inflates the value of a hotel point, unless you’re able to talk your way out of a resort fee and you can get to the hotel without a vehicle.

Fees on Award Stays in Major Programs

Let’s interlude with a quick refresher on major programs’ rules about fees on award stays:

  • Hilton: no resort fees on points redemptions, but parking charged
  • Hyatt: no resort fees on points redemptions, parking may be charged depending on elite status
  • Marriott: resort fees and parking charged
  • Choice: resort fees and parking charged
  • Best Western: resort fees and parking charged
  • IHG: resort fees and parking charged

Calculating Cents per Point

Taken at face value, you’ve effectively got a cash co-payment on award redemptions in the form of fees with most major loyalty programs, which reduces the value of your points. The naive formula that you’ll typically see for cpp (cents-per-point) is:

cpp = \frac{rate*100}{points}

But, the total cash value of your stay is the nightly rate plus fees, not just the nightly rate. And as a result, we ought to include resort fees and parking in that valuation. Let’s introduce a MEAB reduced comparative value cv, which is a reduced overall cents per point that takes fees into account for redemptions:

cv_{meab} = \frac{(rate-fees)*100}{points}

Looking at the JW Marriott Austin for a concrete example: For a Saturday night, one-night stay in the cheapest room, the cash price next weekend is $235, plus a $25 destination fee, plus a $54 self-park fee. An award night for the same room on the same weekend is 43,000 Bonvoy points. That means we’re getting a reduced MEAB comparative value (cv) of:

cv_{meab} = \frac{(\$235-\$25-\$54)*100}{43,000} = 0.36

That works out to a whopping reduced comparative value of 0.36 cents per point, which is bad even by Marriott standards. Side note: If you instead booked this Marriott stay via the Chase Ultimate Rewards portal with a Sapphire Reserve, the $25 resort fee would be included in the cash rate and you’d end up paying 17,333 points and $54 for parking, instead of 40,000 Bonvoy points and $79 in fees. Remember this example when you’re looking the Ultimate Rewards 70% transfer bonus to Bonvoy.

So What?

Looking at reduced value comparative calculations lets you compare currencies across different programs in a more genuine and equitable way. The results aren’t always pretty, but they do make Hyatt and Hilton look better than other programs ceteris paribus.

Happy Tuesday friends!

Don’t worry friends, there’s always something more at MEAB.