EDITORS NOTE: In 2024, I’ve introduced Guest Post Saturdays. Today’s guest post is from a new travel blogger but seasoned financial hacker, Graham, who offers great insight on application of churning techniques to other aspects of finance.

tl;dr:

  • The tricks you know from churning can be applied elsewhere in life, such as when you change jobs:
    • You can double dip on 401k matches and mega backdoor contributions
    • You can hold out for the best offer on a once-in-a-lifetime operation like rolling an old 401k to IRA
    • You can drain corporate benefits, like you’d drain an Amex coupon book before closing the card
    • You can get your annual fees (aka taxes) refunded if you get money clawed back by your employer
    • Just like you book refundable bookings as backups, you can rely on COBRA as a refundable (never charged, really) backup insurance option

Intro

In the world of churning and travel hacking, we’re used to using all sorts of tricks to get the most value for ourselves. We double or triple dip on annual benefits, we hold out for the best offers on NLL cards, we drain the coupon book benefits on a card before closing it, we take advantage of grace periods for getting annual fees refunded, and we make preventative refundable travel bookings. It turns out that the kinds of tricks we use for credit cards and travel also apply to many other aspects of life. In this post, I go through all the ways I’ve found to apply churning tricks to the process of changing jobs.

It should go without saying, but I’m just some random dude on the internet that isn’t a lawyer or accountant (and more importantly isn’t your lawyer or accountant). I’ve done my best to research and cite these tricks, and to include my own experience where I have it, but make sure to do your own research and understand the consequences of what you’re doing before blindly applying tips in this post.

401ks

Double Dipping: Two 401k Matches

Many employers offer to match the money you contribute to your 401k each year. Those matches apply to an overall per-employer limit ($69,000 for 2024) not your personal limit ($23,000 for 2024). Having two employers gives you the opportunity to get two full matches. Let’s imagine this scenario:

  • Employer 1 offers a 50% match on contributions (up to some fraction of your salary), and you’ve earned enough for up to a $7.5k match on 15k contributions
  • Employer 2 offers a 50% match on contributions (up to some fraction of your salary), and you will earn enough for up to a $5k match on 10k contributions

There are multiple ways to optimize this scenario:

  • Easier, Less Profitable Way – Limiting Contributions at Employer 1: You could limit your contributions to Employer 1’s plan to $15k, so you maximize the match without going over. Then when you join Employer 2, you can use your remaining space to contribute $8k, getting $4k of your possible $5k match. This leaves some money on the table, but nets you more than if you’d just maxed your 401k at one or the other employer.
  • Riskier, More Profitable Way – Excess Deferral + Corrective Distributions: You could contribute $15k to Employer 1’s plan and $10k to Employer 2’s plan. This would put you in a situation where you’ve achieved the maximum match, however, it also puts you $2k over your $23k personal limit and means you’ve made an Excess Deferral. The consequences of an Excess Deferral are double taxation on that money, and potentially additional penalties, which probably outweigh the value of the additional match. You can avoid the double taxation and penalties with a Corrective Distribution that removes $2k from Employer 1’s plan. The catch is that Employer 1’s plan may not be willing to provide Corrective Distributions, or Employer 1 may attempt to claw back the match. Before attempting this method, you should confirm your plan supports Corrective Distributions and you should be prepared to really pay attention when filing your taxes.

Note that there are plenty of other nuances of 401k plans that might affect your personal results, such as true ups and vesting schedules. Make sure you know both plans inside and out and have thought it through before attempting.

Double Dipping: Two Mega Backdoor Contributions

The mega backdoor roth is the lesser-known big brother of the backdoor roth, and it lets you sock away tens of thousands of dollars through your employer’s 401k plan. An even lesser known thing is that because mega backdoor contributions are not Elective Deferrals, they’re only subject to the overall per-employer limit ($69,000 for 2024), not your personal contribution limit. That means if you change employers through the year –and both plans support it– you can do the mega backdoor roth twice.

Holding Out for the Best Offer: Saving a 401k to Transfer

When leaving a company, you often have three choices for what to do with your 401k:

  1. Keep it with the current plan administrator (beware: there may be fees)
  2. Roll it into an IRA
  3. Roll it into your new 401k plan

There are many pros and cons to each that are beyond the scope of this post (eg. IRAs have fewer bankruptcy protections than 401ks), but here are two reasons you might want to hold off on rolling your old 401k into your new plan:

  • You can sometimes roll a 401k into an IRA to get relationship pricing at banks. For example, I used an old 401k to get to the next relationship pricing tier on my mortgage, saving an additional 1/8% on my mortgage rate. Note that including retirements in relationship pricing is not the norm, and Citi is one of a few banks I found that did that.
  • You can sometimes find significant bonuses to bring an IRA to brokerages. For example, Robinhood has a 3% match right now (beware they require you to keep the money there for 5 years)

One thing to be aware of if you plan to use one of these tricks is the pro rata rule. If you do backdoor roth IRA contributions, the rule can create negative tax consequences if you leave your pre-tax money in an IRA through the end of the year. My personal workaround was to roll my old 401k into an IRA to get the Citi relationship pricing, and then roll the IRA into my new 401k a month later (all within the same year).

Draining Benefits: Using up Annual Benefits

Many companies have miscellaneous benefits that reset to full at the beginning of the year, and have a use-it-or-lose-it model. Examples include commuter cards and FSAs. Many benefits will cease to be available once you leave, and others will have a limited window to submit expenses after you leave. Make sure to keep track of the deadlines for these accounts, and drain them.

Note that some benefits like FSAs are based on paycheck deductions that happen throughout the year, but the full amount may be available in your account starting on Jan 1. I don’t believe there are laws governing this, but on departure my company doesn’t claw back FSA spend that exceeded paycheck contributions. If this is the case at your company an you know you’re leaving far enough in advance during open enrollment period, you could max out your FSA contributions to take advantage of this edge case.

Fee Refunds: Tax Refunds on Clawbacks

If you get any money clawed back when changing jobs (eg. a signing bonus that didn’t fully vest), keep track of it. If you previously paid income taxes on that money, you may be able to deduct the clawback from your income. I personally was able to deduct a $14,000 clawback for the 2019 tax year and had my return accepted with no audit, but this may be a scenario where you want an accountant for CYA purposes.

Backup Bookings: COBRA for Health Insurance

Insurance from your old job usually lasts to the end of the month that you left. If you don’t start your new job by then, COBRA is a program that lets you pay to continue your old coverage. You have 60 days from when your coverage ends to request that continuation of coverage under COBRA, and the coverage “is always retroactive to the day after your employer coverage ends”. You pay the full cost if you do elect, but if you have a short gap in insurance, you can hold off on electing for COBRA until you know if you happen to need it or not. If it turns out you did need it, elect after the fact and be covered. If it turns out you didn’t need it, you’ve saved on the cost of insurance.

About the Author

I love understanding systems, and optimizing for the best outcomes within the rules as implemented (rather than as written, which is a distinction all churners should be keenly aware of). This love has led me to a career in cyber security, to churning, and also to a general obsession with optimizing all things finances. I’ve recently turned that last point into a blog where I write posts like this one (with many more in the pipeline). If you’re interested in that kind of content, there’s a subscribe box at the bottom of the blog. And if you think I’ve missed something, gotten something wrong, or should write future posts on a particular topic, please drop me a line.

– Graham

Graham’s light evening reading, prolly.

EDITOR’S NOTE: The feedback I’ve gotten for guest post Saturday has been resoundingly positive. I’ve got a few posts left to publish, but I’m running low. If you’re interested in a guest post, please reach out!

It’s a good news and bad news situation today. Ordered in terms of goodness:

  1. American Express has a great new referral offer for +10x at restaurants on many charge and credit cards for up to $25,000 spend in restaurants for three months for the referrer. The referral must be sent by May 22.

    Pro tip: Referrals usually stick around for 30 days, so squirrel one away on May 22 and you can double dip this one.
  2. Staples has fee-free $200 Mastercard gift cards starting Sunday and running through the following Saturday. There’s a stated limit of eight, which generally isn’t actually enforced in many locations.

    These are Pathward gift cards, so have a liquidation plan in place.
  3. Hyatt Destination residences have moved from the regular World of Hyatt program to the Homes and Hideaways platform, which really means that these properties now have a low 1.2 cents per point fixed redemption value.

    It already happened, and there’s no way to lock in old rates. Hyatt went #bonvoy in rare form.

Have a nice weekend!

Data deep dive: Visualizing today’s post, and look for the hidden infinitely good news item zero while you’re at it.

EDITOR’S NOTE: The feedback I’ve gotten for guest post Saturday has been resoundingly positive. I’ve got a few posts left to publish, but I’m running low. If you’re interested in a guest post, please reach out!

  1. Do this now: Register for Hyatt’s Bonus Journeys promotion for 3,000 bonus points for every three nights stayed between March 1 and April 30. There’s an additional 1,000 points for some international properties available if you hold a Hyatt credit card too.
  2. Do this now (if you hold Delta status): Choose what to do with your rollover MQMs in the new program.

    I extended my Diamond status through the end of the decade which seems like an insane option to offer, but no complaints. It’s rather niche and limited scope, but this approaches deal of the year territory for people with lots of rolled over MQMs.
  3. The FBNO Amtrak Preferred Mastercard has increased its sign-up bonus to 40,000 points after $2,000 spend in three months, and the $99 annual fee is not waived the first year. Points are worth between 2.5 and 2.9 cents each roughly.

    If you ride Amtrak regularly this a great card, otherwise skip it.
  4. In case you’re wondering how Alaska is doing since the Boeing door plug incident: They’re running another deep discount award ticket sale through tonight:

    – Short haul: 4,000 miles
    – Medium haul: 7,500 miles (including Hawaii and Mexico)
    – Transcontinental: 10,000 miles

    The covered dates are for travel between March 12 and May 22, which obviously overlaps spring break, but also Lubbock, TX’s favorite holiday: Pig in a Blanket Day on April 24.

Happy Thursday!

The official Pig in a Blanket Day pace car.

Introduction

A favorite past time for miles and points hackers is often to think about how to exploit an edge that might form when something big happens. It makes for a great thought experiment, but generally that’s all it is for a long time. Let’s illustrate with one item in particular.

This Week’s Hotness

Mainstream news crossed paths with miles and points news this week, and you’ve no doubt already heard that Capital One has inked a deal to buy Discover. I’ve got the same general thoughts and questions that a lot of you probably have, like:

  • If you’re shutdown with Capital One, would holding a Discover card or a Discover Business card get you back in?
  • Wait, Discover has a Business card?
  • Will the DoJ even let this happen? They successfully prevented JetBlue and Spirit from merging, which would have created the fifth largest airline in the US. Discover is already the fourth largest processing network, and four is bigger than five, so uhh, yeah.
  • Discover owns its own processing network like American Express, which means that if Capital One completes its purchase, it will be in effectively direct control of its interchange fees. Will that mean more rewards for us?
  • What would a hotdog with a donut bun taste like?
  • What will happen to Diner’s Club cards that run on the Discover network, and incidentally remain a great alternate way to earn points transferrable to Alaska?

These are all great questions, but they’re also all completely nebulous at best, and nearly impossible to predict at worst.

Back to the Question

Coming full circle, how do we exploit an edge with big news like this? The answer is, frankly we have no concrete idea about what to do in the early days and weeks of a major change, just like we have no idea about what a donut-hotdog might taste like before we make it. It’s still fun to think and theorize, but in the end, sitting and waiting until we have more data is actually the play.

Also, I lied, we do know how a donut hot dog would taste ahead of time.

Bonus

Yes, this all applies to AA’s ambiguous loyalty points earning changes too.

Yes, these are actually a thing.

EDITOR’S NOTE: The feedback I’ve gotten for guest post Saturday has been resoundingly positive. I’ve got a few posts left to publish, but I’m running low. If you’re interested in a guest post, please reach out!

One of the most consistently inconsistent methods in manufactured spend is earning sign-up bonuses by paying yourself as an OnlyFans model bulk gift card resale, roughly because the basic version involves selling to third parties that ultimately use the card and that makes you beholden to their whims. Their whims are really more about demand though, and that demand is cyclical for slightly different reasons:

Gift Cards

The bulk gift card resale market for cards like BestBuy, Apple, Target generally varies by quarter:

  • Q1: Starts out depressed, but rates and demand increase slowly, especially around holidays
  • Q2: Rates hold steady, demand is lumpy but persistent
  • Q3: Rates increase slightly, demand gets more-or-less steady
  • Q4: Rates reach local maxima, demand is typically the biggest for the year

Grocery Loyalty Points

The profitability of bulk gift card resale markets for manufactured spenders centers around grocery loyalty points, which make up the difference between cost and resale rate for most bulk brands. If you’re cashing those out by selling to a third party, demand looks like:

  • Q1, Q2: Lumpy
  • Q3: Strong
  • Q4: Starts strong, ends weak

The main reason for the difference in loyalty points demand is that they’re often redeemed for discounted fuel by industry and agriculture that sees peak use in Q3.

Smoothing Out Demand

How do you make demand relatively consistent? I’m going to offer two primary ways:

First, it’s easy on paper but relatively hard in practice: Be the end-user. That means do what the end-users do, which is:

  • Buy goods on sale and sell them at Amazon, ebay, craigslist, or internationally
  • Buy Apple products and sell them internationally in places like Brazil
  • Use loyalty points to buy things like Airpods and sell them
  • Use loyalty points for discount gas, either for yourself or as a fueling service

I’ve dabbled in every single one of these, and while they were all successful to an extent (and in one case wildly successful), they’re all a ton of work to scale. Ultimately, I wasn’t fulfilled by any of it and I didn’t enjoy it in the way that I enjoy manufactured spend, so I don’t do those things any more.

That brings us to the second method of smoothing demand, acting as a gift card reserve banker and holding your cards until demand is high, then unleashing fury on the market whenever buyers return.

Finally, let’s talk a bonus method for smoothing out demand Paying yourself as an OnlyFans model which is really a cheater method: Shift the demand elsewhere. For me, that means I’m focusing on other manufactured spend techniques when demand in bulk card resale isn’t solid. There’s plenty of other opportunity out there.

Happy Tuesday!

A different kind of OnlyFans play, courtesy of SideShowBob233.

EDITOR’S NOTE: The feedback I’ve gotten for guest post Saturday has been resoundingly positive. I’ve got a few posts left to publish, but I’m running low. If you’re interested in a guest post, please reach out!

  1. Office Depot / OfficeMax stores have $15 off of $300 or more in Visa gift cards through Saturday, and this one has a limit of 10. As usual:

    – Link your credit cards to Dosh
    – Try for multiple transactions, back-to-back
    – Try for scale in a single transaction, it usually works out
    – Don’t forget about your monthly American Express Business Gold credits

    These are Pathward gift cards which often have a $480 per five minute transaction limit for liquidation at popular in-person liquidation spots.
  2. Citi ThankYou Points has a 30% transfer bonus to Virgin Atlantic through March 16. These miles are generally best used on Delta or ANA metal.
  3. The new American Express Delta card Resy credits turn out to be relatively easy to game in most big cities: buying anything at a restaurant listed on Resy whether or not your make a reservation, including gift cards, will trigger the monthly credit according to dozens of data points.

    More good news too: Some hotels eligible for Delta Stays credits now offer sanitized rooms!

Happy Monday!

It’s technically even possible to find a hotel that’s completely covered by the Delta Stay credit and includes a sanitized room.

EDITORS NOTE: In 2024, I’ve introduced Guest Post Saturdays. Today’s guest post is from the witty, inspiring, and definitely-not-a-giga-chad irieriley.

If you’re like me, you likely didn’t set out in this hobby thinking you’d end up where you did. I was a backpacker when I started back in 2016, dreaming of free economy flights and upgrading from hostels to Hyatt Houses.

I did not think it would lead to hours spent probing fintechs, the rise and fall of the world’s greatest bodybuilding supplement company, and using developer tools to identify offer codes and account masking patterns.

Of course, there’s a lot of steps and shifts in perspective between seeing a TPG ad on TSA bins at LaGuardia and not giving a second thought to 99x Amex AU offers.

MEAB‘s wisdom posts contain a lot of thought provoking questions, but my all time favorite post is this one – concerning perception of dollar value, scaling your spending, and how things change as you go deeper down the rabbit hole. 

To build on Matt’s original premise, I’d posit that the same perception shift occurs with redemption. For the sake of discussion, let’s look at the value of 150k Amex MRs – a sign-up bonus that anyone with a pulse can earn with a personal Platinum card.

  • Non redeemer: What are transferable points? I’m just a giga-Chad cashing out my points for Home Depot gift cards.
  • Beginning redeemer: Wow, $6k of spend in 3 months is a lot. But 150k points transferred to Delta Skymiles must be enough to get to the moon  roundtrip to Europe in business class apparently, a one way basic economy award to Lubbock.
  • Intermediate redeemer: Look at those fools wasting their points on gift cards and transfers to domestic carriers – I got 30cpp by transferring to ANA and booking last minute one way J flights to Japan. 
  • Advanced redeemer: Things have come full circle – I have so many points that I will never be able to redeem them all for travel. I’ll book my travel a year out, and I’ll cash out the rest. 150k MRs = $1,650 with a Schwab Plat or ~$1,950 depending on my bargaining skills.

Pictured: A local business owner/giga-Chad on his way to Home Depot to convert the spoils of $7m of Amex spending into a patio furniture set.

Depending on your situation, each viewpoint can make sense. However, I’d imagine most MEAB readers fall into the final segment. 

And in a community that is largely a perfectly aligned Venn diagram with other optimizer communities like FIRE, cash is king, especially when you hit the inflection point where your ability to earn wildly outpaces your ability to burn. 

I was talking to my P2 (and fellow Waldorf Pedregal enthusiast) about how poorly I had strategized earning and redeeming early on, and she provided some much needed perspective on the whole thing when actually looking back at those first redemptions.

Some of our first cards and subsequent redemptions:

  • Citi AA Platinum pre-derAAilment – SUB used to fly AA Y to Europe, where we attended music festivals and yacht cruised as backpackers
  • Chase Southwest chasing Companion Pass – used to book Y flights to the Caribbean, where we got engaged
  • Capital One Venture – I hit the SUB on the engagement ring, and used the cashback to erase the insane VS surcharges on our first J redemption for our honeymoon

Pictured: Mr. and Mrs. irieriley in 2017 enjoying the spoils of their very first award redemption

While the strategy was akin to SideShowBob233 stepping on a rake over and over again, those first few forays into earning and burning provided more to enrich P2 and I’s lives than another $2,000 into VTI ever will. 

I think it’s ok to occasionally zoom out of doing finger math to avoid looking like a kiter or mourning your Paypal burner to remember why you started this hobby in the first place, and it’s very unlikely that you started because you wanted what sometimes feels like a second job. Instead, you wanted a way to take a trip for free, or some extra cash for bills. 

Pictured: MSers determining whether they’re clear to pull back into their hub account

If there’s anything the last 4 years have taught us, it’s that life is short. This is a friendly reminder that points can be used for something besides booking T-355 Qsuites, cashing out or selling – they’re also a tool for engineering unique experiences for you, your friends, and your family. 

Personally, I’m blowing the Chase Sapphire Reserve grocery cash out equivalent of $1,700 of URs to spend 3 nights at a Hyatt SLH 20 miles from my home. A year ago, that would have really pained me. It still does, a bit. But hey, the Hamptons in summer is otherwise too rich for my blood – may as well enjoy it before this particular hotel joins Hilton and becomes 95k 120k 150k HH/nt. And we’re definitely not going because P2 wants to be in the background of Summer House.

And yes, even for those who don’t travel and are firmly #teamcashback. Don’t forget to use your proceeds to treat yourself or a loved one every once in a while. Even if it’s just a boba during a money order run. 

– irieriley

Pictured: In keeping with the Simpsons motif, a fitting desk decoration for a MSer deep in the weeds of earning looking for some perspective

EDITOR’S NOTE: The feedback I’ve gotten for guest post Saturday has been resoundingly positive. I’ve got a few posts left to publish, but I’m running low. If you’re interested in a guest post, please reach out!

  1. Chase is sending targeted offers on its personal Southwest cards for 3x points at gas, grocery, and dining through the end of 2024, and bonus points count for companion pass but not toward other status levels.

    What does Southwest have to do with gas, grocery, and dining you ask? Well, they’re probably the worlds biggest supplier of pretzel snack-mix bags, and the snack-mix bag cabal knows how to pull strings, trust me. (Thanks to Lava121)
  2. We’re not yet at the point that the Citi Shop Your Way Rewards card moves from Unsung Hero to just Hero, but we’re approaching it. In addition to holding a card with greater notoriety, holders also saw a new round of targeted offers for online spend through March 14:

    – 200,000 Shop Your Way Rewards points after $750 or more in spend (MS Ninja)
    – 250,000 Shop Your Way Rewards points after $1,000 or more in spend (Jacob)
    – $50 statement credit after $750 or more in spend (David 99)

    Yes, these offers stack with the 2024 monthly statement credits for grocery, gas, and dining provided of course that you spend in those categories online. What does Citi have to do with gas, grocery, and dining you ask? They’re a credit card issuer and they want to attract spend on their cards, duh.
  3. The Marriott Bonvoy Business card has a best offer sign-up bonus of five free night certificates for up to 50,000 points per night each after $8,000 spend in three months. [insert joke here about overpriced Marriott hotels in Lubbock]

    I’m not linking to anything on this one because I hope that you can find someone to give you a referral, so they’ll earn points on your successful application too. Using a referral is a great networking icebreaker in the miles and points community for those of you looking to expand your network. (Thanks to DoC)
  4. Having a stable of burner phones and phone numbers is eminently useful, and DDG highlights a great, low cost option for adding a new device to your portfolio: A Moto G Stylus 5G plus a month of service for $40. Make sure you activate the phone, and I’d suggest only leaving it active for the first month then moving to a cheaper service. It’ll unlock automatically in 180 days.

Have a nice weekend!

The leader of the the pretzel snack-bag mix cabal.