What's Your Credit Card Rewards Strategy?

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fareastwarriors
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Re: What's Your Credit Card Rewards Strategy?

Post by fareastwarriors » Mon Jun 05, 2017 12:14 pm

jrbdmb wrote:Related question about spending some of the $6000 grocery spend for my Amex Blue Cash Preferred ...

I have about $1500 in grocery spend (6% cash back) remaining on my BCP that I'd like to use ASAP. A recent Amex BCP Terms and Conditions update taking effect July 01 2017 states specifically that Gift Card Purchases and Reloads (and other "money equivalent" transactions) do not qualify for the normal 6% rewards.

Can Amex really identify whether I'm buying a GC at the local store vs. groceries? Is there any way to avoid scrutiny other than avoid "obvious" purchase totals like $505.95?
I been buying gift cards using BCP with no problems but I usually include other grocery items. I don't know if Amex has the ability to see everything I purchased in my cart.

You say the terms are effective 7/1? Then you have a few more weeks to max it out.

Mudpuppy
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Re: What's Your Credit Card Rewards Strategy?

Post by Mudpuppy » Mon Jun 05, 2017 3:44 pm

jrbdmb wrote:Can Amex really identify whether I'm buying a GC at the local store vs. groceries? Is there any way to avoid scrutiny other than avoid "obvious" purchase totals like $505.95?
If they have an agreement with the grocery store to get transaction details, they can figure out whatever they want to about the transaction. Even if the grocery store just passed along purchase categories, they'd be able to separate your food purchases from your sundries and gift cards. And buried somewhere in the fine print of the cardholder agreement, you probably have consented for them to form such agreements with grocery stores and other vendors.

Welcome to the world of big data.

d0gerz
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Re: What's Your Credit Card Rewards Strategy?

Post by d0gerz » Mon Jun 05, 2017 4:46 pm

Question about Chase's 5/24 rule:

I was 4/24 so applied for the Chase Ink Business Preferred Card (and got approved!). I applied as sole proprietor and used my SS# for tax ID. Will this application move me to 5/24 meaning I can no longer apply for Chase cards subject to 5/24? Or will it not count since it's a business card?

SVT
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Re: What's Your Credit Card Rewards Strategy?

Post by SVT » Mon Jun 05, 2017 4:55 pm

d0gerz wrote:Question about Chase's 5/24 rule:

I was 4/24 so applied for the Chase Ink Business Preferred Card (and got approved!). I applied as sole proprietor and used my SS# for tax ID. Will this application move me to 5/24 meaning I can no longer apply for Chase cards subject to 5/24? Or will it not count since it's a business card?
I've read that in most/all cases, the Chase Ink card does not count towards 5/24. On /r/churning, it is always advised to get one of the Chase business cards when you're at 4/24, then apply for 2 other Chase cards at the same time to end up at 6/24.

ResearchMed
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SPG points on sale this month - Re: What's Your Credit Card Rewards Strategy?

Post by ResearchMed » Mon Jun 05, 2017 10:05 pm

It seems that SPG points will be on sale throughout this month (June).

https://www.travelcodex.com/2017/06/buy ... l+Codex%29

We now need to explore what these points "could get us" (that we'd want to use) that we can't get from AAdvantage or Amex Awards.

Thanks.

RM
This signature is a placebo. You are in the control group.

Levi
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Re: What's Your Credit Card Rewards Strategy?

Post by Levi » Mon Jun 05, 2017 11:11 pm

camillus wrote:Here's my credit card reward strategy. I believe it is adequately simple and safe while still maximizing rewards. I have been doing this for a few years now and so am well past Chase's 5/24 rule. Here it is in a nutshell:

1) Have all of my credit card accounts monitored by Mint.com and log in monthly to Creditkarma.com (one login for me, one for my spouse). This keep me aware of any fraudulent activity that could be happening across any dormant accounts. I am also quickly aware if I am charged an annual fee on a dormant account so I can quickly request that account be closed with a refund of the fee.

2) Every three months or so, go to one of the leading blogs (these days, doctorofcredit.com), go to the "best signup bonuses page," scroll down the list to find a card I'm eligible for - hasn't been chase in quite awhile - and apply (and usually get immediate approval). This hobby usually sends your credit score to the 800s after a few years.

3) Since I already have a mint.com login, and already have logins at most of the major credit card carriers, there's not much hassle setting up the online interface. Once I receive the card, I simply monitor spending for when I approach the amount needed to generate the signup bonus. When I get very close to completing spending, I apply to a new card.

4) At this point, I'm pretty much ignoring Chase cards due to the 5/24 rule. I find there's plenty of other cards to sign up for with cashback bonuses or round trip tickets. (Chase has already bought me two companion passes at this point - nearly 4 years of CP.)

5) This simple strategy gets me about $500 in cash or a round trip ticket every 3 months, or about $2000 or more a year, a "cashback" of something like 15% or more on my annual spending.
After spending the weekend reading up on credit card churning, I think this is the strategy I will be going for. I don't travel much or have the desire to do so, just want cashback/statement credit = )

Only credit card I have right now is a citi double cash which I got as my first CC ever 2 months ago before I knew about sign up bonuses or churning, however I have a mortgage/bank accounts/debit card/etc, score is 812 currently.

My plan is to open a Chase Sapphire Preferred in branch and hope to call in to get the match to 70k points sign up bonus, but 50k is ok too. Assuming I can't get the offer match this should get me $590 in cash back total, $500 cashback from 50k points, $50 from adding an authorized user, and $40 from 1% cashback on the 4k worth of purchases. After 6 months I'd downgrade it to a chase freedom to avoid the $95 annual fee which is waived the first year.

Looking at my transactions over the past year I spend around $1,500 per month so the 4,000 would be within my normal spending for 3 months, if its close to the end and I haven't hit the 4k spent then I'll look into doing manufactured spending.

Am I missing anything? From everything I've read this is the best card for me right now for cashback. I've read a ton but just doing one last sanity check. In 3 months I'll re-evaluate which card to get next.

gvsucavie03
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Re: What's Your Credit Card Rewards Strategy?

Post by gvsucavie03 » Tue Jun 06, 2017 5:19 am

Levi wrote:
camillus wrote:Here's my credit card reward strategy. I believe it is adequately simple and safe while still maximizing rewards. I have been doing this for a few years now and so am well past Chase's 5/24 rule. Here it is in a nutshell:

1) Have all of my credit card accounts monitored by Mint.com and log in monthly to Creditkarma.com (one login for me, one for my spouse). This keep me aware of any fraudulent activity that could be happening across any dormant accounts. I am also quickly aware if I am charged an annual fee on a dormant account so I can quickly request that account be closed with a refund of the fee.

2) Every three months or so, go to one of the leading blogs (these days, doctorofcredit.com), go to the "best signup bonuses page," scroll down the list to find a card I'm eligible for - hasn't been chase in quite awhile - and apply (and usually get immediate approval). This hobby usually sends your credit score to the 800s after a few years.

3) Since I already have a mint.com login, and already have logins at most of the major credit card carriers, there's not much hassle setting up the online interface. Once I receive the card, I simply monitor spending for when I approach the amount needed to generate the signup bonus. When I get very close to completing spending, I apply to a new card.

4) At this point, I'm pretty much ignoring Chase cards due to the 5/24 rule. I find there's plenty of other cards to sign up for with cashback bonuses or round trip tickets. (Chase has already bought me two companion passes at this point - nearly 4 years of CP.)

5) This simple strategy gets me about $500 in cash or a round trip ticket every 3 months, or about $2000 or more a year, a "cashback" of something like 15% or more on my annual spending.
After spending the weekend reading up on credit card churning, I think this is the strategy I will be going for. I don't travel much or have the desire to do so, just want cashback/statement credit = )

Only credit card I have right now is a citi double cash which I got as my first CC ever 2 months ago before I knew about sign up bonuses or churning, however I have a mortgage/bank accounts/debit card/etc, score is 812 currently.

My plan is to open a Chase Sapphire Preferred in branch and hope to call in to get the match to 70k points sign up bonus, but 50k is ok too. Assuming I can't get the offer match this should get me $590 in cash back total, $500 cashback from 50k points, $50 from adding an authorized user, and $40 from 1% cashback on the 4k worth of purchases. After 6 months I'd downgrade it to a chase freedom to avoid the $95 annual fee which is waived the first year.

Looking at my transactions over the past year I spend around $1,500 per month so the 4,000 would be within my normal spending for 3 months, if its close to the end and I haven't hit the 4k spent then I'll look into doing manufactured spending.

Am I missing anything? From everything I've read this is the best card for me right now for cashback. I've read a ton but just doing one last sanity check. In 3 months I'll re-evaluate which card to get next.
What is manufactured spending?

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camillus
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Re: What's Your Credit Card Rewards Strategy?

Post by camillus » Tue Jun 06, 2017 5:29 am

Levi wrote:Am I missing anything? From everything I've read this is the best card for me right now for cashback.
Levi, I hope I caught you before you went to a Chase branch. You have a rare opportunity to capitalize on the all-time home run of the credit card signup bonus hobby: the Southwest Companion pass. Currently Chase is offering all three of its Southwest branded cards as $2k spending in three months for 60k miles. I believe the miles can be transferred to amazon gift card at a 1:1 ratio, but that's not what you want. Let me tell you what you want: The Companion Pass. Basically, it's a year and a half of free airfare for you and a significant other. Two credit card sign up bonuses will give you several thousand dollars worth in free airfare.

I'd Google "Companion Pass" and "Chase 60k" and see what the blogs come up with. If I could do this again, I would, but I can't. You're new to the game, so you can! (Google also the Chase 5/24 rule).

This strategy is at least 4 times as good as the Chase Sapphire preferred.

Edit: re-reading your post, I can see you're not into travel. Would you if it were free? Like, 8 times to Orlando for you and your authorized user? Even if not, I believe 60k miles will transfer 1:1 to amazon gift card.

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camillus
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Re: What's Your Credit Card Rewards Strategy?

Post by camillus » Tue Jun 06, 2017 5:39 am

gvsucavie03 wrote:What is manufactured spending?


Manufactured spending is a dark art used by folks needing to complete required spending to meet requirements for signup bonuses. It is very close to money laundering. For example, use your credit card to buy a prepaid card, bring the prepaid card to the post office to buy a money order, deposit the money order into your checking account, use your checking account to pay off the credit card. "MS" sends your money around a loop coming back to you, allowing you to "churn" by sending the money out again.

I am not comfortable with this dark art as I feel it has compromised my integrity in the past. If you want a little window of what a credit card thief feels like, this is it. "MS" is also usually outside of the terms of service for the various products being used.

gvsucavie03
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Re: What's Your Credit Card Rewards Strategy?

Post by gvsucavie03 » Tue Jun 06, 2017 7:41 am

camillus wrote:
gvsucavie03 wrote:What is manufactured spending?


Manufactured spending is a dark art used by folks needing to complete required spending to meet requirements for signup bonuses. It is very close to money laundering. For example, use your credit card to buy a prepaid card, bring the prepaid card to the post office to buy a money order, deposit the money order into your checking account, use your checking account to pay off the credit card. "MS" sends your money around a loop coming back to you, allowing you to "churn" by sending the money out again.

I am not comfortable with this dark art as I feel it has compromised my integrity in the past. If you want a little window of what a credit card thief feels like, this is it. "MS" is also usually outside of the terms of service for the various products being used.
Yikes. I'm not that desperate for a couple hundred bucks. Sounds illegal or very close to it.

dbr
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Re: What's Your Credit Card Rewards Strategy?

Post by dbr » Tue Jun 06, 2017 8:30 am

gvsucavie03 wrote:
camillus wrote:
gvsucavie03 wrote:What is manufactured spending?


Manufactured spending is a dark art used by folks needing to complete required spending to meet requirements for signup bonuses. It is very close to money laundering. For example, use your credit card to buy a prepaid card, bring the prepaid card to the post office to buy a money order, deposit the money order into your checking account, use your checking account to pay off the credit card. "MS" sends your money around a loop coming back to you, allowing you to "churn" by sending the money out again.

I am not comfortable with this dark art as I feel it has compromised my integrity in the past. If you want a little window of what a credit card thief feels like, this is it. "MS" is also usually outside of the terms of service for the various products being used.
Yikes. I'm not that desperate for a couple hundred bucks. Sounds illegal or very close to it.
It is not illegal. It is almost always in violation of your agreement with the credit card company. When this sort of thing is detected it can result in your card being closed and any points earned taken back. It may result in all your cards with that company being closed and you being blacklisted by that bank forever. They don't have to file charges or go to court to do this because the basis is that you have violated a contract. Typically the T&Cs make clear you do not own your reward points and taking them back is not taking property from you. No bank is under any obligation to extend credit or maintain a business relationship with anyone. Possible recourse is that you didn't really do it and their fraud department is being overzealous.

It is also possible that what might be called manufactured spending is actually ok. An area that rises close to that might be payment of income taxes on the credit card, a transaction that is accepted by any bank, as far as I know.

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Re: What's Your Credit Card Rewards Strategy?

Post by Mudpuppy » Tue Jun 06, 2017 11:18 am

dbr wrote:
gvsucavie03 wrote:
camillus wrote:
gvsucavie03 wrote:What is manufactured spending?


Manufactured spending is a dark art used by folks needing to complete required spending to meet requirements for signup bonuses. It is very close to money laundering. For example, use your credit card to buy a prepaid card, bring the prepaid card to the post office to buy a money order, deposit the money order into your checking account, use your checking account to pay off the credit card. "MS" sends your money around a loop coming back to you, allowing you to "churn" by sending the money out again.

I am not comfortable with this dark art as I feel it has compromised my integrity in the past. If you want a little window of what a credit card thief feels like, this is it. "MS" is also usually outside of the terms of service for the various products being used.
Yikes. I'm not that desperate for a couple hundred bucks. Sounds illegal or very close to it.
It is not illegal. It is almost always in violation of your agreement with the credit card company. When this sort of thing is detected it can result in your card being closed and any points earned taken back. It may result in all your cards with that company being closed and you being blacklisted by that bank forever. They don't have to file charges or go to court to do this because the basis is that you have violated a contract. Typically the T&Cs make clear you do not own your reward points and taking them back is not taking property from you. No bank is under any obligation to extend credit or maintain a business relationship with anyone. Possible recourse is that you didn't really do it and their fraud department is being overzealous.

It is also possible that what might be called manufactured spending is actually ok. An area that rises close to that might be payment of income taxes on the credit card, a transaction that is accepted by any bank, as far as I know.
It's better, and far more ethical, to practice "scheduled spending". If you know you have a major expense coming up and that vendor takes credit cards, figure out what card bonus you want this time and sign up for that card. Need to spend $5k replacing your patio cover and the contractor takes charge cards? Get a new card with a $4k spend requirement and you'll meet it in that single transaction. This is not in violation of the card member agreement and it's a way to get a little more out of those periodic large expenses that can happen, particularly for home owners.

And I would consider paying property taxes by credit card to be "scheduled spending", not "manufactured spending". It's a legitimate expense that can be legitimately paid by credit card. The fee many assessment districts put in place for paying property taxes by credit card does have to be kept in mind, as the fee cuts into the rewards. Similar logic applies for making quarterly estimated income tax payments by credit card, although the fee there is even steeper.

I suppose paying taxes might be against a card member agreement though (it could be considered a cash transaction, not a purchase, and many exclude cash transactions from the rewards programs). I know of at least one rewards card that treats the percentage reward rate for tax payments as lower than the percentage for purchases. But buying a patio cover or washer/dryer combo or other similar large purchase is normal spending, so it should be perfectly fine from a card member agreement perspective.

rjbraun
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Re: What's Your Credit Card Rewards Strategy?

Post by rjbraun » Tue Jun 06, 2017 11:58 am

camillus wrote:
Levi wrote:Am I missing anything? From everything I've read this is the best card for me right now for cashback.
Levi, I hope I caught you before you went to a Chase branch. You have a rare opportunity to capitalize on the all-time home run of the credit card signup bonus hobby: the Southwest Companion pass. Currently Chase is offering all three of its Southwest branded cards as $2k spending in three months for 60k miles. I believe the miles can be transferred to amazon gift card at a 1:1 ratio, but that's not what you want. Let me tell you what you want: The Companion Pass. Basically, it's a year and a half of free airfare for you and a significant other. Two credit card sign up bonuses will give you several thousand dollars worth in free airfare.

I'd Google "Companion Pass" and "Chase 60k" and see what the blogs come up with. If I could do this again, I would, but I can't. You're new to the game, so you can! (Google also the Chase 5/24 rule).

This strategy is at least 4 times as good as the Chase Sapphire preferred.

Edit: re-reading your post, I can see you're not into travel. Would you if it were free? Like, 8 times to Orlando for you and your authorized user? Even if not, I believe 60k miles will transfer 1:1 to amazon gift card.
camillus - thanks for the helpful summary of the Southwest Companion Pass (CP). With Chase's bump to 60k miles I am trying to find a way for Southwest to work for me. I am based in NYC and "Southwest" destinations are of limited interest. If I could book a trip to Chicago (very interested) and one other, to, say, Oakland (interested enough to visit San Fran), for SO and me, this would seem to kind of be the "break-even point" for the offer. It seems like I would be about even with the Chicago trip (the $200 in SW credit card annual fees would offset the "free" ticket for SO) and then net $500 or so on the Oakland trip. So, $500 in potential "savings" but using up two Chase 5/24 spots and $4,000 to $5,000 in credit card spending.

1. Once I find the trip and fare I want, how hard is to use the CP for SO's ticket? Is it as easy as finding a second fare when I book mine and then applying the Pass?

2. If I apply for the SW card, I will need to apply for two of the three to get enough points for the CP: SW Rapid Rewards, SW Rapid Rewards credit card Premier Business credit card, and SW Rapid Rewards Premier credit card. Not sure how easily I will qualify for a business card, though I already have Chase Ink Business Preferred (if that's relevant). If I apply for two, should I apply at the same time? I thought I read that somewhere. Will SW Premier Business count towards 5/24 (subsequently, for future Chase applications), assuming I get approved? I am currently 2/24 and am trying to keep capacity for Chase United (will be 24 months in August since last award and am hoping for 70k targeted offer) and Chase Sapphire Preferred (Oct 2017 will be 24 months since prior CSP award)

gvsucavie03
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Re: What's Your Credit Card Rewards Strategy?

Post by gvsucavie03 » Tue Jun 06, 2017 2:38 pm

Mudpuppy wrote: It's better, and far more ethical, to practice "scheduled spending". If you know you have a major expense coming up and that vendor takes credit cards, figure out what card bonus you want this time and sign up for that card. Need to spend $5k replacing your patio cover and the contractor takes charge cards? Get a new card with a $4k spend requirement and you'll meet it in that single transaction. This is not in violation of the card member agreement and it's a way to get a little more out of those periodic large expenses that can happen, particularly for home owners.

And I would consider paying property taxes by credit card to be "scheduled spending", not "manufactured spending". It's a legitimate expense that can be legitimately paid by credit card. The fee many assessment districts put in place for paying property taxes by credit card does have to be kept in mind, as the fee cuts into the rewards. Similar logic applies for making quarterly estimated income tax payments by credit card, although the fee there is even steeper.

I suppose paying taxes might be against a card member agreement though (it could be considered a cash transaction, not a purchase, and many exclude cash transactions from the rewards programs). I know of at least one rewards card that treats the percentage reward rate for tax payments as lower than the percentage for purchases. But buying a patio cover or washer/dryer combo or other similar large purchase is normal spending, so it should be perfectly fine from a card member agreement perspective.
This makes a lot more sense, especially the first paragraph regarding spending on stuff you need anyway. The purpose of credit card rewards and bonuses are to get you to spend more with them.

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gunn_show
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Re: What's Your Credit Card Rewards Strategy?

Post by gunn_show » Tue Jun 06, 2017 4:00 pm

rjbraun wrote:camillus - thanks for the helpful summary of the Southwest Companion Pass (CP). With Chase's bump to 60k miles I am trying to find a way for Southwest to work for me. I am based in NYC and "Southwest" destinations are of limited interest. If I could book a trip to Chicago (very interested) and one other, to, say, Oakland (interested enough to visit San Fran), for SO and me, this would seem to kind of be the "break-even point" for the offer. It seems like I would be about even with the Chicago trip (the $200 in SW credit card annual fees would offset the "free" ticket for SO) and then net $500 or so on the Oakland trip. So, $500 in potential "savings" but using up two Chase 5/24 spots and $4,000 to $5,000 in credit card spending.

1. Once I find the trip and fare I want, how hard is to use the CP for SO's ticket? Is it as easy as finding a second fare when I book mine and then applying the Pass?

2. If I apply for the SW card, I will need to apply for two of the three to get enough points for the CP: SW Rapid Rewards, SW Rapid Rewards credit card Premier Business credit card, and SW Rapid Rewards Premier credit card. Not sure how easily I will qualify for a business card, though I already have Chase Ink Business Preferred (if that's relevant). If I apply for two, should I apply at the same time? I thought I read that somewhere. Will SW Premier Business count towards 5/24 (subsequently, for future Chase applications), assuming I get approved? I am currently 2/24 and am trying to keep capacity for Chase United (will be 24 months in August since last award and am hoping for 70k targeted offer) and Chase Sapphire Preferred (Oct 2017 will be 24 months since prior CSP award)
Sounds like the SW CP is of less value to you, and if you don't want to burn 2 Chase apps, and will only use a couple SW flights, probably not worth it. If you could use it to take trips to Cancun or Cabo or DR or any of the tropical locations SW now flies, and thus utilize a few free $400-600 fares, probably worth it. SW tends to be more valuable to west coasters who primarily use this airline (90% of my travel) since most of the routes originate out here.

Using the CP is as simple as, if there is an available seat, it qualifies. You book the first ticket, go back into your account, there is a button to add a CP ticket, and boom done. With any amount of advance planning you should be fine 99-100% of the time.

I would apply simultaneously. I plan to do this next January. As most of the blogs state, getting this accomplished as early in the year as possible is ideal, since you get the rest of that year + the following full year. Of course what matters most is how you plan to use it, so if you have some expensive Southwest travel potential the rest of this year, go ahead and do the game now. But if you play it right next Jan/Feb you can get almost two full years out of the points and CP.
"I love competition. And I want to win." R. Murdoch

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camillus
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Re: What's Your Credit Card Rewards Strategy?

Post by camillus » Tue Jun 06, 2017 7:50 pm

Thank you gunn_show! Well put.

I'm thinking that I lived in NYC or near another international hub, I'd try to target carriers who fly internationally to get to Europe more cheaply & regularly. I think the best way to do this is the Sapphire cards or possibly the Delta cards from Amex - not sure.

I happen to live in a Southwest hub, so that influences my valuation I now realize.

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Re: What's Your Credit Card Rewards Strategy?

Post by rjbraun » Wed Jun 07, 2017 9:57 am

gunn_show wrote:Sounds like the SW CP is of less value to you, and if you don't want to burn 2 Chase apps, and will only use a couple SW flights, probably not worth it. If you could use it to take trips to Cancun or Cabo or DR or any of the tropical locations SW now flies, and thus utilize a few free $400-600 fares, probably worth it. SW tends to be more valuable to west coasters who primarily use this airline (90% of my travel) since most of the routes originate out here.
Thanks. Yeah, that's kind of the conclusion I have also come to. But, sounds like an amazing deal if you can benefit from SW's routing!
camillus wrote:Thank you gunn_show! Well put.

I'm thinking that I lived in NYC or near another international hub, I'd try to target carriers who fly internationally to get to Europe more cheaply & regularly. I think the best way to do this is the Sapphire cards or possibly the Delta cards from Amex - not sure.
Yup, that's my strategy. SO and I really fly more internationally. Definitely on the prowl for how to get more deals for flights to Europe (or to a lesser extent Asia), especially if we can nab some business class seats. There seem to be good deals on coach travel internationally these days, so we've tended to just pay cash for the tickets. Not the case for business, though, in addition to the overall higher price point, so would love to find a way to use points for business class seats.

Already have all the Chase Sapphire cards I can get for now. Trying to use up my 5/24 capacity before going outside the Chase universe. Unless Delta miles can be used on a lot of partner carriers, not sure it makes sense for me to focus there, though I plan to take a closer look.

Gemini
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Re: What's Your Credit Card Rewards Strategy?

Post by Gemini » Wed Jun 07, 2017 1:57 pm

Is there a "best" card to make quarterly tax payments? I have a large bill coming up and trying to see if there is anything out there worth considering.

Right now, we have Chase Sapphire Reserve x 2 and Chase Freedom plus Chase Freedom Unlimited. AMex Blue Cash Preferred for groceries and PenFed 5% cashback for gas.

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flamesabers
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Re: What's Your Credit Card Rewards Strategy?

Post by flamesabers » Wed Jun 07, 2017 2:29 pm

Gemini wrote:Is there a "best" card to make quarterly tax payments? I have a large bill coming up and trying to see if there is anything out there worth considering.

Right now, we have Chase Sapphire Reserve x 2 and Chase Freedom plus Chase Freedom Unlimited. AMex Blue Cash Preferred for groceries and PenFed 5% cashback for gas.
Are you trying to meet the minimum spending requirements for a new card? Or are you trying to get cashback from your tax payments?

Generally the surcharge fee negates the rewards of most cashback cards.

https://www.irs.gov/uac/pay-taxes-by-cr ... debit-card

There is also the risk that your tax payment may be processed as a cash advance instead as a purchase.

Gemini
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Re: What's Your Credit Card Rewards Strategy?

Post by Gemini » Wed Jun 07, 2017 3:10 pm

flamesabers wrote:
Gemini wrote:Is there a "best" card to make quarterly tax payments? I have a large bill coming up and trying to see if there is anything out there worth considering.

Right now, we have Chase Sapphire Reserve x 2 and Chase Freedom plus Chase Freedom Unlimited. AMex Blue Cash Preferred for groceries and PenFed 5% cashback for gas.
Are you trying to meet the minimum spending requirements for a new card? Or are you trying to get cashback from your tax payments?

Generally the surcharge fee negates the rewards of most cashback cards.

https://www.irs.gov/uac/pay-taxes-by-cr ... debit-card

There is also the risk that your tax payment may be processed as a cash advance instead as a purchase.
Not trying for a new card (yet). Just trying to get cashback or points.

Some are using the Fido 2% cashback for this purpose - is that card still avail? IRS charges 1.87% and Fido pays 2% so one comes out ahead.

Does it make sense to incur a 1.87% extra fee and use any of the chase cards?

deltaneutral83
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Joined: Tue Mar 07, 2017 4:25 pm

Re: What's Your Credit Card Rewards Strategy?

Post by deltaneutral83 » Wed Jun 07, 2017 3:22 pm

camillus wrote:
gvsucavie03 wrote:What is manufactured spending?


Manufactured spending is a dark art used by folks needing to complete required spending to meet requirements for signup bonuses. It is very close to money laundering. For example, use your credit card to buy a prepaid card, bring the prepaid card to the post office to buy a money order, deposit the money order into your checking account, use your checking account to pay off the credit card. "MS" sends your money around a loop coming back to you, allowing you to "churn" by sending the money out again.

I am not comfortable with this dark art as I feel it has compromised my integrity in the past. If you want a little window of what a credit card thief feels like, this is it. "MS" is also usually outside of the terms of service for the various products being used.
This post is 100% inaccurate in it's entirety. I'm not even going to begin to explain as I think this post may have been satire with the "Dark Art" but I'll just leave it at inaccurate.

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flamesabers
Posts: 1350
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Location: Rochester, MN

Re: What's Your Credit Card Rewards Strategy?

Post by flamesabers » Wed Jun 07, 2017 3:38 pm

Gemini wrote:
flamesabers wrote:
Gemini wrote:Is there a "best" card to make quarterly tax payments? I have a large bill coming up and trying to see if there is anything out there worth considering.

Right now, we have Chase Sapphire Reserve x 2 and Chase Freedom plus Chase Freedom Unlimited. AMex Blue Cash Preferred for groceries and PenFed 5% cashback for gas.
Are you trying to meet the minimum spending requirements for a new card? Or are you trying to get cashback from your tax payments?

Generally the surcharge fee negates the rewards of most cashback cards.

https://www.irs.gov/uac/pay-taxes-by-cr ... debit-card

There is also the risk that your tax payment may be processed as a cash advance instead as a purchase.
Not trying for a new card (yet). Just trying to get cashback or points.

Some are using the Fido 2% cashback for this purpose - is that card still avail? IRS charges 1.87% and Fido pays 2% so one comes out ahead.

Does it make sense to incur a 1.87% extra fee and use any of the chase cards?
If your tax bill is $1k, you'll end up getting a net amount of $1.30 in cashback rewards with a 2% cashback card. In comparison, you only have to spend $26 at a regular store or wherever with a 5% rewards card to get a cashback credit of $1.30.

I wouldn't want to take the risk of this transaction being treated like a cash advance and having to pay a lot more money then if I just stuck with paying taxes with an ACH from my checking account.

dbr
Posts: 23314
Joined: Sun Mar 04, 2007 9:50 am

Re: What's Your Credit Card Rewards Strategy?

Post by dbr » Wed Jun 07, 2017 3:57 pm

flamesabers wrote:
Gemini wrote:
flamesabers wrote:
Gemini wrote:Is there a "best" card to make quarterly tax payments? I have a large bill coming up and trying to see if there is anything out there worth considering.

Right now, we have Chase Sapphire Reserve x 2 and Chase Freedom plus Chase Freedom Unlimited. AMex Blue Cash Preferred for groceries and PenFed 5% cashback for gas.
Are you trying to meet the minimum spending requirements for a new card? Or are you trying to get cashback from your tax payments?

Generally the surcharge fee negates the rewards of most cashback cards.

https://www.irs.gov/uac/pay-taxes-by-cr ... debit-card

There is also the risk that your tax payment may be processed as a cash advance instead as a purchase.
Not trying for a new card (yet). Just trying to get cashback or points.

Some are using the Fido 2% cashback for this purpose - is that card still avail? IRS charges 1.87% and Fido pays 2% so one comes out ahead.

Does it make sense to incur a 1.87% extra fee and use any of the chase cards?
If your tax bill is $1k, you'll end up getting a net amount of $1.30 in cashback rewards with a 2% cashback card. In comparison, you only have to spend $26 at a regular store or wherever with a 5% rewards card to get a cashback credit of $1.30.

I wouldn't want to take the risk of this transaction being treated like a cash advance and having to pay a lot more money then if I just stuck with paying taxes with an ACH from my checking account.
The point of paying taxes with a card is to make bonus spend for 50,000-100,000 miles/points with a new card. It makes no sense for ongoing spending. I have never heard of a card company disallowing this as a cash advance, though one could reasonably wonder if it isn't logically more a cash advance than an expenditure. One could browse or search through the FlyerTalk discussions on credit cards on the subject and see of that ever turns up, not to mention ever finding it on any of these blogs: https://milesfeed.com/

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camillus
Posts: 201
Joined: Thu Feb 28, 2013 9:55 pm

Re: What's Your Credit Card Rewards Strategy?

Post by camillus » Wed Jun 07, 2017 5:56 pm

deltaneutral83 wrote:This post is 100% inaccurate in it's entirety. I'm not even going to begin to explain as I think this post may have been satire with the "Dark Art" but I'll just leave it at inaccurate.
I wasn't intending satire! You had a strong reaction though :-)

I've decided, after doing it, that for me it was crossing the line in terms of integrity and safety. I had too many uncomfortable interactions with cashiers and I didn't like the feeling of having a few thousand dollars worth of gift cards in my pocket in a dark parking lot. The integrity part was the most important part for me. I like to treat all people with high levels of kindness and honesty. I found I couldn't do that well while I was doing MS.

Anyways, deltaneutral, to each their own.

madbrain
Posts: 4505
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Thu Jun 08, 2017 4:14 am

camillus wrote:
deltaneutral83 wrote:This post is 100% inaccurate in it's entirety. I'm not even going to begin to explain as I think this post may have been satire with the "Dark Art" but I'll just leave it at inaccurate.
I wasn't intending satire! You had a strong reaction though :-)

I've decided, after doing it, that for me it was crossing the line in terms of integrity and safety. I had too many uncomfortable interactions with cashiers and I didn't like the feeling of having a few thousand dollars worth of gift cards in my pocket in a dark parking lot. The integrity part was the most important part for me. I like to treat all people with high levels of kindness and honesty. I found I couldn't do that well while I was doing MS.

Anyways, deltaneutral, to each their own.
I understand about not wanting to carry high value gift cards.
However, I don't understand the integrity part. There is nothing illegal about buying gift cards with a credit card, or most other forms of MS.
Some institutions will frown on it if you do it in high volume, but it is usually fine if you are just meeting minimum spends.

madbrain
Posts: 4505
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Thu Jun 08, 2017 4:19 am

Gemini wrote: Does it make sense to incur a 1.87% extra fee and use any of the chase cards?
Depending on how you value the points, maybe. You could pay your taxes with a Freedom unlimited which earns 1.5 UR points per dollar.
Then if you also have the Sapphire Reserve, transfer the points, and redeem them at 1.5 cent per point - ie. 2.25 cents per dollar spend.
This is assuming a redemption through the Chase travel portal. It doesn't always have the best prices, and some travel options (budget airlines, and some hotel rooms) are just not available. But I often find a way that redeeming the points that way for parts of travel expenses makes sense.
And of course, you might assign a higher cent per point value when doing some transfer to partners (airlines, hotels). I have rarely found that to be the case, though, and it is very time consuming to find out as a lot of award options can't be booked online and require phone calls to airlines that are not staffed 24/7 - particularly inconvenient for international bookings.

That said, I don't personally pay my taxes with a credit card - I usually adjust my withholding pretty close, and typically have a small refund.

madbrain
Posts: 4505
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Location: San Jose, California

Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Thu Jun 08, 2017 4:26 am

dbr wrote:[
It is not illegal. It is almost always in violation of your agreement with the credit card company. When this sort of thing is detected it can result in your card being closed and any points earned taken back. It may result in all your cards with that company being closed and you being blacklisted by that bank forever. They don't have to file charges or go to court to do this because the basis is that you have violated a contract. Typically the T&Cs make clear you do not own your reward points and taking them back is not taking property from you. No bank is under any obligation to extend credit or maintain a business relationship with anyone. Possible recourse is that you didn't really do it and their fraud department is being overzealous.

It is also possible that what might be called manufactured spending is actually ok. An area that rises close to that might be payment of income taxes on the credit card, a transaction that is accepted by any bank, as far as I know.
Which credit card agreement have you seen that specifically forbids MS ? The closest I have seen is some Amex verbiage that says purchases of cash equivalents like gift cards would not earn rewards. For example, doing a transfer from an Amex credit or charge card to an Amex Serve does not earn rewards. This is one case where they can easily track it and deny reward points, because they are Amex on both sides of the transaction.
However, I have never seen any credit card agreement language that completely forbids purchases of cash equivalents.
It is a fact that financial institutions don't like this activity, but it's not specifically written as forbidden in the contract. What is always there, though, is the term that the bank can close your credit account at any time, for any reason. And many are doing so if they detect MS through analysis of transaction activity.

guitarguy
Posts: 1686
Joined: Mon Dec 20, 2010 4:10 pm

Re: What's Your Credit Card Rewards Strategy?

Post by guitarguy » Thu Jun 08, 2017 10:47 am

fareastwarriors wrote:
jrbdmb wrote:Related question about spending some of the $6000 grocery spend for my Amex Blue Cash Preferred ...

I have about $1500 in grocery spend (6% cash back) remaining on my BCP that I'd like to use ASAP. A recent Amex BCP Terms and Conditions update taking effect July 01 2017 states specifically that Gift Card Purchases and Reloads (and other "money equivalent" transactions) do not qualify for the normal 6% rewards.

Can Amex really identify whether I'm buying a GC at the local store vs. groceries? Is there any way to avoid scrutiny other than avoid "obvious" purchase totals like $505.95?
I been buying gift cards using BCP with no problems but I usually include other grocery items. I don't know if Amex has the ability to see everything I purchased in my cart.

You say the terms are effective 7/1? Then you have a few more weeks to max it out.
We recently downgraded to the BCE, and I literally bought a $60 gift card and no other items to get 3% and take my cash back reward balance to $25.02, cash it in, and now I will shelve the card because we don't use it anymore.

However, down the road if/when we switch back to cash back cards, the BCP will be a certain upgrade for us. Do you have a link to the terms of service change that states you will no longer be able to earn rewards on gift cards?

If that's true, it would really kill the purpose for having several cards (Freedom, Ink, BCP, etc) that are valuable for spend where you can max categories and so forth by stocking up on gift cards...assuming of course the other banks follow suit.

guitarguy
Posts: 1686
Joined: Mon Dec 20, 2010 4:10 pm

Re: What's Your Credit Card Rewards Strategy?

Post by guitarguy » Thu Jun 08, 2017 10:58 am

madbrain wrote:
camillus wrote:
deltaneutral83 wrote:This post is 100% inaccurate in it's entirety. I'm not even going to begin to explain as I think this post may have been satire with the "Dark Art" but I'll just leave it at inaccurate.
I wasn't intending satire! You had a strong reaction though :-)

I've decided, after doing it, that for me it was crossing the line in terms of integrity and safety. I had too many uncomfortable interactions with cashiers and I didn't like the feeling of having a few thousand dollars worth of gift cards in my pocket in a dark parking lot. The integrity part was the most important part for me. I like to treat all people with high levels of kindness and honesty. I found I couldn't do that well while I was doing MS.

Anyways, deltaneutral, to each their own.
I understand about not wanting to carry high value gift cards.
However, I don't understand the integrity part. There is nothing illegal about buying gift cards with a credit card, or most other forms of MS.
Some institutions will frown on it if you do it in high volume, but it is usually fine if you are just meeting minimum spends.
First of all, buying gift cards and then spending them is not MS. It's buying gift cards and then spending them. There is nothing wrong with this legally or morally. You're not manufacturing anything or cheating anyone. I don't get this sentiment at all.

MS is different...it involves making purchases and then finding ways to liquidate what you bought back to cash in your pocket, pay off the credit card, and repeat, so you can rack up credit card points and not even spend any money in the end...hence the MANUFACTURED part of "MS." It's not illegal, but I've never done it simply because it seems like a ton of work to me and I don't have time or want to bother with it.

I buy a $500 Home Depot gift card at Staples on my way to the store (or online) and then go spend it on lumber and drywall and earn 5X points with my Ink in the process. I don't think anyone anywhere is upset with me about it.

jrbdmb
Posts: 185
Joined: Tue Oct 06, 2015 4:27 pm

Re: What's Your Credit Card Rewards Strategy?

Post by jrbdmb » Thu Jun 08, 2017 3:41 pm

guitarguy wrote:
fareastwarriors wrote:
jrbdmb wrote:Related question about spending some of the $6000 grocery spend for my Amex Blue Cash Preferred ...

I have about $1500 in grocery spend (6% cash back) remaining on my BCP that I'd like to use ASAP. A recent Amex BCP Terms and Conditions update taking effect July 01 2017 states specifically that Gift Card Purchases and Reloads (and other "money equivalent" transactions) do not qualify for the normal 6% rewards.

Can Amex really identify whether I'm buying a GC at the local store vs. groceries? Is there any way to avoid scrutiny other than avoid "obvious" purchase totals like $505.95?
I been buying gift cards using BCP with no problems but I usually include other grocery items. I don't know if Amex has the ability to see everything I purchased in my cart.

You say the terms are effective 7/1? Then you have a few more weeks to max it out.
We recently downgraded to the BCE, and I literally bought a $60 gift card and no other items to get 3% and take my cash back reward balance to $25.02, cash it in, and now I will shelve the card because we don't use it anymore.

However, down the road if/when we switch back to cash back cards, the BCP will be a certain upgrade for us. Do you have a link to the terms of service change that states you will no longer be able to earn rewards on gift cards?

If that's true, it would really kill the purpose for having several cards (Freedom, Ink, BCP, etc) that are valuable for spend where you can max categories and so forth by stocking up on gift cards...assuming of course the other banks follow suit.
Here is text from my April 2017 statement. I cannot locate a previous agreement to determine if the highlighted text below (no 6% cash back for MOs or GCs) is new or just revised from previous agreements.

Details of Important Changes to Your Cardmember Agreement

This notice amends the Cardmember Agreement (the "Agreement") as described below. We have the right to
amend it as described in the Agreement. Any terms in the Agreement conflicting with this change are replaced
fully and completely. Terms not changed by this notice remain in full force and effect. We encourage you to read
this notice, share it with Additional Cardmembers on your account, and file it for future reference. If you have any
questions about this change, please call the number on the back of your Card.

Things you should know about this program
Effective June 30, 2017, the Supplement to the Agreement is amended by deleting the How you earn reward
dollars section and replacing it with the following:
How you earn
reward dollars
You will earn Blue Cash® Reward Dollars (reward
dollars) for eligible purchases on your Blue Cash
Preferred® Card Account. The number of reward
dollars you earn is based on a percentage of
the dollar amount of your eligible purchases
during each billing period. Eligible purchases are
purchases made on your Card for goods and
services minus returns and other credits.

Eligible purchases do NOT include:
• fees or interest charges,
• balance transfers,
• cash advances,
• purchases of traveler's checks,
• purchases or reloading of prepaid cards,
or
• purchases of any cash equivalents.


You will earn a reward of:
• 6% on the first $6,000 of eligible
purchases in a calendar year at
supermarkets located in the U.S.
(superstores and warehouse clubs are not
considered supermarkets);
• 3% on eligible purchases of gasoline
at gasoline stations located in the
U.S. (superstores, supermarkets and
warehouse clubs that sell gasoline are not
considered gas stations);
• 3% on eligible purchases at select major
department stores located in the U.S. (The
current list of select major department
stores at which you can earn a 3% reward
is available at americanexpress.com/
rewards-info); and
• 1% on all other eligible purchases.
Purchases made through a third-party payment
account or on an online marketplace (with
multiple retailers) will not earn a higher
percentage reward.
Merchants are typically assigned codes and
categorized based on what they primarily sell.
A purchase will not earn a higher percentage
reward if the merchant, or a particular merchant
location, uses a code that is not eligible for a
higher percentage reward. For questions about a
higher percentage reward on a purchase, call the
number on the back of your Card.
A purchase may not earn a higher percentage
reward if the merchant submits the purchase
using a mobile or wireless card reader or if you
use a mobile or digital wallet.
Please visit americanexpress.com/rewards-info
for more information about rewards.

gvsucavie03
Posts: 1228
Joined: Sat Feb 16, 2013 8:30 am

Re: What's Your Credit Card Rewards Strategy?

Post by gvsucavie03 » Thu Jun 08, 2017 6:37 pm

jrbdmb wrote:
guitarguy wrote:
fareastwarriors wrote:
jrbdmb wrote:Related question about spending some of the $6000 grocery spend for my Amex Blue Cash Preferred ...

I have about $1500 in grocery spend (6% cash back) remaining on my BCP that I'd like to use ASAP. A recent Amex BCP Terms and Conditions update taking effect July 01 2017 states specifically that Gift Card Purchases and Reloads (and other "money equivalent" transactions) do not qualify for the normal 6% rewards.

Can Amex really identify whether I'm buying a GC at the local store vs. groceries? Is there any way to avoid scrutiny other than avoid "obvious" purchase totals like $505.95?
I been buying gift cards using BCP with no problems but I usually include other grocery items. I don't know if Amex has the ability to see everything I purchased in my cart.

You say the terms are effective 7/1? Then you have a few more weeks to max it out.
We recently downgraded to the BCE, and I literally bought a $60 gift card and no other items to get 3% and take my cash back reward balance to $25.02, cash it in, and now I will shelve the card because we don't use it anymore.

However, down the road if/when we switch back to cash back cards, the BCP will be a certain upgrade for us. Do you have a link to the terms of service change that states you will no longer be able to earn rewards on gift cards?

If that's true, it would really kill the purpose for having several cards (Freedom, Ink, BCP, etc) that are valuable for spend where you can max categories and so forth by stocking up on gift cards...assuming of course the other banks follow suit.
Here is text from my April 2017 statement. I cannot locate a previous agreement to determine if the highlighted text below (no 6% cash back for MOs or GCs) is new or just revised from previous agreements.

Details of Important Changes to Your Cardmember Agreement

This notice amends the Cardmember Agreement (the "Agreement") as described below. We have the right to
amend it as described in the Agreement. Any terms in the Agreement conflicting with this change are replaced
fully and completely. Terms not changed by this notice remain in full force and effect. We encourage you to read
this notice, share it with Additional Cardmembers on your account, and file it for future reference. If you have any
questions about this change, please call the number on the back of your Card.

Things you should know about this program
Effective June 30, 2017, the Supplement to the Agreement is amended by deleting the How you earn reward
dollars section and replacing it with the following:
How you earn
reward dollars
You will earn Blue Cash® Reward Dollars (reward
dollars) for eligible purchases on your Blue Cash
Preferred® Card Account. The number of reward
dollars you earn is based on a percentage of
the dollar amount of your eligible purchases
during each billing period. Eligible purchases are
purchases made on your Card for goods and
services minus returns and other credits.

Eligible purchases do NOT include:
• fees or interest charges,
• balance transfers,
• cash advances,
• purchases of traveler's checks,
• purchases or reloading of prepaid cards,
or
• purchases of any cash equivalents.


You will earn a reward of:
• 6% on the first $6,000 of eligible
purchases in a calendar year at
supermarkets located in the U.S.
(superstores and warehouse clubs are not
considered supermarkets);
• 3% on eligible purchases of gasoline
at gasoline stations located in the
U.S. (superstores, supermarkets and
warehouse clubs that sell gasoline are not
considered gas stations);
• 3% on eligible purchases at select major
department stores located in the U.S. (The
current list of select major department
stores at which you can earn a 3% reward
is available at americanexpress.com/
rewards-info); and
• 1% on all other eligible purchases.
Purchases made through a third-party payment
account or on an online marketplace (with
multiple retailers) will not earn a higher
percentage reward.
Merchants are typically assigned codes and
categorized based on what they primarily sell.
A purchase will not earn a higher percentage
reward if the merchant, or a particular merchant
location, uses a code that is not eligible for a
higher percentage reward. For questions about a
higher percentage reward on a purchase, call the
number on the back of your Card.
A purchase may not earn a higher percentage
reward if the merchant submits the purchase
using a mobile or wireless card reader or if you
use a mobile or digital wallet.
Please visit americanexpress.com/rewards-info
for more information about rewards.
My card agreements all say that too, but I still buy gift cards that my wife uses to buy groceries.

madbrain
Posts: 4505
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Thu Jun 08, 2017 7:51 pm

guitarguy wrote: First of all, buying gift cards and then spending them is not MS. It's buying gift cards and then spending them. There is nothing wrong with this legally or morally. You're not manufacturing anything or cheating anyone. I don't get this sentiment at all.

MS is different...it involves making purchases and then finding ways to liquidate what you bought back to cash in your pocket, pay off the credit card, and repeat, so you can rack up credit card points and not even spend any money in the end...hence the MANUFACTURED part of "MS." It's not illegal, but I've never done it simply because it seems like a ton of work to me and I don't have time or want to bother with it.

I buy a $500 Home Depot gift card at Staples on my way to the store (or online) and then go spend it on lumber and drywall and earn 5X points with my Ink in the process. I don't think anyone anywhere is upset with me about it.
The credit card issuer is only involved with one part of the transaction - the "buying gift cards" part .

I don't see how they can dictate what you do with the gift card subsequently - give to someone else, spend it, liquidate it, etc. The credit card agreement can't have any bearing on that. All the credit company and agreement can do is decide whether you will earn rewards on the gift card purchase with a credit card, and whether the purchase will be allowed in the first place.

Liquidating a gift card is not really a ton of work, IMO, and I don't see anything wrong legally or morally with it.

madbrain
Posts: 4505
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Thu Jun 08, 2017 8:00 pm

jrbdmb wrote: You will earn Blue Cash® Reward Dollars (reward
dollars) for eligible purchases on your Blue Cash
Preferred® Card Account.
All that you quoted is saying is that they won't pay rewards on certain types of purchases. This is not the same as not allowing the purchase in the first place. And of course, without fully detailed line-by-line access to the the merchant's information, the card issuer has limited means to enforce this policy and actually deny rewards.

The card agreement does not require the credit card user to notify the bank every time they make a purchase that the the bank consider ineligible for rewards.

If rewards are still given by the bank, that would not be a breach of contract by the card user, but a failure on the part of the bank to identify the part of the transactions that are ineligible for rewards. The bank is certainly within its rights to close the credit account at any time, however.

guitarguy
Posts: 1686
Joined: Mon Dec 20, 2010 4:10 pm

Re: What's Your Credit Card Rewards Strategy?

Post by guitarguy » Fri Jun 09, 2017 6:13 am

jrbdmb wrote:
guitarguy wrote:
fareastwarriors wrote:
jrbdmb wrote:Related question about spending some of the $6000 grocery spend for my Amex Blue Cash Preferred ...

I have about $1500 in grocery spend (6% cash back) remaining on my BCP that I'd like to use ASAP. A recent Amex BCP Terms and Conditions update taking effect July 01 2017 states specifically that Gift Card Purchases and Reloads (and other "money equivalent" transactions) do not qualify for the normal 6% rewards.

Can Amex really identify whether I'm buying a GC at the local store vs. groceries? Is there any way to avoid scrutiny other than avoid "obvious" purchase totals like $505.95?
I been buying gift cards using BCP with no problems but I usually include other grocery items. I don't know if Amex has the ability to see everything I purchased in my cart.

You say the terms are effective 7/1? Then you have a few more weeks to max it out.
We recently downgraded to the BCE, and I literally bought a $60 gift card and no other items to get 3% and take my cash back reward balance to $25.02, cash it in, and now I will shelve the card because we don't use it anymore.

However, down the road if/when we switch back to cash back cards, the BCP will be a certain upgrade for us. Do you have a link to the terms of service change that states you will no longer be able to earn rewards on gift cards?

If that's true, it would really kill the purpose for having several cards (Freedom, Ink, BCP, etc) that are valuable for spend where you can max categories and so forth by stocking up on gift cards...assuming of course the other banks follow suit.
Here is text from my April 2017 statement. I cannot locate a previous agreement to determine if the highlighted text below (no 6% cash back for MOs or GCs) is new or just revised from previous agreements.

Details of Important Changes to Your Cardmember Agreement

This notice amends the Cardmember Agreement (the "Agreement") as described below. We have the right to
amend it as described in the Agreement. Any terms in the Agreement conflicting with this change are replaced
fully and completely. Terms not changed by this notice remain in full force and effect. We encourage you to read
this notice, share it with Additional Cardmembers on your account, and file it for future reference. If you have any
questions about this change, please call the number on the back of your Card.

Things you should know about this program
Effective June 30, 2017, the Supplement to the Agreement is amended by deleting the How you earn reward
dollars section and replacing it with the following:
How you earn
reward dollars
You will earn Blue Cash® Reward Dollars (reward
dollars) for eligible purchases on your Blue Cash
Preferred® Card Account. The number of reward
dollars you earn is based on a percentage of
the dollar amount of your eligible purchases
during each billing period. Eligible purchases are
purchases made on your Card for goods and
services minus returns and other credits.

Eligible purchases do NOT include:
• fees or interest charges,
• balance transfers,
• cash advances,
• purchases of traveler's checks,
• purchases or reloading of prepaid cards,
or
• purchases of any cash equivalents.
None of these restrictions include regular run-of-the-mill gift cards. You will be fine.

guitarguy
Posts: 1686
Joined: Mon Dec 20, 2010 4:10 pm

Re: What's Your Credit Card Rewards Strategy?

Post by guitarguy » Fri Jun 09, 2017 6:28 am

madbrain wrote:
guitarguy wrote: First of all, buying gift cards and then spending them is not MS. It's buying gift cards and then spending them. There is nothing wrong with this legally or morally. You're not manufacturing anything or cheating anyone. I don't get this sentiment at all.

MS is different...it involves making purchases and then finding ways to liquidate what you bought back to cash in your pocket, pay off the credit card, and repeat, so you can rack up credit card points and not even spend any money in the end...hence the MANUFACTURED part of "MS." It's not illegal, but I've never done it simply because it seems like a ton of work to me and I don't have time or want to bother with it.

I buy a $500 Home Depot gift card at Staples on my way to the store (or online) and then go spend it on lumber and drywall and earn 5X points with my Ink in the process. I don't think anyone anywhere is upset with me about it.
The credit card issuer is only involved with one part of the transaction - the "buying gift cards" part .

I don't see how they can dictate what you do with the gift card subsequently - give to someone else, spend it, liquidate it, etc. The credit card agreement can't have any bearing on that. All the credit company and agreement can do is decide whether you will earn rewards on the gift card purchase with a credit card, and whether the purchase will be allowed in the first place.

Liquidating a gift card is not really a ton of work, IMO, and I don't see anything wrong legally or morally with it.
I don't disagree with any of this. I don't think MS is morally wrong or anything like that. I couldn't care less. If banks don't want people taking advantage of loopholes to rack up points, then close them. My main point was that buying a gift card and then using it is not MS because you're not manufacturing anything.

Regarding the amount of work...I dunno. You could buy gift cards to merchants and then sell them I guess. You could somehow do the money order thing. Go to Walmart and cash them or something I read people do that. All that just sounds like a ton of work to me. If it involves going into a Walmart I'm out. If there is an easy way to do this I'd love to know...if you have any tips that are honestly worth trying I'd appreciate a PM...otherwise I'll stay in the camp that it's not really worth my time/effort. A few cards a year timed with big purchases like property taxes and auto/home insurance and what not is good enough for me.

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TheTimeLord
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Re: What's Your Credit Card Rewards Strategy?

Post by TheTimeLord » Fri Jun 09, 2017 7:57 am

guitarguy wrote: I don't think MS is morally wrong or anything like that. I couldn't care less. If banks don't want people taking advantage of loopholes to rack up points, then close them.
Remember your words next time you feel the banks have treated you unfairly or taken advantage of you. You should have closed the loophole that allowed them to.
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MrNewEngland
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Re: What's Your Credit Card Rewards Strategy?

Post by MrNewEngland » Fri Jun 09, 2017 8:14 am

I do strictly cash back cards, no points and no miles.

I mainly use a 1/2/3 card from BoA. With a 75% add on I actually get 1.75% on all purchases, 3.5% at grocery stores, and 5.25% at gas stations. There are also various store that you can sign up to get bigger cash back (5% at AutoZone turns into 8.75% back).

I also use a Chase card and a Discover card bc they rotate quarterly 5% cash back deals such as restaurants, groceries, gas, and home improvement stores. When they have a 5% gas quarter it no longer helps me since BoA put me in the rewards program.

None of my cards have an annual fee.

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flamesabers
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Re: What's Your Credit Card Rewards Strategy?

Post by flamesabers » Fri Jun 09, 2017 10:26 am

madbrain wrote:
jrbdmb wrote: You will earn Blue Cash® Reward Dollars (reward
dollars) for eligible purchases on your Blue Cash
Preferred® Card Account.
All that you quoted is saying is that they won't pay rewards on certain types of purchases. This is not the same as not allowing the purchase in the first place. And of course, without fully detailed line-by-line access to the the merchant's information, the card issuer has limited means to enforce this policy and actually deny rewards.

The card agreement does not require the credit card user to notify the bank every time they make a purchase that the the bank consider ineligible for rewards.

If rewards are still given by the bank, that would not be a breach of contract by the card user, but a failure on the part of the bank to identify the part of the transactions that are ineligible for rewards. The bank is certainly within its rights to close the credit account at any time, however.
In order to be able to effectively enforce this policy, I think card issuers would have to require stores to not allow gift cards to be purchased with credit cards. I don't know if this has been done before, but if it has, I think it would be deeply unpopular among consumers and as a result, be potentially detrimental for both card issuers and retailers. I'm doubtful consumers would like not being able to purchase gift cards with a credit card and would probably avoid card issuers/retailers that enforced this policy.

Another consideration is when retailers encourage consumers to buy gift cards with deals such as buy x amount in gift cards, get a y amount free gift card. I think this is especially common during Christmas and other holidays where gift shopping is commonplace. Retailers likely assume if they can get you in the store with a gift card sale, you'll likely buy other merchandise as well. If buying gift cards with a credit card is prohibited, I doubt these gift card sales wouldn't be nearly as effective.

If there was an easy way to enforce this policy, I don't think it would upset most consumers. Stores are already doing this in part with their own sale offers. For instance, stores may advertise something like buy $100 in merchandise and get x% off your total purchase. In the fine print of the advertisement it will say gift cards and the like don't qualify for this sale. I don't think a policy like this drives consumers away from shopping at the store.

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Re: What's Your Credit Card Rewards Strategy?

Post by guitarguy » Fri Jun 09, 2017 10:47 am

TheTimeLord wrote:
guitarguy wrote: I don't think MS is morally wrong or anything like that. I couldn't care less. If banks don't want people taking advantage of loopholes to rack up points, then close them.
Remember your words next time you feel the banks have treated you unfairly or taken advantage of you. You should have closed the loophole that allowed them to.
Ha...that's funny. Good thing banks always act in your best interest and not theirs huh?

For the record, I don't MS. Never have. I just don't really care to pass judgment on those that do. The fact is it's not illegal and you're within your rights to do it.

I also don't pass judgment on the bank when they catch you gaming the system and shut your accounts down. The fact is they don't like you racking up points and they can simply shut you down for pretty much any reason, MS being a perfectly legitimate one, and be completely within their right too.

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Re: What's Your Credit Card Rewards Strategy?

Post by Barefootgirl » Fri Jun 09, 2017 11:17 am

Aww come on now, lol

remember : banks are people too. :sharebeer
How many retired people does it take to screw in a lightbulb? Only one, but he takes all day.

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TheTimeLord
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Re: What's Your Credit Card Rewards Strategy?

Post by TheTimeLord » Fri Jun 09, 2017 12:22 pm

guitarguy wrote:
TheTimeLord wrote:
guitarguy wrote: I don't think MS is morally wrong or anything like that. I couldn't care less. If banks don't want people taking advantage of loopholes to rack up points, then close them.
Remember your words next time you feel the banks have treated you unfairly or taken advantage of you. You should have closed the loophole that allowed them to.
Ha...that's funny. Good thing banks always act in your best interest and not theirs huh?

For the record, I don't MS. Never have. I just don't really care to pass judgment on those that do. The fact is it's not illegal and you're within your rights to do it.

I also don't pass judgment on the bank when they catch you gaming the system and shut your accounts down. The fact is they don't like you racking up points and they can simply shut you down for pretty much any reason, MS being a perfectly legitimate one, and be completely within their right too.
Didn't say they did, just pointing out people tend to complain about institution s using loopholes against them. So if you feel it is fair to use loopholes I guess you don't mind being on the receiving side occasionally.
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Re: What's Your Credit Card Rewards Strategy?

Post by Mudpuppy » Fri Jun 09, 2017 12:35 pm

flamesabers wrote:In order to be able to effectively enforce this policy, I think card issuers would have to require stores to not allow gift cards to be purchased with credit cards. I don't know if this has been done before, but if it has, I think it would be deeply unpopular among consumers and as a result, be potentially detrimental for both card issuers and retailers. I'm doubtful consumers would like not being able to purchase gift cards with a credit card and would probably avoid card issuers/retailers that enforced this policy.
Some stores will not allow you to purchase just a gift card with a credit card. You have to purchase the gift card with other items and even then they might give extra scrutiny to your ID if the gift card balance is high. But this has nothing to do with card rewards and everything to do with stolen credit cards. They don't want thieves to use a stolen credit card to buy a large gift card, which is then converted to cash for the thieves by either purchasing goods before the gift card can be deactivated (the goods can then be sold or pawned for cash) or using some of the same methods manufactured spending uses to convert gift cards back to cash.

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Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Fri Jun 09, 2017 6:09 pm

flamesabers wrote: In order to be able to effectively enforce this policy, I think card issuers would have to require stores to not allow gift cards to be purchased with credit cards.
And they certainly have the option to do that, through the card merchant agreements, though this would have to be done at the whole network level (VISA/MC/Amex/etc) rather than one individual bank issuer.
I don't know if this has been done before, but if it has, I think it would be deeply unpopular among consumers and as a result, be potentially detrimental for both card issuers and retailers. I'm doubtful consumers would like not being able to purchase gift cards with a credit card and would probably avoid card issuers/retailers that enforced this policy.
Plenty of retailers have indeed moved to that policy.

I think the issue with the gift cards is not so much the manufactured spending, but the losses due to fraud, ie. people buying gift cards with stolen credit cards, and then having the transactions disputed/reversed lately. Either the bank or the merchant has to eat the loss in this case. It's understandable that they would want to fight it. But that has nothing to do with MS, really.

Many other retailers have dealt with the problem by allowing only purchases of small denominations gift cards ($10 - $100) to limit their losses. At that point, the activation fee that come with these cards ($4-$6 per card) that make them unattractive for MS.

One retailer (CVS) scans the customer's ID for each gift card purchase and limits purchases to $2000 per 24 hour period. This likely solves their fraud issue as well. I believe they get away with this by requiring ID for gift cards regardless of payment method (even in cash), not specifically for credit cards.
If there was an easy way to enforce this policy, I don't think it would upset most consumers. Stores are already doing this in part with their own sale offers. For instance, stores may advertise something like buy $100 in merchandise and get x% off your total purchase. In the fine print of the advertisement it will say gift cards and the like don't qualify for this sale. I don't think a policy like this drives consumers away from shopping at the store.
Agree with you there. FYI, I wasn't really talking about store gift cards, which I almost never buy, but VISA/MC prepaid debit cards, which are easier to convert to cash. Even though these cards have no ATM cash access, you can typically get a money order from one (for an additional fee) still .

Obviously, the purpose of these cards is to make the banks and stores that issue them money. Even without any fraud (stolen/lost credit card case), MS eats into their profits. So, the banks don't like it. But they don't explicitly forbid the practice. They just close your account when they detect/decide that you are an unprofitable customer to them through their analytics. They often don't tell you why they do so. The contract gives them the right to close the account for any reason.

Over 10 years ago, I had one issuer close all my cards after I took $150,000 in cash advances with 0% rate/no fee for over a year. I deposited the money in money market accounts or CDs earning 5% +. The bank wasn't happy, obviously. I was blacklisted . Still kept the 0% rate for the whole year and didn't pay it back until the original timeline of the offer. These days, every time I apply for a card from that institution, they don't even check my credit and automatically deny me. But I still always get approved after calling the reconsideration line to talk to a human being .

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Re: What's Your Credit Card Rewards Strategy?

Post by madbrain » Fri Jun 09, 2017 6:16 pm

TheTimeLord wrote:
guitarguy wrote: I don't think MS is morally wrong or anything like that. I couldn't care less. If banks don't want people taking advantage of loopholes to rack up points, then close them.
Remember your words next time you feel the banks have treated you unfairly or taken advantage of you. You should have closed the loophole that allowed them to.
FYI, one of the methods of MS I was using last year was to liquidate the VISA gift cards by google wallet, and sending the money electronically to my husband. The money was instantly available in his account. No going to the store to get a money order and deposit it. And zero fee.
I got shutdown after doing about $5,000, which was to cover the minimum spending on a couple credit cards I I just got.
Google closed not just my payment account. They never explained why, except they claimed violations of terms of services. I read every word, and there was nothing in them against what I did. They wouldn't say what I did that was against their TOS.
I wasn't getting anywhere. I did get upset when I tried to purchase groceries through Google express and they wouldn't accept payment.
At that point, I went to the CFPB and filed a case against Google payments. The situation was resolved in my favor. My google account is now in good standing again, and I can make purchases through it again. I'm not doing MS with it anymore, though, even though it's a completely unwritten rule that you can't.
Obviously, this really has to do with the fact that google was losing money in the process by allowing free money transfer without any fee when using a prepaid debit card.

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Re: What's Your Credit Card Rewards Strategy?

Post by Barefootgirl » Sat Jun 10, 2017 2:27 pm

It's not like the card issuers and gift card companies aren't aware of this "hobby". Surely, it's part of the calculated business case - the business case where we're a small population compared to their primary, more desirable customers.

I was just seeking out a local bank to sign up with, in the small community where I hope to purchase a summer home. No banks there with any kind of a major regional or national footprint - only small credit unions. Should be interesting, can't see myself doing much of anything around there - they would all know me anyway.
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Re: What's Your Credit Card Rewards Strategy?

Post by DiMAn0684 » Sun Jun 11, 2017 9:20 am

Barefootgirl wrote:It's not like the card issuers and gift card companies aren't aware of this "hobby". Surely, it's part of the calculated business case - the business case where we're a small population compared to their primary, more desirable customers.
Was just thinking about this a couple of days ago. There are multiple blogs online that encourage users to sign up for cards to take advantage of bonuses, and those bloggers get paid really well by the card issuers. If the people coming through those links would have been largely unprofitable to the banks I'd think the banks would stop working with these bloggers. My guess is that most people either stick with cards they get referred to and don't 'optimize' point earning by using different cards based on spend categories, or don't use points in optimal manner or use them at all.

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Re: What's Your Credit Card Rewards Strategy?

Post by Da5id » Mon Jun 12, 2017 7:05 am

DiMAn0684 wrote:
Barefootgirl wrote:It's not like the card issuers and gift card companies aren't aware of this "hobby". Surely, it's part of the calculated business case - the business case where we're a small population compared to their primary, more desirable customers.
Was just thinking about this a couple of days ago. There are multiple blogs online that encourage users to sign up for cards to take advantage of bonuses, and those bloggers get paid really well by the card issuers. If the people coming through those links would have been largely unprofitable to the banks I'd think the banks would stop working with these bloggers. My guess is that most people either stick with cards they get referred to and don't 'optimize' point earning by using different cards based on spend categories, or don't use points in optimal manner or use them at all.
I can't believe that the issuers are foolish. They presumably make enough money through people who don't optimize, people who get into trouble and pay fees, people who end up running a balance. And through the credit card issuers use of the business relationship to get some customers to open bank accounts or use other financial products. That said, I do wonder why they don't eventually decide you aren't worth it. I've not used my Chase Freedom for a non-5% purchase in years, you'd have thought they'd realized I'm a bad customer :)

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Alexa9
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Re: What's Your Credit Card Rewards Strategy?

Post by Alexa9 » Mon Jun 12, 2017 10:24 am

Just got $575 in Delta GC from the Barclaycard Arrival Plus Intro Bonus. $3k spend in 3 months. They raised the bonus from 40k points to 50k points.

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Re: What's Your Credit Card Rewards Strategy?

Post by guitarguy » Mon Jun 12, 2017 11:21 am

madbrain wrote:
TheTimeLord wrote:
guitarguy wrote: I don't think MS is morally wrong or anything like that. I couldn't care less. If banks don't want people taking advantage of loopholes to rack up points, then close them.
Remember your words next time you feel the banks have treated you unfairly or taken advantage of you. You should have closed the loophole that allowed them to.
FYI, one of the methods of MS I was using last year was to liquidate the VISA gift cards by google wallet, and sending the money electronically to my husband. The money was instantly available in his account. No going to the store to get a money order and deposit it. And zero fee.
I got shutdown after doing about $5,000, which was to cover the minimum spending on a couple credit cards I I just got.
Google closed not just my payment account. They never explained why, except they claimed violations of terms of services. I read every word, and there was nothing in them against what I did. They wouldn't say what I did that was against their TOS.
I wasn't getting anywhere. I did get upset when I tried to purchase groceries through Google express and they wouldn't accept payment.
At that point, I went to the CFPB and filed a case against Google payments. The situation was resolved in my favor. My google account is now in good standing again, and I can make purchases through it again. I'm not doing MS with it anymore, though, even though it's a completely unwritten rule that you can't.
Obviously, this really has to do with the fact that google was losing money in the process by allowing free money transfer without any fee when using a prepaid debit card.
Do you think it was a "too much too fast" type of thing that caused the shutdown?

I'm guessing that's the case with a lot of these techniques...doing too much or too fast gets things flagged.

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Re: What's Your Credit Card Rewards Strategy?

Post by guitarguy » Mon Jun 12, 2017 11:34 am

TheTimeLord wrote:
guitarguy wrote:
TheTimeLord wrote:
guitarguy wrote: I don't think MS is morally wrong or anything like that. I couldn't care less. If banks don't want people taking advantage of loopholes to rack up points, then close them.
Remember your words next time you feel the banks have treated you unfairly or taken advantage of you. You should have closed the loophole that allowed them to.
Ha...that's funny. Good thing banks always act in your best interest and not theirs huh?

For the record, I don't MS. Never have. I just don't really care to pass judgment on those that do. The fact is it's not illegal and you're within your rights to do it.

I also don't pass judgment on the bank when they catch you gaming the system and shut your accounts down. The fact is they don't like you racking up points and they can simply shut you down for pretty much any reason, MS being a perfectly legitimate one, and be completely within their right too.
Didn't say they did, just pointing out people tend to complain about institution s using loopholes against them. So if you feel it is fair to use loopholes I guess you don't mind being on the receiving side occasionally.
The problem with your argumentative points is that the playing field is not equal.

Banks can catch you doing this crap and then shut you down, cancel your accounts, blacklist you, etc. These consequences for your use of the loophole result in you being extremely inconvenienced at the very least, no longer able to - even legitimately - use their products and reap the legitimate rewards, and so forth. This is one of the reasons I never bothered with MS...I wouldn't want to deal with any of these consequences.

If a bank were to use a loophole to take advantage of little old me...I have no recourse or action to exact this kind of consequence on them. Sure I could take my business elsewhere or whatever, but I can't so easily create the same level of inconvenience that can be exacted the other way with a click of a button. This is typically the case when the "big guy" takes advantage of the "little guy" as opposed to vice-versa.

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