I’ve happily moved away from almost all manufactured spend, but recently found myself with a somewhat pressing need to meet some hefty minimums. I learned some good lessons here, that perhaps will help. One thing I’ll suggest is that if you’re currently happy with doing giftcards/money orders or have some other gigs running, it might be harder to get onboard with what I’ve been up to, so put it in the someday/maybe file.
Before Spend Requirements was need. I needed 6 nights (2 nights then 4 nights) of hotels (nice ones, because I’m valuing vacation time very highly right now) and I also needed to finish a full $1K of spend on a recent AS card application (acquired with pure speculation in mind).
- I identified a great SPG property that was 10K per night ($380 cash price) that worked for the first two nights. $5K Spend
- I identified a 5 star hilton for 50K per night, or a 4 star DoubleTree for 20K per night. Haven’t decided on which one I will go for yet. $3K Spend.
- That AS card.. $1K Spend
All in, $9K spend required, and I need it fast because I want the hotels locked in.. we’re talking first 1-2 weeks of card ownership to hit these.
I held both the SPG and AS card ($6k Spend) for a week or so before executing spend. This allowed me to finish off spend on the other AS card I got (His/Hers) before focusing on the next ones. I decided that I would use a recent (future at the time) cruise to meet min spend, unfortunately I didn’t identify and execute the Hilton points (100K Surpass offer) until a day or so before departure, so it didn’t come along for the ride.
As an aside, I try to work on a dual ‘Speculative Points’ like the AS ones, and ‘Target Points’ like the SPG ones wherever possible. This is a shift from where I was something in a lull and avoided all speculative applications.
Paying a Premium
After several years, and 11 free cruises, I’m starting to fall out of favor with NCL. The swine. For the first time, they set me at a tier level that doesn’t include free casino advances. I tried to quickly engineer that, and have them re-evaluate, but didn’t like the attitude of the person I was working with, and rather than ‘HUCA’ them I decided to just ignore the loss and grab a Margarita and hit the pool instead. That cruise the casino still gave me $200 of free money in addition to the cruise, so whatevs.
I put the SPG card as the credit card on file for the cruise (this one scoops up all expenses) and pulled out about $6K from the Casino at 3%. I then visited the front desk of the cruise and asked to make a partial payment of $1K on the AS card. All in, $180 to meet the spend, in exchange for straight cash.
I’d lie if I said it was instant. The line in the cruise front desk is akin to walmart, albeit a little shorter, but the key difference being that I was able to sip on a Pina Colada while waiting in it.
Paying cash to meet spend, at $30 per $1,000 makes you appreciate that the amount of min spend required to trigger a bonus matters. It was starkly obvious when dealing with the extremes of a $5K card and a $1K card. I do wonder if I would have noticed this difference if both cards were at $3K. Previously, when MSing it’s something I’ve never really cared about at the $0-$5K min spend levels, but it does make a difference in both cost and time. For the MSer’s, many times you cannot buy either the GC or the MO at that level in a single transaction, but you ignore that you are doing multiple trips to make spend because it is ‘free’.
The fee for gaining 30,000 SPG (25+spend of 5) was $150. This means that my hotel cost $75 per night, and I have 10k leftover. 10K SPG is a solid night ‘somewhere’ but I still value these as ‘orphaned points’ because I have no pressing need for them right now.
Luckily for me year 1 fee is waived, but frankly, if the card had $95 fee attached too, I would have still spent $245 for the bonus because it involved such a low level of friction to my daily routine. However, it reinforces that ‘travel is rarely free’ and instead pushes the notion of ‘deeply discounted’. I think that the willing acceptance to pay $150 to gain the bonus, vs run around town with giftcards and money orders is a big step.
My takeaway from this is that I’m more than happy to pay $150 (or $245) for the two nights in the hotel that I wanted, even if I could have spent about $30 to do it for free, via several visits to Walmart…
So my first lesson is that min spending even with a 3% surcharge is a good deal for me.
The next step of that was the Altitude Reserve.. while I didn’t do it this trip (more out of laziness than anything) I’m also happy to ‘Invest’ in Altitude Reserve points, with some caveats….
An Altitude Reserve point is worth 1.5 cents, and earned at 3x on travel. Therefore, even without chasing a bonus, paying $30 for $45 of hotel travel is a good deal to me. It is an investment, because I would move asset class from cash, to funny money. I would hesitate to do this too far into the future speculatively due to the risk that the Altitude Reserve is not backed by Silver, like the USD, but I would move in a certain amount of points in order to cover my immediate 6-12 month travel.
Back from the Cruise
Two cards down, but $3K on the Hilton Surpass to go and a goal of 7 days to meet spend. My first thought was Kiva. I like using Kiva for lazy ‘MS’ it has no fee to fund, but it has two downsides:
- Risk of Loss (I lose money on Kiva, but it still has worked out less than 3% via luck and diversification.
- Time to repay (lock up of float for 6 months or longer has a price, vs getting cash from Walmart which can actually work out as a free loan..)
My mind went then to the IRS. I expect another refund this year, and we haven’t paid any tax yet so in theory I could give them a loan and get it back. I generally don’t advise messing with the IRS though, and like Kiva, it has two downsides:
- A fixed fee to fund via credits card (less risk of loss, more guarantee of loss)
- Time to repay (3 months vs 6 months, but still a lockup period)
Then I started thinking ‘outside the box’…
After a while, It can be very easy to forget about real spend. Personally, for the last 2-3 years I’ve been doing min spend in 1 transaction in most cases, but since my time became limited, and options closed, things have changed. I rarely think about using a card for ‘real spend’ as I have a few that I use for this. With fewer options, I started looking around for real expenses that were close, and see if I could ‘Forward Shift’. I managed to apply about $1400 here via reimbursed business expenses. I generally avoid this also, because it is a PITA to track, but since the year is almost over, and I have good accounting software, I went for it.
In addition, I was able to look forward to November/December and find items like our Car insurance payment, and was able to send in the funds a bit early.
In terms of a relatable example, Resellers have a great option here, because if you buy $1K of inventory on a personal card, you can reimburse it instantly, even if it takes 6 months or more to sell. For me, it was mainly licenses and renewals for various professional organizations.
One thing that caught me was ‘Swap Spending’ or the destruction of priority. With this, I mean that when my goal is 100% fixated on meeting $3K spend naturally, without ‘wasting’ 3% on a transaction fee, or locking up money for the IRS, I would forget the opportunity of the transaction.
The Surpass was a bad example of this, because it offers some multipliers for Dining and Supermarkets, but I would typically use a OBC for Supermarkets (not MSing) for 5% and at least 2x to 3x points Dining card (TYP Premier, or other) those points further being uplifted by 25% or more at spend stage.
The lesson I picked up here was that by shifting natural/organic spend to the card of the day, slipping a $100 grocery bill onto the new card vs the 5% card came at a cost. Often times that cost could be 3%, if you value the points (not the bonus) at 2%. So it might be better to stick with the old 5% transaction, and pay 3% out of pocket to build the $3K minimum.
Interestingly, the Surpass could be a good argument for, or against this lesson. On the one hand, at 6x you could argue a full $3000 of Grocery spend being valued at 18,000 could be another night, or almost two, if you can find a property that fits. Alternatively, you might find that 18,000 points are orphaned in your account for years, and have no value.
So what did I learn?
- I’m fine paying 3% transactions fees. I’d pay more than 3% if I can profit.
- I like profit.
- I’m OK with fancy hotels.
- Even if all MS dies, right now we’re looking at perhaps a 50% uplift from certain programs, which in some alternative universe, or dystopian future, is still epic. Especially if it involves less work than the glory days.
(PS the USD dollar is fiat currency, it is backed by the US Government, which is supposed to be more stable than the Altitude Reserve, but who knows…)
(PPS I now get all my referrals, wherever possible, from fellow humans. For a while I tried to support a few blogs that I like, but I really think that there’s a nice touch in getting a personal referral, so thanks to Amol for the SPG and to Brandon for the Surpass)
Matt, i appreciate the in-depth posts. I’m a true churner. Most of my MS is to meet min spend. I’m in two player mode and we sign up for 5 to 10 new cards every 3 months. I frequently have min spends of $15k-$20k every 3 months. My current method for MS makes me a cash profit of around $11.10 for every $1500 with trips to WM. That does not include the points gained. I would not consider paying for MS unless I was really in a bind. Seems to me the biggest determining factor of whether or not to pay to MS is your access to headache free MOs. This includes proximity as well. I have a WM located 1/2 miles from my work. I use my 30 min lunch break to run through up to $3k in MOs. As an example. For me to MS 15k will require 5 trips to WM at $3k each time. I will net $111 cash profit. Your 3% method would have cost you $450 for the same amt. So I am $561 ahead there. Your 3% method was also not without having to stand in line, so you have time invested as well. For me WM trips like today are combined with grocery shopping trips so the added time for me to MS was less than 10 minutes today. If I was in a rush and needed to do some fast MS, I’d probably go with Simmon M@lls. There I’d have a cost of about 0.8% which is alot better than 3%. It seems to come down to how much you value your time, and what kind of MS you have access to. I dont think it is that complicated.
Time = Money.
But the interesting thing is that what I’m doing may be the future of ‘travel hacking’ … if everything goes away (no more Giftcards or MOs etc, etc) and there is nothing really left, there should still be a 3% route, and that route is profitable.
Remember, my method did not cost money, it saved money. The only way for your way to make money is to add in hours worked.
I still think you are leaving 30-50k in after tax net profit on the table by not MSing. Not the glory days but for part time work its still not too bad.
But I could also make $40-50K from this site if I had pushed it hard into credit cards.
Or I could make $40-50K from selling life insurance.
Not that I don’t need the money, just that I’m making different choices with a different end game in mind.
My biggest thing against MS, even at those figures, is the lack of equity. It is pure dollar per hour. I like gigs that have that plus equity, IE building an ethical business, which pays some income, and also in the long run might have its own intrinsic value.
Yes, you are correct. Especially on the CC pushing on the site. Not sure you can make 50k selling insurance part time (10-15hrs a week) though. Thats tough sledding
Little help please…
Norwegian Cruise Line
Hang Up, Call Again
What’s this about free cruises?
Matt-Are you still in grad school? MBA? How do you pay for school?
I totally get what you are doing here, I am in MBA program with kids and work FT. There is nothing more valuable than time with family and passing expensive courses. Nothing is really worth taking away from that.
Not grad school, but yes, still studying… probably have a requirement of a couple of hours a day right now, more at peak times around exams etc.
I have been buying gift cards at GCM with cash back portal and using that to pay for tuition to meet min spends on new sign ups. I know I’ll be in school for another year and am timing CC sign ups with vacations with GC purchases.