Ha-Ling Peak, Canmore

We haven’t paid for a flight since 2011 when we flew to Calgary and stayed in Canmore in the Rocky Mountains for a week. It shouldn’t surprise you that, even though we actually paid cash for our flight, we still didn’t pay for our hotel that week. It was a timeshare week that was gifted to us from a family member. Got to keep it frugal! Without the free accommodations, we probably wouldn’t have gone.

Andes, Peru

Just like earning miles, there is a method to the madness of spending them. You want to maximize their value. Different airlines are on different airline alliances, meaning you can use their miles on certain other airlines. So certain miles are better to redeem for some destinations than others. Airlines each have their own award charts showing how many miles it will take to fly to different regions. To make it even more complex, there are peak and off-peak awards, routing rules you can avoid or take advantage of, airlines that do or do not charge fuel surcharges depending on the points used… I won’t even start to get into it. There are entire blogs devoted just to redeeming awards. And even after so many flights, I think I’m only at an intermediate level of knowledge on all of it.

Don’t lean on the electric fance

The following flights are all for two tickets, except for the trip to Vienna and Skopje, Macedonia, which I made alone. The cash values I assign come directly from the airline’s website, so take that with a grain of salt. Probably you could find a cheaper version of the same flight if you searched around.

Flights

(RT) = Round Trip

That’s basically ten vacations without having to pay for flights. We’ve spent nearly 1 million miles on flights at this point.

Tokyo Conrad

Free Hotel Nights

To be honest, some of those hotel stays were not completely free. The ones where no points were used were “free nights” we received in exchange for paying a credit card’s annual fee, for example the Chase Hyatt card which gave us 2 free nights for the $79 annual fee in the first year, or the IHG card which gives us a free night annually for $49.

In addition to the points-only stays, most of the hotel chains offer “Points + Cash” deals which can be an even better use of hotel points than using only points.

For example, for a 3 night stay in a Long Island Holiday Inn, we could either pay $170 a night or 15,000 points per night, or the Points + Cash deal, $70 plus 5,000 points. Do the math out and the Points + Cash deal is much better. Spending the 5,000 points would save you $100. Spending the extra 10,000 points for the points-only stay would only save an additional $70.

Geneva Intercontinental

Discounted Hotel Nights

Holiday Inn, Skopje, Macedonia

Miles & Points Balance

What are those “other methods” we’ve used to earn miles? One is just normal credit card spending, then there are some weirder ones, like the times I opened up a bank account and an investment account for the bonus miles offers. Recently, there was an even weirder method for earning miles while I will be writing about on Monday.

Here’s another stat. The total Cash Value of miles and points spent above = $79,963

Using that as an average, our total balance remaining is worth $81,676 in travel! Clearly we have not been able to keep up with the amount of miles and points we’ve been earning, so we’ve got a lot of traveling left to do.

Join us… Join us… Join us in the frequent flyer mile cult!

The post How We’ve Spent Our Frequent Flyer Miles and Points appeared first on RidinKulous.

Things have been chugging along here as usual. Since I last wrote at the beginning of the year, Marge and I have been to the other side of the world. We spent two weeks in Malaysia, Singapore, and Hong Kong around Chinese New Year. Just imagine, me stuck in business class while Marge flies in an empty first class cabin with a Cathay Pacific purser and chef all to herself for fourteen hours. Yes, only one first class seat was available as bookable with points, and I gave it to her. Aren’t I so nice? Will I ever do a full write-up on this trip? I hope so. People, including me, want to know how much this stuff costs!

Other than that, Marge has been choreographing her first modern dance, and I entered a mac & cheese cooking competition. The choreography is new and is going well, but just as we lost competing in the mac & cheese contest four years running, I lost again this year. But it was fine with me, because we still get free tickets to the event for competing.

What I really want to let you know about was a new financial move I decided to make.

I’m done with Lending Club

As I’ve written about before, I got on the Lending Club bandwagon early. April 2011 to be exact. It is a peer-to-peer lending site that had high aspirations of removing the banks from the deposits/lending structure in order to bring people lower borrowing rates and higher savings rates. I signed on as a lender because it seemed promising and people were getting good returns on their investments, plus I agreed with their noble goal of giving more financial power to people instead of banks.

Account as of June 2016

It went really well for years. I invested in hundreds of loans in $25 increments to reduce my exposure to failure. And there weren’t many failures in the beginning. Even though I was lending to people at fairly high interest rates (think 13-20%) I filtered for people with good jobs borrowing with good intentions (credit card debt consolidation, not weddings or vacations). So for years, my account was actually earning around 12%, including defaults.

I was such a Lending Club supporter online, they sent me merch

But defaults are a funny thing. These are all three or five year loans. Nobody really defaults in the first year, but as the loans get older, the chances to default increase. So as you’re getting paybacks from the first year, you invest in new loans, and as your older loans start defaulting, your new loans are paying and making up for it… mostly. Unless you keep putting new money into new loans forever, the real shock of defaults will eventually hit you.

I had about $15,000 invested when I really started to notice, “Hey, there’s a lot of defaults happening.” This is probably three or four years in. So I stopped putting in new money, and lo and behold, those returns really started dropping. Instead of re-investing the payments in more loans, I started withdrawing the payments.

It took about two or three years after I stopped putting in new money, but those returns eventually went negative on a month-to-month basis as all of the loans in there were getting old. But those early returns were so strong, I’d still have to estimate my overall return to be around 6%, maybe 5% once all is said and done. So good returns, but not nearly enough for all of the work involved.

A month or two ago, with about $2,000 left invested in loans, and having to do the annoying tax calculations again, I decided to do a final liquidation and be done with it all. One of the drawbacks of Lending Club is that you can’t liquidate quickly. You either wait to be paid back, or try to sell the loans individually on the Lending Club market, which is what I finally did.

The Lending Club market is a funny place. You list your loans with an asking price, usually a few percent less than the principal and interest accrued. There are people who will buy them up. Since my account was usually taking a loss each month, I figured I might as well list everything at a 4% discount, because that would probably still put me ahead of where I would be waiting for payments and getting more defaults. I probably should’ve taken advantage of this a year ago.

March 2019

If they aren’t selling quickly enough, you can reprice all them down simultaneously, which I’ve been doing, until they finally sell. So I’ve basically taken 5% loss and gotten almost all of my cash back now, instead of waiting it out and hopefully taking less of a loss, but very likely taking more of a loss. After taking out the cash, I put it in either stocks or our money market mutual fund.

So what do I think about peer-to-peer lending after eight years with Lending Club? Despite it being really fucking new and probably pretty risky in 2011, it still feels like a very new space today. The idealism of the early days is gone, and most of the loan funding today is provided by banks instead of individuals, which I suppose might be necessary considering the size you have to be to make any money in this kind of business.

Their loan issuance amounts keep increasing, and now they’re offering something called CLUB Certificates which are securities backed by prime personal loans. The industry is still trying to find its place in the landscape, so it will be interesting to see where it is in a few years. I wouldn’t rule out investing in peer-to-peer lending again in the future.

Any other Lending Club quitters out there?

The post Lending Club appeared first on RidinKulous.

But sometimes this travel hacking scheme takes a little work. Gone are the days when people would do “mileage runs,” basically paying for and taking cheap flights strictly because of a bonus mileage offer. Gone are the days of the US Mint dollar coin deposit trick. But there are new schemes all the time. All it takes is someone like Barry Egan to figure out that each individual pudding cup is worth 250 frequent flyer miles.

Barry Egan stockpiling miles

So it was with the recent IHG Priceless Moments promotion. IHG is the group that owns the Holiday Inn, Crowne Plaza, Intercontinental, Staybridge Suites and other hotel brands. The Priceless Moments promotion is supposed to work like this: For every stay at one of their hotels, you get an entry to an online contest. And with each entry, you can win anything from 500 IHG points to 1 million points to a private helicopter ride over NYC.

The loophole is that, for some legal reason, there is “no purchase necessary.” And so buried deep in the contest’s terms and conditions is the rule that, instead of staying at a hotel, you can also enter the contest by sending them a 3×5 piece of paper in the mail with all of your IHG member information on it. And since the contest ran for 3 months, there were 94 nights you could possibly be staying in their hotels. So to make things even, you are allowed to enter by mail 94 times.

Someone also figured out the ratio of hotel point prizes and calculated that the average person will get about 47,000 IHG points. Sounds worth it to me!

Ladies and gentlemen, this is what 188 envelopes looks like:

Many thanks to the intrepid soul who figured this one out, because we benefited from their discovery. But not without some work.  See, each entry had to be filled out by hand with 8 different bits of information (Name, member number, date of birth, daytime phone number, etc.) Filling out 94 notecards with all of that takes some time! I did it while watching a movie or two. Luckily, the envelopes could be addressed with pre-printed labels!

There was also the matter of sealing the envelopes. Does anyone really wan to do that much licking? So Marge invented the method seen below. She remembers using an old ceramic stamp moistener at an prior job to seal envelopes, and put together the wet paper towel and bowl method seen below.

What’s the price of all of this? 94 first class stamps are $46.06. I got 100 notecards for $1, and 100 envelopes for $3, so about $50 total.  A week after I sent in my entries, I started getting contest entry emails. You had to click a link in each email to see what you won.

More often than not, you get this screen:

But sometimes you get 1,000, 2,000 or 5,000 points. After everything was done, I had won 57,000 IHG points. At $50 spent, that comes out to .09 cents paid out of pocket for each point. That’s great, because I’ve gotten about 0.8 cents of value from each IHG point from my redemptions so far. That also means the 57,000 points is worth $456 of stays at IHG hotels.

You might have noticed I didn’t mention what Marge won.  She also filled out 94 cards, and we spent $50 on notecards, envelopes and postage. But in the end, she didn’t receive any entries. It took me a while to figure out why. I knew the cards were filled out correctly and I had sent them at the same time. The problem was I forgot to register her on the website for the promotion! Always remember the cross your T’s and dot your I’s, kids!

So in the end, we actually paid .18 cents per point. Still good, but not great. Mostly I’m annoyed that we potentially missed out on another 57,000 points!

What schemes have you been running?

The post The things we do for frequent flyer miles appeared first on RidinKulous.

But by a normal human’s standards, 450,000 is hella points! If you had a credit card offering a generous 2x on all purchases, you would still have to spend $225,000 to earn that many points. What I mean to say is, bonuses are where it’s at when it comes to accumulating frequent flyer miles and hotel points. We churn credit cards because it takes little effort and it enables us to take insanely extravagant and frequent vacations we would never be able to take otherwise.

We’ve ended up with so many cancelled credit cards over the years, I’ve started to find creative uses for them. Don’t spend money on a dough scraper. A cancelled credit card works just as well! Here I am dividing up dough for chocolate babkas yesterday.

If you’re wondering how credit card churning works, today I’m going to line out for you exactly which cards we’ve applied for over the years and when. It’s a method that can seem daunting to beginners: Apply in batches on one day called an “app-o-rama”, and make those batches no sooner than three months apart. You should only apply for one card per bank at a time (although in some circumstances, you can do more than one per bank), and make sure you can meet the minimum spending requirement to get the bonus! Then after 11 months, cancel the card unless the benefits outweigh the annual fee.

So if you’re curious about how we schedule all of these applications, this is how we do it:

Norm’s Credit Cards

Marge’s Credit Cards

Add those up and we’ve been approved for 68 cards for 2,995,000 in bonus miles and points! 

(Let’s just say 3 million for short.)

How much regular spending would you have to do to earn that many miles? Let’s just say, many many more dollars than you and I will ever see. Behold the power of the sign-on bonus!

That doesn’t even count the free hotel nights (8). And yes, we have spent $2,596 in annual fees over the past five years to get those miles. But think of how far $2,596 will get you on a normal vacation. I could see a family of four dropping that much on a single trip to Disney World. Three million points will get you much, much farther.

How much farther? Well, you know we’ve been to Japan, Switzerland, Peru and yes, even Florida, using miles, but on Wednesday I’ll be publishing our complete list of award redemptions and you’ll see just how many of those miles we’ve spent. Here’s a preview: We’re earning them faster than we can spend them.

Do you play the miles and points game? What’s your favorite scheme for getting something for nothing?

The post How We Churn Credit Cards for Frequent Flyer Miles & Points appeared first on RidinKulous.

“My husband and I are travel hackers.”

The idea of buying dollar coins with a credit card and depositing them at the bank to pay off the credit card in order to stockpile frequent flyer miles made sense to me, but when Jane Liaw said, “I’m a travel hacker,” the cartoon light bulb went off over my head.  I knew there was more to it than just this dollar coin business. There was a whole world out there. For there to even be a term like “travel hacker” meant that people were turning saving money on travel into a hobby, and I knew I had to get in on it.

Truthfully, I should’ve figured this out much earlier. One of my favorite movies, Punch Drunk Love, came out in the spring of 2003. For those who don’t remember, Adam Sandler played Barry Egan, a toilet plunger salesman who exploits a loophole in a Healthy Choice promotion involving American Airlines miles.  This part of the movie is based on David Phillips, a real guy who exploited the same loophole, and bought thousands of pudding cups, each worth hundreds of frequent flyer miles. I was aware of the pudding story even before the movie was made, so why didn’t I look into it then?

Barry Egan stockpiling miles

I wish I knew, because this kind of scheme is right in my wheelhouse. In college I signed up offers through some weird promotional website in order to gain points to buy a first generation iPod. I’ve earned hundreds of dollars and even household appliances for taking surveys online. I’ve always understood the lop-sided tradeoff companies will sometimes make to market products to you.  So why didn’t I glom onto the burgeoning travel hacker movement, the biggest get-something-for-nothing scheme around? Maybe there was a lack of information on the internet. Maybe I thought the airlines put the kibosh on those kinds of promotions after the Pudding Cup Incident. I probably missed out on millions of miles by not looking into it in 2003.

Well, after that Planet Money story aired, I was onboard. I started researching and found that most frequent flyer mile junkies earned their miles by signing up for reams of credit cards. As a 29 year old who had never had a credit card, that led to more researching about credit scores, how to get approved for a credit card, and all the possible dangers associated with this hobby.  For those who don’t know the travel hacking approach to credit cards, it basically goes like this.

1. Research cards and find the ones with sign up bonuses that you want. Usually these are around 40-50,000 points or miles.
2. Apply and get approved for the card.
3. Complete the minimum spending requirement on the card. This is anywhere between $1 and $5,000, but is usually $2,000 or $3,000 to be completed within 3 months of approval.
4. Wait 11 months and cancel the card before the annual fee is billed so that you truly are getting something for nothing. The annual fee is usually waived for the first year.

Greenhouse at the Schoenbrunn Palace in Vienna, Austria. Free flight with United miles, free hotel with HIlton points.

There are many more tips that go into this.  Don’t get involved without reading up on it much, much more.  If you’re bad with credit cards, don’t even think about it. There are strategies for when to apply, getting approved, deciding on the cards, and of course you should never carry a balance. It’s a very strict regimen.  But I have to say, once you get the hang of it, it’s very little work. I read a few blogs which compile the best credit card offers, Marge and I both apply for new cards every three months, we use them, and without purchasing anything more than we normally would, the miles deposit, and that’s it.

Most normal people out there are getting one mile or point per dollar spent on their rewards card, or maybe up to 5 points during promotions. But by always using a card with a bonus attached, we’re usually earning 16 points or more per dollar spent (50k points/$3,000).

Palm Beach, Aruba. Flights paid for with Delta and Citi points.

In 2011, after some debate, I took the plunge and applied for my first credit card, a US Airways card from Barclays bank. Luckily, I was approved, despite never having a credit card before. It was another five or six months before I applied for my second credit card.

Since 2011, and over 50 cards later, we’ve earned over 2.5 million miles and points. We’ve got enough cancelled credit cards to make Halloween costumes out of them! (We went as Black Friday and Cyber Monday) And our credit scores have never been higher. Don’t ask me why this is. Talk to somebody in the credit industry because it doesn’t make much sense to me either.

In just three short years, here’s where those miles have gotten us:

Aruba – Two round trip tickets. (Free hotel timeshare week from a generous relative)
Toronto – Three hotel nights for the Canadian National Exhibition.
Long Island – Three hotel nights for a wedding.
Vancouver and Vancouver Island – Two round trip tickets, return flight in business class.
Germany and Switzerland – Two round tickets in business class. Five nights in very expensive hotels.
Clearwater Beach, Florida – Two round trip tickets. Two nights at a hotel on the beach.
Annapolis, Maryland – Two round trip tickets. One night at a hotel.
Macedonia and Vienna, Austria – One round trip ticket (That’s me!). Three nights at the Hilton in Vienna.
Orlando – Two round trip tickets. Two nights at the Waldorf-Astoria.
New York City – One night at the Four Points in Soho.

And here’s what we have planned next:
Naples, Florida – January 2015 – Two round trip tickets. Two nights at the Hilton.
Peru – March 2015 – Two round trip business class tickets.
Japan – October 2015 – Two round trip FIRST CLASS tickets. At least four hotel nights.

I’ll be outlining most of these trips later, showing off photos and calculating the retail price vs. what we paid for everything, down to a Per Day vacation cost.

Does anybody else take those weird focus group surveys for money? Have you ever used points to book an awesome trip? Do you apply for cards like crazy, or just hold onto one card and earn a mile for each dollar like a sucker?

The post Our Travels Using Frequent Flyer Miles: Introduction appeared first on RidinKulous.