Comment by whitepoplar | Hacker News Reader

Comment by whitepoplar | Hacker News Reader

To anyone who wishes to simply not have to deal with airline miles earned on credit cards ever again, here's a great option I found: if you have $100k+ across checking + investment accounts at Bank of America + Merrill Edge (their low-cost brokerage arm) you get...

1) 2.625% cash back on BofA's Premium Rewards/Travel Rewards credit card. No messing around with airline miles. Just buy whatever ticket you want. Or, you know, pocket the cash.

2) 5.25% cash back on BofA's Cash Rewards card for "online purchases," up to $2500 per quarter.

3) 100 free trades per month at Merrill Edge. You're not locked into any fund companies and can buy whatever you want. I buy-and-hold Vanguard ETFs.

4) Free BofA checking account, with unlimited ATM rebates + a free safe deposit box. It pays negligible interest, so you may want to use another checking option if you hold larger cash balances, but it's helpful to have around just in case you need a physical branch for anything.

It's really a great deal, and it's wonderful to never have to think about the "gotchas" of redeeming airline miles.

But this requires dealing with BoA who are a terrible company. No thanks.

Can't disagree with you on that one, but it is one of the best deals for consumers. My consolation is that BofA isn't making much money off of me, and for customers with higher $$ the service is actually pretty good.

I confess I have a BofA account or two but they're really invasive with there so-called updating of personal details. Demanding to know which countries you're a citizen of and I've read cases where they freeze the accounts until they comply. Reading about that caused me to open a couple of credit union accounts and transition to them. My original reason for BofA was instant access to foreign currency but they don't do that at my local branches now.

I think a lot of that isn't unique to BofA, but tightened KYC regulation that they have to comply with, but I totally get what you're saying.

Except BofA is the only bank to do this. No other US bank has asked.

I agree, and it’s why I closed my account with them (even though I only have American citizenship, I didn’t like how invasive they are, especially since no other bank asks).

BoA service is proprotional to how much money you have with them. If you've got one of their status tiers you'll get significantly better service.

Sounds just like dealing with an airline.

Could you give examples? Or are there sites which catalogue this?

It'd be nice to have some information for comparison with other status banks.

Lol, so do a lot of mileage programs.

My miles card is Bank of America. Worst bank I’ve ever dealt with. Horrible policies. Outdated online service. I paid off my card early (so I could continue using my card that month) with autopay still on, they pulled the statement balance from my checking again. Most other online banks have their payments system tied into the auto pay so it knows if a statement balance was paid. Instead, BoA takes your money and makes you deal with getting it back.

They also block transactions constantly. I get being cautious but they blocked my brand new card because I added it to Apple Pay (which you have to verify with them to set up so it makes no sense that they locked my card after verifying).

I enjoy the current rewards scheme with the Uber card, but they must have received a massive amount of cash from Barclays to have chosen them. Their website and even backend processing is abysmal. No other card I use has such a bad user experience.

By "5.25% for online purchases," are you referring to this?

https://thepointsguy.com/news/bofa-cash-rewards-pick-bonus-c...

Which is to say, this is a new deal BoA has not previously offered, scheduled to go into effect in mid-January 2019?

Not that it's a bad deal. Just to caveat the recommendation with the observation that in the game, good deals have a way of disappearing when they're taken advantage of. (Oddly enough, the $2,500 cap is probably the best long-term indicator!)

Until you have any sort of problem. BoA is probably in the bottom 5 of banks.

The life hack here is to just double down on an American Express card with no fee and membership rewards. You collect more stable points and transfer into travel points at a positive ratio.

My dirty secret is I almost love Amex more than my family. They have bent over backwards when I’ve needed help (stolen wallet outside of the country while traveling), and while I pay $550/year for the card, I get all of the fee back in services while traveling (lounge, airline incidental credits, etc).

Can’t say enough good things about Americans Express.

One trick with the AMEX Gold/Platinum is that certain airline e-giftcards under certain dollar amounts trigger the airline incidental credits: https://thepointsguy.com/guide/airline-gift-cards-amex-incid...

Can't speak from personal experience, but my father would certainly agree with you. As would a number of other people I know.

A surprising number of people seem to have 'When shit hits the fan, Amex delivers' stories.

The life hack is to sign up for new cards with signup bonus every time you meet minimum spend on the previous card. Signup bonuses significantly dwarf any regular points, even in category cards.

(Personally, I find Chase UR much better than Amex MR.)

That kills your credit rating though, doesn't it?

It will lower it a few points.

If you have a house and a car it kinda doesn’t matter anymore. Those are the only credit I use, and both loans are already made. If travel hacking lowers my credit score from 800 to 785, which makes the APR of some credit card I never carry a balance on go from 18% APR to 21% APR.... so what?

You usually can get the best house loan rate at like 760 so not too hard to stay above that if you are past 30 and pay your bills (being old is s free credit score boost)

Not really. Because of the rules to generate the score (see Credit Karma etc) the effects of a new card mostly balance each other out if you have an old enough average age of credit. On the order of -150 pts for a few months.

The only really valid question for point hacking is, "Are you planning to do anything with your credit score in the next 6 months?"

Decreases credit score: Decreases average age of credit

Increases credit score: Increases total number of credit accounts, decreases utilization rate vs total credit

The main barrier to doing this is single-card limits at certain banks (e.g. Chase's "No more than x new cards in y months").

Not even close to -150 in my experience, hah.

And Chase's 5/24 rule only includes personal cards; many people on HN may consult or otherwise have a business, and business cards don't count. Even sole proprietors (which is you, if you have a SSN) can get business cards.

I gave a ceiling number, as someone asking likely wouldn't have an optimized card portfolio for bonuses.

Worst case, they're pulling their second card, where it could easily have a 150 pt impact.

Last I heard, the Chase rule is a lot more nuanced than that with business cards. And if you're at 5/24, you'll be turned down for a new Chase business card as well.

Not in my experience. It definitely costs some credit rating, but (a) if you aren't applying for a loan, credit score isn't valuable to you to begin with, and (b) it bounces back within a handful of months. My credit score bounces around within a 30 point range centered at ~765 or ~785 depending on which bureau you ask.

I would suggest not doing this for a few months before applying for a mortgage or car loan. Also, only works if you pay your bills on time (auto-pay) and don't carry a balance (22% hurts) (i.e., have your personal financial house in order first).

Coming from a culture less heavy on credit card use than the USA, I find the cashback concept a bit strange.

I understand this: the merchants pay interchange fees to the issuer, the fees are higher than the cashback. Then the credit card issuer gives a part of this interchange fee back to the card holder as a cashback.

So basically you fund a (tiny) zero interest loan to the credit card company and get part of the money back later.

But doesn't the merchant price in the interchange fee? I.e. prices are higher under the cashback system? If prices are not higher, who in the end pays for the interchange fees?

It's a horrible system, and market economics would state that credit card interchange is simply a hidden tax on goods sold. But, it's the system we've got and if you choose to opt-out of credit cards in favor of debit/bank cards, you pay the same price for stuff but don't get anything back for it. Moreover, credit cards offer stronger consumer protections than debit/bank cards in cases of fraud.

One correction--the credit card issuer actually gives a 30-60 day loan of the entire purchase amount to the customer. If you pay off the complete balance by the due date (you can easily set this up via bank autopay), you're charged 0% interest, plus you earn any credit card "rewards" on top of that.

It's all really a rigged game by financial institutions to get people to go into high-interest credit card debt (where they make all their money), but if you pay your balances off each month, it's the most efficient option.

Hopefully we'll see its eventual demise.

Last I checked the cash back maxed at 1.75% Did they change this recently?

Points convert to dollars at 1c apiece. Base earnings are 1.5 points per dollar, plus a 75% bonus for having $100k+, so 2.625%.

Strange. When I had that card they told me 1% base + 0.75% bonus for $100k+ giving 1.75% total.

Reading the ad now, it looks like you're right. 2.6 points per $1 spent.

Unfortunately, BoA products are subpar, including Merrill Edge. The interest rate for the savings account is nearly 2% lower and the mutual funds available have either high expense ratios or transaction fees. While that 0.6% bonus on credit card spending might give me some hundreds of dollars annually, I'd be sacrificing thousands of dollars for it.

You could just buy low-cost ETFs of your choice for free. If you're looking for some place to park cash, BIL is yielding 2.15%.

That being said, I'm not advocating that everyone switch to BofA/Merrill Edge, just that it's a really good deal for those who want it.

I appreciate the tip. Now I need to estimate how much I'd gain from the card versus how much time I'd spend moving money around.

BTW, Uber's Visa from Barclaycard gives something like 4% on restaurants and 3% on travel, which is the bulk of my discretionary spending.

If too many people start taking advantage of this, they might reduce the benefits, so might be good to keep it to yourself.

Also you have to have over $100,000 in liquid assets, which isn't a particularly large group of people.

IRAs and taxable investment accounts count toward the $100k. I don't have any cash parked there.

They also have levels below $100k, but they're not as good.

(You're not disagreeing with GP. Stocks and mutual funds/ETFs are a liquid asset.)

(I didn't know, I thought it meant cash)

No worries! https://www.investopedia.com/terms/l/liquidasset.asp

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