A Man Who Flies Around the World for Free
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In the last five years I've managed to earn and spend about 1.5 million miles and points, with maybe 50k airline miles from actual flying and ~400k points from actual Hilton stays. Between churning, manufactured spend and promotions I'm able to do 1-2 international trips a year in first class, staying at good hotels. I mostly travel to Asia and get great value out of free flights on Singapore, Cathay Pacific and Japan Airlines.
It's an awesome hobby if you: a) have time to kill b) are single and c) have an insanely flexible schedule.
I used US and BA miles earlier this year to fly to Malaysia and Thailand for free (well, plus taxes) in first class, spending five weeks between Hong Kong, Penang, Koh Lanta, Beijing and Tokyo.
Drinking $300 champagne at 35,000 feet on a flight you didn't pay for is a rather fun feeling...
If you know a year-round supplier of $0 fee cards, let us know ;)
While I don't deny the possibility that you're right, if you're not involved in the community I'd consider it far more likely that people have already found the most effective manufactured spend techniques.
As an example, CC charge -> Amex GC w/ cashback from rewards site -> Visa GC w/ PIN -> ATM or money order to withdraw is a fairly "simple" MS chain. The convolutions that people have discovered past that get pretty byzantine. But even <1% adds up when you're churning 5 figures.
The lengths of some of the schemes are entertaining in their own right.
Essentially a round-trip business class ticket from the US to Asia.
Buy gift card with credit card -> Unload gift card back to credit card. Repeat. Send the same $5000 around in a circle (less fees). I'm simplifying of course.
Bluebird, a prepaid debit card from Amex and Walmart, has been one of the big methods for some time but I'm not sure if that one is still viable.
I've been active on FlyerTalk for about five years—after being in that deep for so long, it's hard to step back and figure out where to guide a beginner.
Plus, lots of it is based on your own financial situation. Available funds, credit score, travel profile.
I would argue that the vast majority of people are best served getting 1-2 cards with bonuses they spend in (I use the Amex Everyday Preferred and Chase Sapphire Preferred) and focusing on those. Especially if you have multiple people to bring along, you're better off with one of the flexible points currencies from Chase or Amex (or Citi, theirs is improving) rather than chasing airline-specific miles.
The exception to the multiple-people advice is hotels, as those redemptions are obviously per-room and not per-person. Hyatt offers the best value IMO but Hilton points are stupid easy to earn. Depends on where you want to go as they have very different footprints.
The outright lies I saw people posting during the Redbird heyday were astounding.
Avoid.
I'm not sure how you'd get 25,000-50,000 points every 3 months unless your lifestyle is pretty expensive compared to mine.
For example:
https://creditcards.chase.com/credit-cards/sapphire-preferre... -> http://www.capitalone.com/credit-cards/venture/ -> https://creditcards.chase.com/6000356?CELL=6WKP -> https://creditcards.chase.com/credit-cards/southwest-premier...
180,000 points for $198 [the last one is a business card but this is HN so I suspect a bunch of people have ways of getting one of those]
iirc, 180k points is ~$1800
Just realize this tears up your credit score so don't go getting large 5-6 figure loans for cars/houses while doing this.
Given that the primary difference between a credit card application and a business card application is possession of an EIN, I refer you to the IRS (http://www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-In...),
Question: Does a small company that operates as a sole proprietorship need a tax ID number? Answer:
A sole proprietor who does not have any employees and who does not file any excise or pension plan tax returns does not need an employer identification number (EIN) (but can get one if they choose). In this instance, the sole proprietor uses his or her Social Security number as the taxpayer identification number. However, at any time the employer hires an employee or has to file an excise tax return, they will need a new, separate EIN.
In other words, in the absence of a more formal business structure requirement by the credit card issuer, you can be considered to be your own business.
EDIT: tldr, use your SSN
What part of this tears up your credit score? The hard inquiries or the opening of new accounts? I may be buying a car in the next few months and now I'm a little concerned about opening up a new account or two for points.
https://www.creditkarma.com/article/hard_inquiries_and_soft_...
Hard inquiries when you open the new credit cards. A number of companies have a threshold where it triggers a denial.
Its a bit more complex than the credit score itself, for instance:
http://milestomemories.boardingarea.com/chase-credit-card-ch...
> The 5 cards across all banks rule generally applies to authorized user accounts as well.
So yeah, there are things in place to knock you down a peg if you do stuff like this. But so far, at 4 cards per year, I don't really run into issues.
Play by the same rules as the stock market: it's not about picking winners a low percent of the time but rather avoiding losing anything and running a reasonable risk profile.
If you've got a bit of business spend you can allocate, then you get to play without risking anything. At worst (if some bonus doesn't come through because you missed fine print), you're right where you started (not earning extra rewards).
Disclaimer: Assume it's implied, but no points are worth souring a business relation over. Don't chase points too far.
If you need to play solely with your own money, it gets a little dicier. For example, that $450 annual fee (not waived) card that results in $1,500 worth of travel points w/ $5k spend in 3 months? You'd better be sure you know all the rules.
I'd recommend (as someone else did), trying a few of the smaller card offers. Chase Freedom is a good small starter. They run decent cash bonuses with low spend, no annual fee, and it can ultimately pair with CSP.
Basically, approach it the same way you'd approach a casino. They're trying to attract your business. You're trying to game the system. They're constantly tweaking their rules to mitigate the impact of incentives on their bottom line. Learn the basics and then decide how far you want to go.
If you do just want cashback, Fidelity has a straight-up 2% cashback card.
Thanks!
The issue with a lot of the rewards game is that the best "values" usually come from redeeming for awards that you'd never have considered actually paying cash for. There's still an equivalent cash value to you that may or may not be more than the 1-2% of actual cash you could collect but it's often not really free money in that you're giving up some level of actual fungible cash to get it.
If you're talking about the Visa (?) with the spend then 2%, the Amex version is straight-up 2% from the first dollar. A free-to-sign-up-for-no-fees Fidelity Cash Management Account suffices for a transfer target for accumulated cash back, then you can EFT the funds wherever you like (side note, Fidelity has great EFT options).
The downsides to the Amex are: (1) slightly lower acceptance (2) FIA Card Services (the administrator is not Amex proper) has no auto-pay (3) it's not an Amex proper, so you aren't eligible for most of the Amex $x off $y at z deals
https://www.fidelity.com/cash-management/american-express-ca...
That said, the 2% w/ no AF is still my benchmark that I evaluate everything else against. It's amazing how many alternatives it weeds out.
For the beginners out there:
1. Be sure to read as much about earning miles as redeeming them. Both sides are equally important and redeeming is actually getting much more difficult.
2. Don't let the newbie blogs lure you into hitting credit cards too hard. Banks are starting to tighten the clamps on our hobby. Be sure to learn, start slow, and then start ramping up. Banks like to see a relationship, not just a high credit score.
3. If you're dipping your toe in Manufactured Spending (MS), start small then ramp up over time. Nothing worse than getting shut down for hitting something too hard. That said, MS is a great way to meet minimum spending without using too much money.
4. Don't let headline point valuations fool you into thinking you have to fly in Biz or First to get a good value on your points. Blogs use these kinds of numbers mostly to get you to sign up for CC's. Figure out your your strategy and go that way. A person looking for a lot of domestic flights is going to have a different strategy than someone looking to travel like saryant (and myself, incidentally).
tl;dr; This hobby is amazing if you can figure it out and do the leg work. I too enjoy good champagne 35k ft in the air ;)
If you have any questions, AMA! :)
Take it slow.
Of course - do not do this if you don't intend to pay your balance immediately. Any interest charges quickly undo the ROI.
Just got back from a completely free trip to Japan (flights, hotels). So worth it.
Don't store usernames and passwords in a spreadsheet, use a password manager.
You can open a lot of those credit cards.
Redeeming those miles for international first/business class is a good value (some disagree but that's my use).
Really basic example: Citi routinely has 50k mile bonuses for their American Airlines cards. Round-trip business class US->Japan is 100k miles. Therefore, open two Citi AA cards and you can redeem for a free(ish) business class ticket to Tokyo.
It can get a lot more complicated but that's the gist. Understanding the alliances, the non-alliance partnerships, all the transfer arrangements. Taxes and fees. Routing rules. Flexible point currencies. Knowing how to work around deficiencies and bugs in the airlines' own systems. All that takes time to learn.
At the moment I'm sketching a trip that includes Etihad's new first class apartment, Qatar business class and Singapore's first class suite. Time in Dubai, Bali, Singapore and Tokyo. Four airline tickets, points from three airlines and multiple credit cards, banks and flexible point programs, plus numerous hotel point redemptions along the way. All told around 600k points.
To understand why this is even possible, it's good to understand the factors involved.
1. CC fees, carried balance interest, and merchant fees are extremely big business. So much so that banks and payment networks are willing to give out large bonuses to influence your buying behavior.
2. Airlines (and to a lesser extent, hotels and other brand partners) have evolved their miles and points programs into, IMO, basically an unregulated, overly complicated shadow currency. As a result of the complexity of the programs, valuation sweet spots have emerged where you get outsized value per point/mile
3. Since brand partners basically control the value of these currencies, they can sell them cheaply to financial partners. For financial partners, it's a win/win because they can offer a bonus that is perceived as high value without incurring the full cost of an equivalent cash offer. e.g. a 50k mile bonus looks just about as good as a $500 sign up bonus, but banks pay far less than $500 for 50k miles
4. A good majority of Americans will sign up for cards, use them, and regularly pay late fees, carry a balance, etc. This more than pays for the welcome bonus that card issuers offer. OTOH "travel hackers" sign up for the bonus, but use strategies to prevent incurring the costs usually associated with it.
Another layman question, what does this do to your credit score?
People that engage in churning are a bit self-conscious (source: recovering churner). Simple fact is you don't churn if you don't have to- it's not worth your time.
> Another layman question, what does this do to your credit score?
Opening new credit cards lowers your credit score- it adds weight to the single debt category(mortgage has a house backing it, a credit card doesn't), lowers the average age of credit lines (someone that has paid a home loan on time for the past 20 years is more 'reliable' than the naive 18-year old college student das company is preying upon), and, if you open too many at once, gives the impression you're desperate, insolvent.
I've actually found that the proportion of used/new credit has a larger effect on credit score. Don't max out your credit limits, folks.
There's a variety of justifications, such as "banks are evil anyway" or invoking Plunkitt, but they just never really sat with me.
I would say you have to enjoy travel. If you don't like flying and don't care for international travel, yeah, it's not a hobby you'd enjoy.
I always assumed people on HN would be all over this kind of thing, it's a total minmax optimization problem. Especially back when this was even more of a game, with the US Airways Grand Slam through 2011. The puzzle there is worth reading about. You'd get up to 100,000 bonus miles for completing 36 'partner activities' (bonuses are only awarded in groups of 4 activities -- 1,2,3 you get nothing and at 4 you get all the miles for that group -- and the number of miles awarded for each group of 4 increased from nominal to significant. I spent weeks optimizing and figuring the marginal cost. After minmaxing the hell out of your strategy, you execute; fill in surveys, buy the cheapest thing on Skymall (in my case, a toilet lock for a child I didn't have), book phantom rides on the super shuttle. Maybe spend a few bucks and splurge on a bamboo plan. Ended at 140K miles for $700 -- at the time just short of 2 round trip business class tickets from North America -> Europe -> Asia -> North America.
Once you get into it, your average getaway is better than most peoples' honeymoons; I flew Etihad apartments to the Maldives for a weekend for 75K miles and $100. And that was just one of the many.
Agreed, lucky is one of my favorites. I actually got started with The Points Guy but the quality has gone downhill so much, and the blog has become a shill for card signups even if they don't make sense. My other favorite is Matthew at upgrd and Efficient Asian Man.
http://www.nytimes.com/2001/05/24/news/24iht-radiate_ed3__0....
> A 1996 paper published in the American Journal of Epidemiology found a higher incidence of myeloid leukemia, astrocytoma, prostate cancer and malignant melanoma among 2,740 Air Canada pilots than in the general population.
> One study of female flight attendants in Finland and Denmark found an increased rate of breast cancer.
Three LA to NY flights are more than the approximate dose received at Fukushima Town Hall over two weeks following the accident. But you have to make 175 flights to get as much as you get with just one chest CT scan.
Which makes sense, since a CT scan is basically enough X-rays that you can make a 3D picture.
It doesn't mention if this is accounted for.
PS: Have fun with TSA.
in April 2011, he received a certified letter from United, cheerily informing him that because he had taken advantage of the system his frequent-flyer account was permanently suspended. He was banned from flying, he recalls the letter saying, unless he paid the company $4,755 — the amount it claimed as losses through Schlappig's techniques. [...] Schlappig has repeatedly offered to send United a check but has gotten no response.
-- so, how he continued the Hobby afterwards? Did he switch to a different airline? Can anybody help me understand?
What do you find morally questionable about churning? It's game in which banks and airlines write the rules and reserve the right to change them unilaterally.
But it's not that much fuel. A 30-mpg automobile will consume a similar quantity of fuel (gasoline, not jet fuel) in 120,000 miles of driving.
[1] https://en.wikipedia.org/wiki/Energy_efficiency_in_transport... [2] http://www.eia.gov/forecasts/steo/tables/pdf/wf-table.pdf
Not like he's specifically chartering the flights, the planes is going to fly with or without him.
That said, I don't think Lucky even comes close to the amount of flying Tom Struker does, United's only 10 million mile member.
I mean, come on. It's not like the plane would be sitting on the Tarmac if he didn't board it. It's flying anyway.
I don't think you could. Fuel is one of the most mispriced things in the world; airlines may not be paying pennies a gallon like certain countries wastefully subsidize fuel in their countries, but it's pretty blatant that fuel subsidies of every kind are enormous, and they've been particularly singled out by economists like the IMF as wasteful.
> It's not like the plane would be sitting on the Tarmac if he didn't board it. It's flying anyway.
On the margin of plane flights, there would be fewer plane flights if he didn't have this 'hobby', and much more directly, every flight he boards wastes a lot more fuel simply carrying his weight.
You are exploiting a complex promotion system by finding tiny loopholes, at the expense of everyone else (because at the end of the day, the banks will get their money...)
And no, you can't argue that "because the loopholes exist, that's proof they don't care".
Or another comparison, a white collar criminal who embezzles his company but found a legal loophole that means he can't be charged. Just because it's not illegal, doesn't mean it isn't immoral!
I do find the "mileage runs" a bit odd. You spend a day or two just flying and hanging out at airports? I guess it's all cost/benefit, but that would be a little to much for me.
That said, whatever floats you boat. Looks like a lot of people are really maximizing the points programs. Good for them!
Going between mid-tier and top-tier status can make a huge difference in your rate of upgrades for the next year, mileage earning rate and in AA's case at Platinum you earn 0 international upgrades but at ExPlat you earn 8 one-way international upgrade certificates good for an upgrade from any economy fare to any business, or any business fare to first free of charge.
If you're at 90K of the 100K you need, it might makes sense for you to fly around a bit, see somewhere new -- cheaply, earn some miles and push you over. The next year you'll be a lot more comfortable.
Who hasn't overfilled their cup many times at self-serve drinks counter? Been back for three plates of ice cream at a buffet?
It's sounds like a lot of work but completely harmless. Finding loopholes in complicated systems to me seems like a type of arbitrage mor than anything.
There are some in the FF community who fly first class to Tokyo and then return the next day but they're a very small minority.
But the article says he spends most of the time outside the plane in the airports. That doesn't sound like fun, to me.
I get that some people might like this. I was speaking to my other half about it last night. People go on about how great first class is. I wondered if people had a choice between teleportation and first class which would they choose? I'd go for teleporting. I think most would.
So how great can first class be if I'd willingly exchange it for just the time back?
So I am going to travel anyways, there just happens to be a way that's both cheaper and more comfortable.
Business is a better seat, edible food and free booze. First [on a decent airline] is a different world. Caviar and Krug/Pol Roger/Perrier-Jouet. Lufthansa has an entire separate terminal building with private immigration, security, private assistants, a restaurant, a massive bar and Mercedes or Porsche limousine service to the side of the plane. Flown it many times, and I keep looking forward.
First is no waste of time for me; champagne, caviar, gourmet dining and wifi (or the plausible excuse for not having wifi), it's a wonderful way to spend a few days.
Sure you can get some free stuff, but at what price? What if you took that time and invested it in bettering your skill sets, etc.?
you are spending a lot of valuable time
This sort of sentence is extremely annoying to me. I'm good at several things, one of which is a video game that I've played for most of my life, so I've heard people say things like this for a good portion of my existence and it's up there with some of my biggest pet peeves. I've noticed that when people say this, it's usually a skillset that bothers them on some level, and usually for reasons that are unconscious to the person saying it.
No one says "you could spend more time developing a valuable skillset" to me regarding, say, fitness, because most people would enjoy having better bodies and the reasons for this are immediately apparent. But they'll say this regarding a few video games I am extremely good at, even though the results of having a better body and being really good at a video game are both satisfaction on my end. You might say that fitness leads to better health, but that's still using the assumption that health maximizes enjoyment in some way by extending the number of years you're alive -- because no one would be parading health as a virtue if every year alive were miserable.
I'm sure the reasons differ, but the mentality is always the same: this thing I derive obvious satisfaction from is objectively good ("bettering myself"), while this thing I can't see obvious satisfaction from (or are threatened by) is a waste of time, even if both, extended to their ultimate goal, just result in more satisfaction. It ignores that our skillsets have the same extensional goal: things we value. When you extend the purpose of your skillsets, you're always going to end up with some sense of "I value this thing."
Example: a lot of guys will improve their skillsets so they can get money so they can have lots of sex with women they find really attractive. But if you're already able to do that, and that's your primary motivation for doing that, then you're not going to have as much of an incentive to develop that skillset. Conversely, if the skillset is intrinsically satisfying to you, you'll eschew sex and develop it. But the goal is the same thing: maximizing your own utility from what you value.
You'd better a skillset, in other words, to derive more satisfaction. And since you don't know that they don't already have a developed skillset, since lots of people are good at many things, you don't know how much satisfaction they already derive from their existing skillsets. So you're just saying "you should better yourself" in a vacuum, which is effectively telling them that they could be deriving more satisfaction arbitrarily, even if they're already deriving lots of satisfaction.
So either this ignores that you'd do these things for more satisfaction anyway, or presumes that you can tell a person you've never met how much they're going to get (or should be getting) satisfaction from utilization of their skillsets, which is insanely presumptuous.
I'd be pretty surprised to see that now. On my last long United flight, which was 6-7 hours overseas, my in-flight entertainment system was broken, and they gave me a $25 voucher. I was not impressed.
IDB/VDB (what you get in an oversold situation) is an entirely different beast.
Also, let me remind everyone that Europe is not super small either. There's a lot of diversity. In the Nordic parts, people basically only use debit/credit cards for example. For good and bad, cash is getting rarer here.
If I could 'hack' an extra return flight to SF, NY or Tokyo once a year it'd be great however.
I update my phone and laptop every five years or so. Bike is free.
By the way, if anyone knows of a good way to rack up miles with Star alliance/Lufthansa, I'd love to know.
It's basically a Swedish/Scandinavian "FlyerTalk" community. One part editorial and many parts community/forum.
Those who apply for a credit card must be 18 years or older and provide proof of stable income >= $2000/month before banks will even consider the application. Also, all credit cards are registered at our national credit registration office with their max withdrawal counted towards personal debt risk, so applying for or owning more than just a few CCs at any single time is very unlikely unless one has a very well paid job or other sources of income.
Within three years of starting I had available credit of 150% of my income.
For instance, redeeming AA miles on Japan Airlines will generally cost <$100 in taxes even in first class for a US->Japan flight.
If you really are flying into LHR from the US, one alternative is to fly into a different city in Europe and connect over.
Because he wants to and it works
But the interesting question to me is
> why don't we?
OTOH cards with no fee get tossed in a drawer. I have 5 no-fee Citi Hilton cards just sitting in my file cabinet.
Tightening up the rules or banning these users might be bad PR for them they don't want to deal with.
Yes. These reward cards work out to about 1-2% cashback equivalents after the sign up bonuses. From the credit card perspective, the financials are basically identical to their normal "cashback cards".
If you are like me and just want a couple free plane tickets a year, you just pick up 4 new credit cards [~160-200,000 points/miles] and cancel them. If you put 100% of your spending on credit cards and just cycle through the sign up bonuses every 3 months, its really easy and 160k miles is 2 round trip tickets a year anywhere domestically, with some leftover.