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Comment by saryant | Hacker News Reader

I spend more time than I should in the churning/FF communities (all of which are centered around FlyerTalk). It's fun. Ben's blog is one of the few I follow, most aren't that great. Frequent Miler is a solid resource, as is Wandering Aramean, but nothing beats being active on FlyerTalk itself.

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...

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Good to see another FT'er on HN. I've earned/burned about the same volume of points as you and can attest that this hobby is awesome, with some caveats.

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! :)

All of this is solid advice. There are countless stories on FT of people rushing in too fast (especially with MS!) and finding themselves burned. Blacklisted by banks, holding thousands in gift cards they can't liquidate, points in programs that aren't useful for them.

Take it slow.

Also - stay organized. Every credit card should be accompanied with a spreadsheet entry with all details (un/pw, bonus, etc.), entry into Mint, auto-pay, and calendar reminders (end of free annual fee, etc.). Very easy to slip and forget, or not keep track of getting your actual bonus.

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.

> Every credit card should be accompanied with a spreadsheet entry with all details (un/pw, bonus, etc.)

Don't store usernames and passwords in a spreadsheet, use a password manager.

If you trust it, a lot of people in the miles game use AwardWallet. It saves passwords as well as FF#'s and balances (where available).

AwardWallet is a great concept, but missing key integrations for me (Delta, United). If it's not complete, limited use for me...

Or encrypt the spreadsheet.

Could you give someone who has ABSOLUTELY no idea (even after reading your comment) about any of this what it is you do to hack the system?

Banks give out airline miles to attract to credit card customers.

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.

All of this.

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.

Trade your free time and (temporary) credit score rating for miles- flights, hotel stays.

Why was this voted down? Is this inaccurate?

Another layman question, what does this do to your credit score?

You'll be opening a lot of credit cards, that might suppress your score. But since you are paying off all of them, it should only be temporary.

> Why was this voted down?

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.

Opening your credit cards definitely does not hurt your score nearly as much as you think it would. It can often increase your credit score. And if you're a proper churner, average age of accounts doesn't even get touched since you've got so many cards on record (closed cards continue to reflect positively on your average age of accounts for 7 years).

How does this affect your credit score?

It depends on the person. Generally, it dings your score anywhere from 6-12 points per application (or, more accurately, per hard inquiry). This recovers over the course of a few months and increases the score over the long term due to more available credit. If you're newer to credit in general, I've heard that it reduces your score more, possibly because the FICO algorithms don't quite know what type of risk you are yet.

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.

I got into this pretty late, about 4 years ago; I've managed to hit almost every airlines first class cabin (most of them many times). Just a few left; gotta catch 'em all!

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.

I'd add a criteria d): you truly enjoy flying. I know a person who does this and the thing that makes it work for him is that he truly just loves the experience of being in an airplane, and looking down and marveling at the incredulity of the experience. If you don't feel that way about flying, then the whole hobby becomes more of an unpaid job.

When I redeem points, the flight is part of it, but it's really about the destination. A year ago I used my points to fly first class to attend ScalaDays in Berlin. Last November, Tokyo, Taipei and Hong Kong over two weeks. Earlier this year, five weeks in Southeast Asia.

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.

Oh, I was talking about the activity of flying to a destination and immediately returning, just for the miles.

Yeah, I find that nuts. I don't do mileage runs personally, I just don't have time. Plus they're not nearly as profitable anymore.

do you sometimes feel like you're spending more money in order to get the miles?

Not if you participate in manufactured spending - i.e., buying money...like purchasing Visa gift cards (must be done carefully at the right places / times)

Well, you are spending money on those. Each card has a fee. But if you're doing it correctly you should realize far more value than you end up spending.

Fairly certain all cards dont have fees.

Which Visa gift cards don't have fees?

Except for rare promotions, they have $4-$7 in per-card and/or per-month fees.

If you know a year-round supplier of $0 fee cards, let us know ;)

> Fairly certain all cards dont have fees.

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.

I didn't know there was a term for it. I gave it a shot one or two years ago buying $500 gift cards at grocery stores with a 6% cash back card (amex cash preferred). With the activation fee and taxes, I think each gift card purchase essentially returned ~$22. Surely not the most efficient - but it was simple. Each time I bought a $500 visa gift card I had that uncomfortable feeling like I was doing something illegal - the cashier calls out some code on the intercom and the manager shows up 5 minutes later to allow the purchase to go through. It wasn't worth the hassle - at the end of the year I might have made $150 - whoopty doo. At least I made enough money to pay off the annual fee for the card ($75).

The payoff comes from doing it to hit signup bonuses. If you needed to spend $5000 on a card, you could buy Visa gift cards and spend $59.50, but get 105,000 miles from the bonus.

Essentially a round-trip business class ticket from the US to Asia.

And what do you do with the $5000 of gift cards?

They were visa gift cards. He could use them like a regular credit card.

There are various methods that you can use to unload the cards back to either your checking account or directly to the credit card you used to buy them.

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.

many times what you will end up with is $XXXX in non-transferable gift cards or you will have to sit on them. in those cases you just use them to pay your bills or use them as your spending cash etc.

Any recommendations on how to get started?

I'm not quite sure these days. This hobby has gotten far more complicated than it was when I started. Ben's blog and The Points Guy are probably the best intros. I'm not a fan of TPG but he writes a lot of articles on the basics.

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.

reddit.com/r/churning has a great guide

There's a LOT of downright wrong information. There are some bad seeds there spreading FUD to keep newbies away or lead them down a dangerous path, especially around manufactured spend.

The outright lies I saw people posting during the Redbird heyday were astounding.

Avoid.

Honestly, I'd argue you are better off rotating through credit cards every 3 months for the sign up bonuses. 4 cards a year is few enough not to draw any real scrutiny, at least so far for me.

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.

> 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

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

Yeah, but I'm not sure its worth the paperwork hassle of doing that when you can get another 30k bonus from a different card. 150k v. 180k +EIN cost is likely similar value for $.

EINs are free.

>Just realize this tears up your credit score so don't go getting large 5-6 figure loans for cars/houses while doing this.

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.

I'd advise getting any loan(s) you need in the next 2 years first, then doing this if you are going to.

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.

If you have steady business spending (eg you travel and are reimbursed for your expenses) with flexibility to make some of your own decisions (hotel, flight, etc etc), then I think that's the lowest barrier of entry.

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.

And frankly, if you're in the situation posited at the top of your comment, you may be better off just taking 1% Amazon points or whatever. (Or even a higher % for travel-related expenses on some credit cards.) It's often a lower exchange in theory but it's a lot more fungible and easier to spend than miles.

If you're in that situation, you're probably best off earning one of the flexible currencies like Chase's Ultimate Rewards or Amex's Membership Rewards. You can redeem for a statement balance or transfer to one of their partners.

If you do just want cashback, Fidelity has a straight-up 2% cashback card.

I actually use the Chase Sapphire Rewards card but I should probably look into the Fidelity as most of my points seem to end up getting shifted into Amazon anyway. It's a little complicated because of the minimum to get to 2% but it's probably a better deal than my free Chase Amazon card in any case.

Thanks!

Though I find this game to be lots of fun, I do think that most people are probably better off with a cashback card. Actually, most people probably shouldn't have a credit card to begin with (it pains me to say that given the differences in fraud protection but CC debt is something most are better off avoiding).

CC vs. debit is a matter of discipline but, of course, no real argument for most people if using a credit card in all but the direst circumstances means carrying a balance.

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.

> It's a little complicated because of the minimum to get to 2% but it's probably a better deal than my free Chase Amazon card in any case.

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.

I'm half-curious about the whole thing, and I would be good at it- I enjoy the finance maze- but I have always felt like churning was rather dishonest. I'll do it for fifty bucks to cover the "last mile" on this or that promotion, but churning five figures worth...

There's a variety of justifications, such as "banks are evil anyway" or invoking Plunkitt, but they just never really sat with me.

What do you do for work?

I'm a software engineer.

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