Man makes $300,000 using Credit Card rewards

Discussion in 'Hangar Talk' started by genna, Mar 13, 2021.

  1. genna

    genna Pattern Altitude

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    Brilliant, if you ask me. Never mind the IRS part.

    https://www.morningstar.com/news/do...rd-rewards-the-irs-said-it-was-taxable-income

    “...
    His American Express card offered unlimited 5% rewards at grocery stores and pharmacies after he had spent $6,500. So Mr. Anikeev used his AmEx card to buy prepaid Visa gift cards at grocery stores, routinely stopping during his commute and purchasing the maximum allowed per day at a store. He often used the gift cards to buy money orders, then used the money orders to make deposits in his bank account, then used that money to pay his credit-card bill.

    In a $500 transaction, the 5% rewards would yield $25 -- more than enough to cover gift-card fees of about $5 and the $1 fee on the money order...”
     
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  2. tspear

    tspear En-Route

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    That is brilliant!

    Tim

    Sent from my HD1907 using Tapatalk
     
  3. Daleandee

    Daleandee Cleared for Takeoff

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    That's how you make money today and friends tomorrow ... :D
     
  4. murphey

    murphey Touchdown! Greaser! PoA Supporter

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    This is similar to the AAA story from a number of years ago. Man bought travelers checks at AAA, got airline points or something along those lines, cashed them to pay the credit card bill, etc. Used the points/credits to take family traveling for close to free. Needless to say, AAA changed policies around 2013 or so.

    Until about..oh..end of January this year, when I bought gift cards at Kroger, I'd get points towards discount at the gas station. Not anymore. I wonder if the guy in the Morningstar article was one of the reasons?
     
  5. Huckster79

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    I tried buying a visa gift card w my Amex once and it wouldn’t let me... may have been the store though idk.

    I do put everything on my PayPal MasterCard I possibly can it’s 2% on everything, then pay it off weekly. I put a kitchen remodel on it, my transpinder I just had put in, groceries, gas, Christmas, Hulu, etc...


    I put my rewards into my stock account...
     
  6. Huckster79

    Huckster79 Pattern Altitude

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    After reading the article I’d say pay the taxes on it and ur still way ahead without a fight!
     
  7. ja_user

    ja_user Pattern Altitude

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    yall are way late to the party
     
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  8. murphey

    murphey Touchdown! Greaser! PoA Supporter

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    Many years ago, when my father died (1999), I flew down to Phoenix to take care of everything - multiple times. Plus, paid for his sister and BIL to fly down from NY to Texas for the funeral, paid for my cousin to fly from SFO to Texas for the funeral, and paid the funeral home (both of them, one in Phoenix, one in Texas), paid for everything with my X% credit card. The very nice lady at the Phoenix funeral home said "I hope you don't think I'm being thoughtless or anything, but do you realize you're getting reward points/cash on this credit card?"

    I answered "Mama and daddy didn't raise no dumb child. How do you think I'm paying for the NY family's airline tickets?"
     
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  9. Huckster79

    Huckster79 Pattern Altitude

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    says the person that’s in a business that charges obscene amounts of money for their services and thinks you’re bad for getting X% reward! Geez. Your dad would be proud of you!
     
  10. genna

    genna Pattern Altitude

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    I don’t have that Amex card. And from the story, sounds like they put an end to allowing this. I did try it with Discover IT. Worked like a charm. Can’t make that kind of cash(it’s limited to specific purchases and amount per quarter), but makes it simpler to maximize some cash back.

    now, in theory, you can do this with a 2% reward card like Citi, but it would take a lot of transactions and a lot of money orders. Not sure I would want to get on the feds radar with that
     
  11. DaleB

    DaleB En-Route

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    I was reading an article just the other day about the Feds watching people buying, cashing in, and depositing large numbers of gift cards. Apparently it’s a popular method of money laundering. The focus of that article was people buying gift cards with cash, but I’d bet using a credit cars to buy more than a few is going to trip someone’s alarm.
     
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  12. luvflyin

    luvflyin Final Approach PoA Supporter

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    From the article in this thread; “...The millions of dollars of those transactions tripped the sensors at the Treasury Department's Financial Crimes Enforcement Network, which investigates money laundering, an IRS lawyer said during the trial. That agency kicked the case to the IRS, which said he owed back taxes...”
     
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  13. wsuffa

    wsuffa Touchdown! Greaser!

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    There's even a name for it in the frequent flyer community: "manufactured spend". And a number of frequent flyers have used it to get free trips and airline status.

    But, the credit card companies and sponsors consider this abuse and are working hard to shut it down, including denying credit cards and reducing rewards. This is why we can't have nice things.
     
  14. MauleSkinner

    MauleSkinner Final Approach

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    Apparently paying tolls with cash raises questions, too...
     
  15. Groundpounder

    Groundpounder Pattern Altitude

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    People still do that?
     
  16. Tarheelpilot

    Tarheelpilot En-Route

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    I do.
     
  17. Groundpounder

    Groundpounder Pattern Altitude

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    There is a toll booth that only has one lane that I go through somewhat regularly. Every now and then I am stuck behind someone that doesn't have EZ Pass, and I do everything in my power not to lean on the horn.
     
  18. Tarheelpilot

    Tarheelpilot En-Route

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    Ok. That’s nice of you. You shouldn’t let things bother you so much. Especially things outside of your control. It makes life more pleasant. At least it did for me.
     
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  19. Groundpounder

    Groundpounder Pattern Altitude

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    I bet you still write checks at the supermarket too.
     
  20. Tarheelpilot

    Tarheelpilot En-Route

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    No. I have two monthly bills that get checks but only because they charge 3.00 convenience fees to use any type of plastic or online payment. So they get a check. It’s not inconvenient for me at all so I save the six dollars less postage every month.
     
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  21. Groundpounder

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    #facepalm. You and my dad should hang out sometime.
     
  22. tspear

    tspear En-Route

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    I resemble that remark.
    I pay almost all bills by check, very little did I pay online till this past year when the post office started to eff up.
    And what is really funny, I have been in the online payment processing for over twenty years. :)

    Tim
     
  23. MauleSkinner

    MauleSkinner Final Approach

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    So buy everybody an EZ Pass, or use a different toll booth.
     
    Last edited: Mar 14, 2021
  24. Groundpounder

    Groundpounder Pattern Altitude

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    Why wouldn't you buy one yourself? Hell, it saves money!
     
  25. MauleSkinner

    MauleSkinner Final Approach

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    Last I checked, it cost more than I pay in tolls.
     
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  26. GaryM

    GaryM Line Up and Wait

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    Yep, costs more than cash tolls here, too. When NJ first rolled it out, they discounted tolls to get folks to sign up, then the discounts went away (except on some of the pricy bridge tolls, I think you still save there).
     
  27. weilke

    weilke Touchdown! Greaser!

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    Get an EZ pass from a jurisdiction that doesn't charge a monthly fee. I used to have cars in MD with EZ pass transponders from DE. You still had a deposit but the interest on having $20 tied up isn't all that onerous. MD dropped the maintenance fee so I moved those cars to MD transponders.e
     
  28. YooperMooney

    YooperMooney Pre-takeoff checklist

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    AA partnered with a brokerage firm about ten years ago and offered a MONTHLY 100 “a** in seat miles” for every $1,000 invested with them. So my buddy wires over $1.4M. Yes - he earns not only 140,000 AA miles a month, he also accrues miles toward lifetime Million Miler status. It’s my understanding he did this for the life of the program until they fixed it due to him and for other guys. But they ran this racket for a couple years. He had over three MILLION miles on AA alone and was granted Lifetime Gold status. I know this as he bought me biz class tickets all the time when I was living overseas.
    This guy is so stingy on his miles when it comes to himself he will book award flights in coach. I remember seeing Delta FA’s puzzled looks when they noticed he was a Double Diamond with them. Ridiculous...

    Look up “travel hacking” and there is a whole group of people that play these games.
     
  29. Firepac

    Firepac Pre-Flight

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  30. catmandu

    catmandu Cleared for Takeoff PoA Supporter

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    You would really be saving if your grandfather-in-law was a philatelist, and you had a glue stick and what appears will be a lifetime supply of reclaimed uncancelled stamps (I enjoy adorning envelopes with small denominations, the 1/2 cents are fun to use).