Thursday, August 20, 2015

Suntrust Delta Debit Card is Back - Signup Bonus of 5,000 Skymiles

I've had the Suntrust Delta Debit Card for some years now.  It used to be a fantastically lucrative card: for an annual fee of $75 you could earn a practically unlimited number of Skymiles for making PIN-based purchases.  I earned a LOT of miles this way.  The card really was much too good of a deal, and it hasn't been available to new applicants for quite a while.

Suntrust recently hobbled the card, which was a real heartbreak for those of us who'd gotten one when it was still available.  But, interestingly, Suntrust has now revived the card for new applicants and is even offering a sign-up bonus (a modest 5,000 Skymiles).



 The value proposition is much lower with the new restrictions, but it could be interesting to some folks.

It appears that for new accounts, the card is available only to Signature Advantage  or Premier Banking accounts:

In addition to the $75 annual fee for the card, Signature Advantage accounts carry a $25 monthly maintenance fee.  That fee is waived if you maintain a minimum deposit balance of $25,000 including IRAs, and investment accounts:

Under the new terms, a Delta Debit Card attached to a Signature Advantage checking account earns 1 Skymile per dollar spent, including PIN-based transactions.  However, you are limited to earning 4,000 Skymiles per month.

Just as a mental exercise, let's suppose you had an IRA or investment account that you could transfer to Suntrust to avoid the monthly maintenance fees.  This scenario assumes no opportunity cost for moving that money to Suntrust, i.e. that you'd get the same rate of return with them.  If you maxed this deal out, your return would look like this:

  1. Cost: Annual fee of $75 + cost of MSing $48,000 in PIN-based transactions (approx. $35-50) = $110-$125
  2. Return: 53,000 Skymiles (Signup bonus + 1MPD)
  3. Cost per Skymile: $0.002 or .2CPM
That's not too bad, since  I generally value Skymiles a a little over 1CPM.  Given the hard upper limit on earning, I probably wouldn't jump at this deal myself.  Still, it's worth considering, particularly if you live in Suntrust's service area.  Of course, it you happen to already have $25,000 on deposit with Suntrust, I'd say jumping on this card would be a no-brainer.

UPDATE:  Some folks on the Flyertalk thread dedicated to this card have speculated as to whether one can have more than one Skymiles Debit Card per account.  The answer is yes:

BUT, there doesn't appear to be any reason to do so, as the Ts&Cs state that: "Enrollment and all bonus miles are only applicable once perclient/checking account and SkyMiles number."  The terms also indicate (but don't unequivocally state) that the monthly earn limits are per account, not per card.

UPDATE to the UPDATE:  Oooh.  This just got more interesting.  Via chat, a Suntrust agent confirms that the limits are "per card" limits, NOT "per account" limits.  That means a single joint checking account could carry up to three cards (which must be linked to three separate Skymiles accounts) and earn 4,000 miles per month PER CARD.  I'll be interested to see if this pans out.  If it does, joint account holders could each earn 48,000 miles per year on without each having to deposit $25,000.  The agent also confirmed that that secondary Skymiles Debit Cards would not incur an additional annual fee (but would not be eligible for an additional cap) if both cards were linked to the same Skymiles account.

Wednesday, August 12, 2015

100 Free Marriott Points

For the most part survey's for points aren't a particularly lucrative, and this one's no different.  It's a very quick survey I discovered via Lucky (via PM&M) that offers 100 Marriott points for about 30 seconds work.  That's way less than a buck's worth of points, but if you don't have a lot of activity with Marriott, it coudl be useful for extending the life of your Marriott balance.

Tuesday, August 11, 2015

Things to Remember - Credit Card Referrals

If you're a points and miles enthusiast, chances are you've had a friend ask about "the best credit card" to get.  My answer is always, "that depends."  I try to determine what their goals are, then recommend a card that I think would work best for them.

Of course, I don't allow myself to be influenced by whether I can benefit from the recommendation.  BUT, when I end up recommending a card I carry, I usually check to make sure that I can't refer them to the card.  Often times "refer-a-friend" offers are worse than the best currently available public offer.  But sometimes they're equal to, or better than, the public offer.  For instance, Starwood is currently promoting a "refer-a-friend" offer in which the cardholder gets 5,000 points while the referee gets a 30,000 point offer:

This is equal to the current best available offer, plus you get points for referring your friend/spouse/colleague, etc.  In such cases you're leaving points on the table if you don't remember to make a referral.

Monday, August 10, 2015

Amex Gift Cards and Manufactured Spending- How Long Can it Go On?

UPDATE:  It seems that the answer to my question was: "Not long."  Amex has changed their terms with all of the portals that offered cashback on Amex gift cards.  Under the new terms only cards with a face value of $200 or less offer cashback.  Because the $3.95 activation fee on a $200 card amounts to a 2% premium, this deal is dead for now.


 After posting about the current Manufactured Spending opportunity involving the Amex Giftcard Cycle, I read a recent post by one of my favorite points & miles Bloggers: Greg at The Frequent Miler.

     Greg's post goes a bit more in depth regarding shipping options with Amex and is a "must read."  But it got me thinking about how long this MS avenue could possibly go on.  As the saying goes: "If something can't go on forever, it wont."  

     The Amex Gift Card Cyle is not quite Greg's El Dorado, the Perpetual Points Machine, but it's close.  Since liquidation usually involves around a 1.3% bite, even 1.5% cashback covers your costs (except for time).  The real question is how long this can possibly go on and which link in the quasi-PPM will break first.  Amex takes a hit on interchange fees when it sells the card, but gets it all back when the card is liquidated (and likely then some).  The retailer presumably takes a cut of the load fee for each pre-paid debit card (PPDC) it sells and shares (or passes on entirely) the interchange fee on the PPDC purchase.  WU and Moneygram get their fees when money orders are bought.  That just leaves Vanilla and the other companies.  One can only assume that the PPDC companies are the ones left out in the cold.

     Think about it.  The PPDC issuer has four potential sources of revenue:
  1. The load fee, which can be anywhere from $2.95 for lower value cards to $5.95 for variable load cards.  An MSer will almost always purchase only $500 cards, meaning that the load cost represents approx. 1%-1.2% of the card's value.  It's safe to assume that some portion of that load fee goes to the merchant who actually sells the PPDC.
  2. Interchange fees.
  3. Conversion to reloadable PPDCs.  Many PPDC issuers offer the ability to convert a regular PPDC to a "premium" debit card.  Those cards often come with increased fees, including monthly maintenance fees.
  4. Breakage.  This is an industry term for funds that get loaded onto gift cards and PPDCs that simply never gets spent by the consumer.  Either the card is lost, forgotten about, or simply has a balance that is too low to make it practical to use.  However it comes about, the result is pure profit to the issuer.
     I think that, with respect to MSers, only source 1 really counts.  <caveat: the following is pure speculation>  

     Source 1: Load fees are invariable.  There's no trick, no savvy way to get around them, they're a fact of life.  But even there, a savvy MSer is going to get the most bang for his buck, giving up only (at most) 1.2% of the card's value.  But for every MSer maxing out a variable load there are X casual users paying a much higher percentage.  A $200 fixed value card may carry a $6.95 fee (3.475%).  When grandma buys a $25 card as a gift, she may pay a $3.95 fee (15.8%).  A fee over 10% of the card's face value is huge.  Not in itself, of course, but in the aggregate PPDC companies must be making a lot of money on these cards.

     Source 2:  With MSers, interchange fees are minimal.  When PPDCs originally came out, they were technically "debit" cards, but could only be used for signature based (credit) transactions.  Signature based transactions come with higher interchange fees, thus the PPDC company earned more revenue on the cards.  With the advent of the Durbin Amendment to Dodd-Frank, all that changed and PPDC issuers had to start making PINs available.  So now most PPDCs can be used for many PIN-based transactions (such as the purchase of money orders).  Presumably most casual users of PPDCs likely use the PIN feature seldomly, if ever.  Each card will be used for a single PIN-based purchase.  The fee amounts to "21 cents plus 0.05 percent multiplied by the value of the transaction, plus a 1-cent fraud-prevention adjustment, if eligible."  So, for a, say, $500 PIN-based transaction, the fee would be either 46 or 47 cents (approx. 0.09%).  Not a lot of return there.

     Source 3:  I'll go out on a limb and speculate that virtually no MSers convert to "premium" cards.  And if they do, its probably because there's a good reason to (and one that the PPDC company won't like).

     Source 4:  Since MSers typically liquidate cards almost immediately after their purchase, there's little chance of breakage in MSing.

     In the final analysis, I speculate that MSing is not profitable for PPDC issuers.  If I had to pick a number <wild speculation> I'd say they are losing around 2% on each MS-type sale </wild speculation>.  How long can this go on?  Probably as long as MSing stays small enough that it gets lost in the noise (and much higher profits) generated by casual PPDC purchasers.  Figuring out exactly how long that is is left as an exercise for the reader.
    
     

Thursday, August 6, 2015

Hilton's "No Blackout Dates" Promise - What's it really worth?

Hilton is very proud of the fact that their frequent guest program, Hilton Honors, has "no blackout dates."

Says Hilton: "Fact: If there’s a standard room available at any Hilton Family hotel or resort worldwide, you can redeem points for it. No exceptions, no fine print. It’s that simple."

That's a pretty solid guarantee, right?  Except that it's not always that simple.  Right now I'm trying to book a two-night stay at the Conrad St. James for a trip to London next spring.  At the St. James, the "standard" level room is the King Superior Room, which goes for 80,000 points per night.  You'd think that availability would be pretty decent almost ten months out, right?  Well, you'd be wrong.  Here's what the St. James' calendar currently looks like:







That's right.  According to Hilton, every single Superior room at the St. James is booked from May 9 to July 24, nearly three solid months.  While it's possible that this is true, it seems unlikely that there wouldn't be one single night available for a standard points redemption.  I suspect that the St. James, which is new to the Hilton brand, may be trying to protect it's high season revenue by blocking their Superior rooms, thus  effectively blocking points bookings.  Or maybe it's all just an innocent mistake.  Or maybe some company has booked every standard room for a three month conference.  Or maybe the moon is made of green cheese.  Anyway, I've reached out to Hilton via e-mail with no results.  I'll try Twitter next.

Sure, I could spend an extra 92,000 points per night for a "Premium Room Reward" in a King Deluxe Room.  But that's a horrible value for a room that only runs around £50 more per night than the Superior rooms (approx. £350 vs. £400).

Tuesday, June 16, 2015

The Twilight of the Suntrust Delta Debit Card- Maximizing the Next Few Weeks

As I've discussed before, Suntrust Bank is hobbling its Delta Debit Card on July 25th.  Currently the card earns unlimited Skymiles at a rate of 1 Skymile per dollar spent (on both signature and PIN transactions).  Though the card has not been available to new members for quite a while, there are still a fair number of legacy members out there, yours truly among them.  Many of us have intentionally limited our spending on the Card in hopes of reducing the chances of an account closure.  Since the Card is shortly going to be much less valuable, the gloves are coming off.  But that raises a question: How to get the most money into (so as to be able to get it out of) my Suntrust account?

Because Suntrust has a limited footprint of branches, many folks who have the Delta Debit Card may not have a Suntrust branch in their hometown.  This eliminates the possibility of in-person deposits.  So, what are the alternatives?  Here's a rundown of the easy ways:


1.  The Suntrust App: Like everybody else, Suntrust has an app that will allow you to do online banking, including Mobile Deposits.  It does have some limits, though.  The maximum deposit is $2,0000, and the Limit on Mobile Deposits is $8,000.00 per month.

2.  The Amex Bluebird:  You can link your Suntrust Checking Account to Amex Bluebird and withdraw Bluebird loads into your account.  The limit here on the Bluebird side of things.  You can load your Bluebird with up to $5,000.00 per month and transfer that into Suntrust.  If you have access to another Bluebird Account, you can transfer $2,500.00 from that account into your Bluebird account, increasing the funds available for transfer into Suntrust to $7,500.00

3.  Suntrust External Transfers.  Login to your Suntrust Account and to to this tab:


That will take you to the External Transfer option  (1) where you can link (2) an existing checking account at your local bank to your Suntrust account.

"Incoming" external transfers, i.e. from your account at another bank to your Suntrust account, are limited to $10,000 per day and $20,000 per rolling 30 day period.



That gives you a total $33,000 per month that can easily be transferred into a Suntrust Checking Account (and spent to earn Skymiles) without ever visiting a branch.  What?  That's not enough to wring out of Suntrust in the remaining days before July 25?  Okay, there's a final option. 


Good luck!
UPDATE:  Commenter "USFishin" on Flyertalk pointed out something I overlooked.  It may also be possible to initiate transfers from your local bank into your Suntrust Account.  Because this would not be initiated from Suntrust's website, Suntrust's external transfer limits wouldn't apply.
          

Thursday, June 4, 2015

The Current State of Manufactured Spending

With the impending demise of the Delta Suntrust Card golden goose, this seems like a good time for a  few words about the current state of the manufactured spending pastime.  If you're reading this, you likely know that Manufactured Spending ("MSing") has long been a good way to meet initial spend requirements for new credit card signups and as a way to directly generate miles and points.

Some of the best MSing opportunities have passed us by.  Please doff your caps for a moment as we reflect on the US Mint Direct Ship Program, Amazon Payments, Square Cash, Vanilla Reloads at Office Depot, unlimited Vanilla Visa purchases at CVS, and our other dearly departed MS methods.  <wipes away tear>  Now, where were we?  Ah yes, the current state of the hobby.

There are still some pretty good MS methods out there.  The single best is the Amex giftcard > Prepaid Debit Card > Money Order cycle.  American Express sells gift cards, up to $2,000 in value, that can be used almost anywhere Amex is accepted.  Amex also allows the option of personalizing the gift cards with your name.  I would highly recommend using this option.  Those gift cards can then be used to purchase prepaid debit cards that are, in turn, used to purchase money orders.  The cycle looks like this:


This method allows the user to generate a reasonable amount of spending without incurring an equivalent amount of debt.  It does entail fees, though.  Specifically at stage one the user will incur a purchase fee of $3.95 per $2,000 Amex gift card.  The user will also incur a shipping fee, unless he opts to purchase a year of free shipping from Amex for $99.  Then, at stage two, the user will incur a purchase fee for the Visa/MC prepaid debit card (typically $4.95-$5.95 per $500 card).  Finally, at stage three, the user will incur a money order purchase fee (typically $0.69-$0.99 per $500 in value).  These purchase fees, alone, total around $26.51 per $2,000 in manufactured spend (a rate of approx. 1.3% of the amount of spend manufactured).  Thus, this method could be equated to purchasing miles or points at a rate of 1.3CPP (assuming you are using a card that earns 1 point per dollar spent).  That's not a bad rate, particularly if you only need to spend a few thousand dollars for an initial spending requirement.

However, it gets better.  At the time of writing, many shopping portals pay a rebate on purchases of Amex Gift cards.  For instance, my favorite shopping portal, Topcashback, currently offers a rebate of 1.5% on the purchase of Amex gift cards.  By clicking through their website before you purchase, you can earn a rebate that will offset the fees that I've described above.  Of course, there is still the opportunity cost of the time it takes one to purchase the debit cards and money orders.

So, how does one go about it?  Well, there's a lot of information in this Flyertalk thread.  CVS still sells various forms of Vanilla prepaid debit cards that can be loaded with up to $500.  There is currently a limit of $2,000 worth of cards per rolling 24 hour period.  This limit is enforced by a scanning (and presumably recording) drivers license information.  Vanilla cards are very easy to use because they activate instantly and the PIN is set by entering any four digits the first time you use the card.  Thus, one could order a $2,000 Amex Gift card and take it to CVS to purchase 4 variable load Vanilla debit cards, paying $4.95 to load each one (determining the amount to load on each card is left as an exercise for the reader).  One would then open the Vanilla debit cards, take them to a grocery store that sells money orders (such as Winn-Dixie or Publix), purchase money orders with the Vanilla debit cards, and deposit the money orders in one's own bank account.

CAVEAT EMPTOR:  This is not a foolproof method and things could go wrong.  For instance, CVS could stop allowing the purchase of Vanilla cards with a credit card.  Or Western Union or Moneygram (the two larges money order companies) could forbid the purchase of MOs with debit cards.  Or Congress could repeal Dodd-Frank or the Durbin ammendment (which made PIN-based prepaid debit card transactions possible).  That's a good reason not to purchase more Amex Gift Cards than you can easily liquidate.  It's also a terrible, no-good, bad, bad, bad, idea to engage in any manufactured spending unless you pay your credit card bills off, in full, every month.  Carrying a balance, and paying the ruinous interest rates that entails, means that any miles you earned would be far, far too expensive.