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

UPDATE:  The Amex MS cycle is dead.  At least for now.  Amex has changed the terms for all portals, large denomination gift cards no longer earn cashback.

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.

Not all "Glitches" are Fair Game: Choice Hotels Brings the Hammer Down on a Scammer

In today's news is a story about a points enthusiast who went a bit too far.  From the ABA Journal:

Suit accuses Florida man of exploiting glitch in hotel rewards program

In this case a member of the Choice Hotels's "Choice Privileges" program noticed that the Choice Privileges website was awarding points for reservations made, but later cancelled.  Now, if this had simply been a "Bank Error in Your Favor" sort of situation, I'd argue that the man had done nothing wrong and had little duty to see the error corrected.  That is to say, if he'd simply noticed an extra few thousand points in his account I wouldn't expect him to go to great lengths to make sure Choice clawed them back.

However, that's not what happened here.  It is alleged that the gentleman (Ed: is that the term you're going with?) made hundreds of reservations and subsequently cancelled them.  Then he cashed out the points for gift cards, resulting in an easily calculable financial loss to Choice.  I'm all for gaming the system and exploiting every rule to your advantage.  Banks and travel companies write the rules that govern the points and miles world, so I can't weep for them when savvy customers discover ways to exploit them.   The problem is that in this case the customer went outside the rules.  

As Choice pointed out in its suit: “Frequent-stay programs are common throughout the industry, and neither Choice nor its competitors offer rewards for frequent reservations.”  By making reservations with intent to cancel and earn points to which he was not entitled, it seems that the defendant in this suit has unclean hands.  Although, I do note that the defendant is quoted as saying "I stayed at over 1,100 Choice hotels in the last five years," so perhaps he's already been punished enough.

P.S.:  The Tampa Bay Times story linked above closes with an anecdote regarding "The Pudding Guy" of points and miles fame, citing his story as example of "consumers who jump at the chance to take a promotion to the extreme."  The analogy is rather poor, though.  The Pudding Guy's story is wonderful: he lived up to the highest ideals of our hobby by finding a deal and exploited it to the Nth degree, but all within the letter of the rules.  Moroever, the Pudding Guy proved to be a real mensch, donating 12,150 cups of chocolate pudding to the homeless.