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I read an article about a guy who managed to rack up millions of airline miles by buying $1 coins from the US mint with his credit card, where he got one mile per $ spent. I looked into doing this, and it turns out most credit cards don't let you get miles that way anymore, but what about buying foreign currencies? If I use my credit card to buy euros or gbp online, would I still get 1 mile for every dollar? I could, in theory, just buy a few thousand of a foreign currency, then cash it in and pay off my credit card bill? Sure, I would lose a little bit in the transaction, but it would be worth it for the airline miles. I'm talking about the United miles credit card here.
Why not just read the fine print on the United website?
It sounds like it would be cheaper to just buy an airline ticket. If the average reward fare is 30k points, that represents $30k in spending. If you lose 2%, that's $600, which is about the value of the fare if you book far enough in advance. If you have high volume and the exchange and transaction fees are low enough and you never pay interest it might pay off. It sounds like a lot of work, especially for a crappy airline like United.
Why not just read the fine print on the United website?
It sounds like it would be cheaper to just buy an airline ticket. If the average reward fare is 30k points, that represents $30k in spending. If you lose 2%, that's $600, which is about the value of the fare if you book far enough in advance. If you have high volume and the exchange and transaction fees are low enough and you never pay interest it might pay off. It sounds like a lot of work, especially for a crappy airline like United.
I agree it sounds very complicated, and there also may be foreign currency transaction fees the credit card charges you. When I was going on a trip earlier this year, I applied for a Southwest card (my fav airline since I pack a lot and they don't have baggage fees) that had a promotion where if you spent $1500 in the first 3 months you got 50,000 bonus points. I used the card for groceries, gas, all my everyday purchases, and deducted the amount from my checkbook after every transaction so that when the bill came, the money was already deducted from my account and I could pay it off in full. I reached the $1500 in 6 weeks, got my points, purchased a round trip ticket for 14,000 points and still have 36,000 left.
Many cards have restrictions on "cash instruments". The definition of, and the manner of obtaining "cash instruments" varies by card. You will need to read the fine print as already mentioned.
You may not receive points when buying currency in any denomination or location. So charging currency may not earn rewards. Some may not let you earn rewards when paying a money debt on the credit card, such as paying another credit card or paying banking transactions. There are some that don’t let you earn rewards for anything labeled gift cards. We know that traveler’s checks are out as are money orders.
I read an article about a guy who managed to rack up millions of airline miles by buying $1 coins from the US mint with his credit card, where he got one mile per $ spent. I looked into doing this, and it turns out most credit cards don't let you get miles that way anymore, but what about buying foreign currencies? If I use my credit card to buy euros or gbp online, would I still get 1 mile for every dollar? I could, in theory, just buy a few thousand of a foreign currency, then cash it in and pay off my credit card bill? Sure, I would lose a little bit in the transaction, but it would be worth it for the airline miles. I'm talking about the United miles credit card here.
Each card is different, so you need to check. Most don't allow this, but I haven't checked every card, so you might find one. If you do, let us know
It would still work if there weren't for thousands of people exploiting this in the past. It wasn't just one guy racking up millions of miles, it was a bunch of websites telling hundreds of customers each to go out and do this.
The whole system gives the small numbers of people who do them a real high to know they are flying for cheap based on perks offered by the CC companies. They are 1-2% of the total card holders and what they do is fully legal. For the majority going out and finding 1,500 miles for doing something for $10 isn't going to register the same excitement, but there are a dedicated few who have a spreadsheet and are looking for ways to essentially accumulate miles at say 10% of the going rate cost and then use it 100,000 miles at a time flying business class somewhere exotic. Its not free by any means like the coin buying escapade was, but its certainly out there if you go looking for it.
the Mint came out with a good way to stop a majority of this. They started charging a fee for credit card purchases of the dollar coins. So now when you buy the coins, you actually have to pay for some of the miles. It's a small percentage, but it isn't free like it used to be where you would go in, buy 500 dollars in coins, then go deposit it at your bank and pay 500 dollars off on your credit card. This stopped a lot of people from doing this as they are essentially paying for the miles now.
I'm sure that there are some people that still do this method as it'll probably still be less than buying a plane ticket.
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