How the Government Helped Frequent Fliers Make a Mint

I had a student in one of my classes explain this to me at one point. Every semester when it came time to pay his tuition bill, he would simply max out all of his credit cards paying the bill. The university system would let you pay as much as you wanted, and if you had a balance a week after tuition was due they would send you a check for the balance. While it was primarily in place for students receiving scholarship money, he used it to rack up huge rewards on his credit card.<p>By the time he was a junior (when I had met him) it had gotten him good enough credit he had over a $15,000 limit, so 3 times a year he would pay that to the school, they would pull out their $15 credit card fee, and then deposit it straight into bank account, which he would use to pay off the credit card.

So, I haven't done the US Mint hack, yet....<p>But, I have spent the last 3 months buying the longest, cheapest round trip fares that I've been able to find, also called "mileage runs". American Airlines has had a "Double Elite Qualifying Mile" promotion, which means that I can reach Executive Platinum with American while flying only 50,000 miles instead of the usual 100k miles. This fall, I've done weekend trips to Madrid, Frankfurt, Florida, visited family in the Mid-West, and this upcoming weekend, a I'm finishing with a round trip to Barcelona. I'm flying out from San Francisco on Friday morning, spending 2 days in Barcelona and I'll be back home by Monday.<p>All told, I've spent $2200 on flights, and a bit more for hotels + food. What I get in return is being able to upgrade to first class for free on any domestic flight on American, 8 upgrades on international flights (worth $300-400 each if I sell them), and enough earned miles to buy two tickets worth $1100 to visit family in Central America this spring.<p>I have a hunch, though that after flying first class all next year on American, I'm going to have a really hard time flying coach again. I'm afraid this might be a bit addictive.<p>A friend of mine, (mcargian on hn) hosts a podcast about this stuff at <a href="http://upgrd.com" rel="nofollow">http://upgrd.com</a>. He turned me on to it.

Very clever hack.<p>Still, they're in the minor leagues compared to the civil engineer who racked up 1.25 million frequent flyer miles ten years ago by purchasing over 12,000 pudding cups:<p><a href="http://www.time.com/time/magazine/article/0,9171,996450,00.html" rel="nofollow">http://www.time.com/time/magazine/article/0,9171,996450,00.h...</a>

My guess is that the credit card merchant fees cover the cost of the miles. So it's the US Government (i.e. all of us) getting screwed here, not the credit card company or the airline.

~10 years ago, you could buy inflation protected bonds on a credit card for no additional fee. I bought $10k worth on a card that gave miles and then redeemed them to pay it off.

I met a guy who would register for dozens of free credit cards offers that included air miles on sign up just to get the air miles. He was retired and used this technique to fly around the world. He always canceled the credit cards a few months later. Funny thing is apparently when he called to cancel, they would often offer him more air miles if he chose to keep the card. It those cases he would take the air miles and cancel a month later.

i'm surprised flyertalk, and specifically the 'mileage run' forum, on which most of these obnoxiously good deals appear, isn't more popular with this crowd as there's an obvious overlap in terms of personality types. There are plenty of HN types with the proper skillset and aptitude to find travel deals, who would enjoy the occasional hacking of the travel-industrial-complex.<p>I guess having sufficient understanding of the subtleties of the fare rules and booking systems really only comes from reading a lot and traveling enough to have a vested interest in learning and there are a lot of deskbound hackers.<p>however in the past few years, i went to NYC from SEA for USD $1.26, Romania for $200, Toronto for $0.00 in first class (with my family of five) and a few others i can't remember all due to the joys of reading that site every day...

You have to wonder how much of an increase the mint will see in this behavior now that its in the WSJ. I'm pretty tempted to sign up for a virgin america credit card right now just to do it.

Ha, awesome.<p>It's interesting to watch as people systematically exploit all pricing discontinuities and loopholes. Of course, this is what also gets us spam.<p>I wonder if at some point all pricing ends up having to be flat because of arbitrageurs operating in this manner.<p>(I feel slightly bad - I rarely deal with frequent flier miles even when I do fly, and I've canceled a credit card that offered frequent flier miles because they mailed me such an unbelievable amount of shit.)

Here's the original thread on FlyerTalk: <a href="http://www.flyertalk.com/forum/milesbuzz/833911-buy-presidential-dollar-coins-cc-face-value-free-shipping.html" rel="nofollow">http://www.flyertalk.com/forum/milesbuzz/833911-buy-presiden...</a>