I respond to critics and people who think the points and miles hobby is too good to be true.
Show notes:
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Rough transcript:
You’re listening to the Hurdy Gurdy Travel Podcast. I’m your host, Justin Vacula, here to help you travel the world at next to no cost with credit card points, miles, benefits, and rewards. Make money, save money, and take advantage of great deals!
Thanks for joining me for today’s episode: ‘Is points and miles too good to be true?’
Since I started with the miles and points game in 2018, I’ve heard lots of skepticism from people who likely don’t know much about this hobby. What’s the catch? This sounds too good to be true. It sounds like a scam. Is it all fraud, as past podcast guest Bobby Bedi jokes about?
I first started talking to friends, some family members, and then co-workers about my newfound miles and points hobby, hoping that since I improved my life – mentally, financially, and otherwise – with points and miles, they can benefit, too. Unfortunately, many either don’t take action or think it’s all fraud, all fraud.
Why would banks, companies, travel loyalty programs, grocery stores, and many other places give out so much? You travel so often, Justin, it can’t possibly be as good as you say it is. What’s *really* going on? One of my favorite wins in the credit card space is getting welcome offers from credit cards like the Chase Sapphire Preferred credit card, which I often recommend.
Spend $4000 in 90 days and get, at least in August of 2023, 60,000 bonus points worth at least $600 in cash or more for travel. When getting a new credit card, simply shift expenses to the new card to reach the minimum spend requirement, get the bonus, and then consider adding new cards for high welcome offers. Easy game, right? So why are banks so generous, you might wonder?
It’s possible to win the miles and points game when you’re financially responsible. Other good traits include high self-control, organization, and attention to task. You’re hopefully embracing the frugal life, or, if you’re spending money on certain luxuries, you can afford what you’re buying. In many cases, organization is needed to keep track of accounts and benefits, which I don’t think is difficult when using technology and apps, including Google Calander, Google Sheets, Evernote, and whatever works for you.
Sadly, to be frank, some people are not financially responsible and find themselves in significant credit card debt, paying high-interest rates. Maybe someone lost a job or had a medical emergency and didn’t have much money saved. Whatever the case, banks are making money because others pay credit card interest. Banks also win when people pay credit card annual fees and either don’t use card benefits that can justify paying the annual fees or don’t spend enough in bonus categories that can help offset annual fees. I pay many annual fees, personally, but when I do, I only pay annual fees when they are worth paying. I win partially because others lose.
Banks also win because they change fees for merchants who use their services. One thing you probably won’t hear from Dave Ramsey, one of the most foolish and uninformed credit card critics who somehow is still respected by major online publications claiming he is a financial expert, is that people using cash and debit are often paying fees passed on to merchants and getting nothing in return.
Consider your last visit to a major grocery store chain. Your $100 or so transaction likely had the same price tag whether you paid with cash, debit, or credit. The grocer likely baked in merchant fees from payment processors as part of that transaction, and those few percentage points, especially from Amex cards in many cases, add to big profits for banks.
Banks also win because people aren’t superusers like myself. Since I use credit for higher business-related expenses and creative spending, as I’ve discussed in previous episodes, I get far more rewards than people who only use credit for just some purchases. No matter what, banks will make merchant transaction fees on my transactions at grocery stores, for example, but I’m not paying interest. I’m using card benefits and am ultimately winning. Maybe banks lose money to me, but they win from others paying interest on significant credit card debt. Surely, banks understand that, yes, we’re going to pay out high welcome bonuses and some benefits, but in the end, we will win overall.
This situation of some winners among a crowd of losers is not too much different than in-person or online casinos that pay tons of money for customer acquisition and advertising, knowing that, yes, they’ll give away random pots and pans to Slot players, but then the Slot players will continue to give up a 5-10% house edge and come to the casino to pick up those random gifts.
I’m more than happy to, with online casinos, take advantage of deposit offers, signup offers, odds boosts for sports, and much more to play with an edge, but I only play with an edge, much different than people who tell stories about straight up gambling playing Roulette on their phones while they’re sitting on a toilet. That online casino gave up a few hundred dollars in getting that customer, but then the customer gave up far more.
Now that we understand how banks win, after they attract financially irresponsible people, I’d like to address some mindset objections concerning miles and points. I’ve heard, ‘This seems too complicated, I can’t possibly do this’ from many. Indeed, at a high level with the hobby, and probably every hobby, it can seem difficult because you aren’t yet in the game and this is new information.
But after starting small, doing research, and listening to my past podcast episodes, you can learn how to make the system work for you rather than being worked by the system. This is one hobby that pays you! Your effort results in, as I mention in many episodes, making money, saving money, and traveling at low cost.
I wasn’t brought up in a rich household that silver spoon fed me information about miles and points. I’m not performing brain surgery. Indeed, I have self-control, like math like the rest of America, and love the game-like element of this hobby, trying to figure out the puzzle and maximize returns. I’ve loved card, board, and role-playing games for most of my life. In many ways, the credit card hobby is like playing Dungeons and Dragons or the recently released PC game Baldur’s Gate 3 trying to maximize damage output with spells and items, find synergy between party members, use rules to my advantage, and learn from experimentation.
Here’s my Amex Gold Card for +4 or 4x at grocery stores, and here’s the Altitude Reserve for +4.5 or 4.5% whenever mobile wallet payments are possible. Oh, interesting, I’m going to get reimbursed by MGM casinos for up to a $600 flight, and I can book with a United Quest credit card for an additional $125 rebate. Oh, I don’t have to pay a credit card balance in full for 12 months, well, let’s park that extra money in a high-earning checking account like Juno for 5%. You can indirectly use credit to gamble with an advantage? You can find many interesting plays in miles and points like you’ll stack barrels, also in Baldur’s Gate 3.
I’m regularly looking for ways to gain an edge: reselling popular low-stock items on eBay, seeing opportunities through loyalty programs, signing up for rewards at restaurants for birthday offers, buying extra low-cost phones to automate free to play casino apps with autoclicker apps, and so much more.
This hobby morphed me into a hustler looking for ways to win that people mostly overlook or don’t optimize. I cashed in that free birthday breakfast at Denny’s and walked out with a $0.00 receipt, but how many enter and end up spending $10 or more when they never would have gone there otherwise? Be smart and optimize rather than foolishly spending money whether’s it’s Denny’s or credit cards. There’s no ‘catch’ when you understand the game you’re playing and adjust accordingly to win it.
Some are skeptical about miles and points because they are closed-minded. They don’t know the information, so they doubt it. They’re too entrenched in the fraud reality that travel is expensive, only for rich people, or only something people can do once in a lifetime or once every year. They think credit is “only for emergencies” and don’t understand how they can use it to their advantage.
They think, like Dave Ramsey, that using credit means someone will go into debt and overspend, which, of course is false and maybe a projection on their part that because they think they will overspend that others, too, will overspend. They haven’t thought of stacking opportunities like using a grocery multiplier credit card to buy discounted gift cards and earning points to pay zero dollars for gas. They think loyalty programs are a waste of time because they didn’t figure out how to use them well. They think credit may just be too tempting to max out on useless things.
Indeed, many won’t be responsible with credit, but just because some people lose the miles and points game does not mean no one can win. Don’t just take my word for it, but consider listening to past podcast episodes, including guests’ experiences. If you’re still skeptical, research yourself, going directly to card issuer websites, seeing welcome offers, card benefits, and exploring more on the internet.
Yes, it’s no surprise that I’m making money from this podcast and people who support my content through using referral links or subscribing to my SubscribeStar page. I suppose I’m an evil business owner if you want to think that, but I’m not much different than others who host a podcast to make money talking about different topics.
However, the podcasting money isn’t huge. If I was really all about the money, I’d probably make popular video game content, make pop culture content, and appeal to the masses who have no interest in this hobby prefering to mindlessly scroll through TikTok for three hours a day. I still really enjoy this hobby years later, and it’s nice to learn from others, make some money, and help others travel more while being more financially independent.
As past podcast guest Bobby Bedi said, there’s gold in the streets, and you just have to pick it up. At a really basic level, this miles and points hobby is really easy money for low effort for people who can be motivated and financially responsible. I hope you, too, can win with miles and points and, if you’re still skeptical, give this a shot.
Refuse to submit to the fraud reality of the war on happiness that is often self-imposed. Stop telling lies like ‘travel is expensive,’ ‘banks are evil,’ ‘miles and points is all a scam,’ or ‘points and miles is just not worth it.’ Put in some effort and have discipline. You, too, can achieve major wins and unlock a world of travel, more financial independence, tons of free stuff, and elevated travel experiences.
What a great equalizer, I think, this hobby can be. Whether you’re working a minimum wage job or making 100,000 or more a year, you can, with some effort and discipline, travel like rich people travel. You, too, can make money from financial products and use credit to make money like rich people do. Those who complain about being broke and claim they can’t afford travel can now win and transcend being poor not only earning points and miles, but also accumulating significant cashback, cash from checking account bonuses, and much more.
Miles and points changed my life, having me rethinking many of my assumptions about money, travel, banking, investing, and much more. Prior to 2018, I never would have considered my upcoming three-part vacation to Las Vegas, Vancouver, and Alaska. I never would have taken a $6000 business-class flight to Italy, but was happy to use about 160k Delta SkyMiles. I wouldn’t have paid for a trip to Hawaii, but was happy to use miles and points to visit. The wins will continue.