How to Make Gains with Flights
Many of the best schemes for garnering frequent flyer points for later conversion into free flights or upgrades revolve around credit cards.
Ask a question like, “Which is the best credit card for accumulating airmiles?” and the answer will be something like, “Well, it depends…”
On your income, your preferred airline, your annual spend, what type of flying you do, your credit history.
It is a rich but rewarding subject.
Ideally, you want a credit card that is widely accepted, charges little or no annual fee, converts your spending to airmiles at a good rate, is affiliated with your preferred airline, and has no annual cap on rewards.
But there are a vast number of cards, each with pros and cons and, ahem, your mileage may vary.
Let us say, for the sake of argument, that you hold a credit card with no annual fee, no cap on rewards and for every dollar you spend on purchases, you are given one airmile in return.
Buy a car at $10 000, you receive 10 000 airmiles. Buy a burger at $4.95, you receive 4.
But hey, it all adds up.
Now, you can see the problem here, I’m sure. You have to have the money to pay back the plastic once you spend it, otherwise you start paying high interest rates and suddenly all those free points are getting very expensive.
ideally, apart from your normal household expenditure on groceries, gasoline, clothing and yes, airline fares, you want to find a commodity which you can buy, reaping a swag of airmiles, and then sell on again to get your money back.
Enter the US Mint.
In 2005, the USA introduced dollar coins, intending to gradually phase out dollar bills and other low denominations. Every other Western nation has long since gone down this route, saving billions in the cost of making notes which wear out a lot faster than coins.
But Americans love their dollar bills, and the US Mint found itself with tons of coins that nobody wanted. If they were out there in the community, part of regular transactions, they would be accepted by the community, so the argument went, and to that end, in 2008 the Mint began offering free shipping to anybody who wanted to buy these coins in bulk. Oh yeah, and you could pay with your credit card.
This program was an enormous success. Suddenly the people who wouldn’t touch these coins with a bargepole wanted tens of thousands of them. Hundreds of thousands.
But they weren’t spending the coins on burgers. Oh no, they were taking the coins to the bank and paying off their credit cards with them. And then submitting fresh orders for more coins.
Oh it was a rort and a half! Word spread and the loopholes of the scheme were explored. US coinage could be used to pay any debt, so some people asked the mint to ship the coins directly to their bank to pay off their mortgage. I mean, come on, these things are heavy, and who wants to lug thousands of coins around when good old Uncle Sugar will do it for free?
The word spread and Uncle Suspicious began cracking down, limiting the amount any one person could buy, slowing down shipments, making it difficult for Americans to participate in the mint’s scheme.
But while it lasted, frequent flyers were ecstatic. “My partner and I will be departing on a luxury first class vacation in the French Riviera using this frequent flyer miles strategy!” one delighted coin collector enthused.
Eventually the program was tightened to the point of hardlyworthit.
There’s a similar scheme run by the Royal Australian Mint. Once each year, currency collectors may buy mint banknotes with credit cards. Shipping isn’t free, and there’s a fee, but it still amounts to very cheap airmiles.
I bought a few thousand dollars worth last year, and I know others with higher credit limits than this retired cabbie can show, who are into it for hundreds of thousands of dollars. We kept it all very quiet for a while, just a few of us in the know, until it emerged that we weren’t the really big buyers.
Actual note collectors were buying up big. Real big. They wanted crisp uncirculated notes with specific serial numbers. These folk are serious about their collections. “You become a note collector, you better take on a second job,” one chap moaned to me.
But they aren’t the big spenders either. It turns out that, to a certain ethnic market, notes with serial numbers containing (say) “888” or “8888” are worth a lot of money indeed. Far more than the face value. You need to buy a lot of notes to find the good ones, and it’s a gamble, but that just makes it more fun, apparently.
The US Mint program seems to have wound down to almost nothing, but every July, the Royal Australian Mint accepts credit card purchases of lovely fresh notes.
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