How the Rube Goldbergs of Credit Cards Fly First Class for Free

“Last February, I flew to Bangkok, sort of on a whim,” Greg Davis-Kean told me. And, he decided, it would be fun to fly first class, a luxury that normally would run well into five figures.

Davis-Kean isn’t a Wall Street banker or a Fortune 500 CEO. He’s a 45-year-old professional blogger from Ann Arbor, Michigan. He writes about airline frequent-flyer programs, telling readers how to earn points and miles as cheaply as possible, often without leaving the ground.

In March, he challenged himself to earn 1 million miles and reward points for less than $1,000; he succeeded, breaking a million for less than $280, thanks to a combination of sign-on bonuses for 10 credit cards he registered for during the month and a technique called 'manufactured spending.'

That’s what frequent flyers call using rewards credit cards to make purchases that can easily be converted to cash, then using the cash to pay off the cards. Bloggers like Davis-Kean and members of discussion sites like FlyerTalk are always on the lookout for new ways to rack up high credit card balances without actually spending much money.

“Because of this hobby, I have what seems like an almost infinite supply of miles,” Davis-Kean said, letting him do things like fly to Asia on short notice.

Of course, accidentally buying cards that aren’t readily liquidated can mean running up a big credit card bill without an easy way to pay it off.

“It should not appeal to everyone,” Daraius Dubash, the author of the blog Million Mile Secrets, warned me about the hobby. “It’s a lot of details, and it’s a lot of tracking.”

Still, for serious miles hustlers, the rewards are great. “I tried caviar for probably the first time ever but thought it was just so so,” Davis-Kean wrote on his blog Frequent Miler, discussing the first leg of the Thailand trip: a first-class Lufthansa flight from Detroit to Frankfurt, Germany. Once he arrived in Frankfurt, he enjoyed a luxurious layover in the airline’s first class lounge, where he was treated to a “Jacuzzi bath and then a rainfall shower,” complete with complimentary rubber ducky.

“It’s really very amazing how much pampering you get as a first-class passenger on these international flights, especially the really good ones,” he told me.

From Frankfurt, it was on to Bangkok via Thai Airways, which provided a golf cart so first-class passengers could travel the 100 yards to the fast-track immigration line without getting stuck in the airport crowds.

“Everything is kind of over the top luxury and pampering,” said Davis-Kean, a former software developer. “It was really, really fun to experience that—things that I would never in a million years have paid for.”

On his way back to the States, he received a “free hour-long full body massage” courtesy of Thai Airways, then flew to Hong Kong to board a Singapore Airlines flight across the Pacific.

“I capped the whole experience by flying Singapore Suites [Class] from Hong Kong back to San Francisco, and that was just beyond extraordinary,” he said, with each Suites passenger essentially having an enclosed room to himself.

“When it was time for bed, there were so few people in the suites that they offered to make up a separate suite for me as my bed,” he said. “I basically had a hallway between my living room and my bedroom for the flight.”

The experience wasn’t perfect, according to Davis-Kean’s blog: his airline-provided pajamas had a tag that poked his skin and they were a bit warm for his taste, but the bed, slippers and service were all excellent, he wrote.

“They had to drag me off that plane kicking and screaming when I landed in San Francisco,” he told me.

Davis-Kean said he started exploring alternative ways to earn miles after a previous employer cut back on employee travel to save money. He began looking into ways to keep his elite frequent-flyer status and soon started his own blog.

“One of the ways that I found to keep my elite status was to spend a ludicrous amount of money on certain Delta credit cards that offer elite qualifying miles with very high spend,” he said.

Initially, he would spend his money on Kiva, the microlending site that enables anyone with a valid credit card to fund loans to entrepreneurs in developing countries. He’d have to initially pay off his credit cards with additional funds, but the loans had a very low default rate, so he could expect to get his money back when they ultimately came due.

“I think of it as being similar to investing in long-term certificates of deposit,” he said. “Your money is invested somewhere, it’s not accessible during that time, but you’re doing it for some kind of reward.”

More recently, Davis-Kean has found more convoluted ways to score more points faster. In his million-mile challenge, he earned points buying housewares and electronics through shopping portals, like Chase’s Ultimate Rewards Mall, that offer bonus points with each purchase, then reselling the items on sites like Amazon and eBay.

Sometimes, he’d even take multiple trips to the online rewards portals, first ordering store gift cards through the sites, then spending the gift cards on actual goods to resell, and getting bonus rewards points for both transactions. The skills involved in finding new manufactured spending techniques aren’t entirely different from those he used as a programmer, when he was asked to solve seemingly intractable problems with code, he said.

“My challenge was to say, that seems to be impossible, but how can we figure that out, anyway?” he said. “I sort of became known for that, and I think that’s what I”m doing in the points and miles world, too.”

Probably the purest form of manufactured spending came about in the late 2000s, when the US Mint sold $1 coins commemorating past presidents. The Mint accepted credit card orders for the coins online, selling them at face value, and even picked up the cost of shipping.

The coins were valid US currency, but credit card companies generally treated these transactions as ordinary purchases, not cash advances. That meant buyers were able to order coins, get rewards points, deposit the coins at the bank to pay off their credit cards, and repeat.

“Depositing them takes, all told, maybe 10 min out of my day,” wrote one commenter on FlyerTalk at the time. “Longer if I talk to the attractive young tellers for a bit.”

The Mint eventually limited how many coins each customer could order, and credit card sales were halted altogether in 2011, according to a FlyerTalk frequently asked questions page. Before that happened, self-help writer Brad Wilson claims to have ordered and deposited more than 3 million dollar coins, enough to net lifetime American Airlines Platinum status for himself and his wife, according to his book “Do More, Spend Less.”

Since that golden age of free miles ended, most manufactured spending tricks have been more complicated than simply ordering money through the mail. Many now involve Rube Goldberg-style sequences of purchases, using a credit card to buy some sort of prepaid debit card, then transferring the money to and from various kinds of prepaid cards, until reaching one where the funds can easily be extracted. Usually, that means one that has an online bill pay feature or can be used to buy money orders.

The anonymous author of the blog Travel Summary told me in an email that one of his favorite techniques involved a combination of three cards: Chase Ink small business credit cards, Vanilla Reload prepaid cards and Bluebird prepaid cards from American Express.

He could use the Chase Ink cards at Office Depot—Chase gives five rewards points for every dollar spent on an Ink card at office supply stores—to buy Vanilla Reload cards, which are special prepaid cards used to add funds to other prepaid debit accounts. With the Vanilla Reloads, available in denominations of up to $500 for a $3.95 fee each, he could add money to a Bluebird card, then use Bluebird’s online bill pay feature to pay his Chase bill.

“Using this method, you could [earn enough miles to] fly First Class to Australia/New Zealand (generally the most expensive award tickets) for an out of pocket cost of just $250,” wrote the blogger, who declined to give me his name, identifying himself simply as a 26-year-old California man working a financial job at a consulting firm. But Office Depot no longer accepts credit cards for Vanilla Reload purchases, and even when they did, there were still some potential pitfalls for unwary purchasers, he explained.

“Some people jump in to the game far too soon, before they really understand how things work. I've known people that thought they were buying Vanilla Reload cards but actually bought OneVanilla cards, which is a VERY different product,” he wrote. OneVanilla cards are prepaid debit cards—but they can’t be used at ATMs, or for cash back transactions or recurring bill payments, according to the OneVanilla website.

“That person was stuck with $4K of these gift cards for a while, but thankfully had the cash on hand to deal with it,” the blogger told me.

Similar problems befell frequent flyers who bought “Home Improvement Gift Cards” earlier this year. The cards are sold at face value with no fee and can be used for purchases at shops like Home Depot, Lowe’s, and local hardware stores. But enterprising frequent flyers discovered they could also be used to reload Bluebird cards (which allow online bill pay) or even used at Walmart to buy money orders, which the retail giant lets debit card customers buy for a small fee. And money orders can be deposited at the bank or used directly to pay down a credit card bill.

“That's right,” wrote one commenter on FlyerTalk on July 29. “We are finally back to the days of the mint and it may not last. Now no need to haul around tons of coins!!!”

The blog Points to Paradise publicized the deal that same day, and Dubash’s Million Mile Secrets posted about it two days later, but by August 1, Dubash and others were reporting the cards could no longer be used outside of actual home improvement stores.

“When that eventually happened, so many people contacted me saying they were stuck with thousands of dollars worth of cards they couldn't liquidate,” the Travel Summary blogger told me. “It was a tough situation - if you waited then the deal wouldn't have lasted and you'd miss it. But by jumping in immediately you have some risk involved with not being able to cash out immediately.”

At the time, blogs like Points to Paradise and Million Mile Secrets took some of the blame, with commenters saying they should have kept the deal under wraps.

“I am stuck with $1500 in junk cards,” said one comment on Dubash’s site. “Thank you, Dariush [sic] for killing another great deal so quickly!”

In a phone interview, Dubash dismissed those criticisms.

“I don’t share secrets if people tell me things and they ask for confidentiality,” he said, but he sees no problem in sharing a deal that’s already been publicized online.

“As long as there’s something out there on the Internet, I don’t think it’s safe to call it a secret,” he said.

FlyerTalk managing editor Ariana Arghandewal, who also runs the blog PointChaser, said this wasn’t the first time this kind of question has come up.

“If something is going to get shut down as a result of me talking about it, I’m not going to write about it,” said Arghandewal, a 25-year-old who said she got into the hobby about two years ago, after accruing airline miles on a trip to her native Afghanistan. “I think it’s important to kind of keep these kinds of deals going as long as possible.”

Some FlyerTalk forum members even talk among themselves in a kind of code to keep deals secret for longer, she said.

“I’ve gone into one of these forums and I have no idea what these people are talking about,” she said. And even when some FlyerTalk staffers know how to crack the code, they try to keep the secret deals underground rather than blog about them.

Secrets or not, there seems to be no shortage of short-lived ways to manufacture spend, as companies keep rolling out new ways to store and transfer money.

“We’ve got to always keep on top of it, and obviously if it didn’t keep on changing like this, it’d get boring,” said Davis-Kean.

When I spoke to him on Oct. 21, he and others in the community were excited about Square Cash, a newly released free debit-card-to-debit-card money transfer app. FlyerTalk members hoped it would be a good way to extract funds from prepaid debit cards and earn points on rewards debit cards.

“That’s great as long as it’ll last. If you have a debit card that earns rewards, then Square Cash is like a huge gift, ‘cause from one account you could spend $2500 a week without any fees,” he said. “That’s a heck of money which can result in a heck of a lot of rewards. It’s exciting.”

But within a week, FlyerTalk members were reporting Square Cash rejecting their transactions as suspicious and blocking prepaid cards from the system.

“MC GC [MasterCard gift card] appears to be dead,” wrote one commenter on a Square Cash thread. “RIP once again that was quick.”