This evening I spent over $14,000 in less than an hour on credit cards that earned me points. I didn’t buy a car, or a diamond ring, or a bunch of high-tech equipment. Instead, I bought several  cash-equivalents at a pharmacy store, a grocery store and a big discount retailer. The purchases earned me about 38,000 points across different programs, worth at least $300 using my valuations (and anybody who knows me knows that my valuations are very conservative compared to most bloggers who pump up valuations). Within a few days I will have gotten back pretty much all of that $14k and I will keep the points earned. If I so choose, I could repeat this many times every week. I don’t write this to sound big or clever. I am not a fan of posts along the lines of “hey look how big I went on deal xyz, I’m so smart, look at me”. In fact this kind of spending was pretty conservative. I know people who will make three or four times this spend in one day, and repeat it day in day out.

So why do I write about this? Well as I was driving back home I was thinking about all the recent devaluations. From the huge Hilton devaluation to the more recent Delta and now United drops, it is clear to me that we are in a period of serious inflation. The number of people getting into miles and points through blogs aimed at beginners is huge, but I think even bigger is the smaller group of hard-core hackers who are generating millions and millions of miles year in year out , and then focusing hard on squeezing every last drop out of them when they cash them in. The United devaluation may seem brutal, but let’s take one of the worst examples: US to South Asia is up from 80k one way to 130k one way. For the guy or gal who actually earns their miles with their butt in an uncomfortable seat week in week out, this is a harsh blow. But there are plenty of people in this hobby of ours that are sitting on multi-million United and Ultimate Rewards balances. From the days of Office Depot Vanilla Reloads there were people generating a million Chase Ultimate Rewards per month. For these guys, seriously who cares if the price doubled? When you are a multi-millionaire, it doesn’t really matter if the price of a pint of milk doubles. You can still afford more milk than you ever actually need.

I don’t see this changing any time soon and devaluations are going to continue and they are going to be brutal. All those Club Carlson points we all earned so easily? Wait for them to be wiped out. Hyatt is the nice guy? This one really amuses me. Maybe Jeff Zidell is a nice guy who’s shared a few glasses of wine with BoardingArea bloggers over the years. Those bloggers “trust” Hyatt. But remember Mr Zidell gets paid by a public corporation, his bonus is not set by whether or not Gary or Ben like him. So don’t think Hyatt is some friendly, trustworthy anomaly. Especially with Chase flooding the market with their points. Expect that one to flush down the drain at some point soon too. And American Airlines and US Airways? I just laugh out loud whenever I see anyone post that they are somehow “better” than Delta and United and will just treat their customers better.

No folks, this is the simple consequence of inflation. It has become possible to print large amounts of these various currencies, and as such the cost of goods in those currencies is increasing. Some people stray away from manufactured spending because they think it is somehow unethical or “against the rules”. Each to their own, and live and let live, but those people are going to be very poor in the new world of miles and points. It is time to either adapt to this new paradigm, or move on to another hobby.

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  • jettyboy

    Phil, any thoughts on manufacturing spend in NYC? I recently moved here from LA and have come up with nothing.

    • MilesAbound

      I’ve got to say NYC is the center of many things… but a real backwater for manufactured spend. There is a meetup next Wednesday being held by Mike @ Upgrd.com: http://www.meetup.com/reach-for-the-miles/events/149078392/, worth going along to these kind of events to get some insight into the few locations that work. I get the impression a lot of people go into NJ. MS is definitely regional and I live in a very good area for it.

  • De

    Milesabound, email me for something in our area that might interest you (11/9) only.

  • MilesAbound

    DE: Looks like I missed you sorry (also no email provided)

  • ROB BLACK

    I am a beginner at MF and have only do $5K in VR per month. Where can I go to learn about technique to multiply this 10X ? The only things that I have been able to find are from the well known bloggers that tout $100 visa cards.

    • MilesAbound

      Rob – there isn’t really one strategy that will take you 10x that amount. It is more a question of finding other similar strategies and adding them all up. So start by thinking how you can scale up your current BB technique (I assume that is how you liquidate the $5k VR). Do you have a significant other/brother/mother/father/ cousin/uncle/aunt you can do this with? If you can run just one more, that doubles you up. Amazon payments gets you an easy $1k a month, check out Saverocity for some posts on how you can double that up too. I’ve written about ReloadIts here: http://milesabound.com/using-reloadit-cards-to-earn-miles-paying-contractors-bills-people/. Other people have written about GreenDot reload packs. Look up MyVanilla Debit cards for another way to unload VRs. You can stick $15k through NetSpend before they’ll shut you down. And then try to get the debit cards that earn points (SunTrust Delta that I wrote about: http://milesabound.com/maximizing-the-suntrust-delta-debit-card/ or UFB AA). When you start adding all these together, you’ll find yourself at $50k a month or more. Now with that said do take care – there are risks involved, like if you get shutdown by one card you may be without that money for a long time. Just with your current $5k a month with BB – if you have $5k in a BB account, you need to be able to have a plan B if that account gets locked and you can’t access that money for several months.

      I am in the middle of writing a series on manufactured spend, but it is more of a lesson in fishing than handing out fish. To be successful in MS I think it’s more important to understand the basic techniques and risks and then use them to build a platform, than looking for one magic post that guides you through some magic set of steps.

      • ABC

        I agree, be careful. There is frequently a gap between buying GCs/VRC and unloading them. Would you leave $5k in cash at home? Many do that with VRCs. I find myself going through “old” gift cards and find money still on them. A few weeks back I spent hours wondering where I put ~$5k in VRCs. Creating a system to keep track of >$200k/year in MS is important.

      • rob black

        A very succinct and enlightening answer. I am not adverse to risk but hope to be able to avoid the pitfalls of those that have gone before me. Thanks in advance for your upcoming treatise.

  • CTravlr

    Great post. Agree with you completely