The October Devaluation

Newly-earned points across the Ultimate Rewards ecosystem are now only redeemable for 1 cent each for Chase Travel redemptions, except at Chase’s discretion through the new Points Boost gimmick:

“Points Boost offers give you the opportunity to enhance the value of your points when booking through Chase Travel—up to 2x depending on your card and the offer. Points earned with your card are worth $0.01 each when redeemed through Chase Travel, as outlined in your Ultimate Rewards Agreement. That means 100 points are worth $1, but with a Points Boost promotion 100 points could be worth up to $2. We may offer Points Boost promotions on select airline tickets and hotel accommodations. Points Boost offers are promotional and are refreshed periodically. Offers may change with the refresh. Travel inventory is subject to availability. Please note: Points Boost promotions differ by card. The Points Boost promotions you see within search results and at checkout are based on the card you choose in the card selector.
“

This is a devaluation, not because you, personally, might not get more value from your points through Points Boost than you did through 1.25- or 1.5-cent-per-point redemptions, or indeed even if you have no intention of ever spending your points through Chase Travel.

It’s a devaluation because whenever a program swaps a guaranteed redemption value for a variable redemption value they’re doing it to save the program money; I don’t think Chase is going to “miscalculate” how much it pays travel providers for travel redemptions each year. All the money that’s saved is value that’s being transferred from points-holders to Chase’s bottom line.

The workaround

As I wrote in November, in Chase’s FAQ about the devaluation they describe a possible workaround: “If you cancel a redemption made after October 26th, 2025 with eligible points, they will be returned to your eligible points balance.”

I explained: “This makes it sound like if you wanted to use your devalued points for a partner transfer, you could redeem your legacy points for a refundable reservation, make the partner transfer, then cancel the reservation and get your legacy points back.”

The workaround works

I recently had an occasion to put the workaround to the test.

Having reached my $50,000 cardmember-year bonus earning limit on my legacy Ink Plus card, I had a few hundred thousand "new” Ultimate Rewards points buried under about 50,000 “legacy” points.

I speculatively booked a hotel for an upcoming trip that cost enough to exhaust those legacy points and then transferred my remaining balance to Hyatt. When my statement closed (and my final bonused earnings posted) I transferred the rest to my Ink Preferred Ultimate Rewards account, which never had any legacy points, but still allows transfers to Chase’s travel partners.

I then rebooked my stay with Hyatt points and cancelled the Chase Travel reservation. The entire cost of the reservation was refunded within a few minutes, with my entire legacy balance intact.

Why do this?

No doubt many travel hackers will find this rigamarole a bit pointless, since they have no intention of redeeming their Ultimate Rewards points for paid travel. Even if you’re one of those, I still think there are a few reasons it’s probably worth setting aside a few minutes to play this game.

• Control. Chase obviously enacted this change to reduce the control people have over the value of their points. If they just wanted to reduce the value of newly-earned points, they could have enacted the same changes while allowing transfer redemptions and cash redemptions to come from your new point balance instead of your legacy point balance. They didn’t, because they’re trying to wipe out the value of those legacy points as quickly and quietly as possible. Making sure you get the maximum value from the miles you’ve already earned is a great example of the Tesla Protocol.

• Cash. On February 18, 2026, Chase sent an e-mail stating that cash redemptions would no longer be allowed to external checking accounts starting March 27. If you have a large balance of both legacy and new Ultimate Rewards points, you might want to redeem your new points for cash at one cent each, while preserving the optionality of either transferring your legacy points to partners or redeeming them for elevated Chase Travel value. Refundable reservations make that possible as well.

• Uncertainty. Even savvy travel hackers don’t know what the future will bring. Legacy points retain their value through Chase Travel until October 26, 2027. That’s a long time from now, and a lot can change between now and then. However you plan on using them today, your situation and your needs may change, and I see no reason to throw away 20% or 33% of the value of your points just because it’s an artificial nuisance to put the work in to preserve it.

It looks like the owner of that website finally pulled the plug, but I archived my posts from before and after I wrote there which you can now find (along with all my posts since then) in its own tab at the top of this website. Some of the formatting may not have carried over entirely, but the content itself should all be there.

So from now on I’ll have all my blogs consolidated on this site (at least until Squarespace gets acquired or insists on incorporating AI into everything): The Free-quent Flyer blog for travel hacking, My So-called Gig Economy for work, and Independently Financed for banking, investing, and finance hacking. All three can be found in the top navigation bar and have their own RSS feeds.

Simple as.

Then, and this is unironically how they get you, I saw I could also pay to upgrade to “Economy Plus” using miles. So I did that too. As you’d expect, the first class upgrade didn’t clear, so we happily took our Economy Plus seats. A few days later both the miles and cash co-pay for the first class upgrade were automatically refunded.

I was happy enough with this process that I did the same thing for our return flight, requesting first class upgrades while paying for confirmed Economy Plus seats. This only required transferring a few additional Ultimate Rewards points since the outbound first class upgrades had already been refunded.

Unfortunately, on the day of our departure from Palm Springs, the United counter had a complete meltdown. We arrived at the airport a couple hours early since we were checking bags, and the United counter — but only the United counter — was in full-blown crisis mode. The proximate cause of this seemed to be that the unmanned baggage kiosks weren’t working and since it’s a family vacation destination almost every passenger had checked bags: golf clubs, strollers, cases of wine, etc. By the time we found the right line, and made it to the front, they weren’t accepting any more checked bags, and rebooked us from our nonstop flight to one connecting hours later to a redeye in Los Angeles.

I then, naturally, paid even more miles to upgrade to premium economy on the new redeye flight, although first class mileage upgrades weren’t available.

To give concrete numbers, at this point I had spent:

• 40,000 miles and $75 (first class upgrade request PSP-IAD)

• 26,300 miles (confirmed Economy Plus PSP-IAD)

• 25,500 (confirmed Economy Plus LAX-IAD)

Since the outbound upgrade request was automatically refunded, I was curious how the two upgrades I paid for on the return flight we got moved from would be treated.

Requesting manual refunds

I kept an eye on my United account, but not seeing any refund activity I went to United’s manual refund request form.

You can plug in your ticket number and last name and see what services United thinks you did and didn’t use. The outbound upgrade request was (correctly) listed as having already been refunded, but the return upgrade request wasn’t available because the return itinerary had been swapped out with the flights we actually took.

Fortunately, right below that are the options to “Add trip” or “Enter receipt details” which allow you to manually add information from trips that don’t automatically populate on the refund form.

When you buy or request an upgrade with Mileage Plus miles or cash, that purchase is issued its own United “reference number” beginning in 016. Each passenger should be assigned their own reference number for each upgrade, and those are the numbers I submitted requesting refunds for each of our Economy Plus seat upgrades and first class upgrades for our original nonstop return flight.

Refunds, fast and slow

I submitted my refund request on the afternoon of January 28, 2026, and the initial refunds rolled in almost immediately with accompanying e-mails:

• January 28: $150 in first class co-pays (posted to credit card Febuary 1)

• January 29: 26,300 in Economy Plus upgrade miles (posted same day)

• February 1: 4,000 in checked baggage miles (posted same day; note I did not request this refund)

On January 31, I received 5 e-mails with identical text referring to 5 of my refund requests:

“Due to the nature of your correspondence, your file has been forwarded to our MileagePlus Department, since it relates to an area of their expertise. Please allow 2 – 4 weeks for your MileagePlus account to be updated. Should you have any further questions regarding this matter, please contact: United Airlines MileagePlus Rewards, PO Box 1394, Houston, TX 77210-1394 or call 1800-421-4655. You may also contact us via https://www.united.com/web/en-US/content/Contact/mileageplus/AccountInfo.aspx.”

Conclusion

It’s unfortunate that United can’t or won’t process refunds automatically in situations where your itinerary changes, but the process of manually requesting refunds is itself extremely quick and easy, so I’d recommend doing it as soon as possible after your travel is completed.

In my case, I’ve been made completely whole for all my unused upgrades, except for the 40,000 miles I redeemed for the leg we were moved from — but the corresponding $150 co-pay has already been refunded to my credit card.

I’m sure in 2-4 weeks I’ll receive a refund of the last 40,000 miles I paid as well, and I’ll post an update then. Obviously I’d rather have the Ultimate Rewards points back than the United miles, but between Lufthansa, Swiss, and Air Canada redemptions, Mileage Plus miles aren’t completely worthless and I’m sure I’ll find a use for them eventually.

I think most travel hackers of ordinary intelligence understand why every deal dies. If you think of each deal as being designed with some average cost per user in mind, then the two inputs are the expected total cost and the expected total number of users taking advantage of it. If and when a company realizes those expectations were wrong, they look for ways to bring it back into balance, either by reducing the cost per user (devaluations and fee increases) or reducing the number of users (shutdowns and per-user limits).

Obviously this can take a long, long time, either because of incompetent program management, government regulations, or simply low uptake. Even a program that’s hemorrhaging money on a per-user basis can last for a long time if so few people know about it that it takes the company months or years to notice. If a promotion was the brainchild of an ambitious middle manager, they may even realize it’s over-budget but delay admitting they were wrong as long as possible — time that belongs to us.

That crude model (deals die faster the sooner and more expensive they end up being) doesn’t explain the other side of my formula: there will always be another deal. If every deal dies, then one thing you might expect is that the people who kill them will learn from experience and get better and better at developing deals that are more profitable for their companies than they are for us. The people who pitched unprofitable deals will get fired or reassigned (or promoted) to a role where they can do less damage.

But that hasn’t happened. I’m hardly an “old-timer” compared to some folks in the community, but in the 15 years I’ve made it my hobby, for every deal that has died (that I know about — an important caveat in a tight-lipped community) another deal has come up. Sometimes the new deal is less profitable and sometimes it’s more profitable, but it’s always there.

Some people don’t notice this because for a casual travel hacker, especially people who “just have one deal,” the end of their first deal is the end of their travel hacking career. For a lot of people who started around the time I did, that deal was easily-purchased and -liquidated Vanilla Reload cards at bonused merchants like office supply stores and drug stores. For others it was when money orders became too onerous to purchase at Walmart with prepaid debit cards.

I have a family member who earned the Southwest Companion Pass for 3 or 4 years using signup bonuses and manufactured spend. He saved tens of thousands of dollars on Southwest flights, and when he lost access to those deals he said “that’s it for me” and walked away. And good for him!

“When the fun stops,” as the Vegas casino industry slogan says.

It is extremely profitable to borrow, lend, and use money

Travel hacking is a middle-man business. What drives the creation of new deals in the American market is that the “middle” is enormously profitable, so there are plenty of slices of it to cut off.

A popular article circulated back in 2024 laying out one part of that process, specifically about credit card rewards. I don’t know the author and can’t vouch for the specific numbers he uses, but the general idea is obviously correct:

“The heaviest credit card spenders…are wealthy and sophisticated. They use credit cards primarily as payment instruments. Issuers compete aggressively for their business, which is quite lucrative. This is not because they pay much in interest, because while they have higher headline APRs they only rarely revolve balances. It is because ‘clipping the ticket’ via interchange on a high volume of transactions is an excellent business to be in.”

It’s a cliche that "every business has to accept credit cards now,” but that isn’t true. There’s a beloved grocery store in Wisconsin that only accepts debit cards and, for whatever reason, Discover credit cards.

What people really mean is that most businesses choose to accept credit cards in order to stay in business, that is to say, in order to turn a profit, ideally as large a profit as possible. A business that didn’t accept credit cards would have fewer customers, but that would be an obvious tradeoff to make if businesses were consistently losing money on credit card transactions.

The reason businesses accept the interchange fees they’re constantly complaining about is that businesses are very profitable. Credit card processors take a piece of that profit, credit card companies take another, and there is still enough left over for us to take yet another piece of it in the form of third-party and in-store rewards.

As long as business is profitable, there will always be excess inventory

It’s an old cliche that a plane ticket is a product that becomes more and more valuable over time (since last-minute bookers are more and more desperate as seats get scarcer and scarcer) until it expires worthless (when the plane takes off with unsold seats). But while airline tickets, rental cars, and hotel rooms are convenient illustrations, the same process applies to virtually all retail inventory.

The most expensive day to buy new clothes is at the beginning of the season, because that’s when clothing companies know the clothes are most valuable to you. The cheapest day to buy new clothes is during end-of-season sales when stores are trying to unload spoiling merchandise from the previous season.

It’s true in technology, too: Apple charges the most for new smartphones and computers on the day they’re released, and eventually starts giving them away to clear their shelves before the next generation of hardware is released. A two-generation-old iPhone is as worthless a use of shelf space as a two-week-old banana or a flight that departed two weeks ago.

All inventory is constantly spoiling, and all companies are desperate to get rid of it the second it hits their shelves.

What would really stop new deals from arising?

In one sense, these laws are relatively constant under capitalist conditions. Grocery stores in Europe have loyalty programs because their bananas spoil just as quickly as ours do and they too need to get them off the shelves before they expire worthless. That’s what those weekly grocery advertising inserts have always been for. Grocery stores give away turkeys around Thanksgiving because they don’t want to be left with frozen turkeys the day after Thanksgiving, when Americans stop eating them.

Airlines and hotels in Europe are just as eager to get paid something - anything! - for their last-minute vacancies as ours are, so they operate loyalty programs and let people redeem their points for spoiling inventory. Hotel Tonight is still a going concern after all these years.

But the variations you see across borders do illustrate how conditions would need to change to keep new deals from coming up.

• Interchange fees. The fees merchants pay when you swipe rewards-earning credit cards pay for the benefits we receive. But they also pay for the rewards programs we take advantage of being worth operating in the first place. Lower interchange fees would cause credit card companies to reduce points earning as a first-order effect. But they’d also reduce the total number and the price of points credit card companies are willing to buy from their travel partners, and reduce the value of the partnership to those travel partners. American Express is Delta’s biggest customer because they know they can resell the points they buy from Delta to us at a profit thanks to interchange fees. If interchange fees dropped, they’d sell fewer points to us (for example, by changing earning rates) and buy fewer from Delta.

• Profit margins. I have a relative who worked at Best Buy in the early 2000’s, and he used to rave about his employee discount. He bragged about how he could get us 80%, 90%, or 95% off. But that’s not actually how the discount worked. It was what he called a “cost-plus” discount, so he paid 5% over the amount the stuff cost Best Buy wholesale. For screws, cords, wires, all the stuff that littered the aisles of Best Buy back in the 2000’s, it really was a 95% discount because Best Buy didn’t pay anything for that crap. But if you asked him about a new refrigerator, the discount was just 2-3% because the manufacturers of heavy residential appliances drive a harder bargain with Best Buy than the manufacturers of cheap plastic crap do.

Conclusion

The reason I say there will always be another deal is that I don’t see any chance that any of these conditions will go away in the American market any time soon.

Meaningful credit card rewards would go away overnight for most retail customers if the government capped interchange fees, which is why there is a credit card industry lobbying campaign to make sure that doesn’t happen, with the support of consumer-facing ghouls like Gary Leff.

But no part of this system functions without the very high profit margins of the US retail sector. No matter what you’re discounting, there’s no business in any industry that can afford to sell everything it makes for less than it paid for it forever. Fortunately, those very high profit margins are the backbone of the US economy and we have an economy-wide, all-of-government effort to ensure they stay as high as possible as long as possible.

And that is why even when a deal gets so profitable, so popular, so saturated that a higher-up does finally decide to kill it, it has never given me the slightest reason to believe there won’t be another one, because the underlying conditions that gave rise to deals in the first place have not changed.

Interchange fees make generating credit card transactions just as profitable as ever, and profit margins make it as profitable as ever to get people in your store, taking spoiling inventory off your hands.

First, they are still in operation, unlike a lot of gift card resellers that have come and gone over the years.

The Plastic Merchant was one of the more notorious, if not the biggest, gift card reselling collapses because so many online travel hackers were personally affected and wrote about the resulting bloodshed.

Other long-established sites haven’t folded entirely, but have pivoted to other models. Gift Card Granny no longer buys gift cards, and is now just a skinned version of traditional gift card websites. Raise spun their gift card reselling “marketplace” into GCX, which sounds like it is narrowly targeted at people putting extremely high volume through the platform.

The second reason I use CardCash when citing gift card resale prices is that you can check their prices in real time without logging into the website or having an account. This may not sound like much, but I strongly feel that when you write for a public audience then the public should be able to easily check your work, both because it allows errors to be spotted more quickly and because I’m not interested in troubleshooting every reader’s attempts to sign up for every service I mention.

Citing a public website that works on mobile browsers solves both problems, so I cite CardCash.

Getting started with Aligned Incentives

Having said that, a number of readers reached out to encourage me to get up to speed on Aligned Incentives, for a number of very convincing reasons. Most importantly, CardCash doesn’t provide public quotes for Amazon gift cards. Aligned Incentives requires an account, but buys those gift cards at a “base” rate of 91-93.5% of face value (depending on denomination), which makes it one of the most lucrative possible ways to liquidate frequently-bonused “Zift” gift cards at grocery stores.

More about “base” purchase rates in a moment.

Aligned Incentives is open to new users, although they do require you to use Google credentials to set up your account. Their new user guide is also available to the public. It’s not great literature, but I strongly encourage you to read it start-to-finish to understand the kind of company you’ll be dealing with if you decide to proceed.

Notification settings

The very first thing you will notice after creating an account is the sudden onslaught of e-mails. This will become unbearable immediately, so you will start trying to figure out how to turn them off.

Achieve this by clicking on “Notifications” in the bottom left of the main screen:

Then “Opt out of all emails:”

This will shut off the stream of e-mail notifications for the time being.

Next, it’s time to decide what deals you actually are interested in. Expand the “Gift Cards” menu and click “Show Deal Sources,” in purple:

Here you’ll find a list of every merchant Aligned Incentives has ever issued a deal alert for, plus the all-important “Anywhere,” which is how deals are listed when they’re offering to buy gift cards without being attached to any particular deal. After unselecting all (and adding back “Anywhere,”) you should now look over this list to see which merchants apply to you.

I live in a city with both Safeway and Giant grocery stores, but without Kroger or H-E-B stores. Kroger and H-E-B may offer great deals, but I don’t want to get e-mails about them. If you live in Texas your situation might be the exact opposite!

Notifications settings will inform your dashboard

Once you’ve got your notifications set up properly, the third checkbox on the Notifications page starts doing its work: “Check this box to auto-hide deals from your dashboard that do not meet your notification requirements.” With this box checked, after a week or two (when older deals have had a chance to fall off) your “Seller Dashboard” should more or less reflect the deals that are relevant to you.

Selling gift cards

At this point, Aligned Incentives mostly works like a normal gift card reselling site, with a few nuances. First, before you submit gift cards for sale you have to “reserve” specific numbers of cards in specific denominations.

The price and volume for different denominations will be different, but fortunately most merchant gift cards don’t have purchase fees so you should be able to purchase cards in the most lucrative denominations — as long as the clerks at your local stores are willing to go along, of course.

Second, when you’re ready to submit your gift card numbers, Aligned Incentives also requires you to upload a receipt showing you purchased the cards with a credit card. This was a major source of confusion for me at first, but as I understand it they are only trying to ensure that people aren’t laundering money by purchasing gift cards with cash. They’re not verifying the actual credentials of the card you purchased.

Upon even a moment’s reflection this seems absurd: a mobster could simply give someone with a credit card the cash they wanted to launder, and the cardholder could give the gift card and the credit card receipt to the mobster. But criminals are as lazy as everybody else, so maybe adding the trivial friction of the extra step keeps the very laziest of them off the streets.

Payout timing and Aligned Incentives’ shadow banking function

The timing of gift card reselling payouts is the essence of the business: the longer the payout timeline, the longer your money is exposed to the risk of default (as illustrated most pitifully in the case of The Plastic Merchant mentioned above).

CardCash approves my submissions within one or two business days and I receive my payments within a business day or two after that, which gives a payment timeline of between 3 and 6 calendar days: a card submitted on Friday before a long weekend might not be approved until the following Tuesday, with the payment ultimately received on Wednesday or Thursday, but a submission on a working Monday is almost certainly going to be paid out by Thursday or Friday at the latest.

Aligned Incentives has a “standard” payout timeline of 2 calendar weeks from the time your gift card is submitted. Adding a business day for the ACH payment to be received, and the possibility of intervening weekends and Monday holidays, this gives a payment timeline of 15-18 calendar days.

But here Aligned Incentives introduces a secret second function: that of bill broker. This is an industry now associated (if it’s associated at all) with the history of London’s Lombard Street due to Walter Bagehot’s brilliant essay on the industry, but continues after various transfigurations to this day. A common example is freelance and platform workers, who are often offered versions of a deal where their employer offers to pay 100% of their agreed earnings in 6, 8, or 12 weeks or 95% of their pay today.

As exploitative as these employment arrangements are, they only magnify the basic logic that when you are only paid once or twice a month, you are lending your labor to your employer interest-free on the faith that they’ll have the money to pay you when your bill comes due. The sooner you’re paid, the less faith you need to place in your employer: day laborers need only a day’s worth of faith that the money will be there, and the next day are free to place their faith in another employer, perhaps with a better reputation for on-time payment.

It is generally illegal in the United States for non-banking institutions to take interest-bearing deposits. But Aligned Incentives developed a clever workaround: instead of accepting deposits and paying interest on them, they “purchase” merchandise (your gift cards) and pay higher rates for delayed payments. This is the essence of bill brokering, or what is now called “factoring” and in one of its even more esoteric forms “reverse factoring.”

Gift card sales are deposits into Aligned Incentives high-interest-rate ecosystem

What Aligned Incentives really offers is unsecured deposits into its high-interest-rate bill brokerage ecosystem. Allow me to illustrate this with a current deal.

Mid-Atlantic Giant/Stop&Shop/Martin’s grocery stores are currently awarding 8 points per dollar spent on Zift gift cards (worth 8% in grocery rewards or 8 cents per gallon at participating partner gas stations). Several Zift versions offer Amazon.com gift cards as one of many possible redemptions.

If you purchase a $250 Zift gift card, using a credit card that offers 3% in rewards, the purchase itself will generate a minimum of $27.50 in total rewards, meaning what an investor would call their “cost basis,” the amount they’re actually out-of-pocket, is down to $222.50. After converting it into an Amazon gift card, it’s worth $232.50 to Aligned Incentives in 15-18 calendar days, and you can profit $10 for your trouble.

But here Aligned Incentives offers the same deal it would otherwise be illegal for an unregulated financial institution to offer: consider your payment, which you’re entitled to in 15-18 days, as a deposit, and they’ll pay you up to 3% more if you’re willing to wait up to an additional 16 weeks (127-130 days total):

Here the same $250 Amazon gift card, purchased for the same $222.50 after rewards, is worth $239.47, a 3% cash return for leaving your $232.50 on deposit with Aligned Incentives for an additional 16 weeks.

The advantages of an an almost completely flat yield curve

I want to make one final point before concluding. A yield “curve” gets its name from the observation that most investors demand a higher interest rate on longer-term debt obligations than shorter-term ones, both because over longer periods repayment becomes more doubtful and because locking in a long-term interest rate means you’re not able to invest the same money if rates should rise before your first investment matures.

But Aligned Incentives doesn’t use that model. The interest rate they pay on delayed payments is essentially flat across the entire repayment structure:

I only say “essentially” flat because the first two (interest-free) weeks are more significant to the interest calculation the shorter the total repayment period is. The proof of this is left as an exercise for the reader.

Conclusion

To come full circle, I do not believe Aligned Incentives is an especially well-capitalized debtor that is especially likely to full its debt obligations, any more than I thought The Plastic Merchant was an especially well-run organization before they defaulted on theirs.

What I do believe is that if you are already floating debt to Aligned Incentives for payment in two weeks, you’re already taking a credit risk on their ability to fulfill their obligation. If you understand that, then you are ready to decide whether you’re willing to float the same debt for 2-16 weeks longer, with the opportunity of earning elevated returns while your money is on deposit.

“Platform risk” is the most important risk any travel hacker takes, and you should not delude yourself that gift card reselling is any exception. If Aligned Incentives goes under there’s no chance you’ll ever receive your payments, whether you made your deposit one or 126 days ago.

But if you’re willing to risk money on deposit to the platform, then they currently offer a generous annualized rate of return on those same deposits.

They did grandfather in points earned prior to the devaluation (including pending points), which are now tracked separately in the the Ultimate Rewards portal.

You can view your remaining legacy point total by clicking through to the Ultimate Rewards portal and clicking on the banner reading “There’s been an update to your point value when used for Chase Travel. See what's changed.”

If you have a lot of Ultimate Rewards-earning credit cards, then until you run out of pre-October 26 points, it’s worth thinking carefully about how you manage your point balances.

Premium Ultimate Rewards balances are now stacked: first-in-first-out

The most important thing to know about the devaluation is that all Ultimate Rewards transactions in each account are now paid out of your most valuable points first, regardless of how they are used: for Chase Travel redemptions, partner transfers, or combine points transactions.

Consider an account with 100,000 points earned prior to October 26 and 100,000 points earned after October 26. If you make a 100,000-point Chase Travel redemption followed by a 100,000 partner transfer, the points are worth $250 or $500 more than if you make the transfer first, followed by the Chase Travel redemption, because the first 100,000 points you redeem will always be your more valuable, legacy Ultimate Rewards points.

If you only have one premium Ultimate Rewards-earning card, then that’s all you need to know. But if you have multiple cards, even across multiple family members, as countless readers do, then you have more options.

Transfer newly-earned points to their own account

The simplest workaround is to keep newly-earned points in a different account from your remaining legacy points. For example, I have an Ink Plus account with my remaining legacy points, and an Ink Preferred account I can use to receive newly-earned points. Both allow partner transfers, but partner transfers from the first account would come out of my legacy points first. To the extent possible, I’ll transfer points from my Ink Preferred account before dipping into those legacy points.

Refundable Chase Travel reservations

Another possible option to preserve the value of your legacy points is to make refundable Chase Travel reservations. According to Chase’s FAQ:

“What happens if I cancel a redemption made with points eligible for 1.25x value on Chase Travel?

“Rest assured. If you cancel a redemption made after October 26th, 2025 with eligible points, they will be returned to your eligible points balance. ​However, If you cancel a redemption made prior to October 26th, 2025, the refunded points will not be added to your eligible points balance.”

This makes it sound like if you wanted to use your devalued points for a partner transfer, you could redeem your legacy points for a refundable reservation, make the partner transfer, then cancel the reservation and get your legacy points back.

I have not tried this, and can’t imagine I will have a need to do so, but if you have experimented with this technique please leave a comment and help inform other readers.

Conclusion: not all points are created equal

To a lot of travel hackers, this is all fairly academic: Ultimate Rewards points are so valuable when transferred to their travel partners that 1.25 or 1.5 cents per point is negligible compared to the value they get from Park Hyatt stays and first class flights.

I do some of that goofy stuff, but like most people, most of my travel is still seeing family and friends, and that means not having a lot of control over flight timing and award availability, so I’ve typically redeemed Ultimate Rewards points through Chase Travel once or twice a year, both on cheap flights and when award space hasn’t been available.

That doesn’t mean I’m going to hoard my legacy Ultimate Rewards points: they’re there to be used, and the least valuable point you’ll ever earn is the one you don’t redeem in time. But until the last one’s gone, I’ll certainly be combining points in my non-legacy accounts and transferring from there to partners as a first resort.

Where the story left off, I was deciding what to do with my traditional and Roth IRA balances: Robinhood charges a $100 outbound ACATS fee for in-kind transfers, so I planned to execute a “60-day rollover” of my balances to my external IRA’s.

The problem: a local tax withholding glitch

As they are required to by federal law, Robinhood gives you the option to withhold taxes from IRA distributions, with a default setting of 10%. They also give you the option to adjust that setting for federal taxes. This is important because, to execute a penalty-free 60-day IRA rollover, the entire amount of your withdrawal has to be rolled over. If you don’t notice the 10% withholding, then you have to find the cash elsewhere to “top up” your withdrawal until the withheld money is refunded if and when you file your taxes.

What I found was that when withdrawing my entire IRA balance, I was unable to adjust my local, DC income tax withholding. That would have amounted to a roughly $800 interest-free loan to the government of DC, since I’d get it back when my tax return is processed next year.

Crisis: ACATS doesn’t work

Having given up on the straightforward route, I submitted a transfer request through Merrill Edge to move my IRA balances to my existing IRA there and a new Roth IRA (prepared to pay Robinhood’s $100 ACATS fee).

Each time, the request was rejected, and each time, I escalated my complaint higher, but the only thing Merrill could tell me was that Robinhood was rejecting the transfer because my account was “frozen.”

Since it’s impossible to communicate with Robinhood employees once your account has been shut down, I found that it was necessary to get creative.

Resolution: partial IRA withdrawal

You may recall that I wasn’t able to adjust my DC income tax withholding when withdrawing my entire traditional and Roth IRA balances.

In a fit of inspired pique, it occured to me to see whether I could withdraw less than my entire balance. And, to my very pleasant surprise, the withdrawal of all but a few cents in each account sailed through without even prompting me for withholding information.

The total amount deposited was, however, reduced by the amount of my 3% Robinhood Gold IRA “match.” I wasn’t sure how they would handle this in advance, but I believe they only took out the nominal amount of the IRA match, not any gains I made on the match.

Unresolved: tax treatment

People in the travel hacking community do a lot of shenanigans that generate a lot of tax documents, some of which are useful, and some of which are not useful. As a consequence, there is a very pervasive belief, very much including people who should know better, that tax documents generate tax liability.

This is not true. Underlying activity, whether or not it is reported on documents filed with the IRS, is what generates tax liability. In my case, I fulfilled all the requirements of a 60-day rollover (it was, in fact, a 2-day rollover), but I’m perfectly certain that Robinhood and Merrill Edge will both report me making the same contribution to two different IRA’s. And if the IRS had any enforcement staff left, they might give me a call or send me a letter telling me I’d exceeded my annual contribution limits or owe penalties on my early distribution, or both.

But this is the important thing: I haven’t, and I don’t. Tax paperwork is designed, in the best case scenario, to help you fulfill your tax obligations. But tax paperwork doesn’t create tax obligations. Only the underlying economic activity does, whether it generates tax paperwork or not.

Two weekends ago I doubled up the Adidas gift card 10 point per dollar promotion (sellable for 77.5% on CardCash) with the usual 4 bonus point promotion on Saturdays and Sundays, but only received 2,000 Just4U points. As a reminder, these promotions are only partially stackable. Each is calculated as a separate addition to the base earning rate on these cards, so a $500 gift card purchase earns a total of just 6,000, not 7,000, Just4U points: 2 points per dollar as a base rate, 8 additional points per dollar on the weekly promotion, and 2 additional points per dollar on the weekend.

With that in mind, I was still 4,000 points short.

Requesting missing Just4U points

Requesting the missing points ended up being easy, but not obvious. The channel is not through the Just4U part of the Safeway website at all (where you see your deals, rewards, and transaction history), but through the generic “Contact Us” page. Once there, I filled out a brief form using the “Submit Request” button.

I wrote: “I was only credited with 2000 instead of 6000 just4u points for purchasing a $500 adidas gift card despite having added both the 10x and 4x promotions to my account prior to purchase. I am requesting the additional 4000 just4u points to be deposited into my account.”

I submitted the form on the morning of September 13, 2025, and received an e-mail just after midnight the next day from “web.comments@safeway.com” asking for:

• “A screenshot of the 10x and 4x point offers that were added to your account

• A copy or photo of your receipt showing the $500 Adidas gift card purchase”

When I woke up in the morning I send the relevant pictures, which was easy since they were still sitting on my desk from the day before.

In the afternoon of September 15, I received an e-mail stating they’d “submitted a request to manually load the remaining” points to my account.

Satisfied, I checked only occasionally over the next few days but the additional 4,000 points were successfully credited sometime between September 16 and 17. In other words, the entire situation was resolved in somewhat less than 120 hours.

One concern relieved

Like most people with multiple Just4U accounts, many of them use iterations of the same e-mail addresses. I was curious, if not worried, that submitting my proof of purchase from a different iteration might foul the lines between my multiple accounts. That did not end up being the case, as the timeline above suggests.

Conclusion

Whenever something goes “a little bit wrong” people who are already inclined to catastrophic thinking are guaranteed to lose their cool. But not every hiccup is catastrophic and not every solution is all that hard.

Since then, another stock (WEN) was sold at my limit price, leaving me with 5 remaining open positions.

Having finally received the overwhelming bulk of my money back, here’s the rest of the story.

Involuntary liquidations

On August 27, 2025, I received 10 e-mails, two for each of my remaining positions: one canceling my outstanding limit sell order, and one informing me that a market sell order had been executed. Since I received the first notificationt that my accounts were being closed on July 30, these involuntary liquidations happened exactly 4 weeks to the day after my first notice.

Refunds to originating sources

On August 26, I received an e-mail from Robinhood stating: “At this time, we are actively working with your financial institution(s) to attempt to return the funds that were deposited into your Robinhood account back to their originating source(s). Thank you for your patience.”

I was naturally deeply curious how this process would work, for two reasons.

First, I had been using my Robinhood account for a wide array of hijinx, including meeting monthly debit card transaction requirements and earning rewards on rewards-earning debit cards. It made sense that they could in principle refund these transactions to the funding debit card using the normal Visa and MasterCard “rails.”

But second, I had a substantial amount of accumulated interest and capital gains in my account: how could they “refund” money that didn’t have a deposit source, but rather was generated by the market itself?

All my funding transactions were reversed for the period between May 27 and July 24, 2025 (the last day I transacted before I was shut down). Because these were processed as individual “refunds,” not as normal transfers out, I have not even attempted to match them up with the corresponding deposits in my various accounts, but using my July brokerage statement as a guide, I’ve received my entire account balance, plus at least part of my August interest, back in my assorted accounts.

In other words, if Robinhood did steal any money from me in the course of this process, it’s in the low double digits.

Robinhood’s clawback fantasy

Robinhood, on the other hand, has a different concern: they think I owe them money because my account wasn’t open long enough to “earn out” the rewards I received by transferring money onto the platform.

While they refunded 100% (plus interest and gains) of my funding transactions, my Robinhood account now has a purported “deficit” of a little over $1,800. As far as I can tell, this reflects the amount of various bonuses I received for transferring in cash or assets that required a holding period of 5 years to fully “earn out.”

It gives me nothing but pleasure to think of the time and money Robinhood will waste trying to extract this money from me, which they will never do.

Traditional and Roth IRA accounts

I also have small traditional and Roth IRA accounts with Robinhood, in order to earn the unlimited 3% Robinhood Gold funding bonus, which were not closed or involuntarily liquidated. Instead, I was given 60 days to liquidate and transfer my retirement accounts. Robinhood charges a $100 outbound ACATS (in-kind security transfer) fee, so to avoid that fee I’ll have to transfer the balances to my external checking account and execute what the IRS calls a “60-day rollover” to my other IRA balances.

Conclusion

Robinhood is a gimmick company for a gimmick economy, which makes it perfectly suited for many specific travel hacking needs.

It also belongs to a sector that is still regulated comprehensively enough that there is almost no chance of them taking your money and never giving it back.

However, that doesn’t mean getting your money back, while inevitable, will be fun or easy, which makes the ancient advice as applicable as it ever was: don’t float Robinhood money you can’t stand to be without, because you have no way of knowing when you’re going to get it back.

1. Manufacturing debit card transactions in order to trigger rewards on high-interest checking accounts, since Robinhood allows debit card funding transactions as low as $1;

2. storing cash above the limits of my high-interest checking accounts;

3. and manufacturing debit card transactions on rewards-earning debit cards.

On July 30, 2025, Robinhood notified me they were closing my account. Since I imagine this is inevitable for anyone using their account as aggressively as I was, which surely includes some of my readers, I’ll publish periodic updates as the shutdown process continues, and by the time it’s complete you’ll be able to find a complete timeline of the steps involved.

Initial notification of shutdown

I received my initial notification that my account was being closed on July 30, 2025, a little after 6:00 pm Eastern, after the markets had already closed for the day. The e-mail was short and to the point:

“In light of recent unusual activity detected in your account, we’ve made the decision to close your Robinhood account(s). This can happen when the activity violates our Customer Agreement, or when we exercise the right to close your account as disclosed in our terms and conditions.

Here’s what you can expect over the next several days:

• We will begin closing your Robinhood account(s).

• You’ll be removed from features you had access to.

• Any open positions will be liquidated.

• If any of your accounts are in a negative balance, we’ll apply your existing funds on Robinhood to cover the balance. Any remaining funds may be returned based on eligibility.

• You might receive additional communications or information requests from us during this time—please keep a lookout for these.”

Voluntary sale

The next morning, July 31, I sold my shares in GSY, a short-term money market fund I had been using to take advantage of the $1,000 in free margin that comes with Robinhood Gold, since as I mentioned in a previous post, you cannot both hold cash and use margin simultaneously. This order was executed normally and the funds settled as cash in my account as usual.

Involuntary sales

I had two securities that did not have outstanding sell orders: Vanguard’s long-term corporate bond ETF (VCLT) and a tenth of a “B” share of Berkshire Hathaway (BRK.B) that I’d accumulated through referrals over the years.

On the afternoon of August 4, 2025, those shares were all involuntary liquidated to cash.

Remaining securities

Besides those 3 securities, I also held 7 of my “lottery tickets” in my account: securities that I bought deeply discounted, waiting for their prices to recover and make a nice profit.

Whenever I buy one of these stocks, I immediately place a good-till-canceled sell order against it at my desired capital gain (distinguishing here between my dividend income and my capital gain). As of today, August 19, 2025, none of those orders have been canceled or overridden by Robinhood, although one, for Guess? (GES) was executed at my limit price, so for now my guess is that while those GTC orders are in place, Robinhood can’t or won’t liquidate the positions.

Robinhood Gold interest

On July 30, 2025, I also received a couple of e-mails notifying me I was no longer enrolled in Robinhood’s “brokerage sweep” program and that “by opting out, your uninvested brokerage cash is not eligible to earn interest.” If true, this would be a minor inconvenience, since I would prefer the substantial amount of cash now sitting in the account to earn interest instead of not earning interest.

On July 31, 2025, without any intervention from me, I received another e-mail congratulating me on enrolling in the cash sweep program.

Fortunately, it appears the second e-mail overrode the first. Without getting out my financial calculator, the interest on my cash balance appears to still be accruing at the current 4% Robinhood Gold interest rate. Interest is only actually paid into the account at the end of each month, so I won’t know for another week and a half whether this is just a coding error in the app or if the interest will actually be properly credited.

Retirement accounts

I have a small traditional and Roth IRA with Robinhood to take advantage of their 3% match on contributions and inbound transfers. My automated weekly contributions were paused and cannot be resumed, but my positions have not been liquidated, which matters because uninvested cash in retirement accounts with Robinhood don’t earn any interest at all (unlike at real brokerage firms where it is normally swept into a money market fund).

Retirement accounts are governed under even stricter rules than taxable brokerage accounts, so I strongly doubt Robinhood will liquidate those positions involuntarily, but instead eventually allow me to transfer them in kind to the other IRA’s I have scattered around the financial universe.

They have communicated they will let me know when that option is available, but I haven’t heard anything one way or the other from them about what the timeline for that will be or whether it is linked to the eventual closing of my taxable brokerage account.

Unanswered questions

Obviously the highest practical urgency is in the timeline when my money will be returned to me so I can redeploy it to its highest and best use.

A less urgent but more interesting question is how the money will be returned to me. As mentioned above, I had been using debit card funding from a variety of institutions: CommonWealth One Credit Union, Pelican State Credit Union, Andrews Federal Credit Union, and several proprietary rewards-earning debit cards.

The only relevant information Robinhood has communicated to me is that “If eligible, your funds will be returned to the original funding source or a linked bank account. If we’re unable to return funds via bank transfer, a check may be issued.”

From my perspective the ideal situation would be for a check to be issued, followed by the funds being refunded to one of my rewards checking accounts, with the least favorable option being a refund to my rewards-earning debit cards, since a refund would undoubtedly result in the loss of the rewards corresponding to those transactions.

Conclusion

As comprehensive as this Part 1 may seem, there is quite a bit more ground to cover, so keep an eye out for future entries as I move through the body of the Robinhood shutdown anaconda.

Next time I’ll hopefully provide an account of my contact with financial regulators so far, and future steps I can take as I’m being digested.

The Flexperks Travel Rewards used to earn 3 points per dollar spent on Kiva loans (which could be funded with credit cards with no fees), and redeemed for 2 cents each on certain flight redemptions, while the Surpass used to offer bonus points at drug stores, which financed a lot of my hotel stays while I was in grad school.

But the principle reason I’ve kept both cards for all these years is that they offer bonused earning on grocery store purchases. The Flexperks Travel Rewards card earns 2 Flexpoints per dollar (worth 3% in paid flight and hotel redemptions) and the Surpass earns 6 points per dollar, which is worth roughly 3% depending on your own Hilton redemption preferences. Given how valuable grocery store promotions are, I have found it essential to have at least a few credit cards that earn bonus points there.

But this summer I had my first experience converting a Flexperks Travel Rewards redemption into American Airlines travel credit.

The original reservation

My hometown has always been expensive to fly in and out of, so I usually redeeem Alaska Airlines Mileage Plan miles for my flights, since Alaska has last-seat-availability on their own flights and their Portland and Seattle hubs provide an easy one-stop connection.

For a planned trip in June, the mileage redemption was so expensive that I decided to instead use Flexpoints to book paid American Airlines flights, which worked out to 63,781 Flexpoints for two tickets costing a total of $956.72 (including a nuisance $13.98 “Flight Facilitation Fee”).

The cancellation

We ended up not being able to take that trip, which raised the question of how to get value back out of our canceled flights. If I already had future paid travel plans on American Airlines, I believe I could have called US Bank’s travel agency and asked them to use the value of the ticket to book new flights before our original flights departed.

But I didn’t have future paid American Airlines travel plans, and since the flights I booked were changeable, but not refundable, I decided to cancel the flights through American Airlines’s website, instead of through US Bank’s “Travel Center.”

This went smoothly, and I could pull up the cancelled tickets’ value through the American Airlines website. But every time I tried to use the credit, the website prompted me to call in.

The rebooking

A few months later, I identified a perfect use for that American Airlines flight credit: while outbound flights for Thanksgiving weekend were available with Alaska miles as usual, cash return flights cost almost exactly as much as a roundtrip would: $1071.94, or about a hundred dollars more than the American Airlines credit I held in this unfortunate liminal state.

Figuring I would get a blog post out of it either way, I first called US Bank to see if they would allow me to use my “Travel Center” reference number to rebook my flights. They would not, but they did tell me to call American Airlines at their generic customer service number 800-433-7300 to use the credit with them.

After a few tries navigating their phone menu from hell, I struck on a different idea: American Airlines still allows you to prepare reservations online and then “hold” them to pay over the phone or in person.

The liberation fee

This gambit ultimately worked: once I had the reservation on hold, I could use the phone menu to skip directly to a representative who was able to pull up my held reservation. and I then asked him to apply my travel credits.

I was expecting to pay the fare difference between my flights, but the representative quoted me a price (after applying the credit) $100 higher. When I pointed out the discrepancy, he explained that they charged a $50 per-ticket fee for tickets booked through third parties.

Why it matters

Most paid domestic airline tickets are now “flexible” in a way that was rare before the COVID-19 pandemic, and the price difference between inflexible (“non-changeable,” “non-refundable”) and flexible fares is as low as it has ever been in my adult life.

But if you book paid fares through travel portals using fixed-value points like US Bank Flexpoints, Chase Ultimate Rewards, or American Express Membership Rewards, you should be asking how and whether you, personally, get to take advantage of that flexibility.

Many years ago I wrote about how US Bank was able to successfully and automatically convert a refund I had individually negotiated with Delta Airlines into redeposited Flexpoints. Knowing that the value of your redemptions can be reclaimed is one way you can be assured you’ll get something close to the prospective value you assign them while you earn them. If a sudden change in plans really could wipe out $1,000 in travel value, then you’d be insane to continue earning points in that program.

I found the $50 fee American charged me to “liberate” the value of my tickets as annoying as any sensible person would, but I found it a lot less annoying than being ask to forfeit the entire value of my US Bank redemption, and it has strengthened my fondness for the Flexperks Travel Rewards program in general.

The deal

Zillions cards currently earn 10 Just4U points per dollar spent. These cards have no activation fees, and can be purchased with credit cards wherever employees allow it.

Most weekends, Just4U runs a stackable promotion where gift card purchases earn 2 additional bonus points per dollar (this is confusingly branded as “4 points per dollar” since gift cards earn 2 points most of the time). If that promotion runs again this Saturday, then Zillions cards should earn a total of 12 Just4U points per dollar.

I value Just4U points at roughly 1.85 cents each, so on Saturday this deal will generate a rebate of about 22.5 cents per dollar spent, plus however much you earn with your credit card on grocery store spend. If you redeem your Just4U points for the most valuable grocery redemption, you’ll receive $20 off for 1,200 points, or 1.67 cents per point.

Of course, what you’re spending the money on is a Zillions gift card, so the question is how to get your money back out of the system. As a reminder, fixed-value Zillions cards cost $100 but allow you to redeem $105 for store gift cards. The best resale rate I was able to find on CardCash was 80% on Saks OFF 5th, or $84 per fixed-value Zillions card.

The most valuable Just4U redemptions have a capped number of redemptions each week, but if you sign up for the Freshpass program, which costs $99 per year or $49 if you qualify for SNAP, then your points don’t expire, so you can redeem them for their highest value week after week.

Conclusion

This is both an outstanding deal in its own right, one I myself am planning on hitting moderately hard this Saturday, and a nice reminder that travel hacking is in so many ways a subset of extreme couponing. Stocking up on toilet paper may be less glamorous than first class flights around the world, but the principle is identical and more often than not, so are the means: pay as little as possible for the things you want or need.

So I was surprised to find myself taking advantage of not one, but two promotions in a single week to book two trips that offered me satisfying value for points balances that had grown too large and that I had been sitting on for too long.

When the travel hacking community had more diverse and interesting voices, a frequent argument was over how to value redemptions: should you claim the retail value of the actual flights you take and the hotels you stay in, or use a kind of “if-not” valuation using the price of the flights and hotels you’d otherwise pay for in a world without travel hacking, or even the out-of-pocket expenses you incurred earning your miles and points (while this last can be an interesting exercise, I don’t know anyone who actually uses it since it requires meticulously tracking the cost of acquisition of every mile and point you redeem).

In this post I’ll take a middle road and give the retail price of the seats I would have paid for on the flights I actually did end up booking.

Air Canada transfer bonus from Ultimate Rewards

My partner, who works in the real world, was anxious to take a long vacation this summer, and I was anxious to oblige her. Due to scheduling uncertainty, it was only at the beginning of June that I started looking for options to Europe later this month, and naturally, award availability had grown pretty limited.

Spinning around my digital globe, I proposed Andorra, the microstate nestled in the Pyranees between France and Spain. After a few hours of searching, I found that the two easiest routes (Andorra not having an airport of its own) were to take a long bus ride from Barcelona, or a train followed by a much shorter bus ride from Toulouse, France.

Favoring as little time spent on a bus as possible, I found award availability to Toulouse on Air Canada, with a single connection in Montreal. When I explained this option, my partner sensibly replied, “or we could just go to Montreal.” This suggestion was so obviously superior that I scrapped the Andorra idea completely.

There was award space every day on Air Canada using their own Aeroplan miles, which conveniently is a transfer partner of Ultimate Rewards, where in turn I’ve been sitting on a balance far larger than I’m usually comfortable with and no other obvious upcoming uses. When I logged in, I was delighted to see that through July 17, 2025, I’d receive a 20% bonus on transfers to Aeroplan (there’s also a 25% transfer bonus to Virgin Atlantic through June 15, 2025). For those doing the math at home, that works out to a roughly 17% discount on Aeroplan awards.

I’d never booked an Aeroplan award before, so had to figure out the curious 5-tier redemption system, with “Standard,” “Flex,” and “Latitude” (refundable) options in economy and “Lowest” and “Flexible” options in business. It turned out that the “Lowest” business redemption was cheaper than the “Flex” option I would choose in economy, so I transferred 174,000 Ultimate Rewards points and received 208,800 miles in my Aeroplan account. The transfer processed instantly, and I booked the award for 208,600 miles and $230.90 (315.35 Canadian).

The cash fare for the two economy tickets I would have booked on the same flight is $2022.28, which works out to a redemption value of 1.03 cents per Ultimate Rewards point after deducting the $230.90 in taxes and fees. Since Ultimate Rewards points are redeemable for cash at 1 cent each, that makes this a classic example of “paying for coach but flying in business.” Business class on my flights is now sold out, so it’s unavailable at any price, but the closest equivalent retails for $3208.76, or 1.7 cents per Ultimate Rewards point.

Alaska partner award sale

Alaska Airlines Mileage Plan miles are incredibly valuable for flying on short-haul American Airlines flights, but one reason they’re so valuable is that you don’t need very many of them: even around the holidays I find essentially unlimited award space at 4,500 miles in economy and 9,000 miles in (domestic) first class. Consequently, I passively accumulated Mileage Plan miles far faster than I redeem them, and ended up with a massive balance I’m constantly anxious to find a use for.

As I gather is common in the white collar world these days, we also have a work-imposed week off in August I needed to plan for, so I was delighted to see Alaska Airlines announce an award sale to six destinations: Bangkok, Buenos Aires, Lisbon, Monterrey (Mexico), Tbilisi, and Naples. Alaska does not, in fact, fly to any of these destinations except Monterrey, so in practice this a sale on the seats on their airline partners.

The sale is applicable to economy and premium economy cabins, but not business or first class, and tickets have to be booked by June 30, 2025, for travel between August 1 and November 15, 2025.

While I’ve visited Naples a few times on long trips through Italy, I’ve only scratched the surface of the surrounding areas, and the idea met with instant approval. Award space was wide open when I checked shortly after the promotion went live (it’s since thinned out a little), so I booked seats in premium economy for 100,000 Mileage Plan miles and $165.22 in taxes and fees.

Economy seats on the exact flights we’re taking retail for $1939.82, resulting in a redemption value of 1.78 cents per Mileage Plan mile. The premium economy seats we’ll actually fly in cost $3307.82, for a redemption value of 3.14 cents per mile.

Conclusion

First and foremost I want to point out that these promotions are still going on, so if you foresee any Aeroplan redemptions, this is a great time to transfer Ultimate Rewards points over, and if you’re planning a late summer or fall trip to one of Alaska Airlines’ discounted award destinations, certainly book (or rebook!) your flights to take advantage of these potentially steep discounts.

But there are a few other points worth highlighting in this context.

There is no alternative to actually redeeming your miles and points for keeping yourself intellectually and financially honest. This is different from omnipresent concerns about the “devaluation” of miles and points currencies; it’s about properly valuing them at all, and deciding whether you’re earning the currencies that you personally get the most value from. It’s all well, good, and profitable for affiliate bloggers to spout fantastical valuations of every loyalty currency under the sun, but the only value that matters is the value you actually get for the trips you actually want to take.

Finally, there’s a big difference between choosing between classes of service, or between luxury and no-frills carriers, or between destinations (shall we summer in Montreal or Andorra this year?), and choosing between traveling or not traveling.

Years ago I recall a Netflix executive was quoted somewhere saying “our biggest competitor is sleep.” Speaking for myself, travel hacking is only partly and occasionally about splurging on business class when economy would serve, or staying at the Waldorf Astoria when there’s a Hilton Garden Inn next door. Travel hacking for me is about making travel possible in the first place.

Outside of business travel, most people I know fly internationally at most once a year, and only a few times more than that domestically, and if I had to pay out of pocket for flights and hotels, I’d do exactly the same. Travel hacking lets me travel very literally outside my means: not because of the threadcount of the hotel sheets, but because I get to sleep in hotels at all.

This isn’t a situation you should find yourself in all that often, especially now that these awards are transferrable (sellable) to any World of Hyatt member: you earn free night awards by earning qualifying nights, so in principle any qualifying night you’re paying for with cash or points should instead be bookable with free night awards, especially Category 1-7 free night awards, since that covers virtually the entire World of Hyatt portfolio of hotels.

Nevertheless, that’s the exact situation I found myself in: I’d booked a long weekend in New York City at the Andaz 5th Avenue for the end of April, but had to cancel the trip at almost the last moment, with a Category 1-7 free night award expiring at the beginning of May.

Free night awards have to be redeemed for stays that take place before their expiration date, so I knew there was no way I was going to be able to use it for myself. I could have tried to sell it, but I wasn’t prepared to go hunting for a double coincidence of wants on such short notice. So I called World of Hyatt.

My first call, prior to the expiration of the free night award, had the character of a Tom Stoppard play.

I asked, “can I exchange my free night award for points?”

The young lady on the other end said, “did you know you can transfer your reward to any other World of Hyatt member?”

I said, “yes, can I exchange my free night award for points?”

She said, “we encourage people to try to redeem or transfer their free night awards if at all possible.”

I said, “it is not possible, can I exchange my free night award for points?”

She said, “we sometimes allow for exceptions but we encourage people to try to redeem or transfer their free night awards if at all possible.”

I said, “when would be the correct time to request such an exception?”

She said, “we encourage people are to use their free night awards before they expire.”

I said, “so would the correct time to request an exception be after the free night award has expired?”

She said, “yes.”

So, this week I called World of Hyatt and asked for my expired Category 1-7 free night award to be converted into points and the call lasted, I kid you not, 4 minutes. The agent was able to immediately convert my expired certificate into 20,000 World of Hyatt points.

Is it worth it?

Obviously once your free night award has expired you have a duty to yourself and those you love to call in and ask to have it converted to points. The interesting question is whether it’s worth deliberately allowing them to expire with the goal of getting more value from the points than the award.

And of course there are obvious situations where this is so: my go-to Hyatt in Prague is a Category 2 property that costs as little as 6,500 points off-season: 20,000 points is worth up to 3 nights at that property, compared to one booked with a free night award. If that were the only Hyatt I booked every year, then I’d simply let my single free night award expire and convert it into 3 nights like clockwork.

In fact, however, the World of Hyatt program isn’t especially worth gaming unless you intend to make at least a couple high-level Hyatt award reservations every year. Their footprint is small enough that if you were just making hotel reservations on price you’d have no reason to earn elite status with them at all.

I have not had any trouble getting value from my World of Hyatt free night awards so don’t have any reservations about earning more with the intention of redeeming them for nights that cost more than 20,000 points each. But the option of cashing out expired awards is, for now, still available by phone.

A quirk of the site when used as intended are “boosts,” which can be used to receive an increased rebate on a single gift card purchase, typically 25% on the first $10 in value. A few weeks ago heavy users of the site realized they had somehow accumulated dozens of these boosts, which are expiring May 5. I checked and had 20 in my own account.

If you can find boost-eligible gift cards to stores you typically pay cash at, this is a no-brainer. Apple gift cards, for example, can be purchased in $10 denominations and loaded into your Apple account for purchases across the Apple ecosystem. Perhaps needless to say, it is difficult to find 25% discounts on brand new Apple equipment.

Unfortunately many merchants have minimum values above $10, which correspondingly reduces your total savings. Here are a few other obvious options for merchants where you might already be spending cash:

• Grubhub ($10 minimum)

• CVS ($10)

• Ace Hardware ($10)

• Target ($10)

• Starbucks ($10)

• Walmart ($10)

• REI ($10)

• Ebay ($10)

• Uber/Uber Eats ($15)

• Lyft ($25)

• Amazon ($30)

Note that some merchants, like Apple, allow you to load multiple gift cards into a single account balance, while other merchants, like Ebay, save individual gift cards and limit the number that can be used in a single transaction. Before loading up on gift cards to a single merchant, make sure you know which model that merchant uses.

First, I don’t find it that difficult or uncomfortable compared to some people. I’m already running around town all day, so popping into a grocery store or drugstore for a few minutes makes no difference to me whatsoever.

Second, it lets me keep an eye on what’s happening in the gift card ecosystem, for example with the release of “Zillions”-branded cards and the opportunities that came along with those.

And third, it was cheap. If a $500 card has an activation fee of $5.95, then any card that earns 3% in rewards or more (Chase Freedom Unlimited, US Bank Flexperks Travel Rewards, American Express Hilton Honors Surpass) earns travel at a minimum discount of roughly 50%.

A few months ago, Safeway and CVS simultaneously replaced those $5.95-activation-fee cards with new, $7.95 cards. Meanwhile, Walgreens seems to have pulled prepaid debit cards entirely in my market, thus neutering my Freedom Unlimited bonus at drugstores.

This didn’t affect my actual volume until last week, when Giant followed suit. The changeover happened sometime between Monday, April 21, 2025, and that Thursday.

The new math and remaining opportunities

Paying $8.95 (after $1 in liquidation costs) for $509 in spend at 3% in rewards gives you a discount of a bit over 41%. This is fine, and it’s especially fine if you’re using the spend to meet the requirements for a signup bonus, since almost anything is worth doing to trigger a big enough signup bonus. But it’s a worse deal, and it’s worse by enough that I’ve finally taken a step back from in-person manufactured spend.

While there is no “bright side” to a deal getting manifestly worse, I want to highlight some of the remaining opportunities rather than give in to despair.

First, high-spend bonuses continue to augment the base value of the spend. For example, if you do carry a Hilton Honors Surpass card, then you should want to spend $15,000 per year to trigger the annual free night certificate, and if you’re spending $15,000 per year anyway, you should want to spend it in a bonus category like grocery stores, even if that bonus spend is now more expensive.

Second, grocery store loyalty programs continue to offer periodic bonuses on gift card purchases. Every few months Giant offers 2 or 3 points per dollar spent on variable Visa prepaid debit cards. During those promotions the cards are worth buying in cash, let alone with a rewards-earning credit card.

Likewise, the Safeway Just4U program has had extremely generous promotions both on branded third-party gift cards and the Zillions cards mentioned above. While liquidating those cards can be more cumbersome than prepaid debit cards (depending on whether you think reselling gift cards or buying money orders is more cumbersome), when the stars align the ultimate value proposition can be the same or higher.

Conclusion

Pricing decisions like this are interesting because from the outside we can only speculate what the interests of the different players are. As customers, our primary experience of these cards is that grocery store employees hate them because the values are so much higher than anything else they deal with they’re terrified of mishandling the transaction and losing their jobs.

But grocery stores aren’t run on behalf of their employees, and grocery store management obviously believes there is value in carrying these cards, through some combination of increased traffic (if you’re buying a gift card you might also buy your groceries on the same trip) and payments from the gift card distributor for floor space.

The gift card distributor meanwhile presumably pays third-party merchants (Adidas, Uber, whoever) a percentage of its face value when a gift card is purchased and makes money that way. How the activation fee of prepaid debit cards is split up between the grocery store, the gift card distributor, and the card issuer is a secret, but of course the higher the activation fee the more there is to split up.

And that brings us to the perfectly reasonable question of what, if anything, inflation has to do with it. Under conditions of generally rising prices, the prices of plastic, cardboard, electricity, customer support, and all the other inputs of a prepaid debit card network will also rise, so it shouldn’t be surprising that occasionally the activation fees will tick up as well.

But if that were the excuse — and it’s not my job to make up excuses! — then it would be a nice gesture if they raised the maximum value of the cards as well. After all, just like $500 doesn’t go as far now as it did in 1800, when it could buy you a reasonably sized farm in upstate New York, it doesn’t go as far as it did in 2000 either. We know there’s no technical or legal limitation on the maximum value of prepaid debit cards, since Simon Malls has sold $1,000 cards for years.

Hopefully grocery store and drugstore sales will fall by enough at the new price point that the gift card issuers will decide something along those lines has to be done.

Of course, instead of giving me a chance to relax and take a break, this objectively great situation has me thinking more about how to approach travel hacking, and everything-else hacking, on the scale of years instead of months.

Hoarding

I think of myself as the kind of person who tries to strictly manage their loyalty balances, not out of moral superiority, but for the simple reason that by definition I’m virtually always earning loyalty currencies based on their current value (with the interesting exception of anticipated mergers and transfer opportunities, like the Hawaiian-Alaska merger).

The longer I let balances sit, the less likely I am to redeem them at that current value. In other words, I know the value of my points at their current redemption values, and earn them on that basis, but the longer they sit in my accounts, the less likely their ultimate redemption value will be the same.

It’s vital to differentiate between two meanings of “devaluation,” since they’re often used interchangeably. The top Hyatt redemption tier, to give a simple example, used to be at 30,000 Hyatt Gold Passport points for the seven top-tier Park Hyatt properties in the system. I used to even be able to name them all off the top of my head, although I only ever stayed in Zurich and Vienna, where you get to swim in the old Bank of Austria’s vault and eat breakfast in the old cashier’s hall — a good time!

World of Hyatt’s Category 8 now goes up to 45,000 points, with the Park Hyatts (Parks Hyatt?) in Tokyo, Paris-Vendome, Zurich, and the Maldives Hadahaa joining that category, while the other formerly “top” properties (Vienna, Sydney, and Tokyo) are still in Category 7, which now costs up to 35,000 points thanks to the introduction of seasonal pricing.

These are devaluations, if you mean that holding everything else equal, the same hotel costs more points per night. But of course, all else isn’t equal.

At the level of an individual hotel, properties age and get worn out, and get renovated and refreshed. Where the property is in that cycle should matter when deciding whether points have “really” lost value: you may have fond memories of paying 3,500 points for the rundown Category 1 where you spent your honeymoon and be disappointed it’s now Category 4. But if it’s moved up in categories because they did a gut renovation, then you may find it’s an even more romantic getaway on your 10th anniversary.

At the global level, it doesn’t matter if individual properties move up or down in categories; it only matters how much of your home currency’s value you get across all the redemptions you actually make. In the golden age of blogs and forums people often argued that using cash prices gave inflated values because we would not be able to take the trips we do without travel hacking, so it’s unreasonable to claim points “saved” you the amount of money a trip would cost that you never would have taken.

This supposed problem is just a rhetorical trick though, since people who are not travel hackers, including former and future travel hackers, still take vacations. The correct value to use in calculating your savings is neither the cash price of the hotels you stay in or the flights you take, it’s the money you would otherwise spend on the vacations you would actually take.

Rationing

I call it “hoarding” points when people accumulate more than they can realistically anticipate using in the near-term, running the risk of devaluation. Rationing is the counterpart of hoarding on the redemption side: someone is unwilling to use points except above some minimum value, and for lower-value redemptions uses cash instead.

The problem with rationing is not that it’s bad to get as much value as possible from your loyalty currencies. The problem is that if you’re regularly spending cash instead of miles and points for your travel, you’re probably not earning enough cash, and the same time and money you spend earning loyalty currencies would be better spent on earning cash and cash equivalents.

For example, both the US Bank Flexperks Travel Rewards and American Express Hilton Surpass cards earn bonus points at grocery stores: Flexperks earns 2 Flexpoints per dollar and Surpass earns 6 Hilton Honors points per dollar.

Flexpoints are worth 1.5 cents each when redeemed through the US Bank travel portal, so the Flexperks card earns the equivalent of 3% in cash.

If you spent $10,000 on each card, you’d have $300 worth of travel value or 60,000 Hilton Honors points. There are many cases where 60,000 points can get you more than $300 worth in stay value, especially when using Hilton’s 5th night free benefit, so say you decide to use the Surpass for that spend.

On your next trip, you see a 60,000-point Hilton is available, but you find a cash rate for $250 after taxes and fees, or just 0.4 cents per Hilton point. Since you’re afraid of having “wasted” that $10,000 in spend, you ration your Hilton points and pay cash for the stay instead.

The problem in this case is obvious: you’ve now spent however much it cost to manufacture $10,000 in spend, and you’ve spend $250 on a hotel stay.

If this happens once, there’s no harm done: you can still use the Hilton points on a future stay. But if you find this happening over and over again, then you are probably valuing Hilton points too highly; they probably are not actually worth 0.5 cents to you, and you should be using a different, lower value for them when deciding whether to earn or redeem cash or a different currency instead.

The next dollar problem

On the redemption side this is a version of the “sunk cost” fallacy: it doesn’t matter what you paid for your points, the only thing that matters is whether you will save money by redeeming them now or holding on to them for later.

When it comes to personal finance, I call this the “next dollar” problem, which is closely related to my concept of compounding discipline: what do you do with the next dollar you earn?

Personal finance columns often set out to make these choices sound easy: should you use the next dollar you earn to pay off low-interest student loan debt or high-interest credit card debt? Should you invest in a taxable account before maxing out your retirement contributions?

Sometimes this is explicitly framed in terms of the next dollar, for example the advice to “save every raise” by increasing your 401(k) contribution rate each time your salary increases, so your take-home pay stays the same.

It’s not important to me in the slightest what you decide to do with your next dollar. The point of this exercise is to think about it in advance. For example, should you pay off credit card debt before you make IRA contributions? There are anti-debt and economic literalists who tell you the answer has to be yes: you should rank all your debt by interest rate, start and the top, and every dollar goes into paying off those balances one-by-one before you start saving money.

There are obviously people for whom and times when that’s the right decision, but it’s equally true to describe this as a decision between putting the next dollar into an account protected in bankruptcy or paying of a balance dischargeable in bankruptcy. The more likely you are to find yourself in bankruptcy court, the less inclined you should be to do your creditors any favors.

As for me, I’m currently putting my “next dollars” into Prosper peer-to-peer loans and towards filling up my fourth rewards checking account (if you’re wondering, I have two next dollars because investing with Prosper is an extremely slow process unless you’re willing to lower your risk threshold or increase your per-loan investment, neither of which I’m willing to do).

In a month or two I’ll have met my goals for both those accounts, but there will still be a next dollar. I still have a balance on my Small Business Administration loan from the pandemic with a 3.75% adminstered interest rate, which I could accelerate payments towards, although that’s a lower return than I’m used to getting from my next dollar; even cash in my brokerage accounts earns more. I’m far from the maximum annual contribution to my solo 401(k), so I could move my weekly contribution up, which has the advantage of providing automatic compounding discipline within the account itself.

Like I say, I’ve got a couple months to think about it, but thinking about it I will be.

This leaves me at loose ends when I need to book vacation stays for larger groups, whether it’s a family reunion or just friends getting together at the beach. Last April I tried to solve this problem by signing up for the Barclay Wyndham Rewards Earner Business card, but that didn’t pan out because Barclay wanted more information about my business than I was able or willing to provide, which put me back at square one when it came to booking an upcoming vacation in Florida.

Booking vacation homes is no treat

A curious thing that’s nevertheless impossible to avoid knowing about our late capitalist order is how abstracted it’s become.

The joke I always tell is that when Ticketmaster first started their grifting operation, “service fees” were a tax on tourists: if you lived in town, you could always go to the box office and buy your own tickets without paying the fee.

Today, if you go to the box office of a theater that uses Ticketmaster, they’ll charge you the same fee you’d pay online, and if you’re unlucky, an “in-person ticketing” service fee as well. This is, understandably, because they hate us and want us to become poorer, while they become richer.

I encountered a version of this situation while booking that upcoming stay in Florida. I knew early on that I’d need a rental that had multiple bedrooms and bathrooms, a kitchen, and was near the beach, but didn’t have any real idea how to find one. So I started checking which of my existing resources fit the bill.

• Hotels.com: I have a modest OneKeyCash balance, so booking a stay with their integrated VRBO platform seemed like a good start.

• Delta.com/stays: I have an American Express Delta Platinum Business card, which offers $200 off $200 in Delta Stays reservations per calendar year, so this could be a good way to knock that credit out early in the year — the earlier the better.

• US Bank Flexperks Travel Rewards: I have a balance of Flexpoints that are worth 1.5 cents each towards hotels and airfare, the equivalent of 3% cash back on grocery store manufactured spend.

To my surprise, these three booking channels produced entirely different results. US Bank’s travel booking portal didn’t show any home rentals at all, so those points were off the table. But to my (ultimately pleasant) surprise, Hotels.com, VRBO, and the airline booking portals offered the same properties, with different booking terms.

VRBO charges bizarre damage deposits, but their affiliate networks don’t

As I narrowed in on the specific area and properties I was interested in, I naturally started checking which booking portals would offer the lowest price after taking into account online rebates and credit card bonuses. VRBO had a 2% payout on the Capital One shopping portal, and I could use my OneKeyCash to reduce the upfront price, but I was taken aback by the final page of their booking process: a $1500 fee refundable “at the discretion of the host.”

It may go without saying but I don’t pay money “at the discretion” of anybody else. I once canceled a credit card in order to evade an overweight baggage fee that TAP Portugal tried (and failed) to charge me. I take this stuff seriously.

What I quickly discovered was that the same property I’d narrowed in on was available through airline affiliate booking channels, with neither the $59 protection fee nor the $1,500 damage deposit. I ultimately booked the property through Alaska Airlines’ affiliate channel, since I ended up using my $200 annual Delta Stays credit at a different property on the trip.

Conclusion

This is the kind of exercise that reminds me why I got into travel hacking, let alone blogging about travel hacking, in the first place. We are told throughout our lives that we are, in economics terms “price takers,” and that all the prices we pay for everything are determined in advance by forces far beyond our control.

But that’s not true, and the companies we buy services from don’t believe it’s true either.

We are, in fact price setters, because we get to decide what we’re willing to pay for. And the more tools we have to set our own prices, the lower the prices we will eventually pay.

We went to the baggage claim office and filled out the standard forms. I asked the woman minding the store whether we should expect the bags that night, and she said the last courier had already been dispatched so we wouldn’t receive them until the next day. So, we headed out to celebrate Christmas Eve.

I’ve had delayed bags before and was annoyed, but not worried. Carriers at large airports have contracts with local couriers to deliver bags, and we were only going to be 70 minutes or so away from the airport. I was also happy with the regular updates I was getting from American (the bags arrived at the airport on the next flight a few hours later, which obviously would have been good information to have in advance) and then later in the evening from FedEx saying that the shipping label had been created and that delivery was expected on December 26.

That didn’t happen. The bags sat at the airport until December 27, when we apparently passed them like ships in the night on our way for our next flight: we were going to Oregon for 10 days and still didn’t have any clothes but the ones on our backs. At that point, I said, “I’m on vacation, I’m not worrying about this, let’s replace everything.”

So when we arrived in Oregon, we headed to REI and did exactly that. For those who don’t remember the pivotal scene from 2014’s “Wild,” REI has a very generous return policy: almost everything they sell can be returned for a cash refund. We have an REI back home as well, so my logic was simple: spend as much money as we want replacing our stuff, and return anything that doesn’t get reimbursed by American Airlines and Chase, the issuer of the credit card I used to pay the $36.20 in taxes and fees on our award tickets.

Ultimately, between the two I was reimbursed for everything barely a month later.

Chase Ink baggage delay insurance

Like most such benefits, Chase’s baggage delay benefit is administered by a third party, in this case Assurant. To find out if your Chase credit card offers this benefit, you can navigate to “Card Benefits” from a dropdown menu on your Chase dashboard by clicking the three dots next to each card listed.

If your card has a baggage delay insurance benefit, you should see this tile or one like it once you select the “Travel” category:

My personal World of Hyatt Visa card and business Ink Plus and Ink Preferred Visa cards have this benefit (identical in all three cases) but my personal Freedom Unlimited Visa and my Freedom Flex MasterCards do not.

For a trip to qualify for the benefit, you must pay for the entire cash cost of the flight with the eligible card, whether that’s the cash fare on a paid flight or the taxes and fees on an award flight.

After settling in on the Oregon coast, I set up my account with Assurant and initiated my claim. I was able to do this entirely on my phone, although it probably would have been slightly easier on a PC.

I was able to initiate my claim without providing any documentation yet, since I wasn’t sure what they would ultimately need, and in these circumstances it’s always better to know exactly what they’re going to ask for so you don’t provide too much, too little, or too conflicting information.

Assurant’s document request

Later on the evening of December 27, I received an e-mail from Assurant with a linked document thanking me for my claim and providing a list of documents to submit:

“To avoid processing delays, please provide the following documents within 15 days:

• “A copy of the settlement payment or denial of payment from the Common Carrier claim (such as planes, trains and cruise ships)

• “Itemized Receipts for the essential items you purchased

• “Your Card Account Statement (showing the last four (4) digits of the Account number) demonstrating that the payment for the Trip was made on your Covered Card and/or with redeemable Rewards

• “Your Travel Itinerary

• “Documentation from the Common Carrier (such as planes, trains and cruise ships) indicating your baggage was delayed”

To make life as easy as possible for my claim manager, I titled each of these documents precisely as asked, and uploaded all of them but the first (my American Airlines settlement) on December 31:

On January 8 and 12, 2025, I received identical e-mails requesting the first, missing document again, which of course I still did not have.

American Airlines delayed baggage reimbursement

The reason Chase needed this final document is that, as you’d expect, credit card baggage delay insurance is always or almost always “secondary” to the reimbursement you receive from your common carrier for the same delayed baggage “event.”

However, this raised another question without an obvious answer: if the Chase baggage delay insurance is limited to $100 per day, for up to 5 days, would that $500 per passenger cap be applied before or after deducting the amount of reimbursement I receive from American? In other words, would receiving $500 in reimbursement from American “exhaust” my Chase baggage delay insurance without Chase having to pay me a thing? Fortunately, that didn’t turn out to be the case.

To apply for reimbursement from American, I navigated to this page, then expanded the “What happens next?” pane to reveal the buried “Submit a claim” button. Here, I provided the exact same information Chase required, plus photos of my baggage claim tags.

I submitted my claim on January 7, and on January 16 received an e-mail with the subject line “American Airlines Central Baggage Resolution.”

The e-mail took an oddly snarky tone, violating what seems to me one of the first principles of brand management, or even communication: if you’re doing someone a favor in order to create goodwill, don’t make a big show of how generous you’re being. The e-mail read in relevant part:

“We're reimbursing you in the amount of $9xx.xx for clothes and toiletries. Please note, that some clothes aren’t covered, because the clothes were purchased after you received the bags, the bags were delivered on December 27, 2024, at 11:25 am. We are making an exception to reimburse you for the items that are considered reasonable.”

As I explained above, the baggage was delivered after we had already left the state they were delivered to. From our perspective, the baggage was still delayed until we finally received it in Oregon on January 4, while from American’s perspective, they had already fulfilled their obligations on the morning of December 27.

I can see both perspectives, but rather than simply take credit for the gesture of good will, they decided to rub their “generosity” in my face, despite being the responsible party for the entire situation in the first place. As I said, this strikes me as an unforced error.

I received the check on January 27.

Back to Chase

With my settlement letter in hand, I uploaded it to the Chase portal on January 16, 2025. On January 24 I received an e-mail linking to the approval of my claim for the full amount of our expenses, minus the $9xx.xx paid by American. The next day I received an e-mail to register for Assurant’s payment portal (separate from the claim portal) and received an ACH for the amount due on January 27.

Conclusion and lessons learned

To get the obvious out of the way, this is an incredibly valuable credit card benefit, and I’ll never book a flight with a credit card that doesn’t offer it again. I spent over $1,000 on high-quality clothes and got every penny of it back — and I still got to keep the clothes!

On a more fundamental level, one of the sources of my stress was exactly the issue that American pointed to in their approval of my claim: on multi-leg Alaska Mileage Plan trips like this, I almost always book each leg as a separate ticket, since Alaska prices out awards as one-ways anyway. That meant neither American nor Alaska was correctly “tracking” us across the country. On future trips where I know I’ll be checking bags, I might work harder at getting each leg onto a single reservation.

But ultimately, this is a story about the need for two things: urgency and documentation.

The second your bag is delayed, you have permission to go shopping, and I suggest you take it immediately. I do a lot of my shopping at REI anyway, but picking any store with a generous return policy is a good way to give yourself “permission” to buy everything you really want or need. Replace your electric toothbrush (now I have a travel toothbrush and a home toothbrush). Buy your favorite brand of underwear (now I have a LOT of boxer briefs). Get a new raincoat.

And keep everything. I even filled up the little bag Hanes underwear comes in with the tags and labels from all the stuff we bought, just in case. A lot of the ink on receipt paper and baggage claim tags fades within a day or two, so scan or take pictures of them immediately. Do it in the parking lot. The e-mailed receipt from REI conveniently included images of the items we bought, which made it even easier to print that to a file I could submit online. Find and download the credit card statement your original ticket purchase appeared on.

And remember: they’re the ones who screwed up. Your’re not taking advantage of them, you’re being made whole.

Many years ago when I spent more time on the travel hacking circuit, I heard a guest talking about a then-current Office Depot/OfficeMax deal. She exclaimed, “it was worth doing with cash!” This made such an impression on me that it’s stuck with me through the years, and has exerted a kind of gravitational pull of commonsense that not all travel hackers are naturally endowed with, myself very much included.

Longtime readers will recall that over the course of the merger between Office Depot and OfficeMax, the stores continued to be operated independently (Madison, Wisconsin, where I lived at the time of this anecdote, had an Office Depot on one side of town and an OfficeMax on the other), but they had synchronized their weekly coupons. A common promotion at the time offered a $15 discount off the purchase of $300 in Visa or MasterCard gift cards (depending on the week).

The promotion worked at both stores, but the stores had different inventory and sales policies: OfficeMax had fixed-value gift cards that could be purchased with credit cards (like Chase Ink cards that earned 5 Ultimate Rewards points per dollar) and Office Depot had variable-value cards that could only be purchased with cash and debit cards. What this meant was that most people were stuck buying two $200 fixed-value cards with their Chase Ink cards, paying two activation fees, and earning a small profit before credit card rewards and liquidation costs.

The speaker at this gathering was making the simple point that $500 variable-value cards were worth buying without earning any credit card rewards at all: you could earn all your profit up front by buying $500 variable-value cards with cash, and not face any purchase restrictions at all; she could clear the store out, write them a check, and walk out with $1,000 in profit (after liquidation). As I recall, in this iteration of the promotion purchasing three $500 gift cards would trigger five $15 credits, for a pre-liquidation profit of $54.15 per 3-card purchase.

I still use this anecdote as a kind of quality control check when I’m exploring a new technique, or a new approach to an old technique, because it helps me break them into individual parts: which parts cost money? Which parts earn money? Is there a way to skip the parts that cost money and jump straight to the parts that earn money?

A simple example is bank account signup bonuses. Doctor of Credit curates an endless list of these bonuses, which typically let you earn a few hundred dollars for setting up a direct deposit and sometimes leaving some money in the account for a few months. Some of these banks also allow you to fund your initial bank account deposit with a credit card, usually limited to a few hundred or thousand dollars.

You can imagine someone taking these two facts and deciding “the best technique is to use my highest-earning credit card to fund accounts with banks with the highest new account bonuses that accepts credit card funding.”

In this example the error is clear: you should sign up for the highest new account bonuses regardless of whether they can be funded with credit cards. Accepting a $200 signup bonus instead of a $300 signup bonus so you can charge $500 to a credit card that only earns 2% in rewards is the purest false economy — use cash and earn the $300 instead.

Leverage

If ordinary Americans ever encounter the idea of leverage, it’s in one of two places: the purchase of a primary residence, and the gutting of the industrial and commercial giants of the 20th century. The principle is the same in both cases.

Given any amount of starting capital (including $0), you can earn an excess return on any investment through the addition of borrowed money: $100,000 spent on a $100,000 house allows you to earn the appreciation on a $100,000 house, but $100,000 spent on the down payment of a $500,000 house allows you to earn the appreciation on a $500,000 house. If you can’t make your mortgage payments, or the house craters in value, you can walk away with nothing but a stern warning on your credit report.

Likewise, in the leveraged buyout of a stodgy old industrial firm, investor groups can borrow against the assets of a company and strip it for parts. If they are able to unload the shell to some greater fool at a profit, then they’ve earned free money on the exercise. If not, they haven’t staked any of their own money on it to begin with anyway.

This is the core of the ideology of leverage: stake as little of your own fortune as possible to secure an equity interest with unlimited upside.

Against opportunity cost

Many pillars of elementary economics, which is as far as most business and finance journalists seem to make it, rely on the conceit of rational economic actors who are constantly operating at an “opportunity frontier.” That is to say, all their resources are optimally allocated across all available opportunities at all times. When a new opportunity comes along, the economic actor determines whether and how many resources to allocate to it by comparing it to all other existing opportunities.

I like to think of this as the “bump off” fallacy: each new opportunity is evaluated to see whether it should bump a lower-earning opportunity off the bottom of the stack of available opportunities.

The problem, which I have only become more aware of as I have become more experienced, is that virtually no one operates anywhere close to the opportunity frontier. This is frequently parsed by malicious people as “this generation would rather eat avocado toast than save for a down payment,” but I am making a much more literal argument: most people do not hold even their long-term cash savings in accounts that earn the maximum rate of interest available to them.

They are not guilty of anything for not maximizing their rate of return. There are only so many hours in the day, and too many people spend too many of them between working and getting back and forth from work. You would be insane to blame them for preferring dinner, a beer, and a football game than moving money back and forth between high-interest checking accounts.

The flip side of that is that “opportunity cost” is an absurd way to describe the choices of someone who is not operating anywhere close to the opportunity frontier.

You only get to keep the difference

There is a commonsense logic behind the concept of opportunity cost, however, which I use when making decisions about using cash or debt for any given opportunity: you only get to keep the difference.

That is to say, if an opportunity comes along that lets you earn (pulling a number out of thin air) 19.6% APY (1.5% per month annualized), and you choose to finance that opportunity with cash that’s currently earning 5.01% APY, then you shouldn’t take credit for the full 19.6% you see in returns, but only the difference between that and the return you would have earned on your status quo ante, a “mere” 14.59%.

Obviously I’m being a bit facetious: that would be an excellent thing to do with your cash savings, if you had to. But if you didn’t have to, and you could keep the whole whack, you’d be even better off.

Administered interest rates on credit card debt make a lot of things worth doing with debt

Back in November I described my distinction between “administered” and “market” interest rates. Credit cards offer a curious combination of the two: an administered interest rate of 0% on loans of between 15 and 50 days (depending on when the purchase falls in the statement cycle and the length of your grace period), and a (high) market interest rate on loans after each statement’s grace period has expired. A credit card earning 2% in cashback rewards offers even more favorable terms, the equivalent of a 2% yield, rather than interest charge, on each new loan you originate each month, as long as you pay it back in time.

Let me illustrate this with an example present at this very moment in the real world. The Giant grocery store chain is currently offering 2 or 3 points per dollar on the purchase of Vanilla Visa prepaid debit cards. Their variable-value cards still cost $6.95 (while Safeway’s cards have gone up to $7.95 in my region), so each purchase yields a profit of $3.05 or $8.05 in grocery rewards ($10 or $15 in grocery rewards less a $6.95 activation fee), minus any liquidation cost. This is a classic “worth doing in cash” situation: the profit is present however you pay for the gift card that generates it.

But remember, you only get to keep the difference. If you did pay with a debit card linked to an account earning 5% APY and it took 5 days to liquidate the gift card back into your balance, how much did it cost you? About $0.33 in interest, bringing your final profit down by the same amount.

In this situation, the rationale for using a credit card is obvious regardless of any rewards earned: why sacrifice the interest earned on your cash when you have access to a costless source of credit?

Inverting the logic of leverage

The common examples of leverage I offered, residential home purchases and corporate buyouts, have in common the basic conceit that acquiring ownership of a productive asset with borrowed money lets you secure a larger future income stream than you would be able to afford with your cash on hand, while enjoying an unlimited upside and capped downside.

What I am telling you is that these opportunities do not only exist at the tail end of the duration curve, the 30-year mortgage or the 10-year airline turnaround or the 5-year electric car plant retooling. The precise same logic applies at very shortest durations, where administered interest rates make debt free or profitable to take on.

When and where that is the case, using capital rather than debt to pursue the same opportunities puts a drag, rather than a tailwind, on your total investment return.