At FTU in DC last weekend, I presented “You can still earn 5X everywhere.”  Many of the tips I presented involved reload cards, gift cards, and Bluebird cards, but I also showed how you can earn 5X almost everywhere without gift cards.  In this three part series, I’ll show you how.

The cards shown above on the left earn Chase’s Ultimate Rewards points.  The cards on the right earn Citibank’s Thankyou points.  In this post, I’ll focus on Ultimate Rewards.  The next post will cover the ThankYou cards and I’ll finish up with a post about what to do with charges that don’t fit into the above buckets.

Ultimate Rewards

Ultimate Rewards points are my favorite form of currency.  Really.  All you need is one of Chase’s premium cards (e.g. Sapphire Preferred, Ink Bold, Ink Plus) to unlock Ultimate Rewards full potential.  For a frequent traveler, the points are better than cash.  If you want or need cash, fine.  Ultimate Rewards points can be exchanged for cash with a value of 1 cent per point.  Or, book travel through the Ultimate Rewards website and get 1.25 cents per point value.  Better yet, transfer points to any of numerous partners and you can often get far more value.

Additional transfer partners not shown above include Marriott and Priority Club.

Some of the best redemption options for Ultimate Rewards points are via partners.  Here are a few examples:

• Transfer to United Airlines and redeem for international business or first class travel on Star Alliance flights.  Redemption value varies widely but you can usually expect to get at least 3 cents per point value and often much more (if you find saver level availability).
• Transfer to Southwest Airlines and redeem for “Wanna Getaway” fares.  For these fares, you’ll get 1.67 cents per point value.
• Transfer to Hyatt for luxury stays.  Hyatt’s award chart tops out at only 22,000 points per night for their most expensive properties.  When redeeming for expensive hotel nights (think $500 and up) you can expect to get over 2 cents per point value.
• Transfer to British Airways and redeem for short non-stop flights on BA partner airlines (American, Alaska, Aer Lingus, LAN, etc.).  One great example that I’ve taken advantage of is to use BA Avios to book American Airlines non stop from Detroit to NYC.  Non-stop round-trip flights are usually $700 and up for weekday travel, but I was able to book the same for only 9000 points.  That’s a value of over 7.7 cents per point!
• Transfer to Amtrak and redeem for bedrooms or special routes.  With Amtrak’s special routes, they charge only 1500 points each way.  I’ve used this deal several times to ride the Wolverine train from Ann Arbor to Chicago.  Prices fluctuate widely, but in my experience I usually get over 3.5 cents per point value.  You can also do well by using points to book otherwise very expensive bedrooms for long-haul routes.

Sure, Starwood points are arguably more valuable per-point than Ultimate Rewards, but Ultimate Rewards points are much easier to earn and faster to transfer to partners.

5X almost everywhere

By filling your wallet with the right assortment of cards, you can earn 5 points per dollar almost everywhere you shop day to day.  Here are the Chase Ultimate Rewards cards that will help you get there:

Chase Ink 5X

I’ve said many times that the Chase Ink Bold (and its twin the Ink Plus) is my favorite card.  I even wrote a secure message to Chase to profess my love.  My feelings haven’t changed.

Chase Ink cards offer 5 points per dollar for office supply purchases, cell phone, landline, and cable.  Just by using an Ink card to pay your cell phone, landline, and cable bills you’ll rack up thousands of points.  And, of course, don’t forget to use the card whenever you shop at an office supply store.  Since Staples, OfficeMax, and Office Depot regularly offer specials that I blog about (such as Free after Rebate items and other lucrative discounts), the Ink card provides many ways to rack up points!

There are multiple versions of Ink cards: Ink Bold, Ink Plus, Ink Cash, and Ink Classic.  The Ink Bold and Ink Plus cards are premium cards with high signup bonuses (50K!) and $95 annual fees that kick in after the first year.  These premium cards award 5X for up to $50K per year of spend.  The Ink Cash and Ink Classic are no-fee cards with smaller sign-up bonuses.  These cards award 5X for up to $25K per year of spend.  For details of how these cards differ, please see “Preparing for Miles“. 

All of the Ink cards are business cards.  Yes, you do need a business to qualify.  If you have a new business (rental property, buy/sell things, consultant, blog author, whatever…) you do not need to lie about your business income, even if your income to-date is zero.  Hopefully you have other income or assets that you can also list to help assure Chase that you’re credit-worthy!  For more information, please see “How to sign up for the Ink Bold (or Ink Plus).”  If you have multiple businesses, you can get multiple Ink cards and you should get the signup bonus for each one (at least, that was my experience).

Chase Sapphire Preferred 4.28X

If you had to settle for just one rewards credit card, for most frequent travelers I recommend the Sapphire Preferred.  While it doesn’t offer any 5X categories, it does offer 2X for all restaurant and travel purchases, and it offers a 7% annual dividend on all points earned.  So, regular earnings are really 1.07X, and 2X earnings are really 2.14X.  With no foreign transaction fees, this is a great card to have in your wallet when dining or travelling (although it does lack a PIN at the time of this writing).  Of course, the card offers a terrific 40K sign-up bonus, so that doesn’t hurt either!

The trick for getting nearly 5X when using the card for travel expenses is to take advantage of the Ultimate Rewards Mall.  By initiating your online shopping through Chase’s Ultimate Rewards Mall, you can earn extra points above and beyond those earned by your credit card.  So, when booking travel, go through the Ultimate Rewards Mall to a site like Travelocity (which currently offers 2 bonus points per dollar) and pay for your travel with your Sapphire Preferred card.  With 2 bonus points from the Ultimate Rewards Mall and 2X earnings for travel with the Sapphire Preferred, you will earn 4 points per dollar.  Then, if you factor in the Sapphire Preferred card’s annual 7% dividend, you would earn 4.28 points per dollar.  It’s not 5X, but its awfully close!

Chase Freedom 5X to 5.5X

The final piece of the puzzle is the no-fee Chase Freedom card which offers 5X in rotating categories each quarter.  For example, this quarter, from April through June, the Freedom card offers 5X for restaurants, movie theaters, and Lowe’s.  Note that 5X earnings are limited to $1500 in spend each quarter.

If you have a Chase checking account, you will also qualify for a 10% annual bonus on points earned (see “The new king of the Ultimate Rewards Mall“).  This means that regular spend earns 1.1X, and 5X spend becomes 5.5X!

Wrap Up

The cards detailed above give multiple opportunities to earn 5 very valuable Ultimate Rewards points per dollar across many types of transactions: office supplies, cell phone, landline, cable, travel, and rotating categories.  In general, if you have competing cards that earn 5X for the same categories, I’d recommend going with the card that earns Ultimate Rewards points whenever feasible.

In the next post in this series I’ll show how it’s possible to earn 5X ThankYou points across many other categories of spend.  And, I’ll show you how to make the most of those points.

More details about the cards shown above,and signup links for each, can be found on either of these pages:

• Best Credit Card Offers
• Preparing for Miles

Caution

The purpose of this series of posts is to show how it may be possible to earn 5 points per dollar almost everywhere, but that does not mean that you should.  Not everyone can (or should) get all of the cards I’ve listed.  While it is true that between my wife and I we have all of the listed cards, this is not meant to be personalized advice for you.  Is this right for you?  Only you can decide.  And, as always, I do not recommend signing up for rewards credit cards unless you always pay your balance in full every month.  Otherwise the cost of the interest payments will far exceed the benefit of points earned.

Through the Ultimate Rewards Mall, you can currently get 15 points per dollar when shopping there.  By itself, that’s pretty good!  However, it’s worth noting that gift card purchases count too.

Double Dip for 30X

Two readers independently contacted me around the same time with information about their Shoebuy experiences. Both reported success in this double dip.  That is, you can go through the Ultimate Rewards Mall once to buy a gift certificate for yourself, and then go through a second time to use the certificate.  This results in 30X bonus points!  By using a Sapphire Preferred account, you also earn the usual 1 point per dollar for all transactions and the 7% annual dividend.  Altogether that brings this deal to 33.17 points per dollar.  Given the Fair Trading Price of Ultimate Rewards points at 1.31 cents each, this amounts to a 43% rebate!  If you need to buy shoes anyway, this could be a great option (assuming prices are reasonable).

Caution: It’s not all good

It’s worth reading Shoebuy’s gift certificate policies before buying.  In particular, note this one:

Shoebuy.com discounts (including Promotional Codes) cannot be used when purchasing or redeeming Gift Certificates on the Shoebuy.com website.

It’s common for stores not to allow promo codes or coupons when buying gift certificates, but it is very unusual not to allow them when redeeming certificates!  And, they really mean it.  One reader tried to use a $10 off coupon in conjunction with his gift certificate, but it didn’t work.  He called and spoke to a supervisor to see if they could apply the gift certificate and the coupon.  Nope.  Could they refund the gift certificate?  Nope.  In the end, I think he got more value from the double dip than he would have gotten from the coupon, so it wasn’t a total loss, but it probably wasn’t worth his time and aggravation.

Reader experiences

Have you bought anything from Shoebuy?  If so, what did you think about their products and services?  How do they stack up against a popular merchant like Zappos?

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Secure message regarding card ending in 0504:

My dearest Sapphire Preferred,

I remember when we met, it was love at first sight.  Your sleek beauty, your steel resolve, and your giving nature made you irresistible.  My fondness for you grew as we travelled the world and dined in fine restaurants.  I will always treasure the times we had.

I don’t know a good way to tell you this, but I’ve fallen for another. 

I know what you’re thinking, but no it’s not the one who goes by the initials S.P.G.  No, my dearest Sapphire, it is your sister Ink Bold. 

Ink is not as beautiful or as strong as you. When I first met her I thought she was rather dull — all business.  But, over time, I’ve grown to recognize her true qualities and my relationship with her has become more rewarding than I ever dreamed possible.

Can you ever forgive me?  I really would like to stay friends. There’s no reason we can’t still visit the mall together from time to time.  If you’ll have me, I know that our friendship will pay dividends year after year.   

Yours truly,

FM

While planning upcoming trips, a couple of Marriott properties have caught my eye.  They both received great reviews and are in perfect locations for where I want to be.  The downside is that neither has award availability for the time I want to go.  So, what are my options?  Can I double or triple dip my way to savings?  Can I get points for buying Marriott gift cards, and for using the gift cards to take some of the sting out of paying for a hotel?

In the past, Marriott has run promotions where they sold their gift cards at a discount or for extra points.  For example, a reader who goes by Jeremy E reported to me that he received 10 Marriott points per dollar when purchasing gift cards several months ago.  To my knowledge, there’s nothing like that available right now.  However, there are some good options for earning extra points through a triple dip:

Dip 1: Buy Gift Cards up to 9X

• By using a Chase Ink card that earns 5 points per dollar for office supplies, its possible to earn 9 points per dollar by going through Chase’s Ultimate Rewards Mall to Staples to buy Marriott gift cards.  5 points per dollar come from the Ink bonus category and 4 points per dollar come from the Ultimate Rewards Mall. 
• With the Sapphire Preferred, you can earn 5 points per dollar by going through the Ultimate Rewards Mall to Marriott.com to buy gift cards.  Two points per dollar come from the card’s 2X travel bonus, and 3 points per dollar come from the Ultimate Rewards Mall.  One reader, Jeremy E, who did this reported that the 2X for travel posted automatically, but he had to call Chase to request the 3X for the Ultimate Rewards Mall. 
• With any credit card, you can earn 3.5% cash back by finding the Marriott Gift Card store on Big Crumbs.  If you use the Marriott Premier Visa Card to make this purchase, you should receive 5 Marriott points per dollar as well.  Lets call this combination 8.5X (5X + 3.5% cash back).

Dip 2: Reserve stay via points / cash back portal up to 3.5X

• If you have access to the Ultimate Rewards Mall, go through the mall to Marriott to make the room reservations to get 3 points per dollar.
• A good alternative to the Ultimate Rewards Mall is to go through Big Crumbs to Marriott for 3.5% back.

Dip 3: Earn Marriott Rewards for your stay up to 15X

• Most Marriott properties automatically give 10 points per dollar.
• Platinum members are awarded up to 15 points per dollar.
• Prior to travelling, it is possible to request a Platinum Elite Challenge in order to get all of the perks of top tier status for your stay, including 15 points per dollar!

Add it up

With the triple dip listed above, it’s possible to get the equivalent of 27.5 points per dollar where “points” are a mix of Ultimate Rewards, Marriott Rewards, and cash.  If/when Marriott brings back the 10 points per dollar for gift cards promotion, you could do even better.  Use your Marriott Premier Visa Card to buy the gift cards for 5X + 10X = 15X.  By going through a portal for both purchasing gift cards and reserving rooms you get another 6X to 7X.  Then you get your 15X for the stay as a Platinum Elite.  That combination would give you a total of 36 to 37X!

20% off through Discover America?

Last April, ThePointsGuy reported a one day sale on Marriott gift certificates for 20% off.  This was part of the American Express Discover America promotion which is coming back this April!  I plan to watch this closely.  If the Marriott promotion comes back, I’ll definitely try to nab some gift cards!

Notes

The triple dip approach described above is stackable with almost all Marriott special offers such as their Megabonus offers.  One exception is that you cannot use gift cards for advance payment reservations.

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NOTE: Please also see a newer post: Hacking Hawaii Revised.

Last week, Mrs. Miler and I were at a dinner with friends when the topic of Hawaii came up. They’ve never been, but they would like to. Their kids have been begging to go, but they feel they need to save their money for future college expenses. I totally understand that, but it’s a shame. I’ve been to many wonderful places around the world, but Hawaii remains my favorite. The photo above is from a trip my family took to the town of Poipu on the island of Kauai. The water on the left, in this photo, is an amazing snorkeling beach. A few hundred feet to the right is a terrific boogie-boarding beach. From there you can ride the waves, watch sea turtles swim, and sometimes watch dolphins play. About a mile further along, are amazing sandstone cliffs which make for exciting and awe inspiring hikes. And all of that is just in the small town of Poipu! Venture out a bit more to see beautiful waterfalls, hike the Waimea canyon, and so much more! And, that’s just Kauai!

So, all of this ruminating gave me an idea and a challenge: find a realistic way for this family of four to go to Hawaii for free.

Hawaii is not an easy destination for this challenge. It’s almost impossible to find low award availability for reasonable dates and times, especially considering our friends would need to book for four. Remember, this needs to be realistic, so the dates of travel are fairly rigid: their kids are both in school so they need to go to Hawaii during a school break. Further, since they live in frigid Michigan, it would be nice if they could go in the winter to get away from the cold. Winter also happens to be the best time to spot Humpback whales in Hawaii. All of this means that they would ideally go during the kids’ winter break from school in February.

For experienced travel hackers, free travel to Hawaii is actually quite easy. The trick is to sign up for lots of credit cards which offer huge sign-up bonuses in the form of airline miles and travel points. Once enough miles and points have been accrued, the trick is to book award flights and hotel nights at the lowest possible cost in the form of miles and points. This is great, but it takes a while if you’re starting from scratch; and it takes a real commitment to learn the ins and outs of credit card signups, minimum spend requirements, award travel booking, and the like.

Instead, this post is for the real family: the one that doesn’t want to wait a year while accumulating points, and doesn’t want to sign up for dozens of cards. And, to make this challenge even harder, I’m going to assume that this family isn’t interested in gift card schemes for meeting minimum credit card spend requirements (e.g. How to meet minimum credit card spend AND get 50,000 to 100,000 extra miles, and How to meet credit card spend thresholds without breaking a sweat). In other words, I won’t ask them to sign up for credit cards requiring minimum spend thresholds that they can’t afford.

Assumptions

In order to make this work, I need to make some reasonable assumptions:

• This family has good credit ratings and has not recently applied for Chase credit cards.
• Both mom and dad will participate in the solution.
• Mom and dad always pay their full credit card balance each month (and will continue to).
• Mom and dad each spend, on average, $1000 per month using credit cards. Even if they don’t spend that much, today, the assumption is that they can by using their cards for all purchases possible: groceries, utilities, cable & phone, restaurants, coffee, etc.
• Mom and dad are willing to sign up for three credit cards each over the course of the year.

The Solution

(Updated on 10/29/2011 due to an error in the original post)

Instead of trying to accumulate airline miles, mom and dad will purchase a vacation package from Delta Vacations. I’ve written before about how it’s possible to save on airfare by buying a vacation package. For example, I found a package that matches up with their kids’ winter break that includes airfare for four and a mid size car rental for a total of $3,116. If they were to book airline tickets alone, without a package, the best current rate for the same dates would be $3660. So, by adding a car, they will save $544! You’re probably thinking that sounds good, but doesn’t sound free. You’re right! Read on:

Mom and dad will use credit card signup bonuses to pay for this trip. Additional credit card signups will provide lodging. There are a few big advantages to this approach over collecting and using miles for airfare. First, there is no need to wait before booking. Mom and dad can start planning their trip right away. Second, everyone in the family will earn airline miles from this trip! This is a long flight, so by the time they are done, the family will be well on their way to accumulating enough airline miles for another trip! Third, this approach includes a rental car. In my experience, to get the most out of a Hawaiian vacation, you really do need a car.

Step by Step

Mom and dad can follow these steps to get their vacation for free:

STEP 1: Sign up for two credit cards each

In one day, both mom and dad should sign up for these cards (note: I do not receive referral fees for any credit card signups):

Chase Sapphire Preferred

After $3000 of spend in three months, this card you will give mom and dad 50,000 Ultimate Reward points each which can be easily and instantly transferred to airline miles, hotel points, or cash.

Chase Marriott Preferred Visa

After your first purchase with this card, mom and dad will each get 70,000 Marriott Rewards points and a certificate for one free night in any category 1 through 4 Marriott!

STEP 2: Call the bank’s reconsideration line if either card is not approved

There is a chance that Chase’s automated system will deny one of the applications. Assuming mom and dad have good credit, though, they will almost certainly be approved once they talk to a real person. So, if either card is not approved, call Chase at this number: 888-245-0625. See also What to do when your credit card app is denied.

STEP 3: Use the cards!

When you receive the Marriott card, make a purchase right away: buy a coffee, fill up your gas tank, buy a $1 Amazon gift card, whatever. It may take a while to get your Marriott points so you want to get this started as soon as possible. Once you have made the first purchase, put away the card. Instead, start putting all of your spend on the Sapphire Preferred card in order to ensure reaching $3000 of spend in three months.

STEP 4: Book your Delta Vacation

Go to deltavacations.com and book a “Flight + Car Rental” vacation. You might have to play with the dates a bit to find the best price. For example, in order to find the $3116 fare, I put in a Sunday to Sunday trip. Returning from Hawaii is an overnight ordeal, though, so the kids will miss one day of school (Monday) if you do this.

Another trick to note has to do with picking your rental car. You might think that to get the best deal you should take the smallest car they offer. Look carefully at the rates, though, and you might find a better car for the same or even less money.

When you get to the payment screen, note that you can pay all at once or pay a deposit now and the rest a few months later.

If you can’t afford to cover the full amount right now from your savings, then just pay the deposit. Either way, make sure to use your Sapphire card since it will help you complete your minimum spend and you will get double bonus points when you use your card for travel purchases.

STEP 5: Book your hotel

Once both Mom and Dad receive their bonus Marriott points they will have a total of 140,000 points to use for redeeming free hotel nights. Marriott has many great resorts in Hawaii and pretty good availability for rewards, so you should be able to find something very nice. If you need a few more Marriott points, keep in mind that the bonus points from your Sapphire cards can be transferred directly to Marriott points! Another option is to find points plus cash options. For example, I found that at the Kauai Marriott Resort (see photo below), you could stay for the week for a total of 150,000 points plus $50 per night. Not bad!

STEP 6: Pay for the vacation, partially, with points

When it comes time to pay the balance of the Delta Vacation package, both Mom and Dad will hopefully have met the minimum spend requirements on their Sapphire cards and have received their 50,000 bonus points each. In order to meet the minimum spend, they had to charge $3000 to each card, so those purchases would have amounted to additional points. So, mom and dad will have, at least, 106,000 points at this time. Redeem those points for cash in order to get $1060 back. Use this money to help pay for the vacation package.

STEP 7: Sign up for one more card

With this link, the Chase Freedom card offers $300 cash back after spending only $500 in 3 months. As a rewards card, it gives 1% cash back on all purchases and 5% cash back on specific types of purchases (the types change every 3 months – currently it is for department stores, movie theaters, and charities). After having met the minimum spend on the Chase Sapphire cards, Mom and Dad should each sign up for this card and begin using it for all transactions until they have spent $500.

Wrap Up

For this seven night Hawaiian vacation including airfare for four, a rental car, and resort hotel, mom and dad will shell out a total of $3,116. Thanks to Chase credit card bonuses, though, they will receive a total of $1,660 cash back. So, in total, mom and dad will spend $1,456 which amounts to $364 per person for a fantastic trip to Hawaii! Additionally, each family member will earn approximately 10,000 airline miles that can be used towards future travel! If, instead, this family were to pay for this entire vacation (including lodging at the Kauai Marriott resort), it would cost $4,838 from Delta Vacations or much more if they booked the flights and hotel separately. With this plan, they would save, at least, $3,382!

So, this plan doesn’t quite get the family of four a free trip to Hawaii, but it makes it much more affordable. If you’re really committed to the “free” part, all it really takes is a few more credit card signups, such as this Citibank offer which will give mom and dad 50,000 Citi ThankYou points each after $2500 of spend. Another is the Chase Ink Bold which offers 50,000 Ultimate Rewards points after $5000 of spend in three months. If you go for this card, I’d recommend doing a single application and work together to meet the minimum spend. By redeeming the points from each of these cards (two Citibank cards and one Chase Ink Bold), you will get back over $1500 in cash and gift cards, and now your Hawaii vacation is truly free!

Do you have ideas or suggestions to improve this plan? Please contribute and post your ideas in the comments below!

In part one of this series, I introduced the idea of the quest for the perfect perpetual point machine. A perpetual point machine (PPM) is a scheme in which, after a little push, hotel points and/or airline miles are accrued over and over again, forever, with little or no additional work. In itself, this sounds great, but I also introduced some rules that would be necessary for the machine to be perfect:

1. The PPM may take effort and money to setup initially, but must not take much effort or money to keep it going.
2. The PPM must be able to generate hundreds of thousands of points per year.
3. The PPM must do no harm.
4. The perfect PPM would also somehow do some good for the world, not just for the recipient of the points.

I’m not going to claim that I’ve found the perfect PPM, yet, but today I will introduce a scheme for an imperfect PPM that could nevertheless result in hundreds of thousands of miles for anyone who wants to put in the effort. This scheme capitalizes on an opportunity I’ve written about before to double-dip on Ultimate Rewards bonus points for shopping at Sears. Through the Ultimate Rewards Mall, you can buy Sears gift cards and earn 10 bonus points for every dollar spent. These bonus points can be redeemed directly for cash (at a penny each), so you can essentially buy Sears gift cards for 10% less than face value. The double-dip comes when you go through the Ultimate Rewards mall a second time and purchase Sears merchandise using the gift card. Even though the mall makes it look like you need to use your Chase credit card for purchases, several readers have asserted that you will receive bonus points for purchases that use gift cards. I am testing this theory and will post with the results as soon as I can. Assuming it is true, it means that it is possible to buy anything you want from Sears online and receive 20% back in the form of Ultimate Rewards points. A nice little bonus is that if you sign up for the Sears Shop Your Way program (it’s free), you will get an additional 1% back in the form of Shop Your Way points. So you’ll really get 21% back for all Sears online purchases.

NOTE: AS OF NOVEMBER 2011, SEARS PURCHASE BONUSES HAVE DROPPED TO 6 POINTS PER DOLLAR

The Sears Double Dip Machine

This Perpetual Point Machine idea is to buy items from Sears and re-sell them at lower cost, over and over. You can discount these products up to 21% off and still come out ahead. How? By using the Chase Sapphire Preferred card for its outstanding rewards. In addition to 1 Ultimate Reward point for every dollar spent, this card also offers a year-end bonus of 7% of all points earned. If you were to buy and sell $10,000 of Sears merchandise per month without profit, you would still earn 10,000 base points per month from credit card spend and even more thanks to the year-end bonus: Through the double-dip, each 10,000 of spend amounts to 200,000 UR extra points plus 10,000 base points. Your end of year bonus, then, would be 7% of 210,000, which equals 14,700 bonus points per month. So, in total, you would earn 24,700 UR points each month for a grand total of 296,400 points per year!

This probably sounds like a ridiculous amount of work in exchange for a few hundred thousand points. Consider this option, though, to make it much easier: list for sale high end, low margin products on eBay or Amazon before you have bought them. When someone orders an item from you, go through the Ultimate Rewards portal to Sears to buy enough gift cards to cover the purchase. Then, go through the mall again to purchase the item (using the gift cards) and have the item sent directly to the buyer. That way you never have to deal with having unsold stock on hand, and you don’t have to worry about packing and shipping! By concentrating on high end products, you will have fewer sales to deal with. If, for example, you can sell just five $2000 laptops or TVs per month this way, you would do well.

When pricing your items, you need to account for all of your costs: vendor fees from eBay or Amazon, sales tax, shipping fees, etc. I’ve done the math for a few sample products and have found that it is still possible to undercut the cheapest vendors (on Amazon, for example), but there isn’t much room for error. Also, it is critical to find items where Sears has a good price relative to the competition. Otherwise you’re out of luck.

Why this machine is imperfect

1. It takes more work to setup and keep going than I’d like. Personally, I wouldn’t want to deal with cranky customers who have shipping problems, product questions, and returns.
2. Sears will catch on. At some point, Sears will figure out the double-dip scheme and close the loophole.
3. This PPM does not fit the “do no harm” rule. At the very least it hurts Sears’ margins. At worst, they lose money on every one of these sales.

Still Searching

Personally, I’m not planning to do the Sears Double Dip machine. How about you? Instead, I’ve been working on another scheme that could meet all of the criteria for a perfect perpetual point machine. I’m happy to report that this scheme does not involve Sears or Ultimate Rewards in any way. On the down-side, it has been harder to get it going than I had thought. I won’t reveal the details of the new scheme just yet, but I’ll give a small hint: I put together a new website called “Best Travel Hacks“. This site is itself an attempt at a perpetual point machine. Yes, “Best Travel Hacks” is, itself, a travel hack! I think, though, that people will find it useful as well. Look for more info soon.

See also:

• The Perfect Perpetual Point Machine, Part 1
• The Perfect Perpetual Point Machine, Part 3
• All Perpetual Point Machine (PPM) Articles

As I’m sure you know, credit card companies frequently offer huge sign-up bonuses. NerdWallet, for example, lists seven current bonus offers worth at least $500 for signing up for credit cards and meeting minimum spend thresholds. Signing up for the cards is the easy part. Meeting the minimum spend thresholds can be harder. Recently I posted a way to meet minimum spend thresholds without breaking a sweat. In that post I detailed how to easily buy and liquidate American Express gift cards in order to meet your spend requirements. For some, this will still be the best way to go, but in this post I’ll offer up another option that will let you meet the spend requirements and earn huge numbers of extra bonus miles.

In previous posts I’ve talked about how the Chase Ultimate Rewards mall offers 10 extra points per dollar spent at Sears. See, for example, this post or this one. What I didn’t know at the time was that you do not need to use your Chase card when making purchases through the Ultimate Rewards mall. A reader named Scott pointed this out to me yesterday. He has reported success in going through the mall to buy Sears gift cards, and then going through the mall a second time to make Sears purchases using the gift cards. What this means is that he was able to get not just 10 extra points per dollar spent at Sears, but 20! This amounts to, at minimum, a 20% rebate on Sears’ purchases since Ultimate Rewards points can be redeemed for cash for a penny each. Better yet, use the points to purchase travel via Ultimate Rewards and the same points amount to a 25% rebate. And, best of all, if you value airline miles at 1.5 cents each, you can transfer Ultimate Rewards points directly to airline miles, which then amounts to a 30% rebate! As if that wasn’t enough, remember that if you have the Chase Sapphire card, you will get an annual bonus of 7% for all points earned during the year. So, those 20 extra points earned for Sears’ purchases will net you an extra 1.4 points per dollar spent at the end of the year! Or, if you have the Chase Ink Bold card and a Chase checking account, instead of a 7% bonus, you can get a 20% end of year points bonus!

So, the basic idea here is to use this trick to meet your minimum credit card spend and get huge numbers of extra miles! For the purpose of this example, I will assume that you signed up for the Starwood Preferred Guest (SPG) card which requires $5000 in spend to get the full 25000 points. I’m purposely picking a non-Chase card just to show that it is possible. Adjust the directions below to your situation. Wherever I say to use the SPG card, use instead whatever card you have for which you need to meet spend requirements. Also, this example assumes you need to spend $5000. For your card, you may need to spend less, which is perfectly fine. OK, so with that out of the way, here is how to do it, step by step:

NOTE: AS OF NOVEMBER 2011, SEARS PURCHASE BONUSES HAVE DROPPED TO 6 POINTS PER DOLLAR

Step 1: Make sure you have access to the Ultimate Rewards Mall

If you have the Chase Sapphire Preferred credit card or the Chase Ink Bold business charge card, then you’re good to go. If you don’t have either, I highly recommend signing up for one (or both) since they offer great sign-up bonuses, and they offer great rewards for day to day spend as well. Once you get one of these cards, make sure you can sign into your account at chase.com. From there, you should see a link to Ultimate Rewards.

Step 2: Sign up for the Starwood Preferred Guest (SPG) card (or any new credit card offering a big bonus)

If you haven’t already picked out which credit cards to sign up for, or if you’re still wondering whether it’s a good idea, you’ll find a few useful links here.

Step 3: Browse to the Ultimate Rewards Mall

Browse to www.ultimaterewards.com/mall and login with your Chase ID and password. Find and click on Sears to shop at the Sears online store:

Step 4: Buy $5000 worth of Sears gift cards using your SPG card

Sears has a limit of $500 per card, so you will need to buy at least 10 cards. I’d recommend, though, getting a mix of different value cards since smaller denomination cards can come in very handy as gifts (and, the holidays are coming up, you know!).  I also recommend ordering the physical cards rather than the e-cards (or a mix of both) because if you need to it is possible to sell the physical cards to PlasticJungle for 83 cents on the dollar. People have reported having trouble trying to do the same with e-cards.  But, only sell the cards if you need the money immediately for paying off your credit card bill.  Otherwise, there are much better uses for the card (as I’ll show later in this post).

Note that you will most likely get a call from Sears’ fraud department. That’s OK! You haven’t done anything wrong, and they are just doing their job. Be polite and answer their questions and you’ll make it easily through this step.

At this point you will have now met your minimum spend requirements AND earned 50,000 Ultimate Rewards points! Remember that you can transfer these points instantly into valuable airline miles or hotel points!

Step 5: Use the Sears gift cards wisely

The reason this trick works is that Sears gift cards are incredibly versatile, and they never expire.  So, if you can afford to, take your time and spend the cards for purchases you would have made anyway.  The cards can be used at Sears, Land’s End, or Kmart. As much as possible, you should use the gift cards online because you can go through the Ultimate Rewards mall a second time in order to make these purchases! This means that it is possible to turn the $5000 purchase of gift cards into an additional 50,000 Ultimate Reward points. In total, you will have earned 100,000 Ultimate Rewards points from this trick and that’s before counting your annual extra bonus of 7% (for Chase Sapphire card holders) or 20% (for Chase Ink Bold + Checking account holders)! Also, remember to sign up for Sears’ Shop Your Way program which will give you an extra 1% rebate on all purchases.

If you’re still scratching your head about how you can possibly make good use of $5000 in gift cards, here are some ideas:

Gifts:

As mentioned earlier, you can give the gift cards away directly as gifts. A better use, though, is to order gifts through the online store so as to earn bonus points a second time!

Shop for clothing:

Land’s End sells terrific clothes, and they accept Sears’ gift cards!

Every-day staples:

Whether you need shampoo, tissues, detergent, etc, it’s all available at Kmart.

Automotive needs, home improvements, appliances, tools, electronics:

It’s all available at Sears.

Charity:

Consider buying (online, of course) new toys and warm clothing to give to the needy for the holidays. Keep your receipts and take deductions at tax time!

Sell the cards:

If you really need cash, you can turn the gift cards into real money through PlasticJungle.  While this deal is currently available, I can’t guarantee that it will continue (especially if this hack becomes popular!).  They currently pay 83 cents for each dollar of Sears gift card value.  On the PlasticJungle website, make sure to select “Get Paid” rather than selecting either of the Instant Funding options:

Conclusion

If you can afford to have your money locked into Sears gift cards, you can earn amazing amounts of extra miles and points.  Remember that all of these points are in addition to the miles and points you will earn from credit card signup bonuses!

For those of you who love to get stuff from Land’s End, here’s an outstanding deal.  If you shop Land’s End online by going first through the Mr. Rebates shopping portal, you can get 30% off the highest regular priced item, free shipping, AND 5% cash back.  But it gets even better (much better):  If you have a Chase rewards card with access to Chase’s Ultimate Rewards Mall, you can get an additional 12.5% back (in travel rewards).  Then, you can get another 1% back through Sears’ Shop Your Way rewards!  That means, if you purchase a single regular priced item, you will get back 30% + 5% (of 70%) + 12.5% (of 70%) + 1% (of 70%) = 42.95%!

Follow these steps:

1. Browse to the Chase Ultimate Rewards Mall and find Sears.  At the time of this writing, purchases from Sears via this portal are rewarded with 10 Ultimate Rewards points per dollar.  With UR points worth at least 1.25 cents each when redeemed for travel, that’s equivalent to a 12.5% rebate.  However,you want to buy from Land’s End, not Sears.  So, go to Sears from this portal and buy an e-gift card in the amount you need at Land’s End.  Sears owns Lands End, so a gift card from Sears will work at Land’s End.  It may take an hour or so to receive your e-gift card.

2. Go to Mr Rebates and log in (if you don’t already have an acount with Mr Rebates, you can do me a huge favor by signing up via this link.  Thanks!).  Find Land’s End, and notice they are offering a 5% rebate.  Also notice, there are some links for special deals.  The best deal, at the time of this writing, is one that says “30% off Highest Regular Priced Item + Free Shipping on $50+ Order”.  Click through that link to shop at Land’s End.  When shopping at Land’s End, make sure to pick a large item that is not on sale in order to get 30% off that item.  Before you checkout, though, read step 3:

3. Make sure you belong to Sears’ Shop Your Way Rewards program.  When checking out of Land’s End, enter your Shop Your Way Rewards number.  You will earn 1% back.  Note: you won’t earn Shop Your Way Rewards for the e-gift card, but you will earn for your final purchase.  Don’t forget to use your e-gift card to make your final purchase.

If you bought just a single regular priced item from Land’s End, you should now have the equivalent of 42.95% off!

To make things clearer, let’s walk through a scenario:

Suppose you see a nice jacket at Land’s End listing at $259.  Here’s what to do:

STEP 1: Figure out how much Sears credit you need.  $259 – 30% = $181.3 + tax.  I don’t think they will let you buy a gift card for exactly that much, so instead, buy one for $200.  By going through the Ultimate

Rewards mall, you have now earned 2000 UR points worth at least $25 in travel.

STEP 2: Via Mr Rebates, click through the 30% off link to get to Land’s End.  Find the jacket and add it to your shopping cart.  Thanks to the 30% discount, you save $77.70 right away.  The checkout amount should be approximately $181.30 (I say “approximately” because tax isn’t accounted for in this example).   Because you went through Mr. Rebates, this purchase will get you 5% cash back ($181.30 * .05 = $9.07 cash back)

STEP 3: Checkout.  Use your Sears e-gift card to pay.  Make sure to enter your Shop Your Way Rewards number to get an additional 1% back ($1.81)

So, let’s look at the final tally:

• You spent $200 to get a gift card
• You received $25 + $9.07 + $1.81 = $35.88 back in cash and travel
• Your total outlay for the $259 jacket is $200 – $35.88 = $164.12
• Depending on how much tax you were charged, you still have some Sears’ credit to spend!