82 votes
Accepted

Credit card offering 0.5 miles for every cent rounded up. Too good to be true?

The catch is that you are paying the extra cents for nothing but miles. If you want to "boast" that you earned 10 miles per dollar, you have to also note that you paid $4.00 for $3.20 worth of coffee. ...
nanoman's user avatar
  • 29.7k
69 votes
Accepted

How do credit card companies know what type of business I'm paying for?

They Do this using the Merchant Category Code. See https://en.wikipedia.org/wiki/Merchant_category_code. This is assigned to the merchant when they sign up with the bank that is going to handle ...
Yogesh_D's user avatar
  • 626
62 votes
Accepted

How does the math work when buying airline miles?

Your experience might vary depending on the mileage program, but in most cases, buying extra miles is a waste of money. Some legitimate uses: If you are close to a redemption value you want, there's ...
Earth's user avatar
  • 1,379
57 votes

Credit card offering 0.5 miles for every cent rounded up. Too good to be true?

Imagine that you pay cash for everything and every day you come home and put your change in a jar. Say you have a month's spending: 3.40, 2.60, 7.10, 8.90 Now you have 22 dollars spent (gone forever)...
user3067860's user avatar
50 votes
Accepted

What can Amex do if I cancel their card after using the sign up bonus miles?

Note: I am not a lawyer; this is not legal advice. TL;DR: As Hart CO says in their answer, there is probably nothing they can do once you've used the points, other than close your card and, ...
TripeHound's user avatar
  • 9,171
48 votes

Gigantic point amount on rewards card - what are potential consequences?

I can't give you proper legal advice, but if I called their customer service and used half an hour of my time to wait and explain the situation in detail, and their official response was "just use the ...
Falco's user avatar
  • 625
38 votes

Gigantic point amount on rewards card - what are potential consequences?

I would behave exactly as I would expect it from others. If you were the one giving away too many points by accident you would be thankful if somebody notifies you about this error. You can write a ...
Freddy's user avatar
  • 803
31 votes
Accepted

Do mortgage points get applied directly to the principal?

When you pay points on a mortgage, you're paying to offset interest. The payment is essentially a fee, and does not decrease principal. In your example, if you pay $1,000 against a $100,000 mortgage, ...
dwizum's user avatar
  • 17k
29 votes

Credit card offering 0.5 miles for every cent rounded up. Too good to be true?

If I end up rounding even $20 I'll end up with 1000 miles and so roughly $10 to $12 in AA value. So you'll be spending $20 to get $10 to $12 worth of miles? You seem to be confusing earning mile as ...
Acccumulation's user avatar
25 votes

How does the math work when buying airline miles?

The most practical (though not necessarily cost effective) reason for buying miles is to reset your mileage expiry date. Most programs have some some of expiry built into them so that if you don't ...
RobV's user avatar
  • 410
19 votes

How does the math work when buying airline miles?

It makes a lot of sense for the airlines, obviously. If you are very near to a free flight, it might make sense to buy a small amount, but generally, it is a very bad deal for the buyer. Not everyone ...
Aganju's user avatar
  • 37.7k
19 votes

Gigantic point amount on rewards card - what are potential consequences?

If you want to maximize your expected benefits, at minimal risk of financial repercussions or sleepless nights, I would suggest the following. Send an email explaining the situation, and announce ...
Dennis's user avatar
  • 191
16 votes

How do credit card companies know what type of business I'm paying for?

They don't (through this route at least) know what you're buying, just where. So if you go to your gas station and buy food and no fuel it will display just the same as if you bought fuel. I've just ...
Chris H's user avatar
  • 2,555
11 votes

Credit card offering 0.5 miles for every cent rounded up. Too good to be true?

You're getting miles for 2 cents per mile on the round-up portion (80 cents -> 40 miles). The travel blog I most often read for miles hobbying estimates American's value at 1.4 cents per mile, based ...
user662852's user avatar
  • 8,389
8 votes

Credit card offering 0.5 miles for every cent rounded up. Too good to be true?

I don't think any of the other replies mentioned it, but the value of an 'airline mile' is also being intentionally obfuscated by many carriers today in what is a rather obvious way to devalue them. ...
R. Hamilton's user avatar
  • 3,226
8 votes

Gigantic point amount on rewards card - what are potential consequences?

Of course, as a 'good' person (or maybe a 'stupid' person), I should call them, (wait 30 minutes in the queue), and then try to explain the issue to the service desk. I actually did that, and the guy ...
Dheer's user avatar
  • 57.1k
8 votes

What can Amex do if I cancel their card after using the sign up bonus miles?

If you churn enough cards with AMEX they will blacklist you from ever getting another bonus with them again. I learned this the hard way. If I had realized this I would have kept my AMEX cards ...
Heather's user avatar
  • 339
7 votes

What can Amex do if I cancel their card after using the sign up bonus miles?

Remember there is a financial arrangement between the card and the airline mileage program. If you violate the terms and conditions with one there is an impact with the other. When you earn miles ...
mhoran_psprep's user avatar
7 votes

How do consumer reward point systems work?

Or is it just a marketing strategy to attract more customers? Attracting new customers is not the main goal. Keeping frequent customers and getting them to be more frequent (spend more) is the goal. ...
Mattman944's user avatar
  • 1,718
7 votes
Accepted

Should I save up my credit card points?

Pros of Saving Points When you do decide to redeem them, you won't have to worry about meeting the minimum threshold. If there are "specials" for redeeming (like getting discounted gift cards) you'll ...
briantist's user avatar
  • 3,014
6 votes

Gigantic point amount on rewards card - what are potential consequences?

An ideal option for you would be to use as many or as few as you choose, but have all of them available to you. The service desk guy told you you can do exactly that. Problem, though: you have no ...
kaay's user avatar
  • 161
6 votes

Credit card offering 0.5 miles for every cent rounded up. Too good to be true?

Other answers have corrected your misconceptions about the offer. Here is a blog post considering the offer under its actual merits: https://onemileatatime.com/barclaycard-aviator-card-flight-cents/ ...
stannius's user avatar
  • 5,301
5 votes

What can Amex do if I cancel their card after using the sign up bonus miles?

My question is, what can they do if I have already used the miles? All of the threat seems revolved around taking the bonus away, but what if it's already been spent? If you have used your reward ...
Hart CO's user avatar
  • 70.5k
5 votes
Accepted

How do consumer reward point systems work?

Coffee beans are apparently about 18 cents per cup, or about $2 to $5 at Starbucks. Let's use 20c and $2.20 for ease of calculation, ignoring other costs (or amortize them into the rounding). Suppose ...
Lawrence's user avatar
  • 9,362
4 votes

How does the math work when buying airline miles?

There are some rational reasons, I will provide one example. Please edit in if you have other good scenarios, we can make it a wiki answer. Some airlines count purchased miles as regular miles (not ...
Stian's user avatar
  • 1,104
4 votes
Accepted

Buying points on a mortgage

The questions you linked all look at the break-even time, meaning how long will it take to recoup the cost of reducing the future interest. In those analyses, using the nominal value of future ...
D Stanley's user avatar
  • 135k
4 votes

Buying points on a mortgage

I think it is more than reasonable. In my opinion, calculating the present value of both options is a good way to make the choice. Using this calculated value to determine the break-even point would ...
Xalorous's user avatar
  • 2,855
4 votes

What can Amex do if I cancel their card after using the sign up bonus miles?

I'd simply put this as a comment but don't have the rep... Just for the sake of completeness, I'd like to suggest an alternative: Simply ask AMEX if they will permanently waive the fee. I know this ...
eerick's user avatar
  • 141
4 votes

Do mortgage points get applied directly to the principal?

No, points do not affect principal balance, they are just a fee to reduce interest rate over the life of the loan. If it were just extra principal payment you could just put more money down initially (...
Hart CO's user avatar
  • 70.5k
4 votes
Accepted

Refinancing a mortgage: Can you buy points with cash out?

A "cash-out" refinance is just borrowing more than you currently owe, and "buying points" is just prepaying interest upfront. How good a deal the points are depends on how long you ...
D Stanley's user avatar
  • 135k

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