Originally Posted by
swat16
Don't forget to take into account the opportunity cost of putting your money in one of these accounts. Using your example of $10,000, you would lose $402 in interest if you put $10K into a BD account instead of a high-interest reward checking. For the past two years I have been banking at FDIC-insured and NCUA-insured banks and credit unions that offer 4.02% interest on up to $10K (some banks allow up to $25K). The only "catch" is you have to make 12 POS transactions per month plus one billpay or direct deposit. I personally rent Redbox movies or buy coffee for my 12 transactions. So if you are putting $10K in one of these accounts for the miles alone you're now spending $546 just to earn 12,000 miles, so you're spending $.0455/mile ($546/12000 = $.0455).
The above has been discussed Ad Nauseum in AA forum BD thread, just fyi.
Again, BD is not for those who are spreading 10K here, 25K there and deal with multiple institutions as well as have to perform monthly tasks in order to keep the accounts 0 monthly fee plus earning that high APY.
Folks using BD has high amount of idle cash that far exceeds the 10K here 25K there type of approach, and do NOT want to be bothered with those little tasks. For them, an annual trip in CX F to Asia is well worth the cost to acquire
SIZABLE AA miles.
Different asset levels requires different approaches best suited to different folks - it cannot be more obvious in this BD discussion which is really a redundant to the much more in depth BD thread in AA forum.