Using Paypal to generate miles?
 

Just wondering, would it be possible to send money to yourself (or a friend you trust :)) from your credit card, only to get it back in your bank account a few days later in order to pay off the bill? It wouldn't be a cash advance since Paypal charges show up as purchases and you would still get the points since you're not refunding anything...

Any ideas?

It would work but PayPal charges you fees to withdraw money from your account so your friend/yourself will have to pay a little for taking that money out from PayPal. It all depends on much the fees rack up upto and if its worth it.

Remember the ~3% paypal charges to receive funds from credit card

In my opnion this option is only worth it when you are a few thousand points or miles away from acheving the next tier in a program. For example American Express HHonors and SPG offer gold status to those who eather spend 20/30k a year. How ever otherwise to get a large amount of miles or points one is better off going to the airline or hotel directly. For example American Airlines sells miles for a typical 2.5% and if you pay with the citi advantage card you would also bring in extra miles. One other option that has been talked about is sometimes certain banks will let you open checking accounts by doing a credit card deposit.

Not true. There's a fee for receiving funds, but NOT for withdrawing to a bank account:

Withdrawl fees shown below:
Transfer funds to your bank account: Free!
Request a check from PayPal: $1.50 USD
Get cash out of an ATM: $1.00 USD
Shop online with a Virtual Debit Card: Free!
Buy from over 42,000 PayPal Shops: Free!

this was extensively discussed on FatWallet when Google checkout was free for merchants. I think that deal is now gone, and the merchant fees that PayPal charges would eat up any rewards - I think. If you can find a way around that, pls post away!

Google Checkout is free until 12/31/07.

THe fee's range from 2.5 to 2.9% depending on how much you purchase from your friend.

So 100k would cost you 2500-2900 dollars.

Not worth it, unless there is a promo, or you have a specific reward in mind where you were going to pay 4-5k for a J ticket or something like that.

Esp. as many airlines will let you buy miles for ~2.5 cents per mile. So not even worth the hassle for J/F.

Would this be worth to get miles if the charge is only 1.9% ? I know of a way to do that.

ONly you can answer that. Are you going to redeem them for a ticket that give you > 1.9cpm value out of them? and just becuase you are, is there no alternative that you would normally do for cheaper?

For instance, F to OGG Can cost $2000 so you could use 75k miles for that. But lots of times it is $1200 if you are flexible, or if you are on the West coast, most people will take a cheap coach Fare as an option as well...

All up to you

This is based on AdWords spend, though, right?

I don't spend any money on Adwords and it's still fee-free for me.

It seems like on the merchant side, you have to spend $1 on adwords for every $10 worth of transactions going through your store. Anyone else experience this?

Not through 12/31/07.
https://checkout.google.com/support/...y?answer=30724

Alright, in this case why is nobody opening up a store and using this to generate tens of thousands of points..?

Wouldn't it violate the agreement with the merchant bank or else visa/mc?

Well from the visa/mc standpoint, you're just making a purchase...

The only thing I could find in the Google Checkout Terms of Use is that "the Seller is not to use this Service as a means of providing a cash advance to the Buyer", which this sort of operation may be construed as...

I have two separate companies legitimately and I subcontracts with the other so could I have this done through google checkout? is there a limit on the amount. the # of $ is in the millions for the year...

and i'm not violating any cash advance stuff... currently company A buys/subcontracts services to company B and we pay wire transfer fees between each company which we would also eliminate with google checkout...at least for 2007

now there no AMEX double point promotion to use google checkout, is there:p

No limit that I could find in the Terms of Use, so this process seems perfect for you. Obviously read through it yourself to make sure but...

And I wish there was a promotion :)

Would this really be worth the cost?

Well, lets say you needed even 5,000 more SPG points on your SPG Amex to hit 20K. You charge 5K, get that back to pay the CC, and now youu got 20K. If you transfer that to an airline you get a bonus of 5K points.

Doesn't seem like a bad idea, but if you opened a account under your name and just kept charging under your name, I'm sure google would catch on. But if you and a friend opened an account.....

Oh just read this

Just have a friend paypal you and vice versa money back and forth.

You have to pay a 2.9% fee on credit card payments :(

As I understand it, Paypal only charges for withdrawals under certain limited circumstances.

They don't charge if you just take the money out and put it into your bank account. They do, however, charge you for the credit card transaction, making this not worth it...

I did a search for Paypal and this seemed the closest to what I was looking for.

I've not bothered with the BA Chase Visa (US based) until now but it has a deal where if you spend $30k in a calendar year you get a voucher for a free companion ticket when using miles. I've had a similar voucher with my BA Amex in the UK and it is excellent.

I've just signed up for the card and $30k before the end of the year in personal spend is likely to be difficult for me but a lightbulb came on about using Paypal. It seems a bad way to generate miles from a cost perspective but if I could spend around $30/$1000 to get this voucher it could be worth doing.

Is the information in this thread from 2years back still relevant?

Thanks
M :)

I wouldn't encourage you to generate spending this way.
Paypal has became very strict with sending large amounts of amount between personal accounts (using credit card).

In worst case scenario, you may be on the hook for large amount of money withhold by paypal and it will be very time consuming and pain stacking to get the money back from Paypal.

If you absolutely have to generate spending, I would suggest you looking in to low fee prepaid gift cards from visa, mastercard, american express or discover. So that you can use those prepaid cards well in to next year (the 3% fee you are paying on paypal might very well cover the interest you lose until you spend the gift cards).

I'm curious whether this applies to personal towards business accounts. I'm not clear why Paypal would/should care if you send money every month (say, $10k) from your own account to a corporate merchant account.

The benefits are huge - if you have a points multiplier on your card, say 1.5x, the txn fees are 2.2%, you are looking at ~$1,350 to get 100k points - which is nothing to sneer at.

I'm having trouble replicating your calculation. If the card earns 1.5 miles per dollar and the transaction fee is 0.022 per dollar, the cost per mile must be 0.0146, which is $1,466 per 100,000.

Sorry - you're right, my bad. Still, though - fr from the 0.03 airlines charge per mile.

1) I'm fairly certain IF PayPal finds out, it would be a problem.

2) Even if PayPal doesnt care, it's likely the cc companies would.

I'm not sure why either should care (Paypal get their txn fees, CC company gets the annual and a cut of the PP fees) but you may be right.

I emailed PP. let's see what they say :D

Financial institutions and governments care about any activity which shuttles money between accounts for no productive purpose. This is the essence of money laundering. They don't have the resources to evaluate whether you are doing it for some harmless motivation.

Indeed, but that's a very low standard. Airlines intentionally set the retail price of miles to consumers high. There are plenty of ways to generate miles through economically productive activity.

A fair point, hence why I was asking. It does seem like too much trouble for what it's worth - but that wouldn't prevent discussion, would it :)

Here I'm not sure I would agree. What would be other ways of generating miles at 0.01466 dollars per mile? Even in MR realm this is considered fairly good if I am not mistaken - and an MR implies flying to places you may not want to go to (leaving aside the fun of MRs, obviously) - not to mention potential loss of revenue from work (i.e. vacation days).

honestly IMO this sounds like a good idea, if your limit's high enough, if you had some sort of multiplier then at $1350 for 100k miles it would be well worth your time if you flew internationally a lot.