prasha11

Why are you so mixed up?

We did the grocery shopping to feed AmEx for 5% reward. Everyone for a year was singing happy songs about MSing. Suddenly AmEx goes on the starvation mode refuses to accept our groceries and starts shooting (someone gave them a gun? no, they always had but never used!)
Such irrational behavior comes under hostage situation or bullying…who is that? We need to find for answers….

MileageGoblin

You didn't feed Amex anything. You starved them 3%+ of every transaction on net input/output. I've had OBC since 2002, but the Frank-Dodd act just enabled the use of GC debit card pins in the past few years which facilitated MS on this card. Amex took notice of this aberration and shut it down for the big abusers.

BeyondtheWrap

Pretty sure the CC companies would disagree with that statement.

prasha11

1) Are you suggesting we are the scoundrels and must feel guilty?

2) It took AmEx almost a year to notice the 'aberration'? in high frequency trading technological environment? you must be naive to suggest that....

VegasGambler

When dealing with a big company, everything moves slowly. It's not just one person making a decision.

hargobind

I think it's a handout. It's available for all, some just choose not to do it. Imo

ICEE45

I think the red part only applies to AMEX cards. Don't see that on cards such as Chase Sapphire:

"To qualify and receive your bonus, you must make Purchases totaling $4,000 or more during the first 3 months from account opening. ("Purchases" do not include balance transfers, cash advances, cash-like charges such as travelers checks, foreign currency, and money orders, any checks that access your account, overdraft advances, interest, unauthorized or fraudulent charges, or fees of any kind, including an annual fee, if applicable.)"

No mention of prepaid cards or gifts cards, so it's fair game.

ICEE45

A handout is free, such as someone giving you food or money for doing nothing. MS takes at minimum some thinking, planning, and action. Some are better than others because they've figured out a better process. Certain jobs are available for all to do, but some just choose not to do it. I wouldn't call that job a handout.

Despite MS, credit card companies are probably still making a killing on these bonus programs. The transaction fees, interest charges on unpaid balances, and other fees such as late payment, balance transfer, and cash advance > a small percentage of people MSing. MS is tolerable because you can bet that Americans will carry some sort of balance forward and that is the cash cow. Lure them in with big bonus and take the shirts off their backs with high interest rates.

I meet a spending requirement through MS and receive some miles. I sell those miles to a third party broker, who then books a discounted ticket to one of his clients. In this case all three parties now have more discretionary income. The credit card company loses out a little bit. This is my definition of trickling down economics.

iflyjetz

I bolded the pertinent part.

Charging your Sapphire to put money on prepaids or gift cards is a cash-like charge. They are cash equivalents. Cash equivalents are assets that are readily convertible into cash.
Are you not able to convert prepaids and GCs into cash? In a nutshell, that's MSing.

There's not much grey; it's pretty black and white.


As far as the entire thread, you're getting paid to do the equivalent of digging a hole one day and filling it back in the next. There are losers that pay for you to do this. When the losses are great enough, they change the rules to make it prohibitive/impossible to continue that particular aspect of the MS game.

AlohaDaveKennedy

Not mixed up at all. Like the Giant Panda, the stomach of the Giant Banker has just evolved to the point that it can no longer digest the common food from your grocery shopping. Nature restricts the diet of the Giant Banker to bamboozling - LIBOR gaming, illegal foreclosures, money laundering and beggaring taxpayers.

littlewinglet

I prefer to think of it as day-trading in plastics futures.

jan_believes

Call me naïve but Hank Paulson (knowing the point of moral hazard must be made) figured out a way to approach the economic downturn by strong arming the US banks to accept the $ (TARP), which was just "paper" (added to the debt) anyway, and churn it back to the gov't with interest, again was just "paper" from the Fed again. I think he hoped to make a point and subtly say, don't let this happen again. Couldn't do anything on the Euro side, but he took this side of the pond as his responsibility and domain. He was on his way out so he couldn't guarantee it anyway.

Problem: Once the banks got the money, they decided not to lend. Their revenge, perhaps. Then, they took a look at main street (community banks) and probably lobbied for them to go under. As, if they would not already be a target. Some were probably badly managing their loans anyway, pushing boundaries. Contagious, at the time.

I don't think anybody at the time had a better idea. Even great minds can't resist an extended lunch break.

(JMHO, be kind)

TheDapperDon

This dude throws ML around and other foolishness. I don't understand the point of this thread or his presence in this forum.

ICEE45

Ok, it's black and white and it's MSing.^ But at least it's not a handout. With all of the credit card spending bonus offers continuing to flood the market, it's obvious that it is still a lucrative business for the banks and credit card issuers. Interest on unpaid balances are a huge cash cow. In my view, the credit card companies will stop these spending bonuses if more people paid off their entire balance every month. I wouldn't worry about that.

If their losses are so great (due to MSing) and they change the rules to make it prohibitive/impossible to continue that particular aspect of the MS game, then I say adapt to the changes or get out of the game. The game is constantly changing and when one door closes another one pops open. That's life.

gloobnib

This sums up MS in a nutshell.

To address the OPs question, MS is an economic inefficiency that is being exploited by a small handful of people for personal gain. In all honesty, it is "immoral" in an economic sense in that it creates incentives for people (like me) to expend resources (time and energy) towards an activity that frankly has no point in the larger scheme of things.

Are people who MS acting "rationally"? Yes (by definition) or we wouldn't be doing it. Is it "rational" or "efficient" from an economic standpoint? No.

Frankly (pun intended) MS, as practiced by most people here, is a textbook case of unintended consequences and deadweight loss that is introduced as a result of government intervention (Dodd-Frank and the ruling that gift cards must have a PIN). Nobody designed the system to work the way it does; we MSers just learned to exploit the loophole/unintended consequence.

So, in short, it is immoral, doesn't benefit society and serves no useful purpose. But that doesn't stop me from participating!