I began blogging as FrequentMiler with a goal of simplifying free travel. As a newbie to travel hacking I was amazed by the opportunities that existed, but also overwhelmed by the complexity. There seemed to be countless tips and tricks all of which required understanding arcane airline specific rules, hotel policies, credit card bonuses, and the like. It seemed to me that I could do a service by writing a dead-simple “how-to” blog targeted to those who don’t want to dig through mountains of Milepoint and FlyerTalk threads or read dozens of blogs a day.
Instead of making things simple, though, I think I’ve done the opposite. I’ve posted complex schemes for buying and selling gift cards, triple-dip shopping, and buying miles for less than a penny. I plan to get back to my original goal (soon, I promise!), but for now I’ve become obsessed with trying to find the perfect perpetual point machine. A perpetual point machine is a scheme in which, after a little push, points and/or miles are accrued over and over again, forever, with little or no additional work. I truly believe that the perfect perpetual point machine is out there. We just have to find it!
Actually, an awesome perpetual point machine already exists and is well known: credit card sign ups. Much has been written about the incredible signup offers that are readily available to people with good credit scores. Simply by applying for a handful of cards and meeting minimum spend requirements, you can earn thousands of dollars worth of travel rewards with very little effort! Every three or four months, you can apply for more cards and earn even more free travel. It’s simply amazing. If you’re not already taking advantage of some of these deals you should seriously consider it!
So, if there is already such a great perpetual point machine available, why am I looking for another? To me, this is a great game in which we win by earning huge amounts of points for very little effort or expense. Since the credit card machine is already so well known, playing that game only gets us to even ground with everyone else who is playing the same game. If we find a new machine, though, we’ll get ahead! In the end, hopefully, everyone will have fun along the way, and everyone will go home with the prize of free travel.
So, how about it? Do you want to help in the search for the perfect perpetual point machine? If so, here are some criteria to help us judge whether we’ve found it:
- The Perpetual Point Machine (PPM) may take effort and money to setup initially, but must not take much effort or money to keep it going.
- The PPM must be able to generate hundreds of thousands of points per year.
- The PPM must do no harm. In my earlier post “Perpetual Point Machine… Not!” I described a failed scheme to buy gift cards with gift cards and earn miles each time, indefinitely. The problem with that scheme is that, if it had worked, it would clearly harm the retailer who would have been responsible for buying all of those miles.
- The perfect PPM would also somehow do some good for the world, not just for the recipient of the points. Kiva loans are a great example of this, but the number of points that can be accrued annually is limited by the amount of money you have available to loan. For most people, this won’t come anywhere near the goal of achieving hundreds of thousands of points per year.
So that’s it. Did I miss any important criteria? Do you have any great ideas that qualify? I actually have an idea that might meet all of the criteria. Before I publish it, though, I want to try it out because I’m not really sure it will work. Once I’ve had time to try it out I’ll blog all about it. In the meantime, what are your ideas?
See also:
- The Perfect Perpetual Point Machine, Part 2
- The Perfect Perpetual Point Machine, Part 3
- All Perpetual Point Machine (PPM) Articles
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Looking forward to your update! Can you share a teaser?
Thanks! I’ll publish more very soon! I’m working on two PPMs (perpetual point machines). One takes advantage of Sears gift certificates (no surprise there!). The other holds more promise, but is going to be much harder to get right. I won’t give away anything about that one yet, except to say that no gift cards or shopping portals are involved 🙂
There’s no way this would work. If you were producing hundreds of thousands of points a year, someone needs to buy those points from the airline. Even if we assume an incredibly small purchase price of 0.1 cents per mile, that doesn’t matter. Someone is paying for the miles.
If someone is paying for the miles, you better be giving them something in exchange. The CC bonuses and other “great deals” for earning miles with purchases are all cases where someone didn’t plan the promotion very well. They’ll still make money on the average Joe who carries a balance or redeems for bad awards, but they’re losing money on you. So no matter what happens, if you’re getting a good deal, they’re getting a bad deal. I don’t try to “do no harm.” I intend to do harm. I just assume that I’m not doing enough harm to ruin the entire system.
Kiva may be a nice way to earn miles while helping others, but that still doesn’t mean it’s a great deal. You could put a ton of money into Kiva and earn miles instead of interest, or you could invest the money and split the interest between yourself and donating it to charity. Take $10,000 at 5% and you’ve got $500. At 2 cents a mile, that’s equivalent to 25,000 miles. Alternatively, if you reinvest $10,000 each month with Kiva, you might earn 120,000 miles, but you’ll also be hurting Kiva unless you pony up an additional donation to cover their operational expenses (I’m sure they’re paying a percentage for each CC transaction).
@Scott, I understand the skepticism. If I were you, I probably wouldn’t believe it either. However, I do have a scheme in mind that I believe will work. I will post info about it once I’ve tried it out. As to Kiva, you have some good points there too. If your entire goal is to maximize returns, then you can use those returns to do good for yourself and others. However, I’d argue that Kiva loans may do substantially more good than a portion of 5 percent since 100 percent of the loan is used (and repaid) by a person trying to earn a living. I don’t know whether Kiva has to pay credit card fees: they are partnered with PayPal and it may be the case that PayPal covers those fees as a sort of donation themselves.
Doesn’t credit card churn harm your credit rating?
No. My rating has gone up up up for the past 2 years and have earned 3+ million miles and have run some 40 cards.
I too miss the mint – ah the days of paying my mortgage with coins – so much fun!
If its out there, I’m sure you will find it. As a new follower to the scene and to you, this blog is OUTSTANDING! I hope you can meet all of your criteria and share. Soon!
@tarheel thanks! And, more importantly, GO HEELS!
It was called mint coins. It ended earlier this year.
@NYBanker yep, but that one wouldn’t have easily passed the “do no harm” criteria since it was ultimately the tax payers who paid. BTW, I’m not intending to open a debate again on that issue — I’m just pointing it out! I don’t fault anyone who took advantage of the mint coins.
@HikerT: You might be right, but credit card bonuses continue to roll out, bigger and better than ever. So, there is some precedence of a scheme that continues to roll even after word gets out. Anyway, I know it sounds like cold fusion or other improbable pursuits, but it might be possible and I’ll have fun pursuing it as long as I believe in that possibility!
If it can do no harm, who would pay for your flights, inevitably?
@Joe: Good question! You’re right that someone has to pay. I think the key is that whatever organization pays will also somehow get value out of the transaction so that they will end up either even or ahead. One example would be if a by product of a scheme meant additional product exposure for a company so that they sell more than they would have otherwise.
The problem is once the word gets out it’s not sustainable. So even if something exists, by publishing it you will kill it. It’s akin to the concept of arbitrage.