A bunch of thoughts on maximizing Barclaycard’s new Flight Cents program

At first, I ignored the Flight Cents program that Barclaycard is rolling out in trial form from October to March. For those that don’t have their noses buried as deep in credit card promotions as I do, Flight Cents is a new program on Barclay’s Aviator Red (American Airlines) credit card. Basically, every transaction is rounded up to the nearest dollar, and you earn AAdvantage miles for the difference. One cent = one mile… so a $3.91 bill at the gas station costs you $4.00 and you earn nine extra miles (plus the four miles you’d normally earn on the purchase).

Of course, underneath all the fancy “rounding up” smoke and mirrors, this is a promotion to sell you miles for one cent per mile. That’s a great price, so either AAdvantage is cutting Barclaycard a deal, or Barclaycard hopes that training customers to use this card for everything will have lasting returns after the promotion ends (not to mention the interchange fees). I’m pretty glad that American Airlines doesn’t have an exclusive agreement with one card issuer, since competition between Barclaycard and Citi is producing some interesting results. Barclaycard is limited to where they can advertise the card, but they’re really going for it where they can. Meanwhile, Citi is increasing the bonus on the AAdvantage cards, Barclaycard is following suit on their card, and now Flight Cents.

Here’s why I ignored it at first: “round up” programs are really just a way to get you to rationalize spending money on things you otherwise wouldn’t. For example, I used to use a service called Acorns that rounded up all your transactions and deposited them in an investment account for you. The idea was that millennials can’t invest money without an app, and they’re too busy blowing their money on avocado toast to set aside a fixed amount every month – hence the easy-to-rationalize round-ups. It’s really no different that the “for pennies a day you could save a starving child” ads that used to run on TV. Likewise, American would probably have decent success selling a boatload of miles for a penny apiece, but this structure guarantees Barclaycard millions of swipes, so it’s a win-win: they get you to use the card more, and you don’t think about all the money you’re spending on miles because it’s split across many sub-$1 transactions.

The problem, however, is that round-ups don’t work like that in practice. Instead, you set a maximum threshold in your Barclaycard account, and your account keeps track of all your round-ups until the end of the month when they charge you a lump sum. At least, this is how I expect the program to work based on how they’ve described it in the FAQ. When you’re looking at your monthly budget, you’re going to see $80 or $150 (or whatever you set as your threshold) in a single transaction purchasing the miles, and if you haven’t budgeted for it (since you figured a few cents here and there wouldn’t throw off your monthly budget), you’re going to go into debt when it comes time to pay your bill. (Another win for Barclaycard.) Because I’m not planning to spend any money purchasing miles right now, I didn’t really want to get involved.

On the other hand, though, $.01 per mile is a really good deal. That’s at the point where you could come out way ahead even booking AAnytime awards (on some routes, some of the time). So, I may dip my toe in. We’ll see – right now all my spending is going on other cards where I have to hit a minimum spend, but I’ll probably have some opportunity to buy some cheap AAdvantage miles in the next few months.

Now, to my thoughts about the nuts and bolts of the program itself:

The maximum amount you can earn is 50,000 miles per month. Breaking that down, the least you could spend to maximize your miles would probably be around $0.89, which would come out to just over a dollar after tax where I live. (Of course, you’d also need to find a place that didn’t have a credit card minimum.) If you earned 95 miles for each of those $0.89 cent purchases ($1.05 after tax), you’d have to make 526 transactions–and that’s way less than the reality, since it’s unlikely you’d average 95 miles per transaction.

Churners have done crazy things in the past, so I’m sure there are some people out there who will go to Target and stand at a self checkout machine buying 100 individual packs of gum for $1.02 apiece. In that case, however, you’re also stuck with $100 worth of gum, and I’m assuming you don’t need $100 worth of gum. In the end, you spent $100 on useless gum and $98 on miles… AKA you bought miles for 1.98 cents per point, which is more than they cost when American runs promos.

Okay, so the gum is out (unless you really love gum). You know what’s not out, though? This:

I just checked to see if Amazon gift card balance reloads can include cents rather than being in whole dollars, and yep they totally can. (In case you’re curious, $0.50 is the minimum you can reload, so your best return would be with multiple $1.01 reloads.) To max out the promotion, you’d still need you do 505 separate $1.01 reloads, which would take some time. However, you could always set up a daily auto-reload, which would get you to 30 without any recurring effort on your part. (People have been doing this ever since the Amex Everyday Preferred card came out in order to hit the 30 transactions per month threshold.) You could even create multiple Amazon accounts to multiply your daily reloads, although I don’t know how many accounts Amazon would let you set up before they shut you down.

(Oh one other thing: you could always return the gum. Those miles wouldn’t be clawed back in this case, because you already paid for them. Barclaycard confirms as much in the FAQ:

So, if you were exceptionally patient and had extremely low self esteem to the point that you placed almost no value on your time, you could buy the individual packs of gum, keep the receipts, and then return the gum one pack at a time, getting you back to a penny per mile.)

In the end, this is a tough promotion to maximize. I think it’s pretty disingenuous for sites to pitch this as “Buy 300,000 AAdvantage miles for $3000!” (which is basically the tagline of a promoted post on The Points Guy that I saw on Facebook today), since you’d have to spend a fuckload of money and/or a fuckload of time to max it out. And even in the Amazon example, if you hit the maximum, you’d still be buying $3000 in Amazon credit along with $3000 in miles, meaning you have to come up with an extra $1000 per month, less however much you’d normally spend on Amazon. (You can’t use Amazon gift credit to buy Amazon or Visa gift cards that you could then liquidate, so your only option to mitigate the $3000 in Amazon credit would be to get into reselling, which is its own ball of wax.)

In the end, I think it’s a neat idea and certainly innovative. It’s also a great opportunity to earn a modest amount of AAdvantage miles for cheap – just setting up one Amazon reload would get you around 2970 extra miles per month, and you probably spend $30 on Amazon in a month anyway. I’m not sure I’d use my Aviator card for everyday spending, since you run into basically the same opportunity cost whenever you use a proprietary airline card instead of a card that earns flexible points or 2% cash back.

The question then becomes whether it’s worth however many AAdvantage miles you’re buying instead of earning flexible points. As an example, restaurants are a great place to maximize the promotion, since you can add a specific tip to get the final bill to $XX.01. However, they’re also heavily bonused on other cards. Say the bill is $25.01… would I rather earn 75 Ultimate Rewards points via my Sapphire Reserve, or 25 AAdvantage miles and 99 AAdvantage miles for 1 penny each? If the value of Ultimate Rewards points is 1.5 cents apiece, the value of the points I’d earn on this transaction is $1.125. (Full disclosure: I originally said $1.25 because I can’t do math, but then I changed it before anyone could call me out on it.) For discussion’s sake, let’s say AAdvantage miles are worth 2 cents per mile (since, presumably, you’d only want to buy them if you thought they were being sold for less than their value to you). If so, the value of the miles you just gained is $2.48… but you paid 99 cents for the miles, so the net value of your transaction is $1.49. That’s still better than with Chase, but the math changes the higher the dollar amount goes… not to mention the question of whether it’s a good idea in the first place to pay for 125 miles when you could get 75 Chase points for free. (Well, not free because there’s an annual fee and blah blah blah blah… how far in the weeds to you want me to go here?)

So, to make a long story short, in order to maximize the promotion in terms of your everyday spending, you’d want to use the Aviator card for low-dollar transactions that ideally weren’t in other cards’ bonus categories and were just over the nearest dollar. That’s kind of a lot of mental energy, but like I said above, I’m willing to try it and see how it goes.

I know I say this at the bottom of every post, but I’m legitimately curious to hear other people’s thoughts on Flight Cents, as well as strategies I’m sure I didn’t even consider that would help maximize it. Comment away!