Credit Card earning extra miles please comment

[QMAX21]

Hi everybody,

Thankfully through the arduous work by myself using this site, I've improved my credit dramatically and received a credit card which allows me to earn airline points toward a free flight. Now what I wanted to ask is this, If I wanted use the card to buy from my brother a TV which is about 750 dollars and when I use my credit card which would earn me points, to pay him and instead of giving me the tv he returns me back the money which I can use to pay the debt and earn me points at the same time, I don't think the credit company would mind this simply because

1. I have the right to buy from whomever I want

2. If a person chooses not to give me the TV but the money back it is ok.

I would sort of make it like Exchanges do options in which a person can purchase an option to buy something and they can either take the item or just pay the buyer the purchas price.

In this instance I would give my brother the option of either giving me the TV, and because I bought it with my credit card for 700 dollars I earn 700 points or if he chooses to not give the TV (which he obviously wouldn't) He could give me back lets say $680 keep 20 and I still have my points.

I don't see anything wrong with this because this goes on in the Financial markets all the time, I should know I work at a fianical market. Have anybody heard of this before. Comments suggestions welcome.

[lovebug5]

I don't get it.

What you're trying to say is that you want to use the CC to purchase a TV from your brother, to get the points...Then return the TV for cash so that the transaction remains on the credit card, still earning you the points even though you returned the merchandise, and use the cash you received from the return to pay off the TV?

I see where you're going with this and others might disagree with me, but I think the whole plan is incredibly manipulative and pretty sh!tty. Not to mention fraudulent.

[QMAX21]

I don't get it.

What you're trying to say is that you want to use the CC to purchase a TV from your brother, to get the points...Then return the TV for cash so that the transaction remains on the credit card, still earning you the points even though you returned the merchandise, and use the cash you received from the return to pay off the TV?

I see where you're going with this and others might disagree with me, but I think the whole plan is incredibly manipulative and pretty sh!tty. Not to mention fraudulent.

Hi Friend, I would use the 680 to pay off the credit card hence I would have a 35-40 balance still left, my brother would earn 20 bucks and I would earn the miles. It wouldn't be fraudulent if he actually gave me the TV I keep it and then return it back and he just return the cash back to me. The items will change hands and if I keep it cool, if not I get a refund from him in cash.

From what I've seen in retail people can get cash back for items returned and it would leave the balance on the card, however they can either pay it or just have it returned on the card. Interesting conecpts though.

[lovebug5]

Purchasing an item and returning it solely to earn miles on the card would be fraudulent and manipulating a system intentionally put in place to "reward" cardholders for frequent purchases. Although the "rewards" system could be argued, considering that you purchase an airline ticket for less money outright, IMO it's consumers who pull these shenanigans who cause CC companies to stop offering incentives to their loyal cardholders.

Not trying to be on a soapbox here or intentionally target your post, but I'm strongly against things like this...

[QMAX21]

Purchasing an item and returning it solely to earn miles on the card would be fraudulent and manipulating a system intentionally put in place to "reward" cardholders for frequent purchases. Although the "rewards" system could be argued, considering that you purchase an airline ticket for less money outright, IMO it's consumers who pull these shenanigans who cause CC companies to stop offering incentives to their loyal cardholders.

Not trying to be on a soapbox here or intentionally target your post, but I'm strongly against things like this...

Hi Friend,

I'm not against your opinion on this. I didn't say I would actually do it simply because I don't want deal with the high balances on my credit card right now. However I think you would understand this better in this scenario

1. Me and fiancee live together and if she decides to sell me something on ebay, I can buy it for 800 on my credit card. Since we live in the same house there would be no problem with the item being given to me.

2. This would benefit the credit card company because they would get their fees on this purchase, ebay would get their fees and of course my fiance would get her fee of let's say 800-730 =70. I in turn would get my points toward a free flight.

3. Now that we live together, over a period of time the money would go back to me anyway and I can use it to pay on the credit card. I don't think anything is wrong with that especially when I would recover the money from her to cover bills etc as well as credit card bills. Lets say she returns 400 to help me on my credit card.

That would be legal and fair I think since a person can decide who they can give money to. Though she earned 70 she could keep a little more and perhaps return only 500 back to me which would ultimately earn her 300 bucks.

T o conclude:

I get my mileage and my credit card paid down

My fiance would get her money anywher from $150

I get the item whatever it is.

[lovebug5]

So basically, you're willing to pay unnecessary fees and interest on a credit card just for the purpose of earning miles? Why not just save your money and buy the ticket outright?

A very wise person said to me, "This seems like an awful lot of energy going into trying to manipulate a system."

[LeslieR]

It seems like life and finances are complicated enough without trying to figure out ways to make them even more difficult. I agree with LB. I think your time and sanity are worth more than a few miles.

[VeVe]

1. Me and fiancee live together and if she decides to sell me something on ebay, I can buy it for 800 on my credit card. Since we live in the same house there would be no problem with the item being given to me.

2. This would benefit the credit card company because they would get their fees on this purchase, ebay would get their fees and of course my fiance would get her fee of let's say 800-730 =70. I in turn would get my points toward a free flight.

It would be cheaper to pay for the plane ticket. You're going to be out lots of money in fees.

And if ebay/paypal figure out the scam (which they have a remarkable talent for doing), they will likely freeze your accounts and not transfer the funds to anyone's bank account due to fraud, so you'd have a large balance on your cc and no cash coming in to cover it.

[QMAX21]

It would be cheaper to pay for the plane ticket. You're going to be out lots of money in fees.

And if ebay/paypal figure out the scam (which they have a remarkable talent for doing), they will likely freeze your accounts and not transfer the funds to anyone's bank account due to fraud, so you'd have a large balance on your cc and no cash coming in to cover it.

HI everybody,

Spoke with an attorney, they said it is perfectly legal. Here is how:

1. you have the right to buy from whoever you want

2. Long as you receive the item that was being bought and the cash exchanged hands it isn't a fraudulent purchase hence ebay and Paypal have no legal leg to freeze account or declare it suspicious.

3. If the person give you back the money they have the perfectly legal right to do so which is their decision.

Last but not least, I usually do just purcahase the airfare and then just pay it off which actually earns points quicker but just wanted to bring this to people's attention as to how you can get miles and actually pay little of nothing. One of my coworkers father actually used ebay to transfer ownership of his car to his son by selling it to him for $1. So there are actually a lot of this going on.

[LeslieR]

Well good luck with it.

[lovebug5]

I'd love to know what law school your "attorney" graduated from and exactly what type of "attorney" he is. Coming from a family of attorneys and also being married to one gives me a pretty clear understanding of advice coming from someone reputable versus someone who isn't. And I can tell you from being married to someone who graduated from the second best law school in the United States next to Harvard, that no reputable or well-educated attorney would ever advise a client to do something like this.

This is scamming a system and is a plan devised by someone who is incredibly manipulative. Thankfully, most of the people who are a part of these forums are too intelligent to ever put a plan like this into place.

[QMAX21]

Well good luck with it.

Thanks,

But I only posted here for conversation not to actually do it. LOL! It was just an interesting idea.

[QMAX21]

I'd love to know what law school your "attorney" graduated from and exactly what type of "attorney" he is. Coming from a family of attorneys and also being married to one gives me a pretty clear understanding of advice coming from someone reputable versus someone who isn't. And I can tell you from being married to someone who graduated from the second best law school in the United States next to Harvard, that no reputable or well-educated attorney would ever advise a client to do something like this.

This is scamming a system and is a plan devised by someone who is incredibly manipulative. Thankfully, most of the people who are a part of these forums are too intelligent to ever put a plan like this into place.

Thanks,

But I only posted here for conversation not to actually do it. LOL! It was just an interesting idea. Also I was good enough to get into Stanford Law School (Oh if my dean didn't forget to fill out the form a few years ago). Last but not least I was fortunate enough to be given a personal 3 page recommendation from a late professor from harvard Law school at one time whom I knew personally. So I am pretty much well versed in things. Last but now being married to an attorney doesn't make one an attorney or one knoweledgable in law.

That is the equivalent of saying that I'm an expert on makeup since I'm getting married to a person who is. LOL! If you knew law 101 you would clearly recognize that your response is quite littered with holes.

[LeslieR]

Lovebug didn't claim to be an expert in the law - she provided some solid evidence of why and how she could spot poor legal advice and distinguish it from something reputable.

This conversation is going nowhere...you didn't get much mileage out of the topic. Most people here are looking for ways to clean up their financial acts, not schemes. Good thing you didn't really plan to do it.

[lovebug5]

LMAO.

I must not got any edumacation and I ain't understanding no stuff on this here website.

[QMAX21]

Lovebug didn't claim to be an expert in the law - she provided some solid evidence of why and how she could spot poor legal advice and distinguish it from something reputable.

This conversation is going nowhere...you didn't get much mileage out of the topic. Most people here are looking for ways to clean up their financial acts, not schemes. Good thing you didn't really plan to do it.

True, I only brought to the table a way people can utilize a credit card like this. My credit is nearing 700 soon, if I go and charge anything it can make my score go down which is something I don't want to do within the next 4 months. Other than that this topic was more of one that is about one's interest and nothing more. I thought it was interesting to bring this up, unless people here are so uptight because of their credit situation to talk on a variety of topics.

[Bigwoodystyl]

This is horrible! This idea...

1. It's against the terms of service from ebay, paypal, etc.

You might think it difficult to get caught, b/c who is going to report it? Your brother?! Then again, as someone here stated, these companies have an amazing knack for this sort of thing...

For example, anytime an ACH is run from Paypal/ebay to your brother's or fiance's or friend's bank account, that ACH transmission file from the ODFI contains not only the deposit amount, but also the legal name of the depositor on file at the RDFI's institution. Now, if it's your brother they might be able to put 2+2 together... If it's someone seemingly unrelated (as far as the name goes anyway), don't think you're in the clear just yet. A simple public records search can tell them if you have ever had any business or personal associations with the person in question. Better still, Business Intelligence Software (BIS) isn't something you want to test the efficiency of... Both Thomson Financial and a company called Verid have an amazing program that can tell you all you need to know about someone... This goes way beyond the limited capacity that Lexis/Nexis offers... (to be honest, it's borderline illegal in some cases, but you have already signed away your rights in the TOS)

Say you don't get caught (right away, anyway) This doesn't change the fact that you are violating a TOS which you electronically signed. If any exchange or return is made, that return is expressly supposed to be along the same channel from which the purchase was made. That is, if you purchase an item with your credit card, and want a refund, you are supposed to have them issue a credit card return. (which in this case would wipe out your net purchase total and earn you zero points/miles). This also doesn't change the fact you might get caught at a later time.

2. It's against the benefits agreement from your credit card.

I don't know this to be a fact, only because I dont know which card you have. However, this would be against any Visa/Mastercard benefits programs, of that I am certain... If you have a Visa or a Mastercard, I can tell you with certainty that it is against your benefits agreement.

By extension, it would then be in direct violation of your credit card agreement, as your card issuer has issued you the card with a direct license from visa/mc with the explicit understanding you will follow all the terms of any programs administered under the card.

You're likely to get your card "revoked". In which case, it will report a credit limit of $0.00, and a remark of "Closed by Credit Grantor". That will wreck your credit more than utilization.

It also leaves you open to be sued, which is unlikely, but important to note.

Maybe this seemed like a million dollar idea when you and your 13 year old brother were smoking weed out of a toilet paper roll, but when you bring it into reality hopefully you see the error of your thoughts.

[jq26]

I guess I'm just slow. I still think that economically, this thing doesn't make any sense. Okay, when I sell NFL tix on eBay, for say, $400, by the time fees are paid I receive maybe $350. The credit card company takes their chunk, eBay takes their chunk, PayPal takes their chunk.

1) So, assume you do the same with this TV and your friend receives $750 (being generous). Then you return it. Your friend doesn't receive $800 back, does he? Probably more like $775 (eBay doesn't return fees, just gives a free re-insert, no?). You and your buddy are now $25 out of pocket for points that may not be worth $25, discount their value by the % that this plan will actually work through to completion.

2) And why would ANY credit card give you reward points for items later returned? Seems like attorneys from airlines and credit cards would shut that scam down in 2 seconds. My guess is if you are thinking about a "loophole", its already been exploited 67,000 other times by people who beat you to it.

So it seems a real stretch that this would even be worth the effort. But good luck.

[jq26]

...when you and your 13 year old brother were smoking weed out of a toilet paper roll...

Just had a flash back of my freshman year dorm room.

[Bigwoodystyl]

I guess I'm just slow. I still think that economically, this thing doesn't make any sense. Okay, when I sell NFL tix on eBay, for say, $400, by the time fees are paid I receive maybe $350. The credit card company takes their chunk, eBay takes their chunk, PayPal takes their chunk.

1) So, assume you do the same with this TV and your friend receives $750 (being generous). Then you return it. Your friend doesn't receive $800 back, does he? Probably more like $775 (eBay doesn't return fees, just gives a free re-insert, no?). You and your buddy are now $25 out of pocket for points that may not be worth $25, discount their value by the % that this plan will actually work through to completion.

2) And why would ANY credit card give you reward points for items later returned? Seems like attorneys from airlines and credit cards would shut that scam down in 2 seconds. My guess is if you are thinking about a "loophole", its already been exploited 67,000 other times by people who beat you to it.

So it seems a real stretch that this would even be worth the effort. But good luck.

I understood it that he wanted to buy the item from a trusted friend. Rate the transaction favorably on ebay or wherever, and pretend the transaction actually took place. Ebay or whoever would then send the transaction to his friend's bank account, who would then send the money back to him (so he could pay his credit card bill)... The TV never actually gets exhanged... heck, there might not even really be a TV. This negates your point addressed in (2). He isn't returning the item properly (which is the major reason why he is violating the TOS)

As far as (1) Yes, ebay or whoever gets to keep their fees. The whole thing could still potentially be a transaction that merits more credit card reward miles/points than what the fees were to Ebay or whoever. As long as one could overcome the listing fees, it would "work".

It doesn't, however, change the fact that it is against the TOS and the credit card agreement.

I have an even better idea, and it will get you cash, rather than reward points. I will open 10 checking accounts at 10 different banks. I will then write checks on each account and deposit them into the other account. Before the check clears, I will write another check from another account. That way, no checks will never get returned unpaid. Each time I make a deposit, I will take $100.00 cash for myself. Here's the tricky part, there isn't actually any money in any of the accounts, except the opening deposits. After 100 (or maybe 1000) or so transactions one or more of the banks might catch on and place a hold on my deposit, bringing down the whole deck of cards. But, who cares, by that time I will have made $10,000-$100,000... This lawyer (the one who I met while smoking the toilet roll) told me this was OK to do and a great way to make some extra cash... I guess I'm all set!!...

[isislc]

I would have to agree with Bigwoodystyl about the agreement with the credit cards and ebay/paypal. If you check the fine print on your card. There are some types of transactions that are not eligible for points. So although you might go ahead and pay whomever for a TV or toaster there is a chance that the transaction may be ineligible for the rewards.

[jq26]

As far as (1) Yes, ebay or whoever gets to keep their fees. The whole thing could still potentially be a transaction that merits more credit card reward miles/points than what the fees were to Ebay or whoever. As long as one could overcome the listing fees, it would "work".

Whether it is a sham or not (eBay would not care because they are only the "broker" and are skimming funds to facilitate) really is beside the point. Economically, it doesn't make sense.

I sell you a make believe widget for $10,000 on eBay. Ebay and Visa skim $600 from the $10,000 payment. You now have $9400 which you give back to me. I pay my $10,000 bill. You are now net $600 out of pocket for 10,000 rewards points. You get a crappy $300 ticket (for which Visa probably pays $100 for).

EBay is happy. Visa is happy. The folks involved in the transaction (whether legit or not) are suckers. So "sham" all you want. No one will care except your accountant. If this plan was a way to get ahead, it would have been exploited 0.02 seconds after rewards cards were invented.

[QMAX21]

This is horrible! This idea...

1. It's against the terms of service from ebay, paypal, etc.

You might think it difficult to get caught, b/c who is going to report it? Your brother?! Then again, as someone here stated, these companies have an amazing knack for this sort of thing...

For example, anytime an ACH is run from Paypal/ebay to your brother's or fiance's or friend's bank account, that ACH transmission file from the ODFI contains not only the deposit amount, but also the legal name of the depositor on file at the RDFI's institution. Now, if it's your brother they might be able to put 2+2 together... If it's someone seemingly unrelated (as far as the name goes anyway), don't think you're in the clear just yet. A simple public records search can tell them if you have ever had any business or personal associations with the person in question. Better still, Business Intelligence Software (BIS) isn't something you want to test the efficiency of... Both Thomson Financial and a company called Verid have an amazing program that can tell you all you need to know about someone... This goes way beyond the limited capacity that Lexis/Nexis offers... (to be honest, it's borderline illegal in some cases, but you have already signed away your rights in the TOS)

Say you don't get caught (right away, anyway) This doesn't change the fact that you are violating a TOS which you electronically signed. If any exchange or return is made, that return is expressly supposed to be along the same channel from which the purchase was made. That is, if you purchase an item with your credit card, and want a refund, you are supposed to have them issue a credit card return. (which in this case would wipe out your net purchase total and earn you zero points/miles). This also doesn't change the fact you might get caught at a later time.

2. It's against the benefits agreement from your credit card.

I don't know this to be a fact, only because I dont know which card you have. However, this would be against any Visa/Mastercard benefits programs, of that I am certain... If you have a Visa or a Mastercard, I can tell you with certainty that it is against your benefits agreement.

By extension, it would then be in direct violation of your credit card agreement, as your card issuer has issued you the card with a direct license from visa/mc with the explicit understanding you will follow all the terms of any programs administered under the card.

You're likely to get your card "revoked". In which case, it will report a credit limit of $0.00, and a remark of "Closed by Credit Grantor". That will wreck your credit more than utilization.

It also leaves you open to be sued, which is unlikely, but important to note.

Maybe this seemed like a million dollar idea when you and your 13 year old brother were smoking weed out of a toilet paper roll, but when you bring it into reality hopefully you see the error of your thoughts.

You didn't read my second example:

Hi Friend,

I'm not against your opinion on this. I didn't say I would actually do it simply because I don't want deal with the high balances on my credit card right now. However I think you would understand this better in this scenario

1. Me and fiancee live together and if she decides to sell me something on ebay, I can buy it for 800 on my credit card. Since we live in the same house there would be no problem with the item being given to me.

2. This would benefit the credit card company because they would get their fees on this purchase, ebay would get their fees and of course my fiance would get her fee of let's say 800-730 =70. I in turn would get my points toward a free flight.

3. Now that we live together, over a period of time the money would go back to me anyway and I can use it to pay on the credit card. I don't think anything is wrong with that especially when I would recover the money from her to cover bills etc as well as credit card bills. Lets say she returns 400 to help me on my credit card.

That would be legal and fair I think since a person can decide who they can give money to. Though she earned 70 she could keep a little more and perhaps return only 500 back to me which would ultimately earn her 300 bucks.

T o conclude:

I get my mileage and my credit card paid down

My fiance would get her money anywher from $150

I get the item whatever it is.

-------------------------------------------

So now with that being said FROM THE SECOND EXAMPLE.

1. How can you violate the terms of agreement when the item from the person living in your home is given to you? Legally the only way ebay, paypal or the credit card company could ever claim that it wasn't transferred is to actually live in your home and spy on you.

CONCLUSION: YOU CAN'T BE SUED BECAUSE YOU DIDN'T VIOLATE ANY AGREEMENT BECAUSE THE ITEM DID EXCHANGE HANDS FROM THE PERSON WHO STAYS WITH YOU.

The attorney I spoke with made a very good point. A person can use their credit card to buy from whomever they want. EVEN IF THAT PERSON LIVES WITH YOU. Now if the person gives you the item THE EXCHANGE OCCURS AND IT IS A SALE.

However let's say bills come up and they give you back the money at your asking it is their choice and neither the credit card company or ebay has the right to interfere simply because THE ITEM YOU BOUGHT WAS DELIVERED TO YOU! NO FRAUD, NO VIOLATION OF SERVICE. It isn't even dishonest simply because the person can say yes or no to giving your money back.

THE only bad thing about this being a scam is based on the fact IF A ITEM NEVER EXCHANGED HANDS. You can't ask for a refund without an item being returned usually.

Last but not least such a method would only make sense IF you were close to getting a free ticket and it was cheaper to just use this method than buying the ticket out right. Since I usually buy my airline ticket directly I can rack up points quicker that way.

Purpose is to show how these cards can be used to get this accomplished. My credit is too good and I don't even want to charge anything on my cards now. Now if you can show me how this example is illegal, let's talk.

[QMAX21]

Whether it is a sham or not (eBay would not care because they are only the "broker" and are skimming funds to facilitate) really is beside the point. Economically, it doesn't make sense.

I sell you a make believe widget for $10,000 on eBay. Ebay and Visa skim $600 from the $10,000 payment. You now have $9400 which you give back to me. I pay my $10,000 bill. You are now net $600 out of pocket for 10,000 rewards points. You get a crappy $300 ticket (for which Visa probably pays $100 for).

EBay is happy. Visa is happy. The folks involved in the transaction (whether legit or not) are suckers. So "sham" all you want. No one will care except your accountant. If this plan was a way to get ahead, it would have been exploited 0.02 seconds after rewards cards were invented.

There are problems with this example

1. It assumes that the item sold is make believe, my example showed that the actual item exchanges hands from the person in the same house with you. (Begging the question fallacy).

2. Why would someone use a $10000 credit card for a airline ticket when the fees are smaller for a smaller credit card which is better suited for this method.

3. This example doesn't take into effect the possibility that if you've been using your card for a long time and that it would cost 50 bucks to use this method plus fees it would make sense instead of going and spending 250 more bucks on an airline ticket.

Conclusion: Method seems to be better suited for when a person is closer to rewards plan. Also what if you didn't have a 10K credit card and your balance has been paid to zero or near zero simply because you've always paid your bill (I know folks on this board tend to run up credit cards and then look for ways to get out of paying them, I mean only someone who has charge offs would come to this site to get out of paying by the nifty methods found here as opposed to the rest of us who actually paid our bills) then this methodology makes sense because the fees would be little or nothing compared to the airline ticket AND YOU GET YOUR MILES AND YOUR MONEY BACK MINUS THE SMALL FEES TO USE ON THE TRIP.

[LeslieR]

(I know folks on this board tend to run up credit cards and then look for ways to get out of paying them, I mean only someone who has charge offs would come to this site to get out of paying by the nifty methods found here as opposed to the rest of us who actually paid our bills)

I think Citibank would disagree that you "actually paid your bills": http://www.debt-consolidation-credit-repair-service.com/forums/showthread.php?t=271510

but that's between you and them.

One can only wonder what (a) you've been doing here for three years and 175 posts if this place is for such deadbeats (and especially since in August 07 you asked a very specific question about charge-offs), ( what your agenda is, and © when this thread will be locked.