Author Topic: How to pay worker so that I can rack up miles on credit card  (Read 4591 times)

HAPPYINAZ

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How to pay worker so that I can rack up miles on credit card
« on: January 01, 2016, 09:09:47 AM »
I have a consulting business and I hire subcontractors to do some of the work.  I keep hoping to find a way to use the expense of those workers to get miles on my credit card.  For those experienced travel hackers...how can I accomplish this without it costing the worker a fee for accepting a credit card directly.  Money orders?  Do Money orders have limits?  Can I get a $60,000 money order with a credit card? 

protostache

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Re: How to pay worker so that I can rack up miles on credit card
« Reply #1 on: January 01, 2016, 11:44:03 AM »
One way to do it:

  • Instruct them to set up a Plasso account, which will also set up a Stripe credit card processing account
  • "Gross up" the amount you owe them to account for Stripe's 2.9% + $0.30 fee by dividing by 0.971. For example, if you owe them $10,000 you'd divide that by 0.971 resulting in $10,298.66. They will see slightly less than $10k when it ends up in their account, so you might want to round up to the nearest dollar.
  • Use Plasso's "Pay Me" feature to pay them the grossed-up amount.

Note that you will effectively be paying $298.66 per $10k for however many miles you end up with, so do the math and make sure it's worth it. Also make sure that this is acceptable for your contractors. For example, I do not accept credit card payments for anything more than $1,000 because the charge-back risk is too high to ignore.

Vilgan

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Re: How to pay worker so that I can rack up miles on credit card
« Reply #2 on: January 01, 2016, 11:46:30 AM »
Main way would be to get the subcontractors to accept credit, which they probably wouldn't be open to since it would take a bit over 2% out. If you pay them 2.5% more when paying w/ credit then they might be open to it, but then there's not much of an advantage. I also wouldn't be very keen on it on the opposite end of the deal due to chargeback risk.

Nothing special with subcontractors vs usual churning approaches. I pay mine using Chase Bill Pay or Chase Quick Pay (depending on amount I owe them) because its free and easy for me and straightforward/no downside for them.

HAPPYINAZ

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Re: How to pay worker so that I can rack up miles on credit card
« Reply #3 on: January 01, 2016, 02:59:34 PM »
Thanks for the input, but I am looking for a way other than a way that will cost the subcontractor a processing fee because if I have to pay them 2.5 to 3% more to get them to take credit card there is no point. 

Vilgan, does Chase Bill Pay or Chase Quick Pay give you miles?  Or are you just paying them out of your account and no miles earned.  That's already the kind of thing I do with my own bank.   
« Last Edit: January 01, 2016, 03:30:26 PM by HAPPYINAZ »

protostache

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Re: How to pay worker so that I can rack up miles on credit card
« Reply #4 on: January 01, 2016, 03:32:16 PM »
Thanks for the input, but I am looking for a way other than a way that will cost the subcontractor a processing fee because if I have to pay them 3% more to get them to take credit card there is no point.

Yep. This is why most people typically don't do large payments with credit cards. Merchant fees are a fact of life for certain things like retail and ecommerce, but subcontractors have better options.

How do you suppose the airlines pay for those award miles, anyway? Hint: it's not coming from their bottom line.
« Last Edit: January 01, 2016, 03:37:40 PM by protostache »

Vilgan

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Re: How to pay worker so that I can rack up miles on credit card
« Reply #5 on: January 01, 2016, 05:18:36 PM »
Thanks for the input, but I am looking for a way other than a way that will cost the subcontractor a processing fee because if I have to pay them 2.5 to 3% more to get them to take credit card there is no point. 

Doesn't exist... credit card processing fees always happen, its just that certain parties (typically merchants) will eat them in order to get your business. There is no magical "no fees" way to churn miles. Every approach results in SOMEONE paying the fee, which is why the good manufactured spend options have decreased over time: some party got tired of eating those fees.

HAPPYINAZ

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Re: How to pay worker so that I can rack up miles on credit card
« Reply #6 on: January 04, 2016, 10:36:44 AM »
I guess I haven't been making my request very clear.  I am fully aware of merchant fees and how credit cards work.  In addition to my consulting business I have an online store, so credit card fees are a daily reality for me. 

In my original post I asked questions about using money orders to pay someone.  Wouldn't this accomplish what I am looking for?  Has anyone done this?  It sounds like I can buy money orders with only a $1.65 fee for $1000 money order.  Then use the money order to pay the contractor.  So if I bought 60 of these to cover a $60,000 bill then I would only have $99 in fees and receive 120,000 miles on my credit card (since I get 2x for each $1).  So I would essentially be getting $1200 worth of travel for $99. 

Other than this being an annoying way to have to pay a large bill, do you see any problem with this?  Since the subcontractor is a also a good friend of mine, I think he would be willing to deal with the annoyance of being paid this way so I can get some miles.  I would still get receipts for paying him which would be necessary for tax purposes and he wouldn't have to pay any kind of fees.  So it seems like it accomplishes what I am looking for.  Or maybe there is some similar way like a certified check or something like that which would do this in a more elegant way?     



soupcxan

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Re: How to pay worker so that I can rack up miles on credit card
« Reply #7 on: January 04, 2016, 10:46:58 AM »
Where can you buy money orders on a credit card for a flat $1.69 per $1000?

If this is possible (which I doubt) then you don't even need to pay your friend, just make the money orders out to yourself and you have created an infinite free travel machine.
« Last Edit: January 04, 2016, 10:48:46 AM by soupcxan »

Turnbull

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Re: How to pay worker so that I can rack up miles on credit card
« Reply #8 on: January 04, 2016, 11:08:41 AM »
You can't buy money orders directly with a credit card. The standard procedure in the travel hacking world is to buy gift cards with your credit cards and then buy money orders with the gift card. I do this with a couple of our rental properties. The bank doesn't care if I mail in a check or money order so this is an easy way for me to manufacture $1k in spending each month. The $500 gift cards each cost me a $4.95 fee and then the money orders are 69 cents each at Kroger.

HAPPYINAZ

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Re: How to pay worker so that I can rack up miles on credit card
« Reply #9 on: January 04, 2016, 11:22:19 AM »
Ah.....OK, thanks for the extra info!  I could have sworn I read online that you could pay for money orders using credit card at the post office.  So thank you for the clarification and pointing out the big hole in my scheme.  I figured there had to be a problem somewhere.   And thanks Turnbull for sharing more info on how to do it with gift cards.   

POINTS of ER

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Re: How to pay worker so that I can rack up miles on credit card
« Reply #10 on: January 04, 2016, 11:36:02 PM »
What you seek is called manufactured spending (MS). Turnbull has provided a very simple way of doing it. You can take that a step further and load those gift cards into a prepaid debit card called "Serve". Once you're able to load the gift cards into this prepaid debit card it acts like a checking account. You then can bill pay your subcontractors for however amount you have loaded into your serve card.

With serve you can load up to $5,000 a month max.

However, there are huge obstacles of doing this route. One of them is being able to find pin enabled gift cards. Second is the hassle of loading your serve at a local walmart, rite aid, family dollar, and dollar general. It's a your mileage may vary game when it comes to being able to load at any of these locations. Some are gift card friendly while others are not. Just imagine showing up with multiple gift cards and you want to load them individually to your serve card. Gives off a bad impression.

This can be lucrative to those cardholders who have the chase ink card. That card gets you 5x per $1 at any supply store. The strategy to doing this is simply buy up to $5,000 worth of visa gift cards at staples, officemax, or office depot during a gift card sale (very important during a promotion to avoid fees). Then load them to serve and pay off bills that I you normally couldn't pay with a credit card (i.e. rent/mortgage, student loans, utilities, etc). Breaking down the math you're essentially earning at least 25,000 Chase UR a month if you can maximize this.
« Last Edit: January 04, 2016, 11:47:26 PM by POINTS of ER »

HAPPYINAZ

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Re: How to pay worker so that I can rack up miles on credit card
« Reply #11 on: January 05, 2016, 10:55:23 AM »
Thank you Points of ER!!  That's very helpful.  I signed up for Brad and Alexi's travel hacking class, so I am slowly learning what you nicely described.  Thanks for the headsup on 5x at office supply store and Chase ink plus suggestion. 


 

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