We recently reported on the the government’s failed effort to persuade Americans to use dollar coins.
But the coins have found at least one group of fans: Travel enthusiasts who buy thousands of dollar coins with credit cards that award frequent-flier miles for purchases.
Once in possession of the coins — shipped to them by the government for free — they can deposit them into their bank accounts and pay off the credit card bills. The result: a free ticket to anywhere.
“We’ve used them to go on trips around the world,” says Jane Liaw, a 35-year-old public health researcher and science writer in San Francisco. Liaw says she and her husband, who use a variety of tricks for earning miles, are planning trips to Greece and Turkey, “all on miles and points.”
I don’t get it — what’s the mechanism whereby buying these coins translates into frequent flyer miles? The article never really explains it.
A Wall Street Journal version of the story from December 2009 clarifies a bit: they’re buying the coins with a credit card that rewards airline miles for transactions, so you’re effectively converting credit to cash, paying off the credit (so it becomes a zero-sum transaction), and earning the rewards as a side effect. A Consumer Reports version of the story from this week summarizes it similarly, while a post on the Practical Hacks blog from July 2009 suggests that the trick may not work anymore. Hmm.