Sep262014

Airheads in the Rewards Credit Cards Bubble

Two bloggers on BoardingArea wrote this week they know hundreds of people who benefit from credit card rewards, yet between the two of them, they only know one person who had financial trouble with credit card debt.

In general, I stay away from commentary about travel rewards credit cards since many bloggers in this points and miles space make a significant part of their income from working as credit card marketers for banks. I generally try not to piss off too many people. I leave that job to TravelBloggerBuzz.

Credit card marketing money is good income for a writer. The money is very good, earning $100 to $200 per approved credit card referral. Many travel writers work primarily as credit card marketers building the dream of travel for themselves and their readers.

Airheads in the rewards credit card bubble is my response to reading posts in which Mommy Points and The Miles Professor share their insights from within the bubble of financial marketing. Financial security among their circle of friends is apparently all wrapped up in great credit card bows and disposable income. I feel like somewhat of a guttersnipe with my circles of acquaintances and friends. Many people I know or did know had credit card indebtedness problems at one time or another.

I’d like to share my down to earth insight as someone who has lived in many places, made my living doing many kinds of jobs and aged through American economic cycles of boom and bust during four recessions since my adult working life began 35 years ago.

Airheads in the Credit Card Rewards Bubble

Let me preface to say this is not a misogynistic attack on two women bloggers. Mommy Points is one of my favorite blogs I read regularly. I simply feel compelled to respond to blog posts by Mommy Points and The Miles Professor. This post applies to many credit card marketer guys too. I rarely read articles about credit cards, but I happened to read both these posts this week.

The Miles ProfessorHe Handed $250 To The Bank and Got Nothing

“While I personally don’t know anyone who got themselves into financial trouble with reward credit cards, I do have a story of quite the opposite.”

Mommy PointsThe Dangers of Rewards Credit Cards

“In my 3.5 years of writing about this type of stuff, I only personally know one person who has gotten a rewards credit card primarily for the travel rewards, and then maxed it out on unneeded items. I know hundreds, even thousands, who have used rewards cards successfully to maximize the purchases they were going to make anyway.”

I read this and think, “What bubble of acquaintances are you living in?”

The country just went through the greatest recession since the Great Depression of the 1930s. I know hundreds of people who lost their jobs without warning when their employer suddenly shut-down or downsized to cut expenses. The unemployment rate in the USA doubled from 5% to 10% between 2008 and 2009. Many people I know found themselves looking for a new job. Some moved to other places for work.

What do you live on when you are suddenly unemployed? Do you really have a big rainy day savings account? Do you cash in your 401K? Do you even have a 401K to access?

Or do you try to meet expenses with credit cards in your wallet and hope you secure a job quickly before the monthly bills start to hurt financially?

Moving to a new place is easy when you are single. One of the hardships many family’s face is when one spouse loses a job and there are few jobs available in your area. Picking up and moving is not an option when the other spouse has a career that is not transportable to another place.

What happens when you need $2,500 for urgent car repairs? When your income is reliant on your ability to drive your car to work each day, sitting around for a month or two waiting to save enough money to fix the car with cash is not an option. Selling your household possessions might be another way to raise cash or borrowing money from a more financially secure relative could be an option for low or no interest repayment.

Or do you demonstrate financial independence and simply reach for the rewards credit card? Not because you are thinking about the miles you will earn with $2,500 in spend, but the job income you will lose if you don’t have a working car.

In 2006 when I started Loyalty Traveler, there were people I knew who were in strong financial positions with multiple houses, playing in real estate speculation flipping houses, and holding 401K portfolios north of one million dollars. Then, over the course of 36 months that real estate and paper wealth collapsed between 2007 and 2009. The $750,000 house dropped in value to $450,000 or less, bad mortgage loans taken out for short-term gain became difficult to alter as bank liquidity dried up resulting in astronomical mortgage payments. Some people I know walked away from their homes, some people dipped into the kind of crazy credit card limit available when you are a paper millionaire, and some watched their retirement dream bubble pop as 401K account balances plummeted, home values plummeted and their job employment income ceased or was significantly reduced.

Some of my friends made remarkable financial recoveries from dire straits. Some others have limped along for years now trying to become financially stable again.

Upgraded to C

In the miles and points world, upgraded to C is a great moment when you learn your economy class flight has been upgraded to C, a business class seat.

Here is our story. In 2009, my wife got a call one day after having been to the doctor for a routine examination. She was diagnosed with rectal cancer. Her medical treatment required eight months. There was a shockwave through my brain when her oncologist told us she would be out of work for most of 2009. I had just been promoted two months earlier from Prior2Boarding to the BoardingArea bloggers page. That didn’t matter much since there was no advertising revenue stream from BoardingArea at the time. I was making all my income on other writing projects.

One day Kelley and I were both working, making the money for a decent living. Then, Kelley suddenly found herself unable to work for eight months. My time available for working on Loyalty Traveler projects diminished as I drove Kelley to the hospital 150 miles round trip several times a week for chemotherapy. For six weeks I drove her 180 miles round trip daily for radiation treatment. We charged the gas on our credit cards, we charged the hospital visit copayments on our credit cards. We paid for food and any bill we could on credit cards so we had money each month to allow us to remain in our home and not have to add a move to the already hectic travel schedule of hospital visits. We went from being able to handle our bills to being in debt.

Five years later, Kelley is a cancer survivor. We travel and we still have credit cards, although credit cards are really a small part of our travel strategy. Bankruptcy would have been the easy out. We stayed in debt and paid off debt.

One of the most irksome phrases I used to read in the miles and points world was Frugal Travel Guy’s “Your credit is your most important asset.”

Bullshit. Your health is your most important asset. Not much else matters when your health is shit.

Up in the Air

Travel bloggers who operate their business as credit card marketers write about the world accessible to you with the right credit cards. They continually tell you to use credit cards responsibly as they earn thousands of dollars a month or even tens of thousands of dollars a year through credit card affiliate marketing. Airheads in the rewards credit cards bubble sell you a travel dream of endless luxurious travel, flying from place to place in the front of the plane, sipping champagne and sleeping in bed as you fly around the world.

Are they lying to you? No.

I have been planning my travels in the points and miles world for more than 15 years and I know credit cards are an easy way to quickly make that travel dream a reality. And even a quicker way to make a decent income writing as a credit card marketer and selling readers the dream of rewards travel.

As a reader of this article, someday you might find yourself without a job, without a car, without a house, or even without a spouse.

One thing is for sure though, if you live long enough, if not you, other people around you will suddenly fall when their financial bubble pops.

I pray your bubble never pops. May you be blessed with good fortune.

*****

NerdWallet Credit Card Facts September 2014

  • The average US indebted household credit card debt stands at $15,607, counting only those households carrying debt.
  • 2,681,038 more U.S. households held credit cards in December 2012 than March 2010. A rise from 116,716,992 to 119,397,330 U.S. households.
  • While average credit card debt dropped from $7,768 in March 2010 to $7,117 in December 2012, the percentage of households carrying credit card debt went up from 43.2% to 46.7%. That is an 8% increase in the number of U.S. households carrying credit card debt in 30 months.

As the economy limps forward, credit card companies increasingly loosen their lending standards. Confident that consumers will be able to pay off their debts, the issuers allow more people to borrow more money. NerdWallet expects household indebtedness to resume an upward trend in the coming years as creditors become more lenient.

NerdWallet – American Household Credit Card Debt Statistics: 2014

U.S. household consumer debt profile:

  • Average credit card debt: $15,607
  • Average mortgage debt: $153,500
  • Average student loan debt: $32,656

In total, American consumers owe:

  • $11.63 trillion in debt
    • An increase of 3.8% from last year
  • $880.5 billion in credit card debt
  • $8.07 trillion in mortgages
  • $1,120.3 billion in student loans
    • An increase of 11.5% from last year

http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

More articles by Ric Garrido »

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Comments

  1. Ric, you know I like you and your blog, too. However, I think you are missing the spirit of my post completely. The entire post was dedicated to the same type of warnings you are giving because the risks are real.

    The post titled “Dangers of Reward Credit Cards” talks about the type of people who should avoid this method of earning travel, and ways to mitigate that risk if you decide it is right for you.

    It isn’t for everyone. The posts says that. I repeatedly say that. I only personally know one person who has come forward and told me about this method gone astray for them, but if I thought it was limited to one person out there I wouldn’t have written a post on the topic or given regular warnings about rewards cards. Heck, we all know credit card companies weren’t built on one person paying interest.

    I’m not sure how much more of a warning I can give at once than dedicating an entire post to the dangers of rewards credit cards.

    On the other hand, it would be pretty “airheaded-ed” for someone to ignore the reality that rewards credit cards are, as you say, “an easy way to quickly make that travel dream a reality.”

    Good seeing you in Vegas.

  2. …I should also clarify the post said that I only know one person who has gotten a rewards credit card primarily for the travel rewards and then maxed it out. I of course know others who have had their own battles with using and misusing credit either due to necessity or impulse, but that was totally outside the world of getting a card for two hotel award nights…

  3. Mommy Points, your post was nothing but bunch of mixed messages. While it’s partially applaudable for you to point out the things that can go wrong with credit cards, in the end you went on to imply this risk is remote –

    “In my 3.5 years of writing about this type of stuff, I only personally know one person who has gotten a rewards credit card primarily for the travel rewards, and then maxed it out on unneeded items. I know hundreds, even thousands, who have used rewards cards successfully to maximize the purchases they were going to make anyway.”

    If the “spirit” of your post was to warn, then this paragraph was completely unnecessary. When you use extreme numbers like these (only 1 person in 3.5 years and thousands, etc…), it became a buffer that would put out any worries people initially would have after reading the first half of your post. Credit risk is a widespread disease that affects hundreds of millions of Americans and for you to play it down and overgeneralize with your own personal experience, it’s repulsive. Just when I thought it can’t get any worse, I watched Nightline.

  4. Awesome post Ric!

    I have been calling the BS since, well, day 1 of my blog lol.

    Some bloggers are so full of the BS that they have lost all connection to the vast majority of people living in this country!

    Many get into problems trying to emulate the lifestyle so many bloggers SELL so profusely but, you know, the shame and wounded pride just does not allow them to shout from the rooftops “Hey, I screwed up with credit…I got carried away because I am an idiot/lost my job/had a health setback/got screwed by insurance company/my wife left me with her personal trainer/lost my a*s flipping homes/lost my a*s day trading/ etc etc etc. So, saying “I only know one person” just means there was only one brave soul who admitted this sorry state in his/her life openly. Or you just don’t get around much or you just hang out with other fellow product salespeople!

    I am getting angry so I need to follow my therapist’s orders to step away for a while so I can breath again 🙂

    And, you know, it’s Friday: Go eat out and charge it. Because you deserve it!

    Thanks for writing this. And this is so right on!

    “Your health is your most important asset. Not much else matters when your health is shit.”

  5. Ric– You definitely make some very good points here. From the perspective of someone who is very financially stable (for the time being! fingers crossed…) I will also add that, as someone who does not participate in manufactured spending, I’ve found that getting new rewards cards that have spending thresholds has actually encouraged me to spend far MORE than I would have otherwise. I’ve definitely thought, “Well, I don’t really need this [new pair of shoes/new outfit/new TV, etc.], but it’s okay, it’ll help me meet my spending threshold to get my sign-up bonus.”

  6. Thank you, Ric, for your candid and vital post.
    I sincerely wish there were no affiliate commissions to be made in the credit card industry; the incessant pimping for personal financial gain would then end. The prostitution of blog readers has been relentless, and has very much changed the “travel” blogging world.

  7. Glad you’re still writing it as you see it rather than censoring yourself to win airhead friends.

    If Boarding Area tries to pull the plug on this, or your blog, rest assured your readers will find you if you ever decide to go it alone.

  8. Thoughtful and heart-rendering post. Thank you.
    In the ideal world, there would be a mandatory introductory warning paragraph about the dangers of debt in every cc pumping post by an “airhead in the…bubble”. But I fear that Upton Sinclair nailed it long ago: ‘It is difficult to get a man to understand something, when his salary depends on his not understanding it.’

  9. While their intentions might have been otherwise, I do agree that the articles made it sound like there’s negligible risk in applying for rewards credit card and I think that was irresponsible.

    However, I believe it was more of an oversight than intentional malice. I think that labeling these writers as “airheads” was inappropriate and was a poor way to start a conversation. You’re all writers trying to create a brand and calling each other names is the same as attacking their brand. Sure, you should definitely call each other out, but next time I hope you do it in a constructive way.

  10. I commend you for posting such a frank, honest and yet personal article, Ric.

    This excellent article reminds me of the conversations we had in Las Vegas last week.

    Thank you. I am hard-pressed to think of how I could improve upon it…

  11. @C – Airheads has a double meaning in this case. Of course I meant it to be attention grabbing, yet airheads is the lifestyle aspiration being sold with relentless credit card links.

    The sales pitch is get up in the air with points and miles earned from credit cards.

    We are all airheads in the points and miles world. Deadheads love grateful dead, potheads love weed, airheads love airplanes, airports and many airheads love credit cards for getting up in the air.

    Nothing has really changed in terms of using rewards credit cards to make travel dreams real. I’ve been using them since 1999.

    The major change in recent years is the shift from travel writers writing about how to use points and miles to travel writers turning into rewards credit card content marketers who get paid well to market credit cards to their readers. It is all about the money.

    I know I don’t need to see the articles about credit card bonuses to be aware of what is available. I receive something like 40 or more credit card applications every month by post in my mail box.

    I receive even more rewards credit card applications in my email every month.

    Would I not know about a rewards credit card offer without bloggers?

    I know credit cards are vital for travelers seeking hotel stays. It is a business part of travel life.
    In my opinion, we would have far more interesting writing about places and the airline and hotel industry if there was not so much focus on credit cards.

    Banks co-opted the travel rewards space away from the airlines and hotels in the past five years. I do not think this is a good change for consumers using loyalty programs in the long run.

  12. The best post I’ve read on BA in many months. Many BA bloggers, mommy points included, to me have become unethical in their constant cc pushing. They act as if they are financial experts when they clearly aren’t. Keep up the good work.

  13. Yep: Transportation bloggers are selling credit cards by putting first class frosting on them. That’s pretty irresistible to some. Including many who are going to wind up deeply in debt as a result.

    Just because they don’t personally know any of the people who get into financial straits as a result of their selling credit cards by pimping first class does not mean they don’t exist. They surely do.

    Do we blame the cigarette company or the smoker? The casino or the gambler?

    Bottom line: caveat emptor.

  14. Bravo to you for writing this. It’s a beautiful piece and I agree with you 100%.

    I get so frustrated reading the constant credit card marketing pushes being shoved down my throat, especially having experienced the ugly side of “I need this to survive”.

    Keep fighting the good fight.

  15. I think your article is generally right but your personal example is a little off the mark. It is not an example of the potential harm credit cards can cause. Rather, it is an example when among several bad options, running up credit card debt is the right decision.

    For example, say your car breaks down and you don’t have the 2K fix it but without it you can’t get to work. Spending 2K on your card is a much better option than going to a payday loan office for the money or losing your job. Similarly, in a medical emergency like yours, your huge line of credit allowed you to stay afloat for eight months. Without that credit card float would you have been able to stay in your home, buy food, make your car payments? In situations like these, credit card debt is the best of many bad options and doing what you did was the responsible choice.

    That said, the vast majority of Americans in too much CC debt did not have medical emergencies and many affiliate bloggers don’t discuss this risk enough. Also, Mommy points relationship with Amex is a little troubling since if she wants that cash cow to keep paying off she will naturally censor her blog (a la the NFL and ESPN).

  16. This needed to be said! If mommy points and all the other BA bloggers gave a hoot, they would shed all their affiliate links! Lets see how much pump would happen if there was no financial incentive. Congrats to your wife for being a survivor. Chemo followed by chemoRT is tough. Its good to know y’ll in one piece!

  17. Or even more pathetic, a certain mom blogger using their young child as a prop to convince young parents that applying for a bunch of credit cards is the secret to taking the kids to Disney World. Now that is really pathetic, but the hapless father should be blamed too for letting this happen. Just about the time you think her blog might have a soul, she goes out and pimps herself again for the infamous “last day to get in on this credit card deal”…which of course resurfaces every other month. Not only a predatory card pimp, she’s worse, dragging her family into it by using them as cheap props. Shame on her. But hey, I don’t have to go to sleep at night having made my living like that.

  18. Thank you for this post. I’ve been waiting for someone in this community to say this publicly for a long long time. Many of us are so very frustrated with the direction things are going, and it’s really high time credit card bloggers get called out for what they are up to. You’ve said something that most will not say, because there is real money involved. I stand up and applaud you.

  19. Amen, brother.

    I get really sick of reading blogs that are nothing more than poorly disguised shills for Cards X,Y, and Z. It also seems that most bloggers work very hard to sell the aspirational aspect of the points and miles game-flying business or first to Europe/Asia, and staying at the finest hotels-rather than helping the less frequent traveler take a family on vacation once or twice a year.

  20. If you don’t want credit cards, don’t apply. If you don’t like what Mommy Points has to day, don’t read her. No one is forcing you to do either. However it is a free country with freedom of speech and she should be able to write about anything she likes without being attacked and insulted. Others should be able to read whatever they want and apply for credit cards without being subject to your criticism. Again, you have the freedom of not reading her if you don’t like what she has to say.

    Ric, the story about your wife’s illness is very touching and I am so happy to hear that she is doing well now after all she has been through. As a cancer survivor myself, I find stories about survivorship very uplifting. However, it is not credit cards or Mommy Points that gave her cancer and your anger is misdirected.

  21. Great post and spot on. Yes you surely can add many many more of the BA bloggers who just seem to be credit card marketers. That’s why I and many many others do not visit BA any more and are highly selective in the blogs we follow and just go to those blogs directly. Yours is one of the good ones.

  22. I did question it myself when I saw line about only one person having problems. It’s hard to know who has credit “problems”. For travel card purposes I consider it a problem if you can’t pay in full every month (given the generally high interest rates).

    The people living off credit cards and not paying in full can often be eating out more often, have more new “stuff” etc. than people in better financial shape. They can look like they’re doing great…until they’re not (maxed out cards and no more approvals for new ones).

    I have a next door neighbor I never suspected of problems until they came to me about their home being foreclosed on.

  23. Fran – I thought somebody responding back to what somebody else says or writes was part of free speech.

  24. Fran: Part of being in a “free country with freedom of speech” is that people can be held accountable for their words. Mommy Points is certainly allowed to write what she wants — BUT — she does not have the right to do this unchecked and with impunity. If other people think she’s doing something irresponsible or unethical, they have the right… and possibly even the obligation… to call her out on it. They have the right to discuss and debate what she is saying. They have a right to consider her motives. That’s what’s happening here, and i’m so glad to see it. I’m also glad I don’t live in your version of a “free country” as it’s a pretty scary interpretation.

  25. Dan (21) – Using a credit card when you can’t pay in full can be a necessity in emergencies and a good decision. However I hope people have a non-travel card for those purposes, since they usually offer far lower interest rates.

  26. Hear! Hear!!

    … and you didn’t even get into the nutty manufactured spending schemes some promote … nor the shameless echo chambering among a koupla popular BA bloggers (invariably followed by the absurd “you saw it here first” tagline).

    I’ve been following your blog since you began offering careful and honest assessments of the hotels reward(s) value some years ago … I recall it was Carlson where you pointed out there was more value than the luxury suite crowd was willing to acknowledge — later when they (Carlson) splashed with some great promotions, all clamored aboard of course

    Keep up the good work.

  27. Great post, easily the best I’ve ever read on BA.

    Loud and proud: I got myself into $10,000 into debt. I’m not going to say “it’s all the travel bloggers fault” = but the incessant pushing, the affiliate articles, et al…it’s like reading a pamphlet from my local bank.

    I started out paying my cc’s in full. Then new credit cards would come out. Then new spending limits. Then “app-o-ramas”. Then manufactured spending.

    Can you believe these bloggers would push manufactured spending? Unethical at best.

    Long story short, I used to aspire to be a “travel blogger” – and I still do. But as I start my travel “blog”, I know two things: (1) I’ll never push credit cards onto my readers, and (2) I won’t be a transportation blogger (hotels are one thing, but to call One Mile at a Time a travel blog is disgustingly laughable).

    Anyways, debt is gone, as I’m currently a part-time attorney with no student loan debt. But the debt games we play are real. I’m a smart guy (I think), and reading BA and seeing 10 bloggers push the same credit cards once got my heart racing and I just HAD to apply at all costs. Now it’s slightly nauseating.

    Keep up the good work!

  28. It might be worth pointing out that the bubble you’re noticing has a regional component. Those of us in the middle of the country (like Mommy Points) didn’t get to benefit from the paper millionaire effect of ridiculous California property valuations, and are likely to know fewer people that ended up underwater when that bubble burst.

  29. Fantastic blog post, I 100% agree with everything you have written!!! Easily the best post I’ve read in months on BA. Keep up the great posts and it’s nice to know that BA has at least one blogger (yourself) that hasn’t been tainted by the easy CC affiliate referral money!

  30. I haven’t been in this game nearly as long as others, but in the short 4 years I have been collecting miles and points I have notices a drastic change in the blogs. It used to be that I read blogs for tips on how to use points and for trip reports on cool vacation destinations. Now it seems that tips and trip reports are becoming more and more rare and postings about credit card offers are becoming even more prevalent.

    Now sure I could simply just ignore these blogs, but that ignores the argument Ric is putting forth. Bloggers are pushing a dream to lure in reader to make money for themselves without any care for the damage they may cause. Aside from the potential disastrous consequences Ric explains, bloggers are irresponsible in another way. They push sources of points without explaining how to use them! Why do they do this?!!? I wonder if it has anything to do with the fact that every blogger seems to have their own award booking service or has a deal with booking service to promote them. Bloggers who push award booking services have twice the conflict of interest as they push credit cards for referral money as well as award booking clients.

    In addition to the issues with the individual blogs, I have found that boardingarea itself is becoming a repository for useless blogs. All one has to do is load boardingarea on a day when a new credit card offer comes out or is about to expire and you will find almost every single blog pushing the exact same offers without any shame. Boardingarea has added a ton of new blogs lately and almost none of them offer anything interesting. In fact many of the new blogs are barely related to travel and simply just push affiliate links for random crap that has nothing to do with travel.

  31. Sure we are all entitled to express our opinion and that is free speech. However starting out by calling someone and “Airhead” and then demeaning how she likes to travel with her child is more a personal attack than expressing a different point of view. If you are going to get so upset about what she has to say you don’t have to read her and you definitely don’t need to sign up for credit cards. Did you ever think maybe you are not her target audience and maybe there are moms out there that want some tips on how to responsibly accumulate miles? That is not grounds for such an attack. Nuff said by me…I have lots of other more professional sources to follow for gathering travel information.

  32. MommyPimp and the rest of the card pimps are despicable scum as far as I’m concerned. What “family” (besides the 0.1%) flies their 4yr old in biz class around the world just “because”? Yet MommyPimp did exactly that. What sort of warped reality bubble do you have to live in to do something like that?

    Pimps like OMAAT, VFTW, MMS and dozens of others like them need to start behaving responsibly, instead of masquerading as travel “experts” when they are really only credit card marketing pimps.

  33. While I commend Ric for an excellent post, other than the airhead comments, I truly don’t understand some of the virulent hatred directed at Mommy Points by his followers. She is a blogger who does an excellent job informing many people of opportunities available to them. Will there be people who don’t handle these opportunities responsibly, absolutely. No one is to blame for that behavior but the individual who is irresponsible. To state that she uses her family as props and is nothing more than a pimp is perverse. I am certain that she makes a comfortable living doing what she does and I congratulate her for being a successful entrepreneur. No one has to read her blog and no one is obligated to follow any advice or recommendations that she makes. In this age of entitlement, it is always easy to blame others. She is not at fault or to blame for anyone that reads her blog and does not have the self control to avoid unnecessary debt.

  34. What is REALLY irresponsible is blog posts encouraging college students to get rewards credit cards. I’m as big a “miles and points” fanatic as most of the folks on these blogs, but PLEASE – let’s teach young folks to use credit responsibly first. The benefits can and will follow.

  35. Marc (#42): I think it was the Nightline segment that brought the hammer down on Mommy Points. I feel the same distaste for many other bloggers who push cards, but there was something so shameless and irresponsible about her participation in that segment, and it was targeted at such a mammoth scale, that Mommy Points quickly came to represent the worst of what’s so very wrong about the Freq. Flyer blogging scene.

  36. Ric, you have always been my favorite blogger, and this post reinforces my opinion. While I am not angry at credit-card pushers, as I have benefited from many of these deals, I also worry that these schemes may tempt those who, often through no fault of their own, find themselves in a precarious financial situation. Thanks for adding your valuable perspective, and I’m glad your wife is doing well. After all, without good health, what good is free travel?

  37. @Marc (#42) – if you actually went back and read her blog from the beginning (and most of the older blogs), you could actually see how the blog changed from a travel/miles/points blog into a financial products blog. She uses miles/points to sell a lifestyle based upon credit card usage.

    The problem comes in when there is not enough disclosure about how much income they actually make. No, I am not asking any blogger to reveal their exact income, but if she is making hundreds of thousands of dollars a year – her lifestyle is very difficult for someone else to replicate on $30,000/$40,000/$50,000 a year.

    You might think hundreds of thousands of dollars is too high of an income, but if she sells 300 credit card applications every month – at $150 on average, that is $45,000 per month – or $540,000 per year. $1 million dollars a year at $150 per application is 556 successful applications a month.

    I applaud Ric for an eloquent post on this subject and appreciate what he has shared about his life.

  38. Ric,
    Thank you for calling out irresponsible behavior. The downward trend towards personal income enrichment at the expense of all ethics is just sad. While I respect the right of others to earn a living (and do so myself) by sales, I wholeheartedly reject the idea that it has to be done at the risk of destroying a family. The push to keep up I see marketed daily is a torch; at some point the blogger has to accept responsibility when someone lights a fire.

  39. Like others, I’m happy to see this contrarian point of view expressed. There’s very little attention paid to the general issue of people who are not able to manage their credit effectively and safely.

    That said, I have some problems with individual points you made in the post:

    1. The post you’re most directly responding to (Summer’s “Dangers” post) seems to me to go above the usual pro-forma “watch out for your credit” statement on travel-and-points blogs. Even if you take exception to one particular paragraph the rest of the post seems like one that should be commended, not criticized.

    2. I personally have learned a lot about managing credit from the blogs, not just acquiring it. I’m talking about how to check my credit score and dispute issues (none of which has ever been an issue for me, but it’s through the blogs that I’ve learned about it).

    3. The majority of the people you know who got into debt trouble seem to have gotten there not from irresponsible credit card spending but from irresponsible real estate decisions. Even today the credit card “frenzy” does not approach the level of insanity we saw in real estate borrowing and lending ten years ago. In my personal observations people who borrowed foolishly during that bubble often became the biggest advocates of speculative real estate credit.

    4. Your family’s inspiring story of fighting and winning a battle against cancer strikes me as an argument in favor of, not against, having a large and available line of credit.

    5. Very few, if any, blogs are purely altruistic. A number of the blogs that people deride as having “become” bad through credit-card pushing were originally started, in large part, to publicize the award booking services of the authors. Boarding Area itself is a profit-making venture supported by advertising. I’m not criticizing these endeavors, just pointing the common notion that if you’re not paying for the product you ARE the product. As I write this comment I’m looking at three or four advertisements – your job as a Boarding Area blogger is to deliver my eyeballs to those advertisers.

    6. When singling out two women bloggers for criticism I hope you’ll consider that the use of the term “airhead” has particular connotations which I strongly suspect were not your intention to convey.

    Anyway, thanks for an engaging and meaningful post.

  40. Like others, I’m happy to see this contrarian point of view expressed. There’s very little attention paid to the general issue of people who are not able to manage their credit effectively and safely.

    That said, I have some problems with individual points you made in the post:

    1. The post you’re most directly responding to (Summer’s “Dangers” post) seems to me to go above the usual pro-forma “watch out for your credit” statement on travel-and-points blogs. Even if you take exception to one particular paragraph the rest of the post seems like one that should be commended, not criticized.

    2. I personally have learned a lot about managing credit from the blogs, not just acquiring it. I’m talking about how to check my credit score and dispute issues (none of which has ever been an issue for me, but it’s through the blogs that I’ve learned about it).

    3. The majority of the people you know who got into debt trouble seem to have gotten there not from irresponsible credit card spending but from irresponsible real estate decisions. Even today the credit card “frenzy” does not approach the level of insanity we saw in real estate borrowing and lending ten years ago. In my personal observations people who borrowed foolishly during that bubble often became the biggest advocates of speculative real estate credit.

    4. Your family’s inspiring story of fighting and winning a battle against cancer strikes me as an argument in favor of, not against, having a large and available line of credit.

    5. Very few, if any, blogs are purely altruistic. A number of the blogs that people deride as having “become” bad through credit-card pushing were originally started, in large part, to publicize the award booking services of the authors. Boarding Area itself is a profit-making venture supported by advertising. I’m not criticizing these endeavors, just pointing the common notion that if you’re not paying for the product you ARE the product. As I write this comment I’m looking at three or four advertisements – your job as a Boarding Area blogger is to deliver my eyeballs to those advertisers.

    6. When singling out two women bloggers for criticism I hope you’ll consider that the use of the term “airhead” has particular connotations which I strongly suspect were not your intention to convey.

    Anyway, thanks for an engaging and meaningful post.

  41. Ric,

    Thank you for this post. It’s the best I’ve seen on Boarding Area for quite some time.

    I generally enjoy your other posts, as well. While I do appreciate and learn, at times, from other bloggers also, the constant credit card pimping gets old. The ridiculous obsession with what some perceive to be luxury travel gets old too. If you need a glass of champagne that bad, there are plenty of cocktail lounges that can meet that need. I can deal with coach and take 2 trips with my miles instead of one in first class. Big deal.

    A lot of people have misplaced priorities. Thank you for your reminder that health is just about everything.

  42. @LarryinNYC – I could have gone into great detail about individuals I know who have had credit problems. The main point was to share my story on how we were cruising along fine and one day it all came crashing down quickly.

    Credit cards were the double-edged sword. Sure they propped us up for the year, but that had its consequences. We were spending more than we were earning. Just our example and one that many others find happens when you have an illness, a death, need to bail your kid out of jail, wreck your car.

    The point is when bloggers repeat to use your credit wisely and act responsibly, there are things that happen that make the credit cards in your wallet the easy way out and perhaps not the best way to buy your way out of a situation.

    I am not saying credit cards are bad. Credit cards are essential in the travel world. What I think is bad is hundreds of travel bloggers equating good travel strategies as having all these credit cards as the primary way to fund your travel.

    There are credit card ads on my blog pages. There are advertisements on most websites. Do you ever click on web ads? I might click on a few ads over the course of the year.

    I singled out Mommy Points and The Miles Professor for what they wrote this week. I singled out Frugal Travel Guy for his tagline that was on the site for years. I could have looked for other guy bloggers to criticize, but my point about airheads in the rewards credit card bubble was not personal, it was my business sense and applies to all the airheads pushing credit cards day after day into our faces.

    Credit card marketing is all the rage in the points and miles world. The statistics on credit card usage in the US tell a story. Nearly half of American households carry revolving credit card debt. And that percentage is climbing quickly. Hundreds of travel blog posts this week will try and sell the reader the dream of more and better travel by signing up for a credit card.

    I am one blogger saying think about the impact of credit card marketing in the travel blog world.

  43. Fran and marc winters,

    No where in the post did Ric call either Mommy Points or the Miles Professor an airhead; nor was he attacking them. Ric explained what he meant by the word in comment 15.

    “We are all airheads in the points and miles world…airheads love airplanes, airports and many airheads love credit cards for getting up in the air.”

  44. A few simple facts:
    1.It’s easier to spend money than make it.
    2. Most folks spend more money using CCs than cash.
    3. Most CC companies are smart and win in the long run.
    4. Most citizens have a hard time assessing long term risk.
    5. Most of us are financially lazy. We’re more likely to keep something (insurer/bank/CCs etc) than close an account or service.
    Be very, very careful with CCs. I am sometimes on the losing end of transactions.

  45. I would say your story is more a parable of ‘value at risk’ rather than rewards.

    People forgot you need a cash cushion. One that’s a year or longer’s worth of expenses. And 401k doesn’t count as cash because it’s in the market and thus, at risk and can decline in value during a market crisis.

    Many of the people burned were taking on too much risk via real estate. You weren’t one of those.

    Would be curious to hear what differentiated those who had remarkable recoveries.

    My guess is they weren’t forced to dip into their retirement accounts, so they didn’t sell at an artificially low price and participated in the upside.

    BTW – I don’t trust Nerd Wallet at all. They are among the worst when it comes to hiding things that aren’t in their financial interest according to people who used to work there.

  46. Rg (59) +1

    That was exactly what I was thinking. I distinctly remember that post. How much of his credit card debt was discharged in bankruptcy?

  47. I agree with your credit card sentiments and pretty much fall into the Dave Ramsey camp regarding credit. In addition, the sign up bonuses are usually only good if you spend thousands of dollars in a limited time period, which leads to binge spending.

    Even if it was not your intent, I am a bit surprised you publicly went after Summer, who it seems in public on twitter has always been nice to you. Yet there are others on BA who not only push credit cards and binge spending, but also push spending hundreds of dollars on daily hotel rooms for the “free” elite benefits, while openly mocking budget travelers.

  48. Well, as one of this hobby’s graybeards (I’ve been playing the frequent flyer game for almost 30 years now), I was troubled by Summer’s Nightline appearance and told her so on her blog. So I applaud Ric for also taking a stand on this.

    That said, the folks pitching credit cards on the travel blogs are not evil. They’re travel enthusiasts who are also running a business — their blogs. As Ric has noted, the selling of credit cards is so ridiculously lucrative that it’s extremely difficult to walk away from this easy money.

    And, for some people — including me — these loyalty credit cards have been almost mind-bogglingly lucrative. I have literally taken my family all over the world thanks to the banks’ “generosity,” and I’ve also covered a portion of my everyday living expenses with their bonuses. The bloggers have obviously done the same. So I can certainly see why they’d think there’s “no harm” in making a buck off this opportunity.

    But, as we all know, not everybody can handle credit well, and there are certainly folks who are hurt by these pitches for more and more luxury vacations.

    Overall, though, I think I can say with 100% certainty that the travel world would be better for readers if there were no credit card referral bonuses. The information would certainly be more objective, and it would be put in better perspective.

    Obviously, most bloggers aren’t going to stop — there’s too much money for them to do so. What we have to hope for is that the banks stop. And they should: are you going to tell me that they really make money on the customers who pick up their cards at “View from the Wing” and its wannabe competitors? The reality is that these blogs are really for “travel hacking,” and they’re aimed at folks who want to exploit loopholes in the programs. Like meet the minimum spend, get the 50K sign up bonus, and cancel the card. If the banks can truly make money off these referrals, there must be a heck of a lot more people running up credit card debt than Summer and her fellow bloggers believe!

  49. Thank you Ric and all the best to you and your wife!
    It’s about time to call out those pseudo-bloggers. They make me sick.
    I also really hope someone will ask them straight in their face how they pay
    for those “miles” trips every day. Using the simple primary school level math,
    if you use 100,000 miles and up every week, you need to earn/buy more than
    5 million miles every year. Can they explain it? Or they will just enjoy
    the blind followers never asking for any explanation for ever?

  50. I haven’t been as angry as many about the pimping of credit cards on a lot of the blogs. I don’t see it as something to get overly worked up about it. I learned pretty fast which posts are to pimp cards and which have value to me.

    I kind of chuckle when something happens and I’m on twitter and see Ben, The Points Guy, Gary, MommyPoints, etc. all tweeting the same thing in rapid succession.

    I don’t use referral links. That is a decision I made because, while I feel like there are some valuable posts and some great information to be had on the blogs, you really do feel like you’re in the middle of an infomercial half of the time.

    I do like Gary Leff’s blog, historically, because I don’t feel like he is pimping his links. He promotes them, but there is a more almost journalistic side to his blog that I like.

    The condition of the travel blog space is troubling to me. But, that’s the way of the internet age.

  51. Someone get this article over to TPG, he has whored himself out to CC companies and his blog has gone from one that contained helpful blog posts to blog posts that are created just to pimp some new credit card.

  52. I do think there are people out there who will get themselves in trouble trying to emulate the travel bloggers “glamorous” lives but they’d just get themselves in financial trouble somewhere else with clothes, cars, extra homes, etc.

    Is it just me or does it seem like some of the BA bloggers have become seriously addicted to earning points and traveling? Some seem to be constantly running from airport to airport for “leisure” travel. Free or not don’t they just want to stay home and enjoy their regular daily lives?

  53. @CCORD – Some of the comments have pointed out that it is not credit cards that are the problem, rather the excessive travel lifestyle consumerism.

    I have observed a pattern with bloggers who appear on the scene and develop very frequent travel patterns.

    I see it as a cycle of new found opportunity. In 1999, I was a Healthy Choice pudding boy. My exploits amounted to about 120,000 miles earned on $600 in chocolate pudding purchases. Pudding Guy from Davis, California became a legend for earning over 2 million miles on his chocolate pudding purchases. I followed that up with earning about 2 million miles over the next 12 months with Latinpass mileage runs and manufactured spend on web shopping portals.

    I had a regular job, so many of my trips flying were only weekend trips to London or three-day trips to Singapore where I spent one night. A Saturday morning flight to Singapore arrived Sunday night and I could get 5.5 hours in bed before boarding the plane again for a 7am flight back to the USA and back to work on Monday. Sometimes I stayed one night in the city. These were the days when a flight to Singapore was under $400.

    I found myself flying to places for no other reason than to earn miles so I could take more flights in business class. London, Paris or Frankfurt for one hotel night. Sure. I got to fly up front much of the time and earn miles to fly up front more of the time.

    After eight years of that lifestyle, I found my eyes wide open flying Air France in business class over the Andes on a $500 mistake fare between JFK and EZE. Reading the inflight magazine on carbon emissions from jet travel, it finally hit me that I was being irresponsible in my frequent travel.

    I was wasting money and time flying around in meaningless circles chasing status. It is fun to jetset around the world. But is it a good lifestyle choice?

    I decided not for me. After logging 100 to 150K for nearly a decade I let my status chasing days on airlines drop.

    My travel preference now is to travel for at least one week at a time and two weeks when I can. Slow down, waste time, and really see the places I am jetting to as a destination.

    I read a great piece in the New York Times today on procrastination.
    http://www.nytimes.com/2014/09/28/opinion/sunday/how-to-stop-time.html

    “Firm in his belief that time is not as natural or apolitical as we might think, Cossery, in his writings and in his life, strove to reject the very system in which procrastination could have any meaning at all. Until his death in 2008, the elegant novelist, living in Paris, maintained a strict schedule of idleness. He slept late, rising in the afternoons for a walk to the Café de Flore, and wrote fiction only when he felt like it. “So much beauty in the world, so few eyes to see it,” Cossery would say. He was the archetypal flâneur, in the footsteps of Walter Benjamin and Charles Baudelaire, whose verses Cossery would steal for his own poetry when he was a teenager. Rather than charge through the day, storming the gates of tomorrow, his stylized repose was a perch from which to observe, reflect and question whether the world really needs all those things we feel we ought to get done — like a few more pyramids at Giza. And it was idleness that led Cossery to true creativity, dare I say it, in his masterfully unprolific work.

    “So much beauty in the world, so few eyes to see it,” is the motto I live by today. Sit back and enjoy the things in other places, yet take time to enjoy the things in your immediate surroundings too. There is beauty everywhere if you take the time to see.

    I truly believe most people need to slow down and stop hustling for more and more money, possessions and travel.

  54. thank you for posting this. It was a breath of fresh air on what has become a pretty abhorrent display of credit card shilling on boardingarea.

  55. My use of the word ‘airheads’ has been criticized in this piece, perhaps rightly so since it is almost exclusively used to describe a stupid person.

    Summer, Mommy Points is intelligent, friendly and a great writer with a welcoming voice in her words. As I said in this piece, I like Mommy Points. This was not meant to be a personal attack on Summer.

    Inna, The Miles Professor, is obviously not an airhead in the ‘stupid’ meaning of the word. She earned her Ph.D. in math at 25 according to her blog and taught at CalTech, probably the brainiest college in the western US.

    I embrace the term ‘airheads’ as an appropriate descriptor for all of us in the miles and points world traveling through the use of frequent flyer programs.

    ‘Bubble’ also has a double meaning regarding credit card affiliate marketing as an economic bubble that may devalue in the next couple of years as more and more bloggers become involved in marketing credit cards.

    The bubble also describes a world of airport lounges, premium rewards travel and fine hotels, a perspective many of us inside the travel rewards world experience regularly and a lifestyle far removed from the reality many people face in their day to day lives.

    As an educator and writer, my path crosses the lives of children and families across the economic spectrum from homeless and criminals to super-engaged community leaders and corporate executives. Much of the time these days, I am sheltered in my own bubble of life as a writer in Monterey. Still, I have had access to a broad perspective of community members and I have had insight to personal details of many people’s lives.

    Again, this is not personal against bloggers. Now and then I make a statement about credit card affiliate marketing. Writing in the BoardingArea space, I can’t avoid seeing credit card affiliate marketing every day. I read many travel blogs as a vital component of my work.

    Based on one statistic from Seth, The Wandering Aramean, about View from the Wing and One Mile at a Time, their two blogs alone had about 50 credit card posts in August 2014.

    Take only the Top Ten miles and points blogs and there are probably more than 25,000 affiliate marketing credit card links over the course of the year in the articles on these ten blogs. That is an enormous number sales pitch offers to see. There are hundreds of bloggers in credit card affiliate marketing.

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