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You Can No Longer Buy Coins From The Mint With Your Credit Card

by Jason Steele

It has been generally known for some time that people could buy $1 coins from the United States Mint with their credit cards. The coins were then deposited in a bank account in order to pay the credit card bill. Customers were given frequent flier miles, cash back, or other reward points for their trouble. Two years ago, the Wall Street Journal brought attention to this scheme, and the Mint responded by limiting $1 coin purchases to $1,000 every 10 days. Travel hackers continued to purchases coins, albeit in limited numbers.

Two weeks ago, NPR again brought attention to this travel hack, in a follow up piece to a story they did on the failure of the $1 coin legislation. This time the Mint responded by no longer accepting credit cards. This brought a wide range of reactions among the reward card gurus out there. Some were angry that people brought attention to their loophole. In their mind, everything should be a secret, exchanged via private messages or posted using known code words to throw off lazy reporters.

Others were resigned to accepting that no great reward travel exploit lasts forever. There are still other ways to earn miles for credit card transactions for things that can be converted to cash. It is clear that those who live to find these loopholes will be determined not to brag about their discoveries.

My Experience

I was initially very skeptical when I heard about the coin buying scheme. It seemed like this involved a lot of risk and hassle. I mean, who is dumb enough to ship cash? Besides, why wouldn’t the bank code the transaction as a cash equivalent and charge exorbitant interest? The more I learned about it, the more secure it seemed. The money was delivered in an unmarked box via overnight shipment. The credit card issuers didn’t know that you were getting direct ship $1 coins. For all they knew, you were ordering the latest shinny proof set intended for serious collectors.

So I gave it a try. I ordered some coins here or there and brought them to my bank. The results were interesting. Some branches happily accepted them, just like they were cash. Others outright refused them citing a lack of vault space. Some even unrolled and counted all the coins. One time, their coin counting machine came up with a total that included a fraction of a dollar! Eventually, I found branches that were regularly willing to accept my deposits, and I ordered them in drips and drabs. My goal was to meet my credit card spending thresholds. For example, a new card may offer a 50,000 mile sign up bonus if I make $1,000 worth of purchases in 90 days. A few clicks later, I had ordered the exact amount of coins and was free to continue to use my regular cards for my daily spending.I always kept some portion of the coins to use around town. Parking meters accepted them, but my housekeeper would not take rolls of coins as payment.

Others were more ambitious. I remember seeing a picture of a pallet of coins that was delivered to someone. Now that the program is closed, people are admitting that they were able to be granted an exemption to the $1,000 every ten day rule, most likely through their company that they are an owner of.

Conclusions

I was never a hard core abuser of the system, but I did use it to fill minimum spend requirements. I also put a lot of these coins in circulation, so I didn’t strictly violate the terms. Deals are like flowers. They sprout, grow, blossom, and wither. This deal took an especially long time to cycle through to the finish, and had a high profile demise when it did. There are still plenty of good ways to earn credit card miles and points, we just need to look a little harder from now on.

 

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