Disclosure: Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Links in this post may provide us with a commission.
Discover Apple Pay Postmortem
Now that the Discover Apple Pay 10% cashback promotion and all of the other end of year madness is over, I have had time to settle down a bit and look back at things. I thought it would be a good idea to look back at my Apple Pay purchases, calculate what I’ll get back and show you a huge mistake that cost me quite a bit of money.
My Original Strategy
When I first heard about this promotion, I wrote that I would probably purchase gift cards to get to the $10K spending limit. My thoughts at the time were simple. Paying fees on gift card purchases made sense given the large amount of cashback. For example, purchasing 48 X $200 Visas at Staples for $206.95 would amount to $9,933.60 in spending and result in $2185.39 in cashback after doubling. Subtract out the $333.60 in fees and you have a nice profit.
No Gift Cards
Of course Discover became wise to our plans and very early on added a simple restriction to this promotion. Gift cards were excluded. That really stopped me for awhile and I began to procrastinate. That was my first mistake. I procrastinated so much that I came into December with almost no Discover Apply Pay spend. As you’ll see a little later that cost me.
Reselling in December
When it came to reselling, December was an inspired month for me. I found deal after deal and began to sell at a breakneck pace. Thankfully this inspired me to begin to search out in-store Discover Apple Pay opportunities. I found many deals at Staples, Best Buy (Apple products) and Gamestop among other retailers. It was great, but there was one huge limitation.
The Float & Low Credit Lines
I was floating a ton of money during the reselling process since I was ramping up inventory that wouldn’t pay me for awhile. This situation wasn’t bad per se, but not really ideal either. Due to this abnormally high float, I was juggling account balances and statement dates. I didn’t want statements to print while there was a high balance, so I would stop using a card shortly before the print date and pay it off.
Unfortunately our Discover cards presented a problem because the statements printed in the end of the month and both cards were maxed out. I tried to increase our limits, but that didn’t help much. I ultimately had to divert funds, payoff these cards and wait for the statement to print. Once I did that, there wasn’t enough time to recycle the credit limit again once I found deals to purchase.
In the end, my wife’s card which has a low limit of $3,500 was the issue. I ran into capacity constraints and only spent $8,000 out of the possible $10,000 on the card. Not a bad final number and I’ll certainly take the extra $1,600 after doubling, but I also left $2,000 in spending on the table. If only I hadn’t procrastinated in October and November. A ~$400 mistake.
My card was a bit different. It has a higher credit limit and thus I was able to spend the full $10K on it. Actually, this was the second mistake. I didn’t spend $10K, but $12K in Apple Pay purchases with it. For some reason I mixed up the scenarios with mine and my wife’s cards and thought I had to use up the whole limit to reach $10K. It turns out I was wrong. $2K+ wrong!
A Huge Dilemma
Since we came down to the wire with our purchases, I ended up buying stuff at about breakeven in order to make sure I hit the $10K limit on my card. Since those extra $2K in purchases won’t earn the bonus, I am spending time and resources for no profit. While I can return the products, I’ll probably just sell them, since their purchase raised me up to a higher elite tier in the store’s rewards program.
I also lost out in another way. Since I will only earn 1% in cashback, I lost out on the rewards I would have earned if I had paid with a different card. In my case I have a ThankYou Preferred with a 3X anywhere retention offer, meaning that I lost out on those higher spending rewards. Of course, it probably couldn’t hurt my relationship with Discover to have some non-bonused spend and that 1% does get doubled to 2% at the end of the year.
What I Will Make
Despite that last bit of over-purchasing, I still do not have any costs associated with my $18,000 in Discover Apple Pay spending. This means that between my wife and I, we will earn a total of about $3,960 or 22% of the $18K in spending once all doubling occurs. That is not bad at all.
Takeaways & Conclusion
In the end this was a fantastic deal and even though I screwed up a bit, I came out way ahead. For me this situation is a good reminder of two things. First, I need to not procrastinate. Had I not been feverishly trying to complete this and many other end of year deals, I wouldn’t have mixed things up. Organization wasn’t the problem, I was. Which brings me to my final lesson learned. Despite how much I study and live this stuff, mistakes happen. I am not perfect, but I am still doing pretty well.
Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.