Are Travel Hackers Parasites?
Travel hacking seems like a particularly parasitic hobby to me. And by that, I mean that we primarily find ways to benefit at the expense of others.
Take credit card churning, as an example. The only reason why these credit card companies offer such ludicrously large sign-up bonuses is because it’s overall profitable for them to acquire customers at such a cost. But if all people were like us and just signed up for credit cards continuously and 1) didn’t continue using the cards and 2) didn’t pay any fees or interest, then the credit card companies would no longer find it profitable to offer such large bonuses (hence, the current trend toward higher barriers to churning). Even when you take into account things like annual fees and minimum spend requirements, essentially all of the credit cards that people talk about in this space must be net negative for the banks if you don’t keep spending on the card.
Or think about frequent flyer miles. Part of the reason why we’re able to get such outsized returns on our miles is because so many people don’t use their miles in these ways. As long as most people are redeeming their miles for things that don’t cost the frequent flyer program very much, we don’t really need to worry about devaluations, even if lots of miles are being created.
We benefit from people who pay late fees. We benefit from people paying ridiculously high interest rates on credit cards. We benefit from people who only sign up for one new credit card every couple of years. We benefit from people who redeem their miles for blenders.
This parasitic nature of travel hacking is particularly problematic as the hobby has grown in popularity and magnitude. While it might be okay for a small percentage of a bank’s customers to be lifetime value negative, we’ve seen multiple times over the past several years how publicity “kills” deals, as the size of the travel hacking parasite grows and attaches itself more quickly than ever.
The whole economy and financial system is based on a zero sum game? Some idiot loses money for someone smart to gain it.
We are parasites on an even bigger parasite, who makes money off of people’s misfortunes, vanity and stupidity…the late payments and interest payment on CC.
Next time you buy a cheap LCD TV and earn points from Best Buy, you can thank the CC companies and the dumb me-first consumers who had to go get that same TV brand new when it first came out and subsidized its future price drop. If everyone was smart and only bought exactly what they needed at the best prices, our economy would tank.
I thought that’s the whole point of hacking-exploiting weaknesses in an imperfect system. Then the system reacts and gets better, and hackers react and find more weaknesses.
My school system is better because it gets money that other schools don’t, because it meets some requirements set by the money-givers. So I benefit while poor kids on the other side of town lose.
If I’m reading you right, it might be net good to have lots of people hack, thereby disincentivizing banks from making things unequal (i.e. forming high barriers to churning).
What I’m trying to say is, it’s turtles all the way down.
Meh with the parasite talk. Weez simply little financial termites. And everyone knows that little termites have employed a very successful business plan since long before the dinosaurs ruled the earth.
Me thinkz them cardinals are increasing in numberz & vigilantesm 🙂