BankDirect Bonus Miles - No Go

Discussion in 'General Discussion | Miles/Points' started by Slow_Mustang, Mar 15, 2012.  |  Print Topic

  1. Slow_Mustang
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    Slow_Mustang Silver Member

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    BankDirect has a program to award you 10K bonus miles for 3 bill pays/month for a 12 month period from your checking account. I fulfilled the requirement, had some payments made for credit cards, in addition to institution to institution fund transfers. They have refused the 10K mile award as the account has not been my 'primary day to day' account. Oh well, it was worth a try.
     
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  2. DTWBOB

    DTWBOB Silver Member

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    Be happy they refused you, one other well known bank is issuing 1099k to people who received miles from them at a rate of 2.5 cents per mile.

    That makes the miles taxable income.

    DTWBOB
     
  3. Slow_Mustang
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    They don't pay any interest on checking accounts. If they started sending out 1099s, there would be lot of accounts closing in a very short time.
     
  4. schnitzel
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    I don't think you have to worry about a 1099 from these guys. It's a possibility, of course, but there's no indication it's coming.

    On the bonus, yes, they've really clamped down and the rules over there seem to change all the time. "Rules" might not even be the word - they just interpret the info however they'd like.
     
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  5. JohnDeere19
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    I don't know what the terms are, but if you fulfilled them then I wouldn't say "oh well," I'd write back and note that I fulfilled all the necessary terms for the promotion and am therefore due the 10,000 bonus miles. Be firm, but respectful. How can they deny you for (bolding mine) "meet[ing] the technical requirements of the program without normal activity" is just poor customer service imo.
     
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  6. schnitzel
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    JohnDeere19 -

    Sounds like you haven't dealt with these guys. They've become pretty obstinate. I agree that no one should just take a 'no' and move on, but there's a limit, and it's hard to really have leverage with these guys.
     
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  7. Slow_Mustang
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    That is what I have heard and am trying to provide a data point and move on. Their definition of 'normal activity' is murky. We don't close all our existing CC's when we get a new one and make it the 'go to' card to get the benefits. Ditto for a new checking account. But this bank, unfortunately, has a different definition of 'normal activity' and they stick by their guns.
     
  8. JohnDeere19
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    I haven't dealt with them. Wow, that's terrible customer service and a great way to lose customers in the long run.
     
  9. schnitzel
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    I honestly believe that they lose money on each and every one of us with a balance of, say, over $50K. So they have plenty of incentive to be negative.

    The big question is: why continue like this at all? Why don't they either shut down the accounts, or further lower the ratio? And all I can hypothesize is that they hope rates will go up and put these accounts back in the black.

    In the meantime, though, beggars can't be choosers. We tolerate this kind of crap because we've got no better option. In fact, a poster on TOBB had his/her account unilaterally closed by BankDirect, supposedly. It's like a shot across the bow: don't anger us!
     
  10. lunettes noires
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    Yeah, I think that may indeed be their goal (to shed mileage-bearing deposits). If you do the math on an account with $200k in it, they would have to be buying those miles for less than .1 cents/mile to make it revenue-neutral compared to their standard checking account that pays .1% interest and no miles instead of .05% interest with miles. It's a wonder to me they haven't shut the whole program down yet, but maybe they committed to AA to buy a whole bunch of miles to get a slightly better rate...
     
  11. schnitzel
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    Or maybe they already bought the miles? Even so, though, seems like a contract with AA wouldn't be keeping them from lowering the rate.

    In any event, even with the bad service, I'm happy for now.
     
  12. mikeef
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    mikeef Silver Member

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    Ahh, now we're into my area of expertise. :)

    I would bet that you are correct in that first sentence. I don't know if $50K is the right number, but it sounds as good as any.

    As most people know, banks make their money off the "net interest spread" between deposits and loans, thus the old "3-6-3" rule ("We'll take your money at 3%, lend it at 6% and be out on the golf course by 3."). The difference between interest earned and paid as a percent of assets is the net interest margin, or NIM. Of course, given how low rates have gotten, that spread has shrunk considerably. The rate that the bank is paying depositors is fixed, given that we know exactly how many miles we will get. Assuming I have $100,000 in the bank, they're going to give me 120,000 miles, which I'm guesstimating cost them in the $1,200 range, or 1.2%.

    But if they lend at 4%-5%, shouldn't that be an easy nut to cover? Ah, it is not. There are regulatory requirements, infrastructure costs, marketing costs and the issue of not necessarily being able to lend every penny that they have in deposits. And there's no investment bank to generate hefty fees to offset those costs.

    So why not get rid of us? Well, they still have to maintain a certain level of deposits to keep the loan to deposit ratio healthy. If we all pulled out our cash, their asset ratios (In the strange world of banking, loans are assets.) would go nuts. So they still need us.

    Still, until interest rates move up, I would continue to expect the balloon to slowly leak air, as BD determines what they can and can't get away with.

    Mike
     
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  13. Slow_Mustang
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    At the end of the day, to make an offer and when the requirements are fulfilled, to come out and say that the reward will not be awarded because we think that your sole aim was to collect miles and not to a have monogamous relationship with us is disingenuous. I am already in such a relationship with a human being and I don't need one with a bank(er).
     
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  14. FLYERIL
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    FLYERIL Silver Member

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    So you are a one woman kind of guy but not a one bank kind of guy.
    Bankdirect just wants you to be less promiscuous about your financials. :D
     
  15. Slow_Mustang
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    Banks only understand cold, hard cash, and we understand only cold, hard miles/points. So, by definition, we have to be promiscuous with them, else this forum will be meaningless to us and Randy will have to find something else to keep himself entertained.;)
     
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  16. schnitzel
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    Given the events of the last few years, promiscuity among banks is necessary for survival.

    Monogamy is necessary for happiness.
     
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  17. FLYERIL
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    Yes, I spread my money/credit around also. I dropped Bankdirect myself after the imposition of the $12 fee. It just seemed like Bankdirect was becoming unfriendly and refusing to comply with their own terms and then imposing additional fees.
     
  18. Slow_Mustang
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    Some employers even let you spread your paycheck direct deposit over 2/3 banks to keep them all happy.
    I kept some money at BD for the 10K bonus. Since their refusal few weeks back, I have been thinking about either putting more money in there and get cozy with them to get more miles/month to justify the $12 fee, or to just let them go and find another 'partner with miles/points benefits' to trust my money with.
     
  19. mikeef
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    I did that and never got my points, either. I only had $100 going there. Seriously, this whole, "You're really just doing it for the points" attitude is grating. Well, duh. Of course I am. If you don't want to honor it, don't offer it.

    My last employer allowed me to do as many banks as I wanted. My current one only allows three, so I have to mix it up.

    Mike
     
  20. schnitzel
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    Right - what they should say is: We want to be your ONLY bank, so show us that you're seriously making us the one and only, and we'll shower you in miles.

    Otherwise, BD just sets the bar at a certain level, people just barely exceed it, and they disallow the miles. They're setting themselves up for problems. If they don't like their own rules, they should change them and play by them.
     
  21. Slow_Mustang
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    I only want to be drizzled with 10K (bonus) miles at a time and not showered :).

    Fortunately, my direct deposit amount was considered large enough, and they had not instituted a formal review of eligibility to receive bonus miles back then, so I got the DD 10K bonus. But that was many moons ago, as one has to do that for only 3 months to qualify.
     
  22. Slow_Mustang
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    Further lowering of miles for the checking account,

    "Earn 100 AAdvantage® miles per month for every $1,000.00 of the average daily collected balance in your Mileage Checking with Interest Account up to the first $50,000.00 on deposit. Average daily balances above $50,000.00 earn 25 AAdvantage® miles per $1,000.00 on deposit, with no cap."

    To get 5000 AA miles/month with a deposit of $50K, one has to pay a service fee of $12/month. It appears that they are trying to shut this thing down.
     
  23. estnet
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    estnet Gold Member

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    Ummm, this was news a few months ago when it was announced and I pulled all my funds out at the beginning of June when this went into effect for July - but perhaps it is good to have a reminder for those who forgot this change was happening.
     
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  24. Mrlasssen

    Mrlasssen Silver Member

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    I am considering opening a checking account just for the mile, park some $ and something for it. Question is if I don't have any activity will they award the miles or shut down the account? Better questions has anyone had any problems getting their money out, the full amount?
     
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  25. royce242

    royce242 Silver Member

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    I'm a supremely happy Capital One credit card holder and money market account holder.

    I would suggest you check out their money market offerings. It gives you miles every month based on your balance and also pays an interest rate, as meager as it is. I figure on the $30K I have in the account, I get about $25 in miles/cash from them. You can use the miles for a statement credit on your credit cards with CO. Plus there are no annual or monthly fees.

    It beats a blank as my father used to say.

    Here are some other banking services they offer...

    https://secure.capitalone360.com/my...m/directbanking&utm_campaign=COF&utm_term=BAU
     

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