TProphet – Page 16

The Case For Carry-On Empathy

June 12, 2014June 12, 2014 TProphet4 Comments

It’s really easy to lose sight of the human element in today’s air travel experience. It’s generally rushed and miserable. With ludicrous fees nipping at your heels everywhere you step among a minefield of “gotcha” clauses in the Contract of Carriage, it’s no surprise that people are in a sour mood as soon as they check in. And this is before experiencing the TSA circus that is all part of the modern security theatre experience.

So, by the time that you get on the plane, I can appreciate that you’re really upset to be delayed even further by someone in front of you, struggling to fit their overstuffed carry-on bag into the undersized bin on the plane. “That guy,” you think, while possibly snapping a picture and making a snarky Twitter post with a hashtag of #CarryOnShame. This is the latest mean-spirited trend in the already angry world of travel.

Several times over the past four years, “that guy” could have been me. Until very recently, I was living abroad. Last year, I lived in 3 different countries around the world (China, The Netherlands and Costa Rica) and each time, I brought my possessions with me on planes. Before that, when living in Beijing, I’d only get to come home 2-3 times per year. I’d make massive Costco runs, bringing back whatever small comforts of home I could carry on and fit in my checked bag and carrying on whatever I could. Most recently, I took another flight, again using my full baggage allowance. After a long time away, I am starting a new life back in my home country, which has become a mean-spirited place that I sometimes barely recognize anymore.

Nearly everything I own is in these bags.

Yes, I’m that guy. The guy with a carry-on bag that I had to sit on in order to fit everything inside. The guy who is using 52 pounds of his 50 pound baggage allowance. The guy who stretches the definition of “personal item” into “whatever I can get away with.” It’s really out of necessity. Airlines do not have reasonable prices for extra or checked bags on international flights so let me make things completely clear: in practice, the choice I have faced each time has been either to be “that guy” or to abandon my stuff and start over. Start over even more than I already am, in a country where I don’t know where or whether I can replace my stuff. Sure, I chose to move, you might say. This is true, but I don’t choose to make things any more difficult. The Calvinist notion that people should have to struggle because… well, because… isn’t one I buy into.

The next time you see a person struggling with an oversized carry-on, trying to fit it into the overhead bin, have a little empathy. Consider stopping to help instead of pushing past or taking pictures to post on Twitter with snarky hashtags. Sometimes life just doesn’t easily fit into a small carry-on bag.

US Bank LifeMiles Visa Bonus: Read The Fine Print

June 10, 2014June 10, 2014 TProphet3 Comments

A few months ago, US Bank ran a 40,000 mile signup bonus for the Avianca LifeMiles visa card. The Avianca program is one of the most generous in the StarAlliance for booking partner awards, if its limitations are acceptable to you. These limitations are substantial. The program doesn’t allow stopovers, you can only book what is available online even if other award space is available elsewhere, and the call centers are in El Salvador and Colombia (it’s best if you speak Spanish). However, there are some real advantages; award rates are reasonable and there are no close-in booking fees.

There’s always a catch.

I pulled the trigger and signed up. 40,000 miles is double the usual bonus offered for this card. As advertised, the deal was for 20,000 miles after the first purchase, and 20,000 miles after spending more than $3,000 within the first 120 days. Well, that seemed easy enough to achieve, and it was. I put the card at the top of my wallet and made the $3,000 minimum spend in the first month. A month later, 20,000 miles showed up in my Avianca account.

Wait a minute. Only 20,000 miles? I emailed US Bank, who explained that the bonus miles are delivered separately and I would receive them within 6-8 weeks. I was definitely not happy with the delay; frequent flier programs devalue very rapidly (often without prior notice) so 20,000 miles today could be worth the same as 10,000 miles tomorrow. However, I was also traveling on a complicated round-the-world itinerary and didn’t really have time to argue across multiple time zones so I just gritted my teeth and hoped that a devaluation wouldn’t happen in the interim.

8 weeks later, there were still no bonus miles! I emailed US Bank again. What I found out (and which their Twitter team confirmed) is shocking. The 8 week clock starts after the first 120 days! Yes, it takes a full six months after completing the minimum spend to receive your bonus miles. And you will not receive the additional 20,000 miles if you close the card before then! This is something that I have never seen before with credit card bonus miles, and it’s a very disturbing trend.

A lot can happen in frequent flier programs in 6 months. I have not only missed the entire summer travel season (and I was counting on using this promotion for a flight this summer), but I would not be surprised to see a massive devaluation strike before my bonus miles are deposited. Avianca has devalued their LifeMiles program overnight in the past, and I expect they may do so in the future amid across-the-board devaluations in nearly all other frequent flier programs this year.

This definitely changes the game with credit card miles and points. For most people, collecting airline miles and points is a bad way to earn free flights. Hotel and other loyalty programs (such as American Express Membership Rewards) are starting to look a lot better.

How I Turned An Overbooked Flight Into $400

June 8, 2014June 10, 2014 TProphet2 Comments

I just turned an overbooked $99 one-way flight into an extra day in Seattle (which I actually wanted), $400 in Delta Dollars (which spend like cash on the Delta Web site), and a hotel voucher for the night. Not a bad outcome for a delay that I wanted anyway! I did this by getting bumped off of a flight, and you can too.

I received a $400 Delta voucher!

Most airlines (with the exception of JetBlue) routinely oversell flights. This means that they sell more tickets than there are seats on the plane. It makes sense for the airlines to do this to soak up inventory that would otherwise go unsold. On almost every flight, there will be a few seats that go out empty because people showed up late or misconnected. Most of the time, this works out just fine for the airlines. Flights go out full (or nearly full), and the airlines pocket the change fees. However, as those change fees have increased–to the point where tickets are now often completely nonrefundable–people have gotten a lot better at making their flights. This has made it a really delicate calculation for the airlines and sometimes it doesn’t work out in their favor.

My flight yesterday was an ideal candidate for scoring a bump. It is the last flight of the day from Seattle to Los Angeles, and it’s also a feeder flight for Virgin Australia’s service to Sydney. These connecting passengers cannot miss their flight without causing a major disruption to their itineraries. Making matters worse, Delta has begun funneling most passengers onto its own flights instead of routing them onto Alaska Airlines, and they just launched a massive expansion in Seattle two weeks ago without adding any additional capacity on the route. Flights (especially connecting flights) are suddenly packed. At the same time, the relationship with Alaska Airlines has deteriorated to the point where the two airlines are no longer cooperating on the route through codeshare, so Delta doesn’t have anywhere for the overflow. And I was booked only from Seattle to LAX, with all of the flexibility in the world.

The US Department of Transportation (equivalent rules exist in other countries) highly frowns on the practice of overbooking when it results in what is called an “involuntary denied boarding” (or “IDB” in industry parlance). There are some really stiff penalties, requiring cash compensation of up to 400% of the ticket price. Additionally, if airlines deny you a seat that you paid for, they have to buy you another seat on the next available flight (whether they operate it or not). If you’re stuck overnight, they have to pay for all of your hotels and if you’re delayed for over two hours, they have to pay for your meals. All of this also gets reported to the Department of Transportation and ends up in published statistics that invariably end up as negative press. As you might imagine, airlines do whatever they can to avoid involuntarily denying boarding to passengers (although if they ultimately do have to involuntarily bump someone, there is a detailed pecking order through which they decide whom to bump).

This is why airlines will sometimes ask for volunteers who are willing to take another flight in exchange for compensation. The compensation is whatever you can negotiate, although it’s typically a fixed offer and there tends to be a lot of competition for volunteering. United typically starts the bidding at $200 in vouchers, US Airways and American start the bidding at $300, and Delta usually starts at $400. However, Delta will only put you on another Delta flight, whereas other airlines (except Southwest) will often buy you a ticket on the next available flight regardless of operating airline. This means you’re usually facing a longer delay with Delta.

It pays to pay attention. By the time that gate staff makes an announcement in the gate area, it’s probably too late to volunteer your seat. Many airlines (such as Delta) ask for volunteers during the online check-in process, so it pays to check in as early as possible – you can usually check in 24 hours early. Also pay attention to the seat map. If there are no seats available for selection unless you pay extra, don’t pay for a seat. You’re likely to get a free upgrade to a preferred seat when you check in (sometimes even first class), and you may have the opportunity to get bumped as well. Airlines call this an “operational upgrade,” or “op-up” for short. This is because it costs them less to give you a free upgrade than it does to bump you off the flight.

How do you know whether you might have a chance at getting bumped? There are a few clues. If you’re asked online to volunteer your seat, you know the flight is definitely overbooked and there is a very high chance of getting bumped. Airlines will offer the lowest possible compensation you might accept online, but you can generally bid a higher amount. Just keep in mind that higher bids are lower in priority, and airlines usually don’t need very many volunteers (sometimes they only need one). If you accept the lowest offer at the earliest time with the least complicated itinerary, you will have the highest chance of being bumped. Note that you won’t always be asked online. If you check in and your boarding pass doesn’t have a seat number but instead says something like “assigned at gate,” you know that the flight is overbooked and you’ll probably have a chance to get bumped.

If you haven’t volunteered your seat online, go to the gate early (the gate typically opens an hour before the flight leaves) and be the first in line to talk to the agent. Ask politely whether the flight is oversold, and if it is, ask whether they are looking for volunteers. If they are taking volunteers, they’ll take your boarding pass. Sit down near the podium (in a place where they can easily see you) and pay attention. Everyone else will board before you. If you do end up getting on the flight, you will be the last person on. Don’t worry, the gate agent hasn’t forgotten about you (and if they have, they will need to give you compensation anyway). So, do not bother the gate agents, they are very busy getting the flight out on time, and if you hassle them they might just put you on board to get rid of you (and you’ll lose your chance at being bumped for compensation). Wait in the gate area and stay visible until they call you to the podium.

What will you receive if you’re voluntarily bumped? It’s whatever compensation you can negotiate, or if you didn’t negotiate up front, whatever you can negotiate with no leverage (being nice and polite to the gate agent goes a long way here). You’ll usually get a hotel voucher for the night if you’re not in your home city and you’re stuck overnight, an airline voucher that is good for up to $800 (although usually for much less), and sometimes meal vouchers depending upon the length of the delay. You should be aiming to get the maximum amount possible with the minimum length of delay (unless, of course, you want the delay), but remember you have competition. If you’re too greedy the airline will accept another volunteer’s less demanding offer!

Meet Seat31B This Summer in New York and Las Vegas!

June 5, 2014 TProphet0 comment

Even though Seat 31B has been online for less than a year, I’m really happy with the overwhelmingly positive and supportive feedback that I have gotten so far. Interestingly enough, even though travel hacking has been a niche area for some time (and there are a number of blogs on the subject), this is an area that has been more popular with frequent fliers than hackers.

Hackers? Yes, for many years, I have been involved in the hacker scene and I am a regular columnist for 2600: The Hacker Quarterly (I write the Telecom Informer column). These days hacking isn’t about committing crimes (it never has been for me), and is a lot more about learning how things work and building amazing stuff. So, you can probably guess how excited I am to help connect the hacker world to the travel hacking scene this summer, where I will be speaking at HOPE X and bSides Las Vegas.

If you’re into travel hacking and you’d like to meet the world’s top experts at hacking computer systems and phones, you’ll definitely want to come to one of these conferences. I’ll cover some of the more common travel hacking techniques and I expect there will be an extensive Q&A where I’ll have the opportunity to cover a variety of subjects. It is sure to be a lively discussion!

Don’t come to either conference just for my talks. Also note that I’m paying my own travel expenses for both and they aren’t paying me anything, so you can rest assured that I’m not promoting these conferences for personal gain. Do, however, come if you’d like to broaden your knowledge about hacking things that you may never have considered were possible to hack! Even if you don’t know anything about being a hacker, all it takes is being curious about learning how things work and interested in finding out what happens when you try something out of the ordinary. You’re sure to learn at least one new skill, if my experience is any guide.Without you sharing these stories and telling your friends, Seat 31B would never have grown so fast. See you this summer, and thanks so much for your support!

Is It Safe To Book A Mistake Fare?

June 3, 2014June 5, 2014 TProphet0 comment

Every time there is a widely publicized and unusually good mistake fare, I end up answering the same question: “Sure, you got a great deal, but will the airline honor it?” A follow-on question is often something like “When I get to the airport, will I be able to check in for my flight?” The answer is usually yes, but there are some cases where the answer is no. Here are 5 simple rules to help you avoid getting tripped up along the way.

Rule #1: An itinerary and a confirmation number is not a ticket. You booked your ticket. The online travel agency sent you an itinerary that indicates the price and the amount charged to your credit card. You even got a confirmation number (one of those codes that looks like CNF1NQ). And then you show up at the airport to check in, the agent types in her computer, frowns, and says the dreaded words:

Sir, your reservation is not ticketed on this itinerary. You will need to purchase a ticket to travel today.

So what happened? Occasionally there can be a glitch in booking where you make a reservation but a ticket is never actually issued. You need both a reservation and a ticket number to travel, and without both, you’re not going anywhere. Do you have any recourse? Only if you were charged for the flight. 99% of the time, when you go back to review your credit card statement, you were never actually charged and will be stuck either buying a very expensive last-minute ticket or abandoning your itinerary.

Rule #2: Don’t Call The Airline. While a deal is active is not the time to contact the airline. If they find out that you got a good deal, they will use every trick in the book to void your contract and cancel the tickets. Only after a ticket number is issued and confirmed, and enough time has passed to thwart shenanigans (72 hours to be safe), should you contact the airline.

Rule #3: $0 fares can be voided. If the airline mistakenly gave you a completely free ticket (charging only government imposed taxes), there is some legal precedent that they can get out of the contract by refunding everything you were charged. This is because the airline never actually took your money in exchange for providing a service (they only collected taxes on behalf of the government), so they never actually entered a contract with you. This theory hasn’t been tested lately because airlines decided that the revenue lost from a few seats mistakenly given away wasn’t worth going to court. However, do keep in mind that they could probably go to court and win. One attorney suggested that if there is any airline-imposed charge in the booking (such as a fuel surcharge or even 1 cent in fare), the airline would have a much more difficult legal case to make. Of course, I am not a lawyer and this is not legal advice.

Rule #4: Frequent flier tickets are a whole different ball game. An airline makes a mistake and offers a routing to Aruba via Amsterdam with a free stopover in Europe, but charges you only the mileage for a single-leg journey to the Caribbean. You can’t believe your luck, and the airline can’t either. A few days before you are due to travel, after having already prepaid for hotels in Amsterdam, you are contacted by the airline. They deliver an ultimatum: either cancel the whole journey (losing all of the money you have already prepaid) or alternatively, they’ll essentially wipe out your whole frequent flier account by re-pricing the trip as three one-way trips: one from North America to Europe, another from Europe to the Caribbean, and finally from the Caribbean to North America. “You’re lucky we can’t prove that you did this on purpose,” they say, “or we’d close your frequent flier account.” Your biggest question is whether they can really do this, and unfortunately, the answer is yes, they can. Airlines are allowed to do pretty much whatever they want when it comes to administering their frequent flier programs. They have very wide latitude, so tread carefully when a frequent flier redemption seems too good to be true.

Rule #5: Contracts Rule. By taking your money and issuing a ticket number, an airline has entered a contract with you. This isn’t true with frequent flier or other $0 fare tickets, but if the fare is 1 cent or more, the contract is in place. You can’t get out of a contract with an airline just because you wish you hadn’t entered it, and the same goes for the airline. So, don’t be afraid to assert your rights if an airline contacts you and tries to get out of the contract. Airlines know this, and also would generally prefer not to alert the general public to mistake fares. So, they usually just try to sweep mistake fares under the rug and allow anyone who has already purchased tickets to fly with no trouble.

Mistake fares can offer some incredible values in travel, and take you to some places that you might not consider visiting otherwise. I enjoyed an incredible visit to Ecuador on Aeromexico, which moved to the top of my list when roundtrip fares (widely believed to be mistake fares) dropped below $400. I was even able to upgrade one segment to first class for $40, I squeezed in a side trip to Mexico City, and I received Delta SkyMiles for the entire itinerary! As long as you follow the 5 simple rules above, you should have no problem flying on mistake fares you find!

Free Short-Term Parking At Phoenix and Sea Tac Airports!

June 1, 2014June 5, 2014 TProphet3 Comments

One of the most irritating things about picking people up at the airport is the short-term parking gouge. My family owns homes in both the Seattle and Phoenix areas, and the problem is the same at both airports: the airport drive is hopelessly congested, eagle-eyed officers are poised and ready to write you a ticket for “waiting,” and short-term parking charges are ridiculous. In the past, more often than not, I have ended up in the short-term parking garage, paying $4 or more for a 20 minute entry.

No more. In both cities, there is a consolidated rental car facility. This facility offers a free shuttle to the airport, and at both facilities, you can park free for up to 2 hours. While the free parking is intended for people who need to do business in the rental car center, anyone can use it and anyone can ride the shuttles. This is a great place to pick up your friends (who can ride the free shuttle to the rental car facility in less time than it will take for you to battle traffic), and it’s also great if you need to visit the airport for some reason (for example, to pick up a delayed bag).

At both facilities, you will not want to drive into the car return area. Follow the signs to visitor parking instead. At no charge, you can park for up to 2 hours (follow all airport signage in the event this has changed since the date of publication) and either wait for your friends or take the bus to the airport. I have found that using the facility saves time at Sea-Tac, although it usually takes a little extra time in Phoenix because the airport is both larger and farther away.

Enjoy the savings, and I’ll see you at the airport!

How I Booked A Round-The-World Trip For Under $219

May 26, 2014June 5, 2014 TProphet1 Comment

Occasionally, airlines will make a mistake when publishing fares. This happens once or twice a year and usually lasts only a relatively short time. This time, two mistake fares happened in rapid succession, one with Alitalia and another with American Airlines, and both the same sort of fare mistake. The Alitalia mistake fare represented a considerably better value and I booked it. I am traveling all the way around the world for just $450.30 in cash and I will earn miles while doing it. This is like paying under $219! Note: These fares are no longer available.

I first became aware of the mistake fare when I saw a tweet from @TheFlightDeal alerting me to it. If you’re not using Twitter to find good deals on flights, you’re really missing out! The people behind this particular account are really, really good. They research and publish exceptionally low fares to a number of destinations. In this case, they didn’t find the deal; someone who posted on FlyerTalk in the Mileage Run Deals forum did. However, they published it quickly after it was posted. Note that for mistake fares, minutes matter. You need to move very fast or you usually will not be able to get them at all.

In this case, the mistake fare was of a type called a “fuel dump.” If you booked a ticket with an Alitalia segment using a particular fare construction on Priceline, the fuel surcharges were not included on the ticket–just the actual fare and taxes. And this presented an incredible opportunity. For a variety of reasons (most of them involving tax dodges and none of them particularly scrupulous), airlines publish very low fares, and most of the cost of a ticket is billed as a “fuel surcharge.” If you can find a way to book a ticket without paying the surcharge, you’ll often end up getting a really inexpensive fare. Generally speaking, airlines have to honor mistake fares if they originate or terminate in the United States. Taking your money and issuing a ticket constitutes a contract in the US, and airlines can’t get out of a contract just because they wish they hadn’t entered it. After all, if you want to get out of the contract, airlines don’t offer any flexibility either.

To get this particular mistake fare, you had to start in Los Angeles or New York, fly at least half of the itinerary on Alitalia-marketed segments (note this doesn’t mean you had to fly Alitalia, just on flights using their flight number), travel into either Milan, Prague, or Budapest, break your journey with a stopover and/or an open jaw, and finally end up in an Asian city. And obviously, this was a one-way fare only. “Fuel dumps” tend to be complicated things like this, where at some point the creaky legacy systems that price and sell tickets break down and something important (like a fuel surcharge) breaks out of the “fare construction,” as it is called in industry parlance.

The upshot? I’m flying from Los Angeles to Boston on Delta, changing to Alitalia flights onward to Rome and Budapest, staying a week, and then continuing on from Budapest to Beijing on KLM and China Southern via Amsterdam (with a 22-hour layover in Amsterdam, enough time to visit friends). The total fare was $362.90. This is actually not the cheapest fare that was offered; some people were able to arrange one-way journeys to Asia (typically from New York to Milan and then onward to Tokyo) for as little as $127. Most of the exceptionally low fares like these involved a lot of searching, with the risk that the deal would die at any moment. I worked very quickly, grabbing tickets for dates that I knew would be personally good for me and booking immediately before the deal disappeared, which turned out not to be a major concern. This particular deal stayed alive for over 24 hours. All of the tickets issued are being honored, no matter how low the fare, and they even qualify for frequent flier credit.

Incidentally, American Airlines made the exact same mistake with fuel surcharges–to the same part of the world–the very next day. Fares to eastern Europe clocked in as low as $500 roundtrip, depending on your originating city. The fuel surcharge was dropped when at least one segment of the journey had an American Airlines flight number when traveling on a US Airways flight. This problem was fixed within a few hours, but not before hundreds of cut-rate tickets were sold.

“So,” you may ask, “That’s great, and congratulations, but you’re ending up in Beijing. Unless you’re moving there, what is your plan to get home?” This is where miles and points can come in very handy, as long as your frequent flier program allows ticketing one-way awards. I currently have miles and points with the Alaska, American and Avianca programs which allow one-way ticketing. However, I am just short of the number of American Aadvantage points required for an economy ticket from Beijing to Los Angeles, and I am also short in my Avianca LifeMiles account because US Bank hasn’t credited my account with the promised 20,000 bonus miles for their credit card signup. While Avianca would let me buy up to the number of miles required, it wasn’t a very attractive option, so I decided to use my Alaska Airlines Mileage Plan miles.

The best one-way option to the US from China on Alaska Airlines is by flying Cathay Pacific. It costs only 30,000 miles for an economy-class seat from Asia to the US. However, I just flew in Cathay Pacific economy class last week from Hong Kong to Los Angeles, and it wasn’t particularly comfortable. Part of this was due to the very obese woman next to me who insisted on putting her dirty feet on the bulkhead the whole way while spilling into my seat, but part of this was the 10-across seating, indifferent service, and poor food quality. However, for 35,000 miles, Alaska Airlines offers an award in Cathay Pacific premium economy–if you can find the space. This isn’t easy to find, and Alaska Airlines doesn’t publish Cathay Pacific space online. You have to call, and it’s really “hit or miss” (mostly miss) with the agents when you call them. They are all friendly and will typically go out of their way to help you if you know exactly which flights you want, but they aren’t always particularly good at searching for award space.

If you join the British Airways Avios plan, you can search for availability on Cathay Pacific. I am a member (with zero miles in my account), so I began my search. Predictably, there was no availability on Cathay Pacific when searching PEK-LAX:

Typically, this is the type of search that an agent will perform when they look for space availability. They will feed the computer your starting and ending airports and if no award pops out, they will tell you that there isn’t any availability. However, what happens if we search a different way? Let’s first look for availability between Hong Kong and Los Angeles:

Now there’s suddenly availability, and there is even a seat in premium economy! We now know we can get from Hong Kong to Los Angeles. All we need to do is get from Beijing to Hong Kong in order to complete the flight. Unfortunately, this isn’t particularly easy on a Cathay Pacific award, because most flights between Beijing and Hong Kong are operated by Cathay’s Dragonair subsidiary. There are only two Cathay Pacific flights per day, and you can only use those with an Alaska Airlines award. Also, the earliest Cathay Pacific flight on Sunday morning arrives after the morning flight from Hong Kong to Los Angeles leaves.

Hmm. If you spend less than 24 hours in Hong Kong, it’s a layover, and not a stopover. This is a very important distinction. Could I go from Beijing to Hong Kong on Saturday and enjoy a visit to Hong Kong as well?Why yes, I could! I called Alaska and booked it. As I expected, the Boise-based agent was very friendly but had never booked such a complicated itinerary before and had no idea what the rules were. I opted to book in premium economy, which is a rare excellent value. If you paid for this fare, it is priced at about $1,000 more than an economy class ticket, but costs only 5,000 extra miles. For a nearly 17-hour flight, the upgrade is actually worthwhile (I almost never consider an upgrade worthwhile, but in this case, I believe it was). The best part? Alaska Airlines allows a stopover anywhere in North America that they serve, as long as your continuing flight is only on Alaska Airlines flights, and it’s available at the “saver” award level. Since I knew I needed to go home to Seattle for Christmas, I added on a flight from Los Angeles to Seattle on Christmas Eve. Alaska had plenty of “saver” economy level availability for this flight. So, my award is technically from Beijing to Seattle with a stopover in Los Angeles, and cost me only 35,000 miles and $102.90 in taxes and booking fees.

I will receive 12,828 Delta SkyMiles for this journey, which is halfway to a free domestic roundtrip ticket. I value SkyMiles at 1 cent per mile, making the effective cost of the ticket $128.28 less. As a special bonus, I also received a free one-way ticket home for Christmas which would otherwise have cost me $119. This more than offsets the redemption cost of my Alaska Airlines miles!

Overall, this is like paying only $218.52 and 35,000 Alaska Airlines miles for a round-the-world journey of 22,276 miles, with the chance to visit five different cities. This will be my first time flying Alitalia, my first time flying in premium economy, and my second round-the-world journey this year. I can hardly wait!

Getting Your Money Out Of China

May 21, 2014May 21, 2014 TProphet6 Comments

I spent 3 years working in mainland China and was paid in the RMB currency. Unfortunately, if you want to convert RMB to any other currency, it is a giant hassle. In mainland China, you can only do it at a bank and you need to have the following documentation:

Your visa, work permit, and residence permit proving that you are legally in the country and legally able to be employed.
Your paystubs proving how much you earned.
Your tax statement from the local tax bureau (Beijing Haidian in my case), proving that you paid your taxes, and the amount of tax paid has to exactly match what is on your paystub.

So, yeah, basically good luck with all of that. You’re probably going to be stuck with a whole lot of these.

Somehow I managed to get most of my money out of the country, but I still have a not-insignificant amount tied up there. This didn’t really bother me much while the RMB was appreciating versus virtually every currency, but now the opposite is true: the RMB is now depreciating versus other currencies.

There are four loopholes for getting your money out of the country. None of them are particularly easy to use, and they all involve some degree of risk. However, until the RMB is more freely traded, these are the available options.

$500 at the airport: Anyone can change up to USD $500 worth of RMB to foreign currency at the airport. Most Chinese international airports have a branch of a Chinese bank (usually Bank of China) where you can do this at the official exchange rate with no fees. Don’t use Travelex or any of the other privately owned kiosks, or you’ll get the official rate plus a whopping fee.

Hong Kong: You can change effectively unlimited amounts of RMB to other currencies in Hong Kong. The exchange market is competitive, and there are many exchange booths and companies along Nathan Road. You can actually get better rates from some of these small, private companies than Hong Kong banks. No identification is required and no questions are asked. However, you have to get the money across into Hong Kong from China, and it isn’t legal to transport large sums of RMB out of China. However, it’s not illegal to transport large sums of RMB into Hong Kong, and you don’t even need to declare the money you bring in. So, if you’re not stopped on the way out of China, you’re golden. Usually, you won’t have any problem with a backpack full of RMB notes if you’re not obviously struggling under the weight, but if China Customs catches you they will keep all the money. Not for the faint of heart! This method also works in Macau, but the exchange rates are less favorable and Customs is a bit more suspicious in Zhuhai because of large sums of money frequently taken across by Chinese gamblers.

Chinese Friends: Chinese citizens (with a Chinese ID card) are allowed to exchange up to $50,000 USD worth of RMB annually. Once you have foreign currency you can wire it anywhere out of the country, so a Chinese friend could change your RMB into USD and then help to wire it to your US account. However, this can be risky. How good of a friend is your friend? Once you send the RMB to their account, you legally have no recourse. Your friend could take the money and disappear. Unfortunately this can and does happen. You also need to consider the emotional impact that handing $50,000 to a friend who makes $10,000 per year can have. This could unexpectedly change the dynamics of your friendship.

China UnionPay: If you have a Chinese bank card, it has a China UnionPay logo. In fact, it’s a very maddening logo, because it’s the only one that foreigners can get on a Chinese bank card (Chinese people can get a card with a Visa or MasterCard logo that is far more widely accepted, but this isn’t available to foreigners). Now, when is the last time that you saw a China UnionPay logo anywhere outside of China? If you saw one at all, it was likely on an ATM and you probably paid some pretty ridiculous fees if you used a Chinese bank card to withdraw money abroad. To give you an idea of just how hard it is to use China UnionPay at ATMs abroad, there is no ATM in the entire country of The Netherlands that accepts China UnionPay.

So, what about using your card for spending? It is pretty well known that merchants widely accept China UnionPay cards in mainland China, Hong Kong and Macau for purchases, but did you know that China UnionPay also works in the US almost anywhere that you can pay with a debit card? Just swipe your China UnionPay card and select “debit,” then enter your PIN. As long as the terminal is able to accept a 6-digit PIN, your payment should go through just fine. Note that you cannot get cash back. The charge will go through on your Chinese bank account in USD converted to RMB at the official rate on the day it is processed. There is no foreign exchange transaction fee and there are seemingly no restrictions on the size of transactions. Since you can’t get cash back, this is viewed as “consumption” rather than a purchase of foreign currency, and isn’t subject to the same restrictions. Obviously this won’t work to get large amounts of money out of China in one go, but you can easily spend your RMB on everyday purchases.

Working in China is an incredible experience, but be sure that you plan how to get your money out of the country! Hopefully these tips will help if you find yourself in a similar situation.

Will An App-O-Rama Clobber Your Credit Score?

May 19, 2014May 21, 2014 TProphet0 comment

In February, I did an App-O-Rama and applied for several credit cards in order to secure bonus miles to use for upcoming travel:

Citi Aadvantage Visa: 50,000 mile bonus, annual fee waived the first year.
BofA Alaska Airlines Visa: 50,000 mile bonus, annual fee not waived.
Chase Marriott Rewards Visa: 60,000 point bonus, annual fee waived the first year.
US Bank Avianca Visa, 40,000 mile bonus, annual fee waived the first year.
Delta American Express, 100,000 mile bonus, annual fee waived the first year.

Note that all of the above offers were exceptionally good ones. One was only available for 2 weeks, and none of these offers are now available.

This is the first time I applied for so many credit cards in such a short time, and I expected an impact to my credit score. I considered carefully whether I should really do this, but given that I don’t really need credit for anything (I have no debt except for my mortgage and I don’t need any), I decided that it didn’t really matter. I was approved for all of the cards, and didn’t have to call any reconsideration lines or anything crazy like that. Citi didn’t approve me “on the wire,” but after a day they approved my application manually and I received the card a couple of weeks later. I have properly received all of the bonuses except for the US Bank Avianca Visa, which posts 8 weeks after the final statement in which the minimum spend is met.

So, the impact to my credit score? After opening the new accounts, it dropped from 820 to 794. This was a pretty substantial hit, although it’s still in roughly the 95th percentile of American credit scores. The more interesting thing is what happened 3 months later after using all of the cards to meet minimum spend requirements and paying off the balances. My credit score went up to 830! I was pretty surprised to see this, and my credit score is now in the top 1% of American households.

The key takeaway? If my experience is any guide, don’t worry too much about the long-term impact to your credit score from opening a bunch of accounts to earn the signup bonus. In my case, there was actually a positive impact from signing up for a bunch of credit cards and going on what amounted to a massive shopping spree. I’m not sure that this is how things should work, but in my case, it’s how they actually did work.

Riding Ordinary Trains In China

May 18, 2014May 21, 2014 TProphet0 comment

Although you can fly a lot of places in China, you can’t fly everywhere and flights to many remote destinations are extremely expensive. Additionally, flight connections aren’t necessarily convenient. If you’re in the densely populated eastern part of China, the extensive network of high-speed trains can quickly and efficiently get you to your destination at a very reasonable price (a typical route is Beijing to Tianjin, a distance of about 220km, which takes about 30 minutes and costs $8). However, if you’re traveling in more remote parts of China, you may be stuck with traditional, ordinary trains as your only option.

With high-speed trains there are three classes: executive class, first class, and second class. There isn’t really much difference between the classes so I always recommend taking second class, which is considerably less expensive. There is, however, a very large difference between the classes on ordinary trains and a substantial difference in fare.

While high-speed trains have fares that are relatively close to discounted airfares on routes where airlines compete, the fares for ordinary trains are very cheap. For example, traveling between Kunming and Dali, a 6 hour journey, costs as little as 61 RMB (about $10). However, the cheap fare will (theoretically) buy you a spot on a bench in a non air-conditioned car sitting with Chinese farmers, who will likely be playing cards and spitting sunflower seeds on the floor. Your seat may be covered by sacks of rice that the farmers refuse to move. This isn’t very comfortable for most Western travelers, or even Chinese people who live in urban areas. Both tend to steer clear of the “hard seat” class. There is sometimes also a “soft seat” class, which buys you a bucket seat in a crowded coach which may or may not be air conditioned. This typically costs 20% more than the “hard seat” class, but is also not particularly comfortable and best avoided except for very short journeys.

The best part of older Chinese trains is the classes that offer lie-flat beds. There are two classes: “hard bed” and “soft bed.” The “hard” and “soft” designations don’t refer to the firmness of the mattress, which is quite firm in both classes, but the configuration of the car. The “hard bed” class offers bunk beds stacked in a 3-bed configuration, in an air conditioned car, with no privacy. This typically costs about 50% more than the “hard seat” class; you will pay around 100 RMB between Kunming and Dali. This class is mostly populated by Chinese middle-class people. As a foreigner, you can expect friendly and garrulous Chinese people to make simple English-language conversation with you and you may be invited to a game of cards. This is a perfectly reasonable and comfortable way to travel if you are a little adventurous.

For another 50% on top of the “hard bed” price, you can enjoy “soft bed” service. This class of service is in an exclusive car, and you will be assigned a bed in a private compartment with a door that closes. However, there isn’t really any privacy unless you buy all 4 beds in the compartment, because the railway will sell the remaining beds to other people. People who travel in “soft bed” class tend to be other foreigners and relatively wealthy Chinese people. Because there is more privacy and the noise is less, you will get a better night’s sleep. Many of the “soft bed” compartments also have a power outlet so you can charge your electronic devices (as long as you bring a power splitter, because otherwise you’re going to be fighting with everyone else in the compartment over the single outlet). Additionally, there is sometimes a Western-style toilet in the “soft bed” compartment.

Slow trains in China aren’t clean and modern like their high-speed counterparts. They are old, and the cars aren’t being replaced or upgraded because high-speed railways are gradually taking over these routes. It’s almost like being transported in a time capsule back to an earlier time in China. I can still remember my first visit, in 2004, riding the slow train from Beijing to Shenzhen, and how different a country China was then compared to now.

It is nearly impossible for foreigners to buy train tickets in advance, and you will need to know some basic Chinese to purchase a train ticket at the train station. If you cannot speak Chinese, it is best to have a Chinese friend buy the tickets for you online (foreigners cannot easily do this because you need to pay using a Chinese bank account), or to arrange tickets through your hotel (this can almost always be done for a small delivery fee, usually about $3). However, traveling by train in China is a great way to see places off the beaten path without spending a fortune!