We spend a lot of time talking about loops in this hobby. Moving your money in a circle with some (hopefully) profitable intermediaries is basically…the whole thing. I think we sometimes manage to make some loops unnecessarily complicated while leaving too much risk hanging off others.

Let’s do a little thought exercise.

Example #1 – closed loop “free” miles vs separate miles + cash

Let’s say you had the ability to put oodles and oodles of spend on a co-branded airline card to earn miles and status. You had a cost associated with that spend, but you had profitable ways to loop the money back into paying the card, and actually came out a handful of basis points ahead of your cost of spend. That’s awesome, free miles, right? Technically, yes. 

But what if you had the ability to run the loops that made the overall play profitable independent of paying a cost to load? Sometimes, there’s synergy in running loops together. Other times, you’re better off running them separately. 

If you can load the first loop with a low (or no) cost method and get your card balance up a different way (even if that is break even or at a minor cost) and run them independently of each other, you’ll likely be able to walk away with a mixture of miles + cashback that is more valuable. 

In the end, the miles in the closed loop aren’t free at all – you’re paying for them in opportunity cost by not taking a step back and considering the other possibilities. 

Time is money, and the best loop is the one you’ll actually run. But it’s always smart to think about alternative ways to reach the same goal if you have the time. MS is one of those things where we’re always thinking about scaling our spend up, but sometimes the best way forward is a focus on lowering costs. 

Example #2 – multiple loops for multiple profits vs “closed” loop for safety

Like I just said, the common focus in MS is more spend, more margin, more earnings. Many people, myself included, frequently advocate for taking every option available to you as long as it meets your personal sense of CPH.

Sometimes, the opportunity cost of doing that is increasing your risk on another platform, especially on platforms that have a limited number of viable levers to pull. 

For example, let’s imagine you have a fintech product per week that lets you load $10k per week. The usual suspects aren’t available, but you have one particular method that will earn you a modest but meaningful profit, especially in two player mode. 

But you have the option of another use for this fintech – offramping funds from a different loop that does accept the usual suspects and therefore pays out higher. This offramping activity doesn’t earn anything on its own, but it makes the account behavior look a lot more normal.

You could double dip and take both profits – I’d be lying if I said I hadn’t before. But you could make the choice to (somewhat) avoid looking like a very odd customer and leave money on the table to attempt to keep your more valuable avenue alive longer. 

Of course, nothing lasts forever in MS, and the examples described above won’t either. There’s always a valid argument behind going as hard as possible. But it’s worth at least considering the risk being added to your profile at a more valuable target. 

“Pigs get fat, hogs get slaughtered” is a common refrain in the hobby, and I like to think it’s comically fitting for the all you can eat buffets of the last few years. This situation is admittedly on a smaller scale, and a more fitting idiom is “have your cake and eat it too.” 

Staying curious and thinking about ways to improve existing plays is always a smart move in the long run – platforms come and go, BINs come and go, MCCs and coding quirks come and go. Experimenting with existing things can often be just as valuable as finding something new. 

චියර්ස්!

Pictured: a pure hit of nostalgia for millennials, and where you used to be able to find many MSers right before Golden Hour