Middle Age Miles

Using Bank Account Funding to Generate Points and Miles

bank account funding credit card generate points miles minimum spend requirements big-spend thresholds
First Bank of the United States, Philadelphia [image courtesy National Park Service]

Bank account funding with a credit card has long been a tool in the points-and-miles enthusiast’s bag of tricks. Used correctly, bank account funding can be extremely helpful in helping you meet minimum spend requirements for credit card sign-up bonuses. It can also be useful to hit big-spend bonuses, such as those that get you free hotel nights or help you attain elite status with airline or hotel loyalty programs.

We recently had our first direct experience with using bank account funding, and it worked out well. This experience made us think that it might be helpful to remind Middle Age Miles readers about bank account funding with a credit card, as a method to generate points and miles.

We certainly don’t profess to be experts in this field, so this article is more of an “awareness” article than anything else.

The Key Issues for Bank Account Funding

Not all banks allow account funding with a credit card. And for those that do, some code as purchases and some code as cash advances. Even for a particular bank, the answer to the purchase-vs-cash-advance question may be different depending on what credit card you use to fund the account.

Of course, it’s critical that bank account funding code as a purchase and not a cash advance, or else it’s not useful to us. Purchases are regular spend and will earn points and miles according to your credit card’s terms. Cash advances do not earn points or miles, they probably incur an up-front fee of as much as 3%, and they begin to accrue interest immediately.

Generally, credit card funding is only permitted when you first open a bank account. (Offhand, we’re not aware of any exceptions to this rule.) And credit card funding may be permitted only if you open the account online.

Thus, the key questions for bank account funding are:

  • Does the bank allow credit card funding at all?
  • If so, will it code as a purchase or as a cash advance?

The Key Resource

The absolute guru in the field of bank account funding with a credit card is Doctor of Credit (Doc). And the key resource for bank account funding is an unbelievably extensive and detailed article that Doc has compiled over the past several years with community-sourced data points for almost 400 banks across the US:

Unfortunately, opportunities for credit card funding have decreased over the past few years. But there are still opportunities out there, for those who put in a little research effort. The good news is that Doc’s resource article has made the research task much, much easier than it would otherwise be.

The Key Tips

The most important thing in bank account funding with a credit card is that you don’t want to be hit with a cash advance fee and incur interest. Thus, we have to be extremely diligent to not let funding go through as a cash advance.

The primary key tip here is:

  • On any credit card that you’ll use for bank account funding, call the credit card issuer before funding and reduce your cash advance limit to $0, or the minimum amount that the issuer will allow.
    • In any event, make sure that the cash advance limit on your card is lower than the amount you’re planning to fund.
    • The funding will not go through if the amount of funding exceeds your cash advance limit, if it would have coded as a cash advance. If it’s coding as a purchase, then the transaction should process with no problem.

And a secondary key tip is:

  • Use the Doctor of Credit article and any other data points you can find that your particular bank will code as a purchase, on the type of credit card that you plan to use.

Our Experience

The catalyst for our successful bank account funding experience was a data point we read on Reddit Churning. This caused us to investigate further and decide to give it a go.

We ended up funding $5,000 into a high-yield money market account (MMA), using our Chase World of Hyatt card. The $5,000 in spend would earn us 5,000 Hyatt points (worth about $75 at our baseline value of 1.5 cents per point). But more importantly to us, it would directly generate an additional 2 nights of credit toward elite status as we’re Going for Globalist in 2019. And, the 2.48% yield on the MMA is quite nice in and of itself – it’s more than we were earning on our checking/savings-type liquid funds too! (Although, it’s less than we’re earning on other less liquid investments.)

Beyond that, the bank was very friendly and even went out of its way to help me through a user error on my part in setting up the account an initiating the funding.

(We don’t feel 100% comfortable giving out the financial institution’s information here, and it’s not available in all geographic locations. We’ll leave it to you to find the best deals for your own purposes, given the available resources like Doc’s great article.)

Everything worked successfully. The bank account funding coded as a purchase, as we’d hoped and expected. Our MMA is open and functional. We have set up our online account with the financial institution. And once our World of Hyatt card statement closed, we received 5,000 Hyatt points and 2 elite night credits as anticipated. We’re calling this an unmitigated success!

Text of email from Hyatt confirming 2 additional elite qualifying night credits

Conclusion

Bank account funding with a credit card can be a great opportunity to earn points and miles as well as help hit minimum spend requirements and big-spend bonus thresholds. But you have to be aware of the pitfalls and be careful to avoid them. We wish you the best of luck in earning points, miles and elite status to help you live your travel dreams!

Do you have additional tips or input on bank account funding with a credit card or available resources? Please share with us and other Middle Age Miles readers in the Comments!


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2 thoughts on “Using Bank Account Funding to Generate Points and Miles

    1. Craig at Middle Age Miles Post author

      Hi Samantha – Thanks for reading and commenting. As we mentioned in the article, we don’t feel 100% comfortable sharing the name of the financial institution directly. We hope you understand. We try to share as much info as possible on the site. And there are good resource materials to help! I hope you can respect our judgment on this and I hope you continue to enjoy Middle Age Miles! ~Craig

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