A Sea Lawyer’s Breakdown of the Military Lending Act of 2006


I am not a real lawyer, but my fellow O-3 Endoid, my High School Friend that I interned with at the Federal Reserve Bank 14 years ago, and myself are trying to wrap our heads around reading the actual guidance given by the FDIC on the MLA as posted here. The actual MLA can be found here, and a comptrollers guide can be read here. My head hurts after reading all of that. Any of you JAGs out there can chime in? This whole thing is goddamn rocket surgery to us!

First and foremost the entire point of this MLA passed over 12 years ago under George W. Bush was this:

The Military Lending Act (MLA), enacted in 2006 and implemented by the Department of Defense (DoD), protects active duty members of the military, their spouses, and their dependents from certain lending practices. These practices could pose risks for service members and their families, and could pose a threat to military readiness and affect service member retention.

It’s interesting how “Service member retention” is mentioned. I believe the MLA is the greatest retention tool of all time. Pretty much these $450 to $595 annual fees are the “new potential debt” that I am trying to avoid by staying active duty forever. Maybe this is the DoD’s plan to retain us forever as a 33 year retired retained O-6s.

It appears that the act was to keep E-1 Seaman Timmy from getting another Chevy Camero at 36+% APR. There are a couple of calculators for shady car dealerships to max out their exploitation, imagine an APR so high that you need a website to calculate reaching 36%. The main target is predatory lenders as the punishment for anyone not complying with the MLA is harsh:

creditor who knowingly violates this section shall be fined as provided in title 18, or imprisoned for not more than one year, or both.

This was an excellent effort to stop these young recruits from fucking up their financial life. Now we wonder why does Citibank, Chase, American Express, and U.S. Bank extend such provisions to their consumer products? The answer lies right here in the comptrollers’ guide:

The main reason these specific banks are waiving annual fees is out of an abundance of caution. They simply do not want to be in violation of potentially charging over 36% interest when the annual fee is factored in. Unless they have a dedicated super computer and some accountant on each service member’s account I don’t see how they could ever keep up making sure they are not in violation on a monthly basis.

The FDIC talks about Bonafide Fees of which any of us can say a $450 to $595 annual fee is excessive. The FDIC guide says these fees are considered reasonable in only these circumstances:

So it would be unreasonable for Citibank to charge $495 for a Citi Prestige card with a wimpy $5,000 credit limit. The bank could say, bring it on and challenge us because we can justify the fee. However since Citi is the same size as Chase and AmEx we look at the other provision mentioned here:

Just because Chase, U.S. Bank and AmEx are waiving fees, does that force Citi (and potentially Barclays) to follow suit? None of the other provisions make any sense. For example page 6 of the FDIC guide shows a calculation of the Military Annual Percentage Rate (MAPR) as per 12 CFR 1026.14(c) and (d) of Regulation Z.:

This section refers to personal loans of which AmEx has set their APR to 0.00% for military. When we look at the credit card section we see this:

For example my $495 annual fee Citi prestige has a $20,000 credit limit and a 17.99% APR.

If we do the MAPR calculation we take the APR of 17.99% and then add the ($495 AF /$20,000 CL) = 2.4% which is only 20.4%. This is less than 36% limit and is NOT in violation of the MLA, even if I drop my Credit Limit to $5,000 I am at an MARP of 28%. So this makes no sense that they are in violation of the MLA. However what if I carry no balance from month to month? Turns out no fee can be charged in this situation:

It appears the worse they could do is charge max of $100 a year for any of their premium products, and only if a balance is carried over!

The MLA interpretation is currently a very generous gift of Chase, AmEx, U.S. Bank, and Citibank. So keep that in mind, nothing lasts forever and this could all end abruptly like how the $995 fee waiver ended for the Gold Luxury Card.

Any one have data points on other banks?


Wonky Citibank Rules

I have been brainstorming on how to maximize Citibank now that they are waiving annual fees per the MLA. As far as I know Citi allows product changes for any of their card to anything else. In the past I took my American Airlines Platinum card and changed it to a Bronze American Airlines which became the AA MilesUp card. I also successfully changed another Platinum AA card into a Double Cash Back card which is of an entirely different family. I am reading now that people have been able to product change their American Airlines Executive to another Prestige after one year. This would be a game changer as each Citi Platinum I’m churning with Snail Mail codes would become another $250 Prestige in my pocket after one year!

The list of possible products (dated Feb 2018) is this:

  • Citi® Double Cash Card
  • Citi® Diamond Preferred® Card
  • Citi® CashReturns® (an old 1% cash back card)
  • Citi® Dividend
  • Citi® Dividend World Elite (same cashback program as regular Dividend)
  • Citi® / AAdvantage® Executive World EliteTM Mastercard®
  • Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard®
  • Citi® / AAdvantage® Gold World Elite™ Mastercard®
  • Citi® / AAdvantage® Bronze Mastercard
  • Citi Prestige® Card
  • Citi ThankYou® Premier Card
  • Citi ThankYou® Preferred Card
  • EXPEDIA®+ CARD From Citi
  • AT&T Access More Card From Citi
  • AT&T Access Card From Citi
  • AT&T Universal Savings and Rewards (5x on AT&T purchases)
  • Costco Anywhere Visa® Card By Citi

Here are my sources for all of Citi’s wonky rules:

If this is the case then we should not attempt to get a Premier card until exactly 24 months from opening the Prestige card. Instead we should hit every single Citi card on their own and convert to a prestige after one year. Keep in mind each Citi card I have opened has been a hard pull and there are reports of a 6/6 limitation. This is where only 6 hard pulls from any bank in 6 months will keep you from getting any new Citibank card. Reader NC asks:

Derp, How many hard pulls have you had in the last 6 months? At least how many does Experian show? I recently got denied for the Prestige for too many inquiries on 24Feb or 25Feb. My Experian account says I have 8 inquiries in the last year. Trying to see the soonest I should apply next and have a chance at approval. I don’t know if I’m ready to garden just yet. Dan, if you see this, weigh in?

The other rule to contend with is the well know 8/65 rule where you must wait 8 days between applications and then 65 days between each pair. For example I got two Citi AA Platinum cards on 24 Jan and 12 Feb (spaced more than 8 days apart). So in a moving 65 day window I had 2 new cards making me ineligible for a third till the first one drops off. I will be eligible to get my next cards at these intervals:

  • 30 March & 18 April
  • 22 June & 7 August
  • 26 Aug & 11 Oct
  • 30 Oct & 15 Dec

What I need to look out for now is not going over 6 hard pulls in a 6 month period. With the application today I have 3 hard pulls at these intervals:

  • 24 Jan 2019 (Drops 24 July 2019)
  • 12 Feb 2019 (Drops 12 August 2019)
  • 30 March 2019 (Drops 30 September 2019)

If we assume I only work Citi this year we can have this to expect:

  • 18 April Application (4th pull of 6)
  • 22 June Application (5th pull of 6)
  • 7 August Application (5th pull of 6 since the 24 Jan dropped off)
  • 26 August Application (5th pull of 6 since the 12 Feb dropped off)
  • 11 October Application (5th pull since the 30 March drops off)
  • 15 December Application (5th pull since 18 April Drops off)

When 24 January 2020 comes around we can then start product changing the AA Platinums to multiple Citi Prestiges just for more $250 credits and free 4th nights. When 24 months rolls around we can finally hit the Citi Premier for more thank you points!

What this plan is contingent on is finding a steady supply of these:

Please don’t throw these out! Hit me up if you got some extra codes

Otherwise I will have to get every single Citi Product with intention to product change to multiple Prestiges in one year.

I will also not be able to get cards from any other bank to risk racking up any hard pulls. Maybe when I am in the upgrade phase I can switch to getting back under 5/24 and working on my wife’s accounts.


Success On Citi Prestige!

Thanks for all of the positive data points on the waiver of the $495 annual fee per the MLA for many readers out there. Not it is my turn, so I decided to jump on the bandwagon. I ran a Credit Karma report and made sure it had been exactly 65 days from opening my first of two Citi Cards based on the hard inquiry dates:

I then plugged the date of 24 January 2019 into Wolfram Alpha and got today’s date:

2019-03-30.jpg (750×1334)

I logged into my Citi account and went under products and found the application link. Upon application, I ran into this ominous message:

I reached out to reader Dan who is the SME on Citi and he told me not to fret. This is SOP for Citi to verify applications via phone. I called 1-800-763-9795 and they verified my identity with a text message. Then I was then instantly approved! I got this email shortly after my phone call:

You can always check you application status here or by calling the number above. My next card will be on Thursday 18 April and will be a fourth Platinum AA using a Snail Mail code. I will do the same thing again on 03 June 2019.

I had the bright Idea to try to hit Premier at the same time as prestige, but there are conflicting reports on getting both bonuses since they are the same Thank You Points product family. Although it is technically possible to get both bonuses simultaneously, any miscalculation would mean doing all that spend for no bonus at all. The safer move is to wait 24 months from Prestige to get a Premier card. Any data points out there on this?

Update: I got a call from 800-825-0393 on 02 April 2019 to confirm that it was me that applied for the card. They said it would take 7 to 10 days, Oddly I got an email on Sunday saying there was an overnight package coming today of which I assumed was the card. However a reader got the same message and it was just an overnight letter saying he had simply been approved for the card. What a waste of resources right there!


Two Years In The Works: 4/24 Strategy

The time has finally come where my wife will be under 5/24. As of today her credit karma report shows this:

The plan is to hit Chase, then U.S. Bank, then Citi. Keep in mind each bank has specific rules:

Chase will only allow 2 new personal cards ever 30 days. This is perfect because of how she will become 4/24 spread out over 5 months:

  • July 2019: Apply for Chase United Club Credit Card
    • Unlimited Lounge Access
    • 12,500 MP Flight segments
  • August 2019: Apply For Chase Sapphire Reserve
    • $300 Travel Credit
    • 3x UR on dining and travel
  • September 2019: Apply for Freedom and Freedom Unlimited
    • Convert both to two more CSRs in 1 year
  • November 2019: Apply for Bonvoy Boundless
    • Need to cancel Bonvoy (Was Marriott Premier)
    • Upgrade to another Ritz Carlton Card in one year
    • 100k offer here
    • 3 Free Nights offer here
    • Note the application restrictions span over to AmEx cards as well:
The chart from Frequent Miler says it all

The US Bank is a no brainer at this point because of the MLA waiver as well as the $325 travel credit. After that we go into Citi Country. Keep in mind these rules: Max 1 personal card per 8 days. Max 2 personal cards per 65 days. Max 1 business card per 95 days. With this in mind we can hit all these products in order:

  • January 2019: Citi Prestige and 8 days later Citi Premier
  • March 2019: Citi AAdvantage Executive and Platinum 8 days later
    • Full Admirals Club Membership for primary card holder
    • 10 AUs get Admirals club only membership
    • Shelf the Platinum after getting bonus
    • Wait 65 days for next batch
  • May 2019: AAdvantage Platinum x2
    • Use Snail Mail Codes to get the bonus again
    • Repeat every 65 days

Next step is to maximize slots in AmEx Credit Holdings. Keep in mind these restrictions: You can only get approved for one credit card every five days. You can only get approved for two credit cards every 90 days. Her current holdings are:

With this optimized plan we should have:

  • Two Citi Prestige Cards
    • $500 travel credit per year
    • 4 free nights at any hotel as a free 4th night
  • United Club Access and American Admirals Club Access
    • Also all Star Alliance and One World Lounges
  • Three Chase Sapphire Reserve Cards
    • $900 in travel credit per year
  • Two Ritz-Carlton Cards
    • Two Free 50k Nights
    • $600 in flight dining or upgrade credits
  • Three Hilton Aspire Cards
    • $750 in Southwest Gift Cards Per Year
    • $750 Hilton Resort Credits
    • 3 free weekend nights at any Hilton hotel, but these
  • Delta Reserve Card
    • One Free First Class Companion pass

I’m tempted to downgrade my Bonvoy Brilliant to a Bonvoy, just to apply for a second Bonvoy Brilliant to take the spot of the Delta Reserve. Then upgrade back to a second Brilliant.



Open Season On Citi

Hello frequent miler visitors! If you are military check out my comprehensive military churning guide here. Good news on Citibank, looks like military are getting annual fees waived on cards opened in 2019 per the Military Lending Act of 2006 (MLA).

Senior O-3 Endoid at Great Lakes as well as O-6 select in Hawaii both reported today that their annual fee of $495 on their Citi Prestige was waived. Here is the time line:

  • 11 March 2019: Applied, instant approval
    • (No Other Citi Card, over 5/24)
  • 14 March 2019: Received Card
  • 15 March: Applied for SCRA and MLA via Citi Fax
  • 19 March: $495 charged and waived on same day
  • 28 March: Finally showed MLA waiver on website

A O-4 reader at Walter Reed also shares his datapoint:


Looks like everything is good for Citibank waiving for premium cards. Just Remember:

  • To apply for a card within the same brand, must wait 24 months after opening or closing account. (Or use Snail Mail Mailers)
  • Max 1 personal card per 8 days.
  • Max 2 personal cards per 65 days.
  • Max 1 business card per 95 days.

Let me know how it goes! I have written posts here and here on strategies if this Citi MLA waiver stays for good. In the meantime please start collecting these:

Best way to hit the 60k AA bonus multiple times are these snail mail codes.


Get Diamond Caesars Rewards Without Gambling

Hilton Diamond via AmEx Aspire is the key to status matching with Wyndham and the status matching to Diamond Caesars. Ask Sebby has other ways listed here. Two years ago I had a stay at Caesars Palace and wanted to get the $44.21 daily resort fee waived so I went for Founders Card. The damn match took 4 weeks and I ended up paying the fees anyways and the whole thing was a bust.

The whole debacle with Fyre Festival, and its relationship to a fake status card called Magnises have left may people to ignore the many pay for status type cards. Founders Card and Select are some of these cards that I have. Everyone rolls their eyes or cackles when I even suggest getting this one card:

However I was sold on it by Mr. Meb Faber and his podcast. For the American Airlines Platnum status match alone the card is worth it, but sadly I wasted my once in 5 year challenge some years ago not knowing of the 5 year status match ban.

Caesars Dubai

I had failed at getting any benefit from the card those first few months. Now how am I going to justify the $295 annual fee for this card? Turns out the Caesars Rewards Diamond status comes with a free annual $100 dining credit, along with random free rooms because they think I am some casino whale:

Best part is the status comes with a one time 3 (or 4) night stay in the Bahamas at Atlantis. Sadly, only Diamond members (real ones, not matched status like FC) get two free nights in Dubai at the New Caesars in Dubai Blue waters. This is more than enough to justify the $295 annual fee, for the first year at least. If you use my link here you can get your own founders card. Make sure you mention you are military to waive the $95 initiation fee.

The perpetual benefit is the waiver of any resort and amenity fees associated with booking at any Cesars Resort. I was given a comp night at the Joliet location so that I could reap the benefit of my $100 dining credit. I was given the room with out any parking or amenity fees:

This fee waiver is critical in a place like Las Vegas where a week long stay would cost you $300+ in resort fees. There were plenty of Comp rooms in Atlantic city as well:

I plan on attempting my M Life Status match there for Hyatt status. Even after two years of FC membership, I am still on the fence if I should go for a third year because I don’t find myself at these resorts as much as when I was a D.I.N.K. H.E.N.R.Y, but I was able to milk it for these first two years! If you have time then play th estaus match game:

  1. Get AmEx Platinum or Hilton Aspire to Get Hilton Status
    1. Or Get the IHG Premier from Chase
  2. Then Status Match Wyndham Diamond Using This Form
  3. Then use this site to Match Wyndham Diamond to Caesars
  4. Go to Atlantic city and:
    1. Get M Life Gold at Borgatta
    2. Back Match M Life Gold to Hyatt Explorist
    3. Go to Hard Rock and be rock royalty
      1. Enjoy a free buffet and $100 in free play

If you are in it for the free buffet as a one time benefit, check out the Salute program for Caesars.


Last Week For 210K Delta Sky Miles

If you got $10k to spend in the next 90 days you might want to consider hitting all three Delta AmEx cards. You would earn 210k SkyMiles which is almost enough for a round trip flight from Detroit to Amsterdam in Delta One:

You would also earn 10k MQM and a $150 statement credit. In one year you would get a First Class Companion Pass with Delta Reserve and a regular companion pass with Delta Platinum. You would then upgrade the Gold and Platinum to a second and third Reserve to get three first class companion passes the year after that. This is a limited time offer for all three that ends 05/01/2019:

The $740 in annual fees are waived for active duty!


MLA for Citi Prestige Now Off? (Now Back On)

O-6 reader and Busyboy reporting that waivers are coming in retroactive to meet the MLA requirements. Those that opened the card after Oct 2017 and were charged the fee are getting the fee back! Busy boy writes:

Mine got waived today for the citi executive. But they told me when i applied from last year when i first got approved for the cc they said i qualified for MLA but they wont waived the fees. I already accepted that they wont ever waived it but to my surprise it was waived :). Account opened last year.

Here is the original article:

Continue reading

Delta Reporting Gift Card Purchases On Visa

Bad news, an O-4 Specialist from Great Lakes just reported a $50 gift card bought on a desktop computer on his Chase Visa Ritz-Carlton card posted as this:

Needless to say there is a whole thread dedicated to these datapoints on flyertalk here. Most recent datapoint is here from bigblue2007:

My two $50.00 delta gift certificates posted on 3/2/18 and the credits posted on 3/4/18. The credits posted in 2 – $50 increments. I have the [AmEx] Platinum card and still have $100 to go.

Not sure what this O-4 did with his Visa, but there has been reposts that you must use this link to buy the cards, some times the mobile app or website will send you to a third party site. Any datapoints out there from our readers?

Delta and Southwest have been the only option for gift cards since United shutdown their registry in Sept 2017, and American Airlines started reporting Gift Cards on 08 Feb 2019.

Sothwest has always been good for us. I got a single $250 gift card with my AmEx Hilton Honors Aspire. On 07 March 2019 an O-3 reader at Great Lakes reports buying a weird $194.40 Southwest gift card (since he got reimbursed for a $5.60 fee previously) from his AmEx Platinum, and getting that reinbursed:

Delta has been great as well, but only at $50 increments. Some people have been able to surpass the three card limit when they call a ticket purchase in:

You can use more than 3 GCs for Delta flights now, though you have to do it over the phone “Up to 3 gift cards can be redeemed per transaction on delta.com. If you wish to redeem more than 3 cards for a single purchase, please call 1-800-221-1212 and a Reservations Specialist will be able to assist you.”

via flyer talk: Originally Posted by ukinny2000 

Other comments suggest you can use up to 6 cards depending on the person on the other end. This most recent datapoint on Delta reporting as Gift Card may be limited to VISA cards and not AmEx, Note this comment here:

At least since December 2018, my VISA Infinite shows “GFT AA Y FEE” in the description. Even with that, it was reimbursed as part of the VISA Airline incidentals statement credit.

-igorjrr from flyertalk


World of Hyatt Offers: Points Vs. Nights

Currently Chase is offering 50,000 Hyatt Points or 2 Free Category 1-7 Nights (Worth 30K each for Cat 7) and a $50 Credit both for $6,000 spend in 3 to 6 months.

I was going to go for the 2 free nights but I realized I only had one year to book it at only these places to maximize my category 7 nights. If I go for the 50K points then I had infinite time to use them, and I could transfer them as needed. I could also use them to book many nights at a lesser category hotel:

By not going the route of the two free nights, I would be losing out 10k points and a $50 statement. The points would have the flexibility on transferring and splitting up 50k.

Did I make the right choice?