Note: Today’s post is loosely related to the “Icarus Paradox,” which you may want to read if you haven’t already.
I had originally titled this post “The First Shutdown of #Milemadness,” however as you’ll come to see the shutdown had nothing to do with the tournament. It will impact my ability to earn miles in the long term, but in the short term it won’t have a huge effect.
Via Certified Mail and First Class Mail
Suntrust sent me a wonderful letter, a Dear John letter of sorts:
I regret to Inform you that Suntrust is no longer able to provide the financial services you require. As a Result we ask that you immediately close your accounts.
Suntrust continuously reviews its products, markets and client relationships to ensure that we are able to provide the best possible client service while also meeting our corporate business objectives. There are circumstances where the company will identify a specific account relationship that no longer meets these criteria. In the best interest of our clients and Suntrust the company will request that those accounts be closed.
In accordance with these Rules and Regulations and as a result of a recent account review we find it necessary to discontinue our banking relationship. We must ask that you close the account by March 26, 2014. If you do not close the accounts by this date we will close them for you, and either hold the proceeds until we hear from you, or we may mail you a check for any collected balance. If any account is overdrawn you will be responsible for all items along with any associated fees, that are present after closure.
If you have a Suntrust Check Card, it will become inactive within 10 days of the date of this letter. In preparation for your account closure you should begin immediately to make other arrangements for any automated credits to, or from your accounts.
I’ve long expected a letter like this. While expected, it still stung a little to receive it. I’ll move on of course, and there’s no huge loss, since the Delta Skymiles debit card is an Open System Card. The miles have long since been transferred to my Delta account and are mine to keep.
From Georgia, With Love
The beginning of this story is as old as time itself:
Boy Meets Card, Boy Falls for Card, Card Breaks it Off
That’s not the whole story, or at least not the story of how my time with this Debit card came to an end:
In late January my card was damaged, broken in half actually, and I reached out to Suntrust to receive a new one. In order to receive a new card I needed to change my mailing address. I delayed doing this as long as possible–I knew that if eyes were placed on my account I would probably not be a customer for long.
After a week, then two, of no new card I figured that things were probably going south. I pulled as much cash out of the account as possible and waited to hear from Suntrust. Today’s letter was unwelcome, but not unexpected news.
What Caused the Closure?
From the above letter, “…as a result of a recent account review we find it necessary to discontinue our banking relationship.” I take this to mean that a person looking at my account red-flagged it for something. That something is probably one of the following:
1. Location. Simply having a Suntrust account opened with a California mailing address seems to be a significant risk factor. They’ve been known to close accounts out of their geographic area:
It is possible that the address change to a CA address (from a CA address) is what caused problems.
2. Spending. I opened the account via online chat back in 2012, earning 30,000 Skymiles during the summer promotion. From that point on I never once contacted the bank. I slowly ramped up production month by month, and went full steam ahead starting in December 2012. The closure could be based on the number of miles earned from the card, or the monthly spend on the card.
3. Activity Pattern. I was transferring in money multiple times a month, and transferring it out while still pending. At first this seemed super risky to me, but this also became one of the most challenging parts of producing Milenomics Manifolds.
Let’s Bee Friends
Whatever the reason for this letter, I’m not bitter. Suntrust, we had a great year and a half. I’d like to thank you actually, for making such an excellent product which allowed me to earn many wonderful Skymiles.
And who knows, perhaps someday (soon even) you might see an application from a Mrs. Simon cross your desk.
If (and when) that happens, please be sure to approve it, so we can go on making Skymiles together. Who knows, we might see each other in the future. I’m not above flying to Florida to open one of these accounts.
Does This Affect #MileMadness?
As you can see this account closure is not related to the Spending tournament I am currently a part of. After I contacted Suntrust and I didn’t receive a new card right away I was pretty much expecting this to happen. Since I didn’t have the card I did not incorporate this card into my strategy for the tournament.
A second, more sinister idea that crossed my mind is that a competitor in the #MileMadness tournament works at Suntrust, and flagged my account to clip my earning potential. I dicounted this because it 1)
sounds is crazy. and 2)The card was likely shut down prior to anyone knowing my involvement in the tournament.
Never a dull Day! In brighter news, I’ve spent $2,425 so far today and earned 2,113 miles, with $2.10 in fees.
How much were you running through a month?
Jack: Between 50 and 60. I don’t think it is related to the volume, but I could be wrong.
Can you give an estimate of what 50k cost? I’m guessing MO fees would be steep.
Jason: 50 money orders cost $35 at Walmart.
I don’t have a (miles-earning) debit card yet but I’ve thought of getting one. If only I had thought about that while I was in Florida last year…. 🙂
PWAC:I’m unsure if opening in person with an out of state ID would be allowed–so don’t go down to FL just for the account, but by all means if you find yourself there… 😉
Was it primarily PIN-based money orders? Was it PIN-based money orders at a specific store? Were there large individual charges, or frequent charges? Suntrust has made some comments in the past about manufacturing spend via money order on their debit card. I’m wondering if they’ll also take a dim view of quarterly tax payments or other more ‘legitimate’ activities if there aren’t also other sorts of uses for the card in the account history.
Gary: Great questions. Usage was about 95% PIN based Wal-Mart purchases. The other 5% were somewhat legitimate online bill payments. I can’t remember a single use below $1500, unless you go back to Summer 2012 when I first got the card. Regardless of how legitimate your spending, at some point the banks hold all the cards and can sever your relationship on the grounds that it no longer meets their business objectives.
That ST has allowed this type of activity to continue for years really has me scratching my head. If they really wanted to they could run a listing of top debit card mile earners and “trim the fat.” The fact that I know people still doing 2-5x my volume leads me to think this was no such witch hunt. Instituting a simple cap on miles earned (say 250k a year) would also be extremely effective.
At the end of the day I really think it was my address that shot me in the foot, but I have no hard proof of that.
Address has been huge with Suntrust it seems. I’ve exceeded your proposed theoretical cap, and so far continue unabated. But then I haven’t been shut down by MyVanilla Debit yet either so go know ..:-)
Gary: all tax payments? Wal-Mart? or a mix of both? Also…lets not tempt MVD and ST with all this shutdown talk! 😉
Taxes and money orders (but not predominantly from Walmart because I don’t live near one). And bizarrely perhaps not a single small, every day charge.
I just received my ST Delta Debit this week, after 2 years without one. I live in a ST state and plan to start off slowly and build. ” Between 50 and 60. ” . Is that thousands? If so I need to get more aggressive. Thanks to you and to Gary.
I’m new here. Curious if you’d still recommend this card to someone in California who only wants to do 5k a month to earn a domestic flight per year etc.
Jason: Run the numbers–$75 for the annual fee (5k miles) + &X per mile fixed costs, plus time and travel. At the end of the day if you’re looking at 60k miles in a year your fixed costs would be $.002 per mile, which is still great.
My warning to you is this: The card is like a drug. You’ll start at $5k a month, but resisting the urge to go huge will be like fighting a strong addiction.
Thank you for the quick and personal reply. I guess my question should be, if you had the chance to do it again, would you get one of these again? I’m interested in it, but would hate to have it get pulled in a month and be out the $75.
I’m also guessing it isn’t safe to do debit – > MO – > ST. Add another institution inbetween?
You better believe I’m getting my annual fee back… 😉 I paid for 12 months of service and they’ve cancelled it on their end, so I’ll expect and fight for a few months refund.
I think depositing directly into ST would be a quick read flag… Someone in the middle, possibly the closest bank to your MOPO.
I definitely will get the card again, as I mentioned possibly in my wife’s name.
Great! I’m going to apply. Last question, promise. Should I be worried about the transactions being identical amounts (eg MO+fee) and add items/mix spending? Of course, keeping in mind my much lower spending.
Jason, I’m always a fan of random amounts but I have no insight that it actually helps with ST. It does keep things fun for your Walmart workers, who you’ll come to know and love as months turn into years.
I have the ST and using it for #milemadness. Its a good filler when I don’t want to go running around guying gc. I don’t live in the area (although i did at one point) but I think having a direct deposit from my work will hopefully keep it alive for a long time. We shall see..
Makes me think I should consider a vacation to an ST state….!~
How does physically visiting a ST state help? I mean, you’d still have your license and address in another state, right? Or are you thinking you use an in state address?
This line of questioning is in no way related to an upcoming spring break trip. 🙂
Jamie: It is entirely possible they won’t open the account in person with an out of state license. They could also require a copy of a bill at the in state address. Not guaranteed to work, but if I’m near a branch, why not? I’m very interested in hearing how your spring break trip goes 😉 please keep me in the loop as to what SiTes you visit.
SureThing! It’s in about a month, but I’ll be sure to report anything worth knowing.
“Hello Mr/Ms Banker, I am planning a move to your state in the coming months, and thought it would be good to have a banking relationship set up with a good local bank. Can you help me open a checking account? “
BeachMiles: I know right. Thanks for the suggestion. Sometimes I should do a bit more thinking before I comment, since I came up with several reasonable explanations within about 5 minutes after posting my initial question.
How did you get $50-60k deposited each month? I thought you are limited to $25k monthly external transfers plus $5k of mobile deposits.
Dru: Those are the limits in place if you use ST’s internal transfer feature. When you’re using another bank to “push” the money instead of ST’s transfer feature to “pull” the money there is no limit.
You mention that you ramped up slowly. Could you give some recommendations on ramp up strategy/amounts? I have had a ST card for about 4 months now but haven’t really been MSing on it other than $1k month to BB. Wanted to see if I was going to get shut down for being out of state first (live in the Bay Area). So far so good, so now I’m ready to let the MS shenanigans begin. My goal is around $30k a month. What percentage of your spend was at WM versus other purchases? My monthly direct deposit is only around $5.5k. I need to find a bank that’s going to be okay with me depositing a ton of MO’s first though.
Aaron: I don’t have any specifics on what works, but what follows is what worked for me. I also don’t recommend using ST as a “real” bank account (depositing your paycheck, etc), since a closure could get sticky. See: System of accounts & Financial Firewall.
I would say this: You’ve spent $75 on your annual fee. What is the number you’d need to hit to make that $75 fee worth the price of admission? I was conservative for the first 4-6 months because I netted a 30k sign up bonus, and then another 20k or so over the 6 months that followed. I believe my early months were about $3k per month. Once I had my 50k I felt that if I was shut down it would still have been worth it. At that point I went all out–limited only by my ability to move money back and forth. Early months were lower as I worked out inefficiencies, ramping up to full production around March of last year and going strong for a year.
Can you go from $1k to $30k? I’m sure you could. But being shut down is always a possibility, in all areas of the game we play. Accept that fact, and protect yourself from the negatives of an account closure.
As for percentage of spend I think I mentioned before 99%+ of my spending was Wal-Mart. I only ever used the card outside of WM purchases if I was faced with a cashier at some other store who said “Cash or debit only” at which point I’d say “sure, no problem,” and swipe the ST Debit. Moving the money into the ST account is the hardest part for us West Coasters, but there are some good ways to do that. I’m unsure if your Direct Deposit amount is your bankroll to play with–if so you’ll be moving that money in and out 6x a month. That’s very doable, so long as you manage the deposits and transfers correctly.
And deposits of MOs can be cancerous–so keep them far from your real bank accounts as well. I’m actually worried about my deposit branch right now. Cashiers and bank manager are ok with my business, but just last week a new hire at my deposit branch nearest to my MOPO started asking a lot of questions and didn’t seem to understand my answers. Watch out for New Hires, they can throw a wrench into the works.
TL,DR: If you are at all concerned about your account being closed, or not willing to accept the risks involved don’t do any of the above. There are some very real negatives to watch out for.
account just closed. in suntrust area. around 100k miles for the month. account closed shortly after miles went into acct.
Sorry to hear this geist 🙁 Thanks for updating us here.
Thanks for the data point, sorry to hear about your shut down. 🙁 I’ve hovered between 20-40k a month and never know what is a “safe” number.
A letter was sent on Jan 30. It implied there was a manual review as Milenomics mentioned. All the miles posted on Feb 5. I’m writing a check to myself for the balance and will close the account once funds are withdrawn.
Did you do anything abnormal this month?
The letter states that the check card will work for ten days, can I just get a bunch of MO? 🙂 Hope my points post.
Geist: Yes, but the 10 days started with the date of the letter. In my experience you will receive every mile you are due.
I bet the manual review was do to so many ACH pulls and pushes in.
Of course, now I can’t get money out. Guess I can write a personal check from BillPay.
Got the shutdown letter today. Ironically, I have down very little this year, maybe $3-5,000 . In the past have averaged about 20K/month. So why now?
FYI. all pin based MO purchases at grocery store