š This fact may be outdated
The described method for earning airline miles was factually accurate and utilized by individuals like Brad Wilson. However, the U.S. Mint ceased allowing credit card purchases for $1 coins with free shipping in 2011, effectively closing this loophole.
A man earned 4 million airline miles for free without breaking any laws by using his credit card to purchase free-delivery $1 coins from the U.S. mint.
The $1 Coin Loophole: Miles for Minted Money
Imagine earning millions of airline miles without ever leaving your home, simply by buying money. This wasn't a fantasy for some savvy individuals over a decade ago. A fascinating loophole involving the U.S. Mint and credit card rewards programs allowed people to amass vast quantities of airline miles for essentially free.
One of the most famous figures to leverage this system was Brad Wilson, founder of BradsDeals. He reportedly earned an astounding 4 million airline miles using this very technique. His story, and others like it, became legendary in the world of travel hacking.
The Presidential $1 Coin Act: An Unintended Consequence
The genesis of this unique opportunity lies with the Presidential $1 Coin Act of 2005. This legislation aimed to increase the circulation of dollar coins in the United States. To achieve this, the U.S. Mint began offering direct sales of these coins to the public. Crucially, they sweetened the deal with two key provisions that would later be exploited:
- Purchases could be made using credit cards.
- All orders came with free shipping.
These two elements, when combined with lucrative credit card rewards programs, created an unprecedented pathway to free travel.
How the 'Dollar Coin Arbitrage' Worked
The process was deceptively simple, yet incredibly effective. Here's a breakdown of the steps:
- Purchase Coins with Credit Cards: Individuals would visit the U.S. Mint's website and purchase large quantities of $1 coins using a credit card that offered airline miles or other reward points for every dollar spent.
- Free Delivery: The U.S. Mint would ship boxes of these heavy dollar coins directly to the purchaser's home, completely free of charge.
- Deposit into Bank: Upon receiving the coins, the individual would then take them to their local bank and deposit the full amount into their checking account.
- Pay Off Credit Card: The deposited cash was then used to immediately pay off the credit card bill for the coin purchase.
The net effect? The individual spent no money out of pocket, but still earned a significant number of credit card reward points or airline miles, purely based on the transaction volume. It was, in essence, a zero-sum game for their bank account but a massive win for their travel dreams.
Why This Loophole is No More
As word spread and more people caught on to this strategy, the U.S. Mint began to notice the unusual purchasing patterns. The intent of the program was to circulate dollar coins, not to facilitate credit card rewards farming. While entirely legal, it was certainly an unintended consequence of their efforts.
In 2011, the U.S. Mint took action to close this loophole. They announced that all future purchases of $1 coins would need to be made via money order, wire transfer, or check. This eliminated the ability to use credit cards, thereby cutting off the flow of easy reward points. The era of free miles from dollar coins came to an end, leaving behind a fascinating chapter in the history of financial ingenuity and travel hacking.