There is a surprisingly big group of people who find ways to game credit card companies and maximise their credit scores for various reasons. Some people use the additional credit eligibility to invest in property, others use the extra points to travel for free, and more.
It can be a lucrative opportunity. Some experts (like the notorious Stephen Liao) even sell courses on “credit hacks“ for thousands online, revealing “black hat” secrets to abuse credit companies without getting caught. Such “black hat” secrets include manufacturing spending, where you buy items like gift cards and then cash them in to pay your credit card bill; thus earning credit points without really risking your own cash (as you can have £0 and cycle the money around like this to earn points).
There is plenty of free advice online that doesn’t rely on breaking credit companies’ terms and conditions, though.
One such person providing this valuable advice is Brian Jung, a credit expert with over 150,000 subscribers on YouTube. Brian provides credit and financial advice, delivering full transparency (including breaking down his earning’s on YouTube) about his financial situation in order to help people educate themselves on the subject.
I managed to catch Brian for an interview in August. Whilst I wanted to reserve the interview for the book, I couldn’t wait.
Brian spills the tea on the other credit experts selling courses online, what he expects from the industry in the future & what value he gets from this hidden industry.
The Brian Jung interview 💳
Please excuse any weird grammar below… As this interview is a transcript, I’ve tried to accurately write down exactly what was said but speech often makes more sense out loud than written down.
How did you first discover “credit hacks”?
I first discovered “credit hacks” on Instagram, but it depends on the definition of what “credit hacks” are because it’s a pretty broad spectrum in this market. Some people would consider “credit hacking” where you just literally use your points and then redeem it for free travel – some people consider that “credit hacks”. But when we’re talking about manufactured spending and all the shady stuff; that came over from Instagram.
I agree it’s a broad term, which does make it tricky, but this question should help:
You seem to prioritise “white hat” credit practices over “black hat” (such as manufactured spend) on your YouTube, have you ever dabbled with these “black hat” practices? And why did you avoid/partake?
So I’ve never actually done the “black hat” practices. Just because as a YouTuber and as someone who is working with the banks within affiliate programmes; I just don’t want to put myself on that risk and if I get my account shut down – which actually happens pretty often – it’s not worth me making a couple extra hundred dollars manufactured spending in order to try and work the system.
So why did I avoid partaking in this? It’s mainly just because of shutdowns. Even though manufactured spending isn’t considered illegal you’re still trying to game the system, and the best analogy to make is like trying to count cards when you play poker at the casino. It’s not illegal but they can kick your ass for it if you get caught and they will probably ban you from ever playing the game.
If you know how to do “white hat credit card hacks” properly, you don’t need to manufactured spend in order to find positive value. I think if that was the case then a lot more people would be doing “black hat” methods. But even if you go “white hat” – you’re good – you can still profit off of this in a way that’s safe and legal.
As someone who comes from a working class background, how did utilising credit change your life?
So utilising credit changed my life in a couple drastic ways.
I think one of the first things that got me hooked into the game was finding out that you could travel first class or business class flights for free. I never thought that was actually going to be a reality – the way I grew up. I never travelled that much, and all the travelling I did I just never thought that business class or first class flights would be in the reality of something I could experience in this lifetime.
Using credit I’ve always known that later down in the road it would be pretty important, but I had no idea just all the extra travel benefits that came with it.
So the mindset that I was raised with was pretty much the idea that credit is bad – I think this is like a majority of people out here – but you assume that credit is bad for you, it’s not good. Now that I think about it – it’s just kind of ridiculous how this mindset is laid out here, but it does give people who are just a little bit more educated an advantage on taking advantage of all the benefits it provides.
Do you think anyone is using “credit hacks” to 100% fund their livelihood, or are they utilising it to improve their lifestyle?
By fund their livelihood, that could mean using the credit limit for investments, rather than just direct funding livelihood.
I actually don’t believe that it’s realistic to 100% be able to fund your livelihood from “black hat credit card hacks”. I just don’t think that’s possible. Most of these people that try to convince people that you can are just trying to sell you the course or the “mentorship” or the “close friends list”. So very, very, very unlikely and the ones that may do – I feel it’ll be a couple of people that have been doing this for a very long time and are still using that to monetise other ways – like a course – or other ways to make income basically.
If we broaden that term up, though, to funding livelihood to people using credit limits for investing – 100% a lot of people do that. When I have the definition of livelihood it’s like actually creating sustainable income so you can pay for rent, pay for your car, pay for food on the table.
But when we’re talking about regular investments there are a ton of people who do that with credit. There are people that actually teach you how to use credit limits to invest into real estate and flip that and then create equity from that. So it just depends on what that definition of livelihood actually is.
This ties into what you were getting at in the previous question: do you think “credit gurus” like Stephen Liao are genuinely utilising credit like they say, or do you think it’s not feasible and is just promotional material?
Yeah I don’t think it’s feasible at all, in my opinion. I think it’s 100% promotional content. His business model – in a way it’s smart, in a way it’s foolish. The way I say it’s smart is because he’s monetising pretty much his entire lifestyle.
So I would take a look into Dan Bilzerian – he’s pretty much funding his lifestyle and puts it on “marketing expenses” for his tax write-offs. Steven Liao; he flexes the girls, the house – it’s very similar to what Dan is doing. He has the Lamborghini and all those cars but he has to slap in the logo in there so he can justify it being a “business expense”. And what are those “business expenses” going towards? Well it’s actually selling the course and the “close friends list” for “credit hacks” and things like that.
It’s a scummy industry without a doubt. It’s annoying because they’re pretty much preying on people who don’t know better. So I made a video talking about it because I just knew he wasn’t doing something ethically right.
After I posted that YouTube video just trying to bring some attention to the matter I’ve had a lot of people reach out to me.
You’ll see his lifestyle that he actively promotes – he has a lot of girls in there – all of those girls are pretty much paid for. So he’s linked in with the guy who owns Seeking Arrangements – which is pretty much a gold digger website. If you have an account there and have a lot of profile hits you can rank up there, and apparently he knows the guy. He has a couple of Instagram photos with him. He’s got a diamond membership with them.
He pretty much hires these girls for his Instagram stories and posts, and people are like “Wow! I want to live this way, how can I do it?”, they reach out and he’s like “Oh, well you have to pay me $1,000 dollars for my close friends list” and that’s pretty much how he monetises it. So if you take a look at his stories he’ll try to include his branding somewhere in there just in case he gets an IRS audit, because what he’s doing is very aggressive with manoeuvring through IRS material.
Stephen Liao is pretty much the biggest one doing it. There are many other people trying to replicate him. Honestly it’s cringey to me. I know there are some people with better intentions where they do want to provide value and they want to provide service, but in my opinion most of this content is available online and the only time I would ever recommend someone pay for promotional content or things like this – it’s only if they’re trying to accelerate the pace that they’re learning. If they don’t want to do the research and spend hours and hours – and they want something in one concise package – that’s when I recommend considering investing into people. But never, ever consider investing into people who are flexing and then try to get people to convert off of that lifestyle – because it’s not true, it’s fake. I don’t know, legally, how they’re still around because I’ve had multiple people tell me “hey I’m trying to sue this guy” and I just don’t want any part of it.
I think most people don’t want to put in the effort to recover an amount like $1,000, but you’ll see there’s a lot of lawsuits man.
Where do you think the most financial value of credit hacks is, such as cashback, reward points or the size of credit limit (and what you can do with that limit)? And can you explain why?
So the most value I find with credit cards – it’s going to compete with two things. So, I’m going to start with points. There’s an argument where cashback is very valuable too – people who don’t find value in points – but the most value you can find from credit cards are going to come from travel benefits. Whether it’s using those points – booking those points and getting redemptions on better flights or better hotel rooms – it’s going to be up there. Certain credit cards also offer things like free hotel nights, and things like statuses, and those are the things I keep an eye out for.
Things like credit limits and other things – yeah, it’s good to have. But if you’re using credit cards, paying it off, most the time those things won’t even matter. And if your primary cards are with American Express and it’s a charge card, it really won’t matter either because they don’t have preset credit limits that you normally have on a regular credit card.
Credit cards themselves are just useful in general because it still allows you to leverage it in getting better interest rates and things like that. But my most valuable benefit from credit cards is redeeming points for travel or getting travel benefits out of it.
Last question for you: Have the “golden days” of credit now passed, or do you think the industry will continue to be fruitful?
This is a really good question. So, if we’re talking about “golden days” of credit in terms of what I’m talking about like “white hat”, ethical, using points like that. That is never going to pass – it’s always going to be there – and that’s because the relationship that the bank has with us consumers and then us getting an exchange of benefit from that; it’s this relationship that benefits all parties. That’s why it continues to work and that’s why it’s not going anywhere.
I think if anything over the next few years they may continue to expand with different partnerships. So we’ve seen things like WeWork partner up with American Express, and DoorDash is working with Chase. A lot of other companies will continue to position themselves with the banks and other issuers.
The main reason for this is just because everyone benefits from it. Say, for example, WeWork gives a full one year benefit for free to American Express Platinum users – which was the promotion last year – people are getting a taste of WeWork whilst the consumers are getting this benefit completely for free, and American Express don’t need to do much. They’re not losing out on any part of the deal, they’re just helping the connection between the two. If anything they may be getting some type of deal or percentage from WeWork. This is something we’re going to see in the future. So “golden days” have not yet passed, just because I think we’re still early on within a lot of these things.
The only exceptions that we’re going to have are things like this pandemic that’s going on. They reduce a lot of the benefits, people don’t travel as much, they can’t connect the pieces. That’s when we’ll see it becoming a little cloudy. And 2020 is cloudy in this industry, because people can’t travel, people can’t take advantage of the benefits, and that’s what one of the most valuable things with credit cards are. So aside from recessions, pandemics; this is going to be an industry that is going to be around for a while because everyone eats.