shinobi - Since your side hustle seems to be over, could you share some details about what you were doing? It might help the rest of us learn how to look for similar opportunities in the future.
Why is it illegal?
The ECOA states that credit card issuers must provide specific reasons for adverse actions to help educate consumers. It can be argued that āHistory of account usageā is not specific.
Makes sense, to be clear, I wasnāt arguing, just wondering what you were thinking with that. There are lots of avenues of consumer protection, was curious what you were referring to. Just wanted to clarify that youāre referring to the lack of specificity given for the reason for closing the account.
The reason for the specificity requirement in the ECOA is to ensure creditors arenāt discriminating against protected groups, not to educate consumers. Iām not saying OP does or doesnāt have a claim, regardless of his or her membership in a class, but I do think there is a difference between whether something is likely illegal and whether there is a colorable claim.
Iām not prepared at this point to concede it is over. Iām at a āwait and seeā stage right now, keeping a low profile, allowing time to pass.
I can share a little nevertheless, including an aspect going back all the way to the OP which generated some questions. But I need to get a couple of preliminaries out of the way.
First, Iāve always been truthful in writing that Iām a phony MSer. I donāt even know how to do real manufactured spending, something my living circumstances almost surely would not permit anyway. I have to travel ten miles just to buy food. I do not live in a city, a suburb, or even in a small town. There are no retail businesses here where I live, or much of anything else for that matter. I needed something I could do via the internet.
Second, I retired a long time ago. I live on the income from my nest egg, money earned and saved years ago. So my success yardstick likely is different from a real MSer. Iām just trying to preserve the buying power of my nest egg by beating inflation and taxes to the best of my ability.
Real, genuine, MSers turn their money over far faster than I ever have done, or been able to do using my scheme. The more rapidly MS money turns over, the larger the profit per unit of timeās passage. I never mastered that approach or learned how to execute it. I tip my cap to those who do know how to do it. You guys are amazing!
I was content to make less profit with purchases that turned over FAR more slowly than āreal dealā manufactured spending . Using my own yardstick, I was still beating the returns on my other investments all to heck. So I was happy. At this point I can go back one year and reveal what was behind the OP, why I made that request for help, and the outcome. Here is the story as it unfolded commencing in April of 2018:
I was on the telephone with one of the credit unions where Iām a member. The rep mentioned they would allow me to use a credit card to open certificates of deposit. I was also aware this particular CU offered a 30 day CD product, completely NCUA insured of course. My mind sort of clicked and I was just a little nonplussed. Doing the math, a 30 day CD allowed me to open as many as 12 CDs per year. With a 2% reward that was a tax free APY of 24%, plus the small taxable yield on the CD itself. With a 3% reward, as at Discover, I was looking at 36% tax free APY. The entire thing sort of boggled my old retired mind. It seemed almost too good to be true. Routinely, at that time, I was earning between 2% and 4% on my nest egg . . all taxable.
There was a wrinkle. The credit union in question would only accept Mastercards or Discover cards. Visa cards and AMEX cards were verboten. And pretty much all I had at that point, April of 2018, were Visa cards and AMEX platform cards. So I was shut out. That was the reason for the OP on this thread.
Thanks to the help of early posters to this thread, and to my own research, I was able fairly quickly to assemble a set of Mastercards and my Discover card. I ended up doing $350,000 of CDs with that CU, rolling the money over of course and making a sweet return each time. I have never before revealed why that sweetness ended. I will now:
I was shut down, not by any credit grantor, but by the CU itself. Before I began purchasing the CDs I insisted on receiving the blessing of the branch manager of the branch where I was making the purchases. I had that blessing and it got me through $350k. But my unusual purchase activity eventually came to the attention of higher ups at that CU. They were alarmed, even though I was breaking no rules. And I was shut down. For me as a retiree, making between 20% and 30 some odd percent on my money was pretty nice. The tax free part was also very welcome.
Anyway, since all that it has been onward and upward. I have scoured the internet, with some success, for other similar opportunities. They are few and far between, but they are out there. Also, I have not since that first experience encountered trouble with use of Visa cards, and that has been a help. The only type of CC that never seems to work with my hustle is anything on the AMEX platform. No financial institution Iāve found wants anything to do with those cards.
CC issuers do not seem to have a problem with large charges to financial institutions. Or at least that was my experience until recently, as reported just above. So that was a help. Also need to mention my more recent profits are nowhere near to those mentioned at that first CU. Right now Iām running only in the vicinity of 10%-15% APY, still tax free of course. Thatās not 30%, but it is higher than I can get anywhere on a CD today.
Obviously to make all this work I need lots and lots of credit. Hence, the recent loss of circa $50k of credit line hurts a lot. I still have many lines, though. After passage of some time I will seek to put 'em back to work.
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Until and unless audited.
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An odd, unusual, first time outcome this morning. Would appreciate any input:
As mentioned up thread my spending activity for May, prior to being shut down, went forward as usual. As a result I had accumulated $250 of May rewards on my PayPal Mastercard. Today I sought to cash in those rewards in the customary manner, something I have done prior over and over without incident. Here is what just happened:
The rewards transferred to PayPal itself normally. At that point involvement of Synchrony Bank was over insofar as I am aware. Also I have no indication at Synchrony Bank of anything whatsoever amiss.
With the funds sitting in my PayPal account I sought to do the same free transfer I always do, via ACH, from PayPal to my personal bank account. But today it was different. PayPal gave me a notice of transfer delay. They did not give me a reason. But the funds are no longer showing in my PayPal account!
While I realize my recent CC shutdowns could impact my relationships with other banks, I did not see coming any possible impact at PayPal. Synchrony bank, sure. But not PayPal itself which is not, after all, even a bank.
So now Iām on hold with PayPal sitting on $250 of my money and not providing me any explanation for what they are doing. Iāve never had a problem with PayPal itself prior, or even with Synchrony Bank for that matter. In light of recent events, itās a concern.
ETA
OK, PayPal has contacted me. Here is what they had to say:
Weāve received your request to withdraw money from your PayPal account to your bank account:
Requested withdrawal amount: $250.00 USD
At PayPal, our primary concern is making sure that your money is secure. We do this by routinely reviewing some transactions. Weāve placed your withdrawal under review and this will last for up to 24. If it passes our review, weāll release it and the regular withdrawal timeframe will then take effect. If we canāt release it for any reason, weāll contact you.
We appreciate your patience while we review your withdrawal.
Thanks,
PayPal
If this is merely PayPal routine it is no big deal. It never happened to me before, but maybe others have encountered this. On the other hand, if this is not really routine and is instead somehow related to my recent CC shutdowns then it remains a concern.
Nothingās ever āroutineā with PayPal. But yes, this is routine PayPal behavior. It has nothing to do with anything else.
Thanks for finally spilling the beans. No, this isnāt something innovative and unique, itās a well known churning method. But yes, banks that allow it in any level of volume are rare, and you are correct to be tight-lipped about. And this also means youāve been lying a bit - whether you turn over $10k/month or $1M/month, you are just as much a āMSerā as the rest of us 
.
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Hey, thanks for that, glitch99. Twice.
First it is a relief to know what just happened to me is PayPal routine. As stated, it never happened to me prior so I was unaware such review and delay could occur.
Second I appreciate the kind words about me being an MSer. I have always maintained my hustle was a form of MS. But quite honestly I am not in the same lofty category of first tier MSers as some other posters here. I have no clue how they are able to do what they do without being caught . . . like I was caught. 
Iāll also add that, since you know theyāve cut you off, the credit union is likely the catalyst for your credit card AA. If they were spooked, one of their first moves would be to contact the credit card issuer to verify you werent using a stolen credit card. Which then puts eyes on your activity. Maybe they stopped after confirming the most recent couple transactions, maybe your other issuers didnt care. But best guess is this is what sparked the credit card closings.
Understood, glitch99. Good post.
In this particular instance I donāt think that was it. Say this because the CU shut me down many months ago. It was actually in the fall of last year that they got me. And it was not just a single card I was using buying those one month CDs. I had a large number of cards in that mix. Still do, for that matter, with my current activity.
Aside from that, I attribute my downfall generally to some rather rudimentary considerations, greed and excess being the most prominent. To wit:
I was āspendingā more money than a person of my means could legitimately be spending. With MS you gotta āspendā money to make money. But nothing in my profile indicates I actually have the means to be able to spend the kind of dough I was āspendingā. I would have to be some sort of rock star or business tycoon to spend like that. And Iām simply, obviously, not in that category. So anyone with eyes on my CC account(s) had prima facie evidence my spending was, in reality, āspendingā. I mean, I drive a fourteen year old Mercury automobile, not a Rolls Royce. And Iāve never been to the Cayman Islands. 
The other glaring tell in my (now) closed CC accounts was lack of anything approaching legitimate spend. Reason for this is straightforward: I donāt spend a lot of money. And I had, and still have, far too many credit cards, so my legitimate spend was FAR too thinly spread out. It was to this dilemma I was referring when I posted about my need, and my attempt, to conceal a rhinoceros behind a fig leaf. I never was able to pull that off. So just glance at those closed accounts and you see LOTS of rhinoceri and no fig leaves at all. Such is life. I did the best I could and fell short.
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I think the most glaring tell is that you were turning over your credit lines multiple times each month. You can only do that for so long before you get caught by a CC issuer that properly uses data analytics to catch people exactly like you.
Can anyone explain to me why a credit union would be interested in accepting credit card payments for cash equivalents (1 mo CDs)? Arenāt they losing a ton of money on that? Does it have something to do with really needing to show cash on their balance sheet?
Really not certain why you wrote that. Perhaps have me confused with another poster. I never recycle my credit lines. And I most especially do not recommend that practice to others. Itās a really bad idea.
Never have understood this myself for the shorter certificates. The financial institution has to pay an interchange fee and also a small fixed fee for each transaction. Admittedly on longer CDs there is opportunity for them to amortize these costs and still come out ahead. But on shorter CDs? I do not think so.
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You are far from unique with these factors. You questioned how others āget away with itā while you āgot caughtā, and that was the likely catalyst. No, there doesnt need to be a direct line (the CU may have filed SARs, which eventually prompted a Treasury inquiry with the credit card issuers), and yes there can be quite a lag between an event and the fallout from that event.
Convenience. An average bank customer brings in a large sum of money and it sits there, so they make it easy to fund. Itās a customer acquisition cost, no different than paying a $300 bonus for opening a checking account. Atypical customers who do this repeatedly get cut off, or the feature gets neutered altogether when facing a critical mass of such behavior (In otherwords, the good 'ole āFatWallet effectā).
Basically, it seemed like a good idea at the time. Until people like shinobi start to partake.
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Good point. I have run across references to this on the net, instances where MSers were investigated because their activity was suggestive to the government of money laundering. For anyone unfamiliar with SARs, here is a reference called SARs for Dummies:
Interestingly, in the examples I have investigated, the āpowers that beā were interested solely in possible money laundering fraud. They never reacted to considerations of unreported income, even after becoming aware of it, since CC rewards are not taxable.
Your writing of your experience is like reading a book on āHow to Beat the Systemā. Most interesting!!
Back to āCC rewards are not taxableā, that is good information for me. (I didnāt realize this). My Citi Double Cash CC payouts of $500+, are really free money. But after reading of your systems, mine are non plus & mean nothing to ābig time spendersā, like you. 
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I donāt mind your having a little fun, pattyb53, so long as you remain aware I am āspendingā money, not spending money. Money which is āspentā is boomerang money. It comes back to you after (or sometimes even before) you collect your CC rewards. Money which is spent is gone. My actual spending is very modest.
My apologies. I could have sworn I read in one of your posts that you did that, but I must have confused you with someone else. So you just said that you pay your cards off before the statement closes, but you donāt actually turn them in the same cycle, right? I suppose early payoff is another tell, but much less glaring. Sounds like there were several factors working against you that could have led to a manual review. If I were you, I wouldnāt be too bummed that I got shut down. I would be super grateful I was able to do it for so long before getting shut down.
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