Exercise Caution When Using Kiva to Meet Minimum Spend Requirements and Earn Miles

Flyertalk member Rommie2k6 offers this warning to folks using Kiva.org as a way of earning points, or meeting minimum spend requirements for credit card signup bonuses.

I’ve been aware that FTers are using Kiva to manufacture spend or generate points…

..I would warn all FTers that there is a risk in doing these kind of Kiva spends. Even if some of you have done your due diligence, and find that the company backing Kiva is financially sound and a legitimate operation there is always a possibility that Kiva can close down overnight. I strongly doubt that Kiva or its parent company has any credit rating, so Kiva loans are going to be akin to junk bonds. If a default happens for whatever reason, I would expect that all outstanding “loans” will be something that FTers will not get back, not without a costly and long drawn out litigation…

Since paypal subsidizes the credit card transaction fees for Kiva, you can load money with a credit card (as a purchase) onto a Kiva account. Then make loans, and when those loans are paid back (there are no guarantees!) you can withdraw the funds instead of making new loans.

The cost here is borne primarily by paypal, miles are generated, and microloans are made to help the poor.

But this is far from a riskless activity, indeed. There’s the risk that a loan defaults, you don’t get paid back. There’s risk that Kiva’s rules could change, and risk that you’re relying on Kiva’s financial stability. I’m not suggesting these are enormous risks, probably the repayment risk is the biggest (and Kiva’s repayment rates are very high). However, folks trying this certainly could be left with big credit card bills and without the funds available to pay those bills.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Life comes with risk. Your 1st priority in doing Kiva loans should be charity and your willingness to fund microloans to those that are less fortunate. Any benefit to you should be secondary.

  2. Am profoundly disappointed that you would repost rommie2k6’s screed thus further distributing misinformation from someone who admits he has not done his due diligence. Yes folks lending has risks. That is almost the only truism in the posting. Yup you could be left with big credit card bills as you say because you lent imprudently. Duh! I urge people to visit he Kiva site themselves, read it, and make their own judgments. Blogging doesn’t exempt someone from the need to deal with facts and not cast unfounded doubt on an org’s operations or financial stability.

  3. This is a terrible post. Yeah thanks for reminding us that our charitable deeds might not payoff with cc minimum spends. Sad post.

  4. No, I’d never consider using Kiva for the miles myself. But it seems to me that it is possible to do the right thing for the wrong reasons.

    You can disparage those who are motivated by the miles, but as far as Paypal, Kiva, and the loan recipient are concerned, the money loaned is the same as that loaned by someone who just wants to help the less fortunate.

  5. yes, agree – just like microplace, paypal subsidizes kiva transaction funding with credit card.
    And, it’s a charity, should never be a mile/money making platform.

  6. I mean you can make it a mile earning endeavor but that shouldnt be your reason for doing it. Any benefit to you whether it makes you feel good or you benefit by elite status by doing it should be secondary to helping your fellow man/woman.

  7. A recent Yale study, showed that overall, charitably inclined folks actually give more, when they do NOT receive anything in return.

    So, although there may be some who give to Kiva to earn miles, overall, folks will give more out of altruism.

    The results of the study were surprising to me, but I think it says good things about the motives of folks that give to organizations like Kiva.

  8. I’m extremely disappointed by this post, Gary. Just like Rommie2k6, you make fearful statements without few or no facts to back them up.

    The fact is that Kiva’s repayment rate is 99%. And in recent years it has been over a little over 99%. In other words, Kiva’s repayment rate is getting better over time.

    Kiva is a non-profit, not an investment company. The only risk you carry when you make a loan is the very small one you might not get paid back by the borrower. Kiva’s financial stability has nothing to do with it.

    And what’s this about Kiva might change its rules. What are you talking about? What rules? And what does that have to do with the safety of our loans?

    And you are forgetting the important point that most people make Kiva loans because they believe in micro-lending and in Kiva, not because they may earn a few miles/points. There are risks involved in using Kiva loans to earn miles/points, but those are a very separate issue from the very small risks involved in making loans.

    Unfortunately both you and Rommie2k6 are getting those two different issues confused. It’s time to be clear about this.

    The risks in making Kiva loans and the risks in earning miles/points from one’s loan are separate issues. They need to be discussed separately. Otherwise great confusion will continue to be spread.

  9. Well, if your post was meant to be something other than what it claims, it is pretty poorly written. There isn’t any clear indication that this is not a serious post. To the extent that you meant something different than you said you seem to have steered quite a few people in the wrong direction and further perpetuated a bunch of unresearched drivel.


  10. @Ike – it was an experiment, and I learned a lot from it. Apologies to anyone that was confused. I suspect that some learned something new from the post.

  11. I am guessing that you meant something very different than what I (and others) understood. I don’t know what you mean by the term “Straussian reading”. I googled it, but I still don’t know what you mean.
    Anyway, I guess that I learned a lesson, too, in that I overreacted. After spending the last few days responding to the questions and comments in that Flyertalk thread on Kiva and trying to present facts and offer whatever clarity I can on these issues, I’m tired.

  12. Here I quote from Wikipedia…


    In 1952 Strauss published Persecution and the Art of Writing, commonly understood to advance the argument that some philosophers write in such a way as to avoid persecution by political or religious authorities.

    … classical and medieval philosophical texts guide their readers in thinking and learning independently of imparted knowledge. …good writing provokes questions in the reader—questions that orient the reader towards an understanding of problems the author thought about with utmost seriousness. Both for Strauss and for Plato, genuinely philosophical writing does not impart special knowledge to its reader, but helps its reader deepen his own understanding of the problems underlying all special knowledge:

  13. What is exactly your point about Kiva?

    Forget Straussian reading and use plain English please.

    Do you have a beef with Kiva? Yes or No ?

    Inquiring members of the KMPLT want to know !

  14. Good post- I didn’t grasp your true thesis until you posted the Straussian reference (and, um, for a second I was thinking Seuss?, but forgive me, it’s Monday and early…)

    It’s good to throw thoughts like this into us gamers, lest we lose sight of the big picture, and all the angles…

  15. this has been a funny comment thread to follow. I did have to look up “Straussian” myself, but at that point understood not to take the post at face value 🙂 seems like many others did not take the hint though…

  16. Good cover up with that ‘Straussian’ thrown in there, Gary. Guess you know your audience well enough that we would have all guessed it was ‘Straussian Reading’ AHAHAHA!!!


    Next time just don’t post something so stupid.

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