US Mint closes free-flights loophole

This guest post comes from Paula Pant at AffordAnything.org.

Two weeks ago, NPR's Planet Money ran a story about rewards enthusiasts buying $1 coins from the U.S. Mint with their credit cards in order to collect frequent-flier miles.

Within a day, the story was a top trending topic on Alexa.com. The following day, I wrote a post explaining the U.S. Mint loophole on my blog. It ran as a guest post here at Smart Spending, where it was shared 2,377 times and sparked nearly 100 comments.

Exactly one week later, the U.S. Mint announced it is ending credit card payments for its $1 coin program. Here's a statement the U.S. Mint posted on its website:

The Mint has determined that this policy change is prudent due to ongoing activity by individuals purchasing $1 coins with credit cards, accumulating frequent flyer miles, and then returning coins to local banks. Local banks, in turn, returned coins to the Federal Reserve. While not illegal, this activity was a clear abuse and misuse of the program.

Don't get me wrong: This isn't the first time the U.S. Mint's $1 coin program made headlines. The Wall Street Journal ran a story in December 2009 called "Miles for nothing," featuring interviews with several people who used the program to purchase $10,000 or more. The Los Angeles Times picked up the story a few days later.

But did its recent resurgence in the news -- coming on the heels of an entire Planet Money series about the federal government's efforts to promote the $1 coin (which they titled, fittingly, "$1 billion that nobody wants") -- hasten the closing of the program?

I say yes, and I believe Planet Money takes the credit (or blame, depending on your point of view). The day after the Planet Money story ran, U.S. Rep. Jackie Speier, D-Calif., sent a letter to her fellow Capitol Hill lawmakers, announcing her intention to push a law through Congress that would halt the making of these coins.

"My bill directs the Secretary of the Treasury to stop minting the $1 coins, immediately halting production of these unnecessary coins," Speier wrote. "Taxpayer dollars that will be saved from this legislation will go towards the deficit."

Perhaps journalism can still change the world.

More on AffordAnything.org and MSN Money:

• Simplify. Your. Money.
• Savings snowball: New method for saving more
• How I lost $400 in 1 minute
• Your take: Do you use $1 coins?
• Find a better credit card
• Quick! Buy a plane ticket and save