Is This The End for Me With BankDirect? (American Miles for Checking Account)

Last month I wrote about whether it still makes sense to have your checking account with BankDirect, the online bank that awards American Airlines miles every month and offers a rich signup bonus.

It may not as an investment vehicle earning miles instead of interest, but I argued it makes a lot of sense for people with big checking account balances, e.g. if you’re receiving big expense reimbursements and just holding the cash until your credit cards are due.

I’ve been a BankDirect customer since July 2003, fifteen years ago this month, and I have earned a ton of miles as a result. I’ve stuck with them through all of the limits on mileage-earning, through their addition of a monthly fee regardless of minimum balance with the bank, but they may have just pushed me too far with a security protocol change.

  • They use two factor authentication. IF they don’t know the device you’re using, your username and password isn’t enough. You’ve been able to get a code texted or emailed to you for the second sign-on piece.

  • As of Tuesday July 17 they will no longer send you an email with a token to sign in when they don’t recognize your computer. They will now only provide these single use codes by voice call or text.

    As part of our continuous efforts to deter online fraud and theft, we are making a change to our single-use Secure Access Codes (temporary codes you use when you log in to your account from an unrecognized computer or mobile device).

    Due to the rise in identity theft and fraudulent transactions attempted by email, effective July 17, 2018, BankDirect will no longer send Secure Access Codes by email.

    Secure Access Codes will still be delivered through your phone via voice call or text, so it is important that we have up to date contact information.

If you use a local SIM card when you travel internationally, you don’t have a new phone number to give them until you’re abroad. But you can’t sign in to update your account.

You can call BankDirect, or email them and have them call you, but that only works during their business hours which is little help when you’re in a time zone on the other side of the world.

And telephone-only codes are of no help when you’re inflight.

If I can’t access my account when it’s convenient for me, the bank isn’t very useful.

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, 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. Get a Google voice/Hangouts number and give BD that number. Texts will be emailed to you. Solved

  2. The text or voice verification processes are nuts for the reasons stated in Gary’s write-up. When I hit one of these roadblocks, I just move our money to a bank that has already worked through that. Money doesn’t usually move back eithet-sort of a Darwinian survival of the cleverest.

  3. I have had two AA BD accounts (one for me, one for my wife, both funneling into my AA account) for many, many years and coincidentally, this week, closed both of them. It wasn’t the 2FA for me, it was the continued devaluation of miles plus increasing interest rates. In addition, after years of not checking my account (and therefore avoiding the $12/mo fee x2), they finally notified me that if I did not acknowledge my existence to them, they would escheat it all to the state. So I had to crawl out from under a rock and start getting charged the $12/mo again. I let it roll for a few months and then just called it quits.

  4. Yeah, this is really just more for parking cash you don’t need which is how I treat it. I agree it would be a deal breaker if I were actually using them as a transactions bank. But I just think of that checking account as a sort of CD that pays miles.

  5. +1 to Ian’s solution.

    Been doing this for many years. Works great for me with many banks and even when I’m in flight because all texts arrive via data to your computer and phone so you don’t need any cell service. It is so handy you can just copy and paste the codes, no retyping in the codes required. 🙂

  6. Google voice no longer works for text alerts at some of the banks when it has always worked in the past. No longer works at Citi, or BofA but currently works at Chase (for now).

  7. I agree on using google voice.

    However you only need to enter the code when using a new device. If you use the phone app your device is known already even while traveling. You don’t have to revering every time. And if you use iPhone then Touch ID gets you in.

  8. My heart bleeds for you. Poor Gary can’t do his banking at 30,000 feet.
    Because I block cookies Chase is always sending me a six-digit code so I can proceed.
    Banks are just trying to stay one step ahead of the crooks.

  9. I just recently abandoned the lower earning savings account but will keep checking for now while it continues to outpace bank earnings (no tax). I agree their IT and the like stinks, but I also don’t use the bank for anything but parked cash earning miles…

  10. @ Gary — This is a security improvement, and you are complaining? Who uses SIM cards anymore? You seriously don’t have international calls/text for cheap on your everyday phone? Surely your time is more valuable than buying and activating SIM cards?

  11. Cutting the nose to spite the face?

    As useless as aadvantage miles are, these are basically extra free miles that can be used to purchase award for double/triple miles.

    I will stay until interest rates are high enough to make this less useful.

  12. I absolutely understand your frustration. My credit union always wants to text but I have no cell service in my office, so this definitely gets annoying. However, my sister and I have recently been helping our dad recover from a situation that makes the bank’s position understandable. Someone got his email password and set up auto-forward to their own email address. They then proceeded to reset every password they could and take over as many bank accounts as they could before they tried taking over dad’s account at the same credit union, which triggered a text message.

  13. Do you have to pay taxes on the value of the miles? I believe the answer is yes, but how do they estimate the value of the miles? If they overestimate them, then it’s really not a good deal.

  14. What is a stupid article/rant. I think this is the article to finally push me to remove your blog from my RSS feeds.

  15. Ironically, SMS is easy to hack due to longstanding flaws in the SS7 signaling protocol used to transmit them. NIST has discouraged their use for 2FA.

    Plugging into something like Google Authenticator would be better and works offline too.

  16. Sorry dude but this is the modern world. I’m an Expat living in London and it’s normal operating procedure in this part of the world.

  17. BD gives 60,000 miles/year for a $50,000 balance, right? With $144 in fees if you aren’t playing games. Many online banks will give you 2% interest now, and you can even do better with some added risk in money market/bond funds.

    So unless you value 60,000 AA miles over $1,144 in interest plus saved fees, (which I doubt anyone does anymore), it’s simply a worse deal.

  18. I use my google voice number for cases where I can’t get the 2nd step code via email. paytrust is another one like that. Or even better, in most places I can just swap in my t-mobile or google fi SIM if I happen to be using a local one overseas.

    Have you tried GV? You can setup GV with either the hangouts app on your device and/or you can just configure GV to forward texts to your email. So you don’t even need the hangouts app unless you want to use it to make cheap international calls or free US toll-free calls when overseas.

    I notice several comments here recommending GV.

    Doesn’t that work for you? It should make this a non-problem.


  19. I have $50k in my BD account and have been getting 60K miles without the $12 monthly fee for the past 2 years. I figure the opportunity cost is about $600 or 1 cent per mile because I can only get 2% interest on a similar account and am in a combined federal and state marginal tax bracket of about 40%. However, if interest rates continue to rise or they reimpose the monthly fee, I’m gone. I hope the reverse happens and BD either provides some interest or additional miles to existing accounts.

  20. Had the same problem with my local bank whole in France recently using my cell when in airplane mode and my bank was calling my house. Did not work. Lucky holiday inn hotel I was at gave us a free handy phone with international calling. Or else we would of been up s creek .

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