Now that you have a Bluebird card, don’t use it

Earn 6X (or more) everywhere by not using your Bluebird card.

A year ago we thought it was pretty cool to earn 2 points per dollar for travel and dining with our Chase Sapphire Preferred cards.  And, thanks to the card’s 7% annual dividend, we were really earning 2.14 points per dollar for those expenses.  That was way better than 1 point per dollar earned with most other cards.

Then, six months ago, I wrote “One card to rule them all.”  Suddenly, 2.14X was laughable compared to 5X everywhere.  By buying Vanilla Reload cards at Office Depot with our Ink Bold cards we were able to earn 5 points per dollar for essentially buying money.  And, then we would load the money onto our American Express Prepaid cards in order to indirectly earn 5 points per dollar everywhere.

Then Bluebird changed the game

On the surface, Bluebird looks like an incremental improvement over older American Express Prepaid cards.  It has higher Vanilla Reload limits ($5,000 vs. $2,500), it provides a way to have always free ATM use, and it has a built in Bill Pay feature.  So, most people rightly see this as a great way to extend “5X everywhere” beyond credit card charges to also include bill payments where payees don’t accept credit cards. 

When it comes to credit card transactions, though, things have changed.  With the old prepaid cards, using them for regular credit card transactions was the easiest and cheapest way to cash them out.  With Bluebird, on the other hand, cashing out is trivially easy.  Not only can you pay bills, but you can link a bank account and withdraw money directly.  With either approach, you can use Bluebird (directly or indirectly) to pay your credit card bills.

When it comes to paying a merchant, using Bluebird is not an optimal strategy.  You’ve already earned 5X for money you’ve deposited to Bluebird, but you won’t earn more by swiping your Bluebird card.  The optimal strategy, is to use the best point earning card you have for the situation. It’s time to dust off those old cards.  Use your Sapphire Preferred for travel and dining.  Use your Ink Bold for 2X for gas.  Use a Blue Cash Preferred card or Hilton HHonors Amex for groceries. For any spend, use a new card with which you are working towards minimum spend requirements. You get the idea.  By paying the credit card bills directly or indirectly with your Bluebird card you will earn 6X or more, in total, for those purchases!  Plus, by using a real credit card you’ll get extended warrantees and other protections that many consumer credit cards offer.

Will Amex shut us down?

One reason you may want to disregard the advice I gave above is fear that American Express will shut down your Bluebird account if you are an unprofitable customer.  American Express surely counts on credit card transaction fees to make money from Bluebird.  If you don’t use the card as a credit card, they won’t make as much money and they could shut down your account for not using it as intended.  If you’re worried about this, then by all means continue to use Bluebird everywhere.  5X everywhere is still awesome!  Alternatively, use Bluebird for any purchase in which you would not get a category bonus from another card.  If half of your spend is within bonus categories and half with Bluebird, then you should still average 6X or more.

Personally, I believe that American Express will be happy with us as long as we maintain a balance in our Bluebird accounts.  They are marketing this as a checking account alternative, after all.  If you load up your account and completely cash it out, time after time, that will look suspicious.  But, if you load it up and then pay various bills, and use an ATM occasionally, and withdraw some money now and then to another bank account, I think you’ll be OK — as long as you maintain a reasonable sized balance.  Caution: This is just my educated guess!  We do not yet have enough experience to know if or when American Express would shut down accounts.  As I said before, 5X everywhere is still awesome.  So, if you’re more comfortable using Bluebird for credit transactions to keep Amex happy, then by all means do so.

But I can’t buy Vanilla Reload cards!

Many people have expressed frustration with not being able to buy Vanilla Reload cards.  Either they don’t have any nearby Office Depot stores or their local Office Depot store doesn’t carry Vanilla Reloads.  If you’re in that situation, look for Vanilla Reload cards in other places.  People have reported success buying reload cards at certain drug stores and gas stations.  You won’t earn 5X with your Chase Ink card at those locations, but you can earn 2X or more with various cards at gas stations; and you can earn 6X at certain drug stores with a Hilton HHonors American Express card.  Better yet, buy reload cards as a way to meet minimum spend requirements for new credit cards. 

If you really can’t find any Vanilla Reload cards that can be purchased with a credit card, you’re not totally out of luck.  See “The 5X everywhere backup plan.”

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About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

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Comments

  1. Didn’t you just say yesterday that you are out of the CC game and will instead be focusing on churning gift cards?

    One more Bluebird posting and I am ready to kill myself. Why can’t bloggers just not blog for a day? Especially if there is nothing new to report.

    • Matt: Bluebird is gift card churning (I include prepaid cards and reload cards in the definition). “nothing new to report” ?? Seriously? This will be a very significant change in how people decide which card to use for daily spend.

  2. Last night I went to my local OD store and for the first time they were out of Vanilla cards. I went to another store and they were out as well, but fortunately the store manager had few in the office that I was able to buy. He mentioned that people have been buying quite a few of them recently. I guess the word is spreading 🙂

    • Papa Smurf: Yes, I think we’re going through a period of growing pains with Vanilla Reload cards. I expect that eventually Incomm will adjust and begin to stock shelves more rapidly and in bigger quantities.

  3. I don’t think you’ll ever have a problem with Amex shutting you down for paying CC bills with Bluebird. I think it’s either OD or Vanilla that is taking the CC processing hit for the initial Vanilla purchase.

  4. FM: I just received my permanent card for Amex Target yesterday. I am curious to know if i can my card, with my wife’s credit card now.
    I need to meet some spending limit with my wife’s card, and it will be nice to be able to load 2k each on her and my Amex Target.

    • CHRIS: Yes, you should be able to reload the Target Amex with your wife’s credit card. It might be easier for you if you have her order a secondary card in your name.

      Jimmy@TravelByPoints: Thanks!

  5. Blue bird will become the best way to laundary money + earn points. The public are not stupid, some crazy guys will finally end up with buying VR >10,000 a day then ruin the whole game.

  6. FM, I love the way you are always one step ahead. Now that most of the other bloggers are trying to occupy the space you’ve created, you are moving on down the road. That’s why your blog is the most valuable. It’s less about what you write and more about how you think.

    • Piecerate: Thanks!

      Dave: I think that would be fine. I’d guess that as long as you keep a balance of a few hundred dollars you’ll be fine (again, just a guess!)

      Jenni: I am doing an experiment to see if its possible to bypass the monthly loading limit. I’m not sure what you have in mind regarding transfer into virtual card?

  7. I agree that the main thing that separates BB from AMEX Prepaid and other cards is the Bill Pay feature. Most years, I spend more on bills (mortgage and property tax) than I do on regular spending. I already have credit cards to cover every major spend category.

    The big question is how AMEX will feel if I use BB *only* to pay bills. I originally planned on using BB for a small purchases here and there just to mix things up, and I’ll probably still do that. But I think FM is right– the most important thing to do is to keep a balance. But how much should that balance be? If I load BB with $5K and pay my property tax $3500, you think that’ll be fine?

  8. FM: I bought whole drawer of VR this year. Can you stay away from the BB and GC obvious idea and work on the innovative idea? 1. bypass BB daily, monthly loading limit. 2. transfer BB into virtual card. 3. virtualize millions of miles/point

  9. I don’t think AmEx will have a problem with people only using BB for bill payments. If you look at my regular bank checking account transactions…I only bill pay and ATM withdrawal. I never purchase with my debit card.
    Besides, I don’t think AmEx is reaching out to people like us. They are reaching out to the Walmart people in America who cannot get a checking account.

  10. FM: The min you post on your website, MMS copies your idea to his website. He’s out of control and a serious copycat. People in his website are complaining. Can you put a stop for copyright violation?

  11. I was just wondering if anyone can report on their experience with bill pay using Bluebird. I would like to pursue paying my mortgage (one of my few point-free expenses) via Bluebird check, but am worried about timeliness of delivery of such an important payment. Can anyone say how this works, lag times, etc. ?

  12. I paid my mortgage (Provident Funding) with Bluebird. It posted with Provident the next day! Provident is in Bluebird’s list of vendors.

  13. FM: How can my wife order 2ndry card to use my name? because when you buy it at target it required to put information (asked for ID).
    I need to be there when my wife bought the 2nd card?

    • CHRIS: I wasn’t referring to the Target Amex card. I was referring to the credit card she has with which she needs to meet minimum spend. If you need to help her meet minimum spend, then she could get you a card with your name on it. It’s not necessary, it’s just something that might be easier

  14. FM: Thanks for working on the BB limit. On the current rate on BB loading, it will take Pres O to finish third term before I can finish loading current set. I am working on the transfer BB to VCard and VMiles. It’s rather tough. Not sure it’s possible.

  15. @jenni couldn’t agree more regarding MMS. Got info from FM on Small Business Sat. A few days ago and then a post by MMS on the same. Coincidence? I think not!

  16. My plan, given Ink/Bluebird/Vanilla, is now just to not stress over which credit card I use. Unless I’m making a large purchase or have a very good category bonus somewhere, I’ll just mostly pull a random card out of my wallet once I’m done meeting minimum spends now on my Hilton Amex and Ink Bold. And with the Vanilla reloads, hitting those spends is gonna be easy.

  17. FM, your plan is awesome. Now I am planning to load up my wife’s and I Bluebird with vanillas(bought with rewards earning credit cards,especially with my two Inks) and pay those credit cards with Bluebird. For those that can’t get vanillas, get a Wells Fargo Prepaid Card. Then load that PP with a rewards earning credit card, then use WF PP to load money into the Bluebird. In my opinion, this is the best back-up plan for loading the Bluebird for those that can’t get vanillas. I have been using WF PP for a some time now, and has worked like a charm ( I have 3 total,2 in my name and one in my wife’s name).

  18. @melovesvanilla – how do you load the wells fargo pp with a rewards earning credit card? Are there gift cards that can be purchased and loaded? If so, where? Or is this soley for reaching minimum spend requirements?

  19. in their website, you enter your credit card info for the funding source, select how much you want to load(the max you can load depends on your credit card cash advance) and you are all set. Almost all credit cards work… except CITI, which treats the transaction as a cash advance…which we do not want. Chase, BankofAmerica,Barclays works well…

  20. I never tried gift cards to load the WF…so I do not have the answer to that…As for the uses, you mainly use it for meeting minimum spend…you can also use it to earn the credit cards rewards at 1X

  21. I just tried to sign up for Bluebird but apparently I can’t because I already have a Serve account. Does anyone know what I need to do to get around this?

    • Jon: Yes, as mulbry said, you have to cancel your Serve account before you can get Bluebird. Alternatively, some people have a spouse or friend get Bluebird. Then, you can continue to use Serve as before. Money can be transferred between Serve and Bluebird.

  22. @MeLovesVanilla, have you used AMEX to load WF PP? It won’t be treated as a cash advance? If I can only get 1x, I want it to be SPG points, which I think are worth more than 2 cents.

  23. I can’t understand the rationale of this post. The idea is to use other CC to pay everything else (1 point/$) and use bluebird to pay the other CC bill (5 points/$). So in total you get 6 points/$.

    But why don’t you use bluebird to pay everything else as well as chase ink bill? That way you will basically get 10 points/$, no?

    The only problem is the chase bill will become bigger and bigger over time.

    • jjj0002: No, you can’t get 10X that way. When you use your Bluebird to pay, you do not get an additional 5X. You only get 5X when buying Vanilla Reload cards at OD. So, paying with other credit cards when possible is a better strategy for earning more points.

  24. 1) Banks and checking accounts like what is called an ‘average daily balance.’ Basically if you wish to just use the BB to load funds thru say, VN and then pay CC bills all month, that still may be fine.. just let the funds incubate in the BB for a bit. A few biz days maybe. Why? Because then your account has girth to it. And we all should know girth is often more important than length. I know this to be true with other banks that have enabled me to offload über funds when buying other ‘items’ at giant retailers.
    .
    2) Amex Prepaid would be the ones who could have issue with someone or possibly block/shut them down, but Amex proper may not care about it and still let you do biz with them on regular CCs. Amex PP and GC often run in tandem but they appear to have remained somewhat separate at many levels in my experience.
    .
    These lessons are true and free for all to prosper from. Then again I have learned some of the above the hard way and what do you get for that? Ask some of the other experts here!
    .
    In the end, it may be wise to put a few transactions on the BB here and there but it’s all about the money.

  25. FM, I think jjj is saying that you can use Ink to buy Vanilla at 5x, load them onto BB, then use BB to pay the balance on the Ink card (which was used to buy Vanilla). Basically, the perpetual point machine. Only problem is that this seems like red flag material.

  26. Dave, FM is right. WF PP only accept visa or mastercard as a funding source. I would have love to milk all my american express cards with WF PP.A good example of a WF use was for my SW card;I used the WF to get the last 10k I needed to get the companion pass(worth every penny spent on minimal fees).

  27. marathon man, I don’t think AMEX really cares how you use their PP. I have 6 AMEX PP, which I used 99% of the time to take out money from the ATM. AMEX never said anything to me about this abuse of the cards.

  28. So FM, you know for sure the Google Wallet will pull from Amex when you use the mastercard. If that’s the case, I will totally be able to milk my AMEX cards via WF via BB to cash out 🙂

  29. Just went to my local OD, no VRs available. Manager stated they will no longer be selling them. I didn’t get any more information. I’m assuming this is isolated but not a good sign overall.

  30. Here is another data point. I went back to the OD store which was out of Vanilla cards on Monday and they had them in stock so I was able to pick couple more.

  31. If OD is constantly sold out of Vnla Reload cards at OD, maybe buy $500 Visa/MC/Amex gift cards at OD and use them to by $496.05 ($500 – $3.95) reload cards at some other place that has them in stock and allows you to pay by credit card. This would increase the cost from 0.79% ($3.95/$500) to 1.794% (($3.95 + $4.95)/$496.05).

  32. Thanks, FrequentMiler! Perhaps I’m missing something here, but is there any special benefit to paying any other bills from Bluebird other than the one for my InkBold card? I ask because since I plan to fund my Bluebird card almost exclusively through Vanilla Reloads purchased at Office Depot, the bill for my Ink Bold card will always be greater than the amount of money I load onto my Bluebird card. My plan would be first to build up a balance in Bluebird (so that AMEX is happy that I always have a balance) and then use my Ink Bold card for Vanilla Reloads (and other purchases so that Chase is happy). Then I would pay off my Ink Bold bill each month via Bluebird. Assuming Bluebird can pay that bill off via EFT, why bother with paying things like mortgage from Bluebird where checks may have to be cut? Thanks! (Like I say, I may be missing something here, which I sort of hope I am!)

    • amdg: The only benefit to mixing things up is to try to avoid looking like you are using the card for money laundering. By having a tight loop: credit card-vanilla-bb-credit card, it might be possible for Amex to somehow detect that loop. If you mix up the payments, there is less chance of being caught for money laundering (which you’re not doing anyway).

  33. re >FrequentMiler says: MeLovesVanilla, Dave: This could be a good example of where the Google Wallet card will come in handy since it will be a MasterCard, but can pull money from an Amex!> disagree completely, at least for the near future- category bonuses are lost on any purchases made with gogle wallet, or other ‘alternative’ means of processing, ‘mobile’ etc.! beware

    • guest: I think you’re missing the point. The idea is that some people want to run up spend on their Amex cards regardless of whether they are getting category bonuses. By making an Amex look like a Mastercard it opens up many new options.

  34. Have you had a chance to see if the routing and account number that Amex gives you for the Bluebird will work when paying a bill by e-check? I notice that there are more numbers in the account than in a normal checking account.
    All of my property taxes due at the end of the year take e-checks for a nominal fee ($1). It would be nice to use the Bluebird account funded through the Ink instead of charging directly to a credit card for 2% – 2.75% or just mail a check (yuck).
    I may try to see if I can send through a partial payment for testing before I load up the Bluebird.

  35. I think a true benefit of using the Bluebird would be to pay your taxes for which you ordinarily would have to pay large credit card fees. I am assuming the Bluebird goes through as a debit card on the online pay sites, so the fee is only a flat $3.49, or if you can use as a checking account, no fee. Am I correct?

  36. JR: Yes, some Visa/MC cards work, some don’t. It depends on which company is behind them.
    .
    Eric Lipkind: No, you can’t use Bluebird online as a debit card to pay taxes. The web sites expect 16 digit cards, but bluebird (and other Amex cards) have 15. Your best bet is to transfer money from BB to your checking account and pay from there.

  37. Hi I just discovered this post. I’m currently with a bank who charges $4 a month if I don’t keep above $300 in my account all month…I’m a struggling college student…I saw BlueBird in Wal-Mart and was interested cause they don’t charge monthly fees. I don’t travel so I don’t care about the 2x points and all that lingo. Can you tell me why BlueBird is bad? Are they like an official bank? Is it accepted everywhere? What is Vanilla Reload? Is it better than BB? Thanks for your help

  38. Hi, I have a cash-back debit card that earns just 1% but can I use this to fund the BB? However, to receive this cashback, I must use the debit card and swipe as a credit. Is it possible to do this at the Walmart? Thanks!

  39. This may be a bit off topic and this is an old forum so I don’t know if anyone wants to answer this, but if you’re using the bluebird card for small purchases of food or any other miscellaneous small-priced things, do they ask for picture verification of some kind (Drivers License, etc.)?

  40. So I can just buy the vanilla reload with a CC, get the points, transfer to Bluebird and turn right back around and pay my CC off with that directly and only pay the transaction fee but get all the points… correct? Or Do I need to cash the Bluebird out somewhere first?

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