July 30, 2014
As of April 2013, Visa and MasterCard gift cards became great tools for earning points and miles thanks to the ability to assign PINs (see “Gift card PINs“). With this ability, it is possible to buy gift cards (to increase credit card spend) and cash them out by using them as debit cards (i.e. to load Bluebird or Serve in-store, pay bills, etc.). To be clear, not all stores will accept gift cards as debit cards for all transactions, but with a little research you should be able to find options that work for you. One example is that Vanilla Visa cards no longer work as debit cards at Walmart, but continue to work elsewhere. More information and many useful resources can be found in FlyerTalk’s Manufacted Spending forum.
Since the summer of 2013, Chase Ink cards have been issued as Visa business cards (they used to be MasterCards). If you have a Chase Ink Visa card, make sure to register it with the Visa Savings Edge program. At that point, any purchase of $200 or more made in-store or online at Staples will result in an automatic 1% statement credit and, of course, you’ll get 5 points per dollar from your Ink card for making an office supply purchase.
In addition to merchant gift cards, Staples sells MasterCard and Visa gift cards. $200 cards are available for $206.95 online and are sometimes available in-store for the same price. After the 1% Visa Savings Edge rebate, your total fees will be $4.88 for each $200 card, which is a 2.44% fee. That fee, though, is more than made up for by the 5X Ultimate Rewards points earned (5 X 206.95 = 1035 points per card). In fact, you could cash in 488 of those points to reduce your net fees to zero and still earn 547 points per $200 card (i.e. 2.7X).
GiftCardMall offers Visa gift cards with values up to $500 each. With each card, there is a $3.95 purchase fee and a shipping fee. If you buy a single $500 Visa gift card, you’ll pay $7.94 in fees, which is a total cost of 1.6%. You can reduce the fee percentage by buying more than one card at a time (which decreases shipping costs per card). For example, if you buy four $500 Visa gift cards at once, you’ll pay $28.86 in fees, which is a total cost of 1.4%.
Portals: You can reduce GiftCardMall fees by shopping through cash back portals. Some portals currently offer as much as 2% cash back for GiftCardMall purchases, but they either exclude Visa purchases altogether or offer a much lower cash back rate for them (such as .2%). A workaround is to click through a cashback portal offering 2% and buy a $250 GiftCardMall e-gift card. You should get $5 back from this transaction. Then, go through a portal again to buy a Visa gift card and use the e-gift card and a credit card to pay. You’ll earn much less cash back on the second pass, but the overall result will be a decrease in total fees as a percentage of the gift card value.
Amex gift cards: Another way to reduce out of pocket costs is to start by buying Amex gift cards through a cash back portal, then use those gift cards to buy Visa gift cards from Gift Card Mall. For complete details please read these posts:
- Everything you ever wanted to know about Amex gift cards
- How to buy $500 Visa gift cards online with Amex gift cards
More about GiftCardMall: GiftCardMall sends the Visa gift cards in one envelope and sends activation codes in another. I think that this helps make delivery of the cards more secure and so I would be willing to accept non-trackable delivery. If you prefer trackable delivery, the total price goes up by $2.
- Pay with any credit card accepted by GiftCardMall.
- With GiftCardMall gift cards, you do not need to set the PIN in advance. Simply use the last four digits of the card number a the PIN.
- Your purchase through a portal may not track correctly, so you might not get paid.
- GiftCardMall often holds up orders as they investigate them. This can be a hassle.
- It’s not hard, but you do need to activate the cards online once you receive them.
- It’s unclear whether any credit card companies would treat these purchases as cash advances. I’ve never heard of this happening with GiftCardMall, but the possibility does exist (especially with Citibank cards).
Many grocery stores sell Visa and MasterCard gift cards loadable up to $500, usually with a $5.95 fee. Use one of many other credit cards that offer grocery store bonuses to offset that 1.2% fee (See: Best Category Bonuses). And, make sure to join the grocery store’s loyalty program (many offer fuel rewards) since some stores will pay out rewards even for Visa and MasterCard gift card purchases.
Gas Stations / Convenience Stores
Some gas stations and convenience stores (which sometimes conveniently code as gas stations for credit card purposes) sell Visa and MasterCard gift cards loadable up to $500, usually with a $4.95 or $5.95 fee. Use one of the credit cards that offer gas station bonuses to offset that 1% to 1.2% fee (See: Best Category Bonuses).
Drug stores tend to have great options for Visa and MasterCard gift cards with fees ranging from zero (rare, but they exist) to $5.95 for $500 cards. Use one of the credit cards that offer drug store bonuses to offset that fee (See: Best Category Bonuses).
Many indoor shopping malls have gift card displays, often near the information desk. Visa gift cards aren’t always on display so you may have to ask for them. Usually, fees are $2.95 or less for cards with values up to $500 each. Simon Mall Visa cards work well, but watch out for Glimcher Visa gift cards as these seem to be useless as debit cards. Unfortunately, I’m not aware of any credit cards that earn a category bonus for generic shopping mall purchases.
Did I miss any particularly noteworthy options? Please comment below.