Beginner’s Guide to Manufactured Spending Series Index
Part 4 | Guide to American Express Gift Cards
Part 5 | Guide to Using BlueBird and Serve
Part 6 | Guide to Using Evolve Money
I have extensively covered Visa gift cards in the last few posts in the series, so let’s change gears a bit and look at what other options are out there. In the beginning of this series, I mentioned that American Express gift cards are more complex and therefore this post will give you an in-depth look into how to purchase and liquidate these valuable gift cards, while possibly making a profit doing it!
It’s vital to understand that American Express gift cards are NOT pin based debit gift cards like Visa gift cards and you cannot liquidate them directly by getting a money order or loading your bluebird. In fact, AMEX gift cards are like any other credit cards except they come with a preset limit of how much you can spend based on the denomination of the purchase.
These cards also have a purchase fee of $3.95 (although there are a plethora of codes that can waive the purchasing fee)
At this point, it would not be crazy to stop and think what the point even is if you are using a point earning credit card to essentially purchase another preset credit card.
There are a couple of reasons to go this route, but perhaps, the most important one is the ability to diversify your spending. Repeatedly spending a variation of $500+ or $1000+ at gas stations or pharmacies has been reported to raise concern from certain issuing banks.
As I mentioned earlier in this series, abusing a bonus category sweet spot will only warrant unnecessary attention to your account. This is especially true when you call in to get a retention offer with hopes to nullify the annual fee of your miles earning credit card.
How to Purchase American Express Gift Cards
You can go directly to the American Express website and scroll over either consumer (may require SSN) or business (requires either EIN or Tax ID) and choose “Personalized Cards”
Personal Gift Cards
The next page is straightforward where you can fill out recipient’s name, card value and choose a shipping method.
The name actually gets printed on the card just like a credit card! Not that this matters, but it does give it a better feel.
The important part on this page is at the bottom where you can enter an AMEX promotion code. Via Frequent Miler’s post, the promo code SYNCGIFT still works to waive the $3.95 purchase fee and there are oftentimes coupon codes to waive the shipping fee. However, there have been reports that some cash back portals will not credit rewards if a code is used that was not provided by their site.
If you notice on the side of the page, it states that “Your gift card purchase can total up to $5,000.” Although the AMEX website does not state the time frame of this limit, this has been verified via multiple data points as the maximum amount for personal cards for every two weeks and any further orders will be declined.
The rest of the check-out process is just like any other that just requires credit card information and verifying all details.
Business Gift Cards
The one key difference in personalized and business cards are that business cards have a much higher limit per order of $75,000.
This increased limit comes with a requirement that the gift card purchase is for an actual business since AMEX asks for the Tax ID of the business in the second page.
Why Purchase American Express Gift Cards?
Besides earning miles and points for your purchase, there is another major reason why purchasing American Express gift cards can maximize your manufactured spending. Shopping portals are a very important part of this game since they offer either bonus miles or cash back based on the portal.
Almost every major airline has a shopping portal with small differences in the payouts. Until recently, Alaska Airlines and Delta, for example, were paying out 3x miles per dollar for purchasing AMEX gift cards.
Ca$hback Monitor is a reliable and updated search engine which displays the payout for third party cash back, airline and hotel shopping portals. You can find the current cash back rates for American Express gift cards here.
One thing that should jump out is that all the airline portals have decreased their payout to 1 mile per dollar which is vital to understand that great deals won’t last long!
Since cashback portals seem to be offering a better deal let’s use befrugal.com, which happens to be one the more reliable ones. Let’s walk through a quick earning analysis of using befrugal.com where the payout is currently 2.5% cash back.
Recall that if transferred to an airline partner your Starwood Preferred Guest credit card can earn up to 1.25 points per dollar on all purchases therefore a $3000 gift card will yield:
- Starpoints Earned = 3003.95 * 1.25 = 3755 starpoints
- Gift Card Fees = $3.95
- Cost per Point = $0.001
- Cashback Earned = $75
- Net Cash Back Earned = $71.05 ($75 – $3.95)
As you can see, not only can you earn 3755 Starpoints, but you do it while making a profit of $71.05!
How to Liquidate American Express Gift Cards
Visa Gift Cards + Bluebird or Money Orders
Since you can’t liquidate American Express gift cards directly, meaning in one step, here is where things get a bit cumbersome. You will still need to buy a Visa gift card, but now adding some extra gift card fees won’t be such a game changer since you have $71 in profit from using a cashback portal to spare.
In order to liquidate the AMEX gift card, you will need to buy 6 Visa gift cards. Five of these gift cards will be for $500 and the last one will be for $470.30 ($3000 – ($504.95*5) – $4.95 (6th card’s fees).
Taking into account the cash back earned and the additional gift card fees, the new profit breaks down as follows:
- Net Cost for Visa 6 Gift Cards = $29.70
- Final Net Cash Back = $41.35 ($71.05 – $29.70)
Once the Visa gift cards are in your hand, it’s business as usual with loading bluebird or purchasing money orders.
1. The first thing is to sign-up for an Amazon account, if you don’t already have one, and enroll in Amazon Payments (its free!)
2. Once you login, you should be at your Amazon Payments home screen. Click on the ‘Send Money’ tab.
3. Fill out the fields as needed and make sure that ‘Goods/Services’ is selected! If you don’t select this option your credit card may charge the transaction as a cash advance which comes with high fees, the last thing you want to have when earning miles and points.
As an additional precaution, I like to add an optional note stating something generic like “Paying you back for the money borrowed”.
4. In the next screen, select the payment credit card of your choice and hit continue.
5. Then all you have to do is confirm your payment.
6. You just manufactured $1000 of spend!
Although it may take some more time since you have to wait for your American Express gift card to be delivered and then go to the store of your choice to purchase the Visa gift card of choice, it might be worth your wait given as there is a potential to earn profit while earning miles and points. In the example within the post, I would have earned $41.35 while getting 3755 Starpoints!
American Express gift cards are a great way to not only diversify your manufactured spending techniques, but it can essentially nullify any gift card fees that come with Visa gift cards and if you’re lucky enough, you may be able to earn a profit.
As I mentioned earlier, with cashback portals, the payout is not always going to be the same therefore it is important to cash in while the deal is still hot. That said, remember moderation is key!