American Express Membership Rewards - Earning points when buying a credit card gift card

I remember reading about this a year or two back somewhere, but I think that was a slightly different situation...

I was browsing my local pharmacy store today and I saw that they were selling visa, mastercard and amex gift cards. The Amex were fixed amounts: $25, $50 and $100 and charged a different amount based on what you bought (from $3.95-5.95), but the mastercard and visa had no amounts on them and they cost $4.95. I asked the cashier and she said that you can purchase one of them and add as much as you want on them (I am guessing there is an upper limit, but she didnt seem to think so).

Anyways, I remember a few years back you could buy these online, but Amex treated the purchase as a cash advance instead of an actual purchase, so you could not earn points. However, this seems a bit different since I'd be "buying" it from the pharmacy (instead of a bank directly) so presumably, I'd earn points for the purchase. I could turn around and use the card at the ATM and get my money back. (for eg. 1000 -- or more -- points for $4.95 seems rather cheap).

There has to be a catch here somewhere... What am I missing?

I am sorry if this has already been discussed -- if someone could point me to the original thread, that'd be great -- I tried searching to no avail.

I believe you're confusing 2 things: gift cards and travel cards.

AMEX travel card - has PIN to withdraw at ATM; designed for the traveller, similar to traveller's checks

AMEX gift card - no-PIN that I am aware of to withdraw at ATM; I received one as an Xmas present; it mentions that it isn't valid at hotels, gas stations, and for rental cars

I believe you're confusing 2 things: gift cards and travel cards.

AMEX travel card - has PIN to withdraw at ATM; designed for the traveller, similar to traveller's checks

AMEX gift card - no-PIN that I am aware of to withdraw at ATM; I received one as an Xmas present; it mentions that it isn't valid at hotels, gas stations, and for rental cars


Yes, but the "Mastercard gift card" and the "Visa gift card" allows you to withdraw cash from the ATM (I read that in the back of the gift card so I am pretty sure of that).

I forgot to mention ATM withdraws have additional convenience fees.

I am not familar with the Visa/Mastercard gift cards. I suggest making an inquiry over on the other credit card forum.

I forgot to mention ATM withdraws have additional convenience fees.

Ah, I see. Plus I suppose the ATMs only allow a maximum withdrawl per day...?

I wonder what the cost is for the withdrawl and what the withdrawl limit per day is?

Ah, I see. Plus I suppose the ATMs only allow a maximum withdrawl per day...?

I wonder what the cost is for the withdrawl and what the withdrawl limit per day is?

IMHO, it's not worth it to rack up miles this way, otherwise, there would be tons of posts regarding this method.

IMHO, it's not worth it to rack up miles this way, otherwise, there would be tons of posts regarding this method.

I think you are right...thats why I am wondering what crucial bit of info I am missing that would make this approach not worth it. :D

This is straight from the AMEX site regarding AMEX gift cards:

Some restrictions on merchant acceptance will apply to the Gift Card. The Gift Card is not for use at airline, hotel, car rental, telecom merchants, or ATMs. It cannot be used outside of the U.S. Additional restrictions apply.


Check out the AMEX site for more info.

my local supermarket also allows only cash for the mastercard (reloadable). The fees are also pretty high for all 3 cards

The Amex TC card is $14.95 to buy plus $2.50 per withdrawal, up to $400. You can reload for a $5 fee. Note that Amex may refuse to let you reload if you're churning for miles.

IMHO, it's not worth it to rack up miles this way, otherwise, there would be tons of posts regarding this method.

Can you tell me why its not a good way to earn miles? What the cost per mile? Seems awfully chep to me. COuld it be that the reason there are not a lot of topics on this, becasue it would spoil someones good deal if word got out ?
Seems like a pretty good ratio as far as points to $ spent goes, imo

Ken in Phx

Another "point" to make, is that just rather than trying to get points for free, one could load up a Visa gift card using Amex, to use as their alternative payment when a vendor doesn't take Amex.

Consider the fact that alot of us would use Amex exclusively if we could, but since we can't we have additional Visa's and MC's, which most likely we are paying a yearly fee on so that we can collect some sort of points. In this way it seems you could elimate extra Visa's and MC's and truly use Amex to pay for everthying.

Plus doesn't Amex get double points at Walgreens :D

Another "point" to make, is that just rather than trying to get points for free, one could load up a Visa gift card using Amex, to use as their alternative payment when a vendor doesn't take Amex.

Consider the fact that alot of us would use Amex exclusively if we could, but since we can't we have additional Visa's and MC's, which most likely we are paying a yearly fee on so that we can collect some sort of points. In this way it seems you could elimate extra Visa's and MC's and truly use Amex to pay for everthying.

Plus doesn't Amex get double points at Walgreens :D


I remember reading somewhere about people having their AMEX cards revoked for "excessive" gift card purchases. Others have talked of it triggering "credit reviews." Anyway... purchase with care.

If you buy an $800 TC card and cash it out, you've spent $14.95 + $2.50 + $2.50 + any ATM fees for 815 points (you get points for the card purchase). That's 2.46c per point. To make it worth while you need to find something to redeem them on that's better than 2.46c/point.

You can reduce the overhead by refilling the card, but you're more likely to be caught and barred from further refills.

Occasionally there are promotions that make it worth while. A Delta promotion that just ended gave an additional 2500 SkyMiles and a $25 gift card for buying a $700 TC card.

The card issuers are certainly aware of the danger of letting people churn for miles, so loopholes where you can get cash for a mile-earning transaction for cheap are plugged quickly.

On the other hand, buying gift cards at a store is generally allowed because you can't redeem them for cash. Depending on the fees for buying a prepaid Visa card at a grocery store, it might make it worth it for the double miles. Amex really doesn't have any way of knowing what's on the bill when you charge something at a grocery store.

You can buy store/restaurant gift cards and charge them with no additional cost. My Diamond Mastercard gives me 5X points for drug stores and grocery stores so this is a great way to maximize extra points for stores you shop with already.

rob

I was in a Sams Club the other with a friend who ended up paying with cash and a Check. I asked why didnt he use a CC and get some points , he said they dont take CCs here.

So I asked in that case since they take WalMart Gift Cards, Id go to my local WalMart and get a card and load it up , of cause Id use a miles earning card and that way one can shop at Sams Club and earn miles or Points.

He said Funny I never thought of that. i said In this Biz (Miles and Points) you MUST always think outside the Box!!

I did check on the prepaid Mastercards at my local grocery store. It's about 5% over face value, so you're paying 5c/mile.

On the other hand, store/resturant cards are sold at face value so it's a way to get grocery bonus points for non-grocery purchases.