Any Potential Problems with Amassing a Huge Amazon GC balance?
Aug 21, 2018, 11:45 am
#16
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Chase's Freedom categories have been tough on me this year.
Q1: Gas Stations. I'm retired now and don't drive much. I gas up about once a month. My wife drives a fleet car so she pays nothing out of pocket for gas. Therefore, I made little organic spend in that category. Thus, I bought Amazon GCs at gas stations (which wasn't always easy).
Q2: Grocery Stores. It's just the two of us now, so we don't spend a lot on groceries. Plus, we eat out more than we should, I admit. Thus, I bought Amazon GCs at grocery stores.
Q3: Gas Stations (again) and Walgreens. I moved our Rx's to Walgreens, but that's not a whole heck of a lot of spending. Thus, I bought Amazon GCs there.
Q4: Holiday: This is not promising because it might be Amazon (again) in which case I'd have to spend $4500 out of pocket in the face of an existing $10,000+ balance! Now, if department stores are there, that would be a little better.
Q1: Gas Stations. I'm retired now and don't drive much. I gas up about once a month. My wife drives a fleet car so she pays nothing out of pocket for gas. Therefore, I made little organic spend in that category. Thus, I bought Amazon GCs at gas stations (which wasn't always easy).
Q2: Grocery Stores. It's just the two of us now, so we don't spend a lot on groceries. Plus, we eat out more than we should, I admit. Thus, I bought Amazon GCs at grocery stores.
Q3: Gas Stations (again) and Walgreens. I moved our Rx's to Walgreens, but that's not a whole heck of a lot of spending. Thus, I bought Amazon GCs there.
Q4: Holiday: This is not promising because it might be Amazon (again) in which case I'd have to spend $4500 out of pocket in the face of an existing $10,000+ balance! Now, if department stores are there, that would be a little better.
You could have bought Visa gift cards in Q1/2/3 rather than amazon. Sure you have to eat the $5.95 fee, but its better than having the money locked up in Amazon cards IMO
Aug 21, 2018, 11:46 am
#17
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Aug 21, 2018, 11:49 am
#18
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You realize that the ongoing APY on a HY saving account with Goldman Sache, AMEX and Synchrony (the former GE Capital Retail), is between 1.75 to 1.85%. Rates are projected to go higher, with Fed fund target being hinted at 4%... if they ever make it that high that is.
Your $10K stash at AMZN that may take you several years to burn thru could potentially cost $175 to $185 interest per annum earning before tax.
I honestly dont understand the logic - sure you have other cards that earn 2 to 3% on the dining etc so your Freedom(s) would effectively only earn you extra 2 to 3% versus using your CSR or a cash rebate card like TD's or CapOne's with 3% on dining, but you dont run the risk tying up large sum of GC balance anywhere, despite you would buy big ticket items at AMZN.
Do you realize that using AMZN GC as payment form would forfeit the protections offered by some of your CCs? things like purchase protection and extended warranty?
Personally I would never use unprotected way to buy any high value items that also can easily require repairs or warranty protection. Nor I would engage in foolish practice to try to irk the extra 2 to 3% while at the same time tied up large sum of cash into a form of INFLEXIBLE form of value. Not to mention that these days so many things are NOT sold by AMZN so you have to be extra careful to read thru and understand the Return Policy before buying. Else tough luck should your purchase turns out to be not it is presented to be. You will have very hard time to get your money back if the seller is not AMZN but one of the gazillions suppliers using the AMZN platform to hawk their wares.
Liquidity has its virtue. No reason to turn a 100% liquid CASH into something that is extremely restricted form of value even if you can easily float it. This is not the question whether one can afford to do so or not, Rather, it is whether one is being blinded by the "extra" earning and seem to lose some common sense.
Now if someone can turn the AMZN GCs into cash, without losing anything, that is a totally new ballgame - and that might be one of the reasons behind AMZN now is more mindful on the GC balances people hold (and the movements of such).
Your $10K stash at AMZN that may take you several years to burn thru could potentially cost $175 to $185 interest per annum earning before tax.
I honestly dont understand the logic - sure you have other cards that earn 2 to 3% on the dining etc so your Freedom(s) would effectively only earn you extra 2 to 3% versus using your CSR or a cash rebate card like TD's or CapOne's with 3% on dining, but you dont run the risk tying up large sum of GC balance anywhere, despite you would buy big ticket items at AMZN.
Do you realize that using AMZN GC as payment form would forfeit the protections offered by some of your CCs? things like purchase protection and extended warranty?
Personally I would never use unprotected way to buy any high value items that also can easily require repairs or warranty protection. Nor I would engage in foolish practice to try to irk the extra 2 to 3% while at the same time tied up large sum of cash into a form of INFLEXIBLE form of value. Not to mention that these days so many things are NOT sold by AMZN so you have to be extra careful to read thru and understand the Return Policy before buying. Else tough luck should your purchase turns out to be not it is presented to be. You will have very hard time to get your money back if the seller is not AMZN but one of the gazillions suppliers using the AMZN platform to hawk their wares.
Liquidity has its virtue. No reason to turn a 100% liquid CASH into something that is extremely restricted form of value even if you can easily float it. This is not the question whether one can afford to do so or not, Rather, it is whether one is being blinded by the "extra" earning and seem to lose some common sense.
Now if someone can turn the AMZN GCs into cash, without losing anything, that is a totally new ballgame - and that might be one of the reasons behind AMZN now is more mindful on the GC balances people hold (and the movements of such).
Last edited by Happy; Aug 21, 2018 at 11:56 am
Aug 21, 2018, 12:14 pm
#19
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Join Date: Sep 2005
Location: JZRO
Posts: 9,169
I'm thinking I could probably branch out to Home Depot GCs (not Lowe's, though, since I have their store credit card that gets 5% off all purchases) because I do shop there, but I don't spend more than a grand or so per year. Still, it would stem the Amazon balance growth.
RNE, obsessively unwilling to let any URs get past my three Freedom cards.
Aug 21, 2018, 12:23 pm
#20
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It seems clear to me that some of us spend much more on Amazon than others.
In my family, we burn through many thousands of dollars a year on Amazon. Even a small five figure balance would not lose so much in opportunity cost as to outweigh the generous 5x (7.5%, to me) points from buying at OD via Chase Ink.
In my family, we burn through many thousands of dollars a year on Amazon. Even a small five figure balance would not lose so much in opportunity cost as to outweigh the generous 5x (7.5%, to me) points from buying at OD via Chase Ink.
Aug 21, 2018, 8:09 pm
#22
Join Date: May 2013
Location: Sacramento, CA
Posts: 374
Chase's Freedom categories have been tough on me this year.
Q1: Gas Stations. I'm retired now and don't drive much. I gas up about once a month. My wife drives a fleet car so she pays nothing out of pocket for gas. Therefore, I made little organic spend in that category. Thus, I bought Amazon GCs at gas stations (which wasn't always easy).
Q2: Grocery Stores. It's just the two of us now, so we don't spend a lot on groceries. Plus, we eat out more than we should, I admit. Thus, I bought Amazon GCs at grocery stores.
Q3: Gas Stations (again) and Walgreens. I moved our Rx's to Walgreens, but that's not a whole heck of a lot of spending. Thus, I bought Amazon GCs there.
Q4: Holiday: This is not promising because it might be Amazon (again) in which case I'd have to spend $4500 out of pocket in the face of an existing $10,000+ balance! Now, if department stores are there, that would be a little better.
Q1: Gas Stations. I'm retired now and don't drive much. I gas up about once a month. My wife drives a fleet car so she pays nothing out of pocket for gas. Therefore, I made little organic spend in that category. Thus, I bought Amazon GCs at gas stations (which wasn't always easy).
Q2: Grocery Stores. It's just the two of us now, so we don't spend a lot on groceries. Plus, we eat out more than we should, I admit. Thus, I bought Amazon GCs at grocery stores.
Q3: Gas Stations (again) and Walgreens. I moved our Rx's to Walgreens, but that's not a whole heck of a lot of spending. Thus, I bought Amazon GCs there.
Q4: Holiday: This is not promising because it might be Amazon (again) in which case I'd have to spend $4500 out of pocket in the face of an existing $10,000+ balance! Now, if department stores are there, that would be a little better.
Really, you don't have to maximize every offer just because it's there. That's addiction. You saved 5% on Amazon GCs; I saved 100% by not buying them in the first place. If and when I can use them, some card somewhere will give me at least a 5% discount. If worse comes to worst, I can get 2% by loading from a debit card or using my Priceline Visa, so now the difference is 3%. And I'm not going to lose sleep over that.
Aug 22, 2018, 6:10 am
#23
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Join Date: Sep 2005
Location: JZRO
Posts: 9,169
Aug 22, 2018, 6:58 pm
#24
Join Date: Jun 2014
Posts: 163
You should see if you can find a grocery store or Walgreens that lets you buy $500 Visa gift cards with your Chase Freedom card.
Buying Amazon or Home Depot GCs to earn 5 UR points per dollar (maybe worth 7.5%) is not a good value. You are only earning 5.5% more than you would with a 2% card, even at a generous 1.5 cents per point valuation.
In July, there was an Amex offer for 2,000 MR points when spending $50 on Amazon. I got this offer on several cards and stocked up on a few hundred dollars of Amazon gift cards, because this was at least 40% back or even 52% back if you value MR points at 1.3 cents each.
Buying Amazon or Home Depot GCs to earn 5 UR points per dollar (maybe worth 7.5%) is not a good value. You are only earning 5.5% more than you would with a 2% card, even at a generous 1.5 cents per point valuation.
In July, there was an Amex offer for 2,000 MR points when spending $50 on Amazon. I got this offer on several cards and stocked up on a few hundred dollars of Amazon gift cards, because this was at least 40% back or even 52% back if you value MR points at 1.3 cents each.
Aug 22, 2018, 8:14 pm
#25
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You should see if you can find a grocery store or Walgreens that lets you buy $500 Visa gift cards with your Chase Freedom card.
Buying Amazon or Home Depot GCs to earn 5 UR points per dollar (maybe worth 7.5%) is not a good value. You are only earning 5.5% more than you would with a 2% card, even at a generous 1.5 cents per point valuation.
In July, there was an Amex offer for 2,000 MR points when spending $50 on Amazon. I got this offer on several cards and stocked up on a few hundred dollars of Amazon gift cards, because this was at least 40% back or even 52% back if you value MR points at 1.3 cents each.
Buying Amazon or Home Depot GCs to earn 5 UR points per dollar (maybe worth 7.5%) is not a good value. You are only earning 5.5% more than you would with a 2% card, even at a generous 1.5 cents per point valuation.
In July, there was an Amex offer for 2,000 MR points when spending $50 on Amazon. I got this offer on several cards and stocked up on a few hundred dollars of Amazon gift cards, because this was at least 40% back or even 52% back if you value MR points at 1.3 cents each.
What if you spend $5k at Amazon a year. What do you propose as a good strategy? How about for $15k?
Aug 25, 2018, 8:47 am
#26
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Join Date: Jul 2003
Location: Florida
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You should see if you can find a grocery store or Walgreens that lets you buy $500 Visa gift cards with your Chase Freedom card.
Buying Amazon or Home Depot GCs to earn 5 UR points per dollar (maybe worth 7.5%) is not a good value. You are only earning 5.5% more than you would with a 2% card, even at a generous 1.5 cents per point valuation.
In July, there was an Amex offer for 2,000 MR points when spending $50 on Amazon. I got this offer on several cards and stocked up on a few hundred dollars of Amazon gift cards, because this was at least 40% back or even 52% back if you value MR points at 1.3 cents each.
Buying Amazon or Home Depot GCs to earn 5 UR points per dollar (maybe worth 7.5%) is not a good value. You are only earning 5.5% more than you would with a 2% card, even at a generous 1.5 cents per point valuation.
In July, there was an Amex offer for 2,000 MR points when spending $50 on Amazon. I got this offer on several cards and stocked up on a few hundred dollars of Amazon gift cards, because this was at least 40% back or even 52% back if you value MR points at 1.3 cents each.
I struggle to spend my measly high 3 figures balance because we spend less than $200 a year and generally during the time there are AMEX Membership Reward promotions that either offer $30 credit or 20% discount like the recent one.
If you have the need, certainly stocked up a 4 figures balance is not an issue.
RNE obviously has far less spending need than his $10K stash - otherwise he would not start a thread for suggestions.
Hence you should not use your family's spend pattern to compare RNE's.
As for the 5% at Office Supplies Stores all the time - Just off the head, currently there are at least 4 cards that give you that - the 2 Inks at Chase, and the 2 SimplyCash at AMEX. Only Ink Plus has the danger to be retired, the other 3 are going strong. There may be other cards that I do not know.
Besides, there are cards earn 5x at grocery stores which have as many AMZN cards as you can buy. So if your goal is to scale up the 5% saving, there are many avenues to do so.
I totally agree that is an addiction that often kills one's common sense. All RNE is getting is a very small 2 to 3% extra but have to carry a highly restrictive "asset" does not sound smart to me. There are many quarters we completely ignore the Freedom offerings. Nothing lose as it totally pales to what Inks can do.
Aug 25, 2018, 10:06 am
#27
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Here we go back to the Square One - only stock up for what your spending needs would be.
If you have the need, certainly stocked up a 4 figures balance is not an issue.
RNE obviously has far less spending need than his $10K stash - otherwise he would not start a thread for suggestions.
Hence you should not use your family's spend pattern to compare RNE's.
Aug 25, 2018, 3:41 pm
#28
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Aug 25, 2018, 4:28 pm
#29
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https://en.wiktionary.org/wiki/and_how
Aug 25, 2018, 4:37 pm
#30
Join Date: Jul 2014
Posts: 3,688
FWIW, here's some interesting discussions related to amazon closing accounts with huge balance: https://forum.elliott.org/forums/amazon.83/
as always, caveat emptor
as always, caveat emptor