While I was away in Europe, I got a notice from Yazing that Giftcards.com dropped the payout on Visa gift cards from 1.5% to 1.25%. Even major cash back portals like TopCashBack are now offering just 1.25% cash back on GiftCards.com purchases. With the $2,500 purchase limit and $6.95 fee per gift card, the cash back earned through shopping portals like Yazing is an essential part of keeping manufactured spending costs low. Now that the cash back rate has been reduced by 0.25%, does it still make sense to buy Visa gift cards through Giftcards.com? It certainly does, though you should be aware of the slight uptick in cost:
Gift Card Fees: $6.95 x 5 = $34.75
Shipping fee: $7.45
Total fees: $42.20
– Cash Back Earned: $31.25
Total cost for $2,500 worth of manufactured spending: $10.95
While a 0.25% reduction doesn’t seem like much, it amounts to a $6.25 increase in out of pocket costs for $2,500 worth of spending. This is still much less than the $19.75 cost of buying the same number of gift cards at Simon Mall, but it’s an expense worth taking into account – especially when churning large volumes of gift cards.
Here’s an example to illustrate what I mean: Generating the standard 25,000 airline miles for a roundtrip economy class ticket at the current 1.25% cash back rate would cost $109 instead of the previous $47. If you’re saving up for an international business class award redemption, you’ll now be paying over $438 for the miles rather than $188. regardless of how you put your miles to use, it’s always good to keep costs in mind and determine whether manufactured spending is worth it for you. Far too many people get caught up in the idea that something is “free” when it isn’t or they do something because others are doing it, without considering for themselves whether it makes financial sense for them.
Forget the fact that the first class seat you saved up miles for normally cost $10,000+ and instead consider whether you can actually afford the significantly less amount of money you spent earning those miles. At the end of the day, we’re all paying something for our free flights and hotel rooms, so its important to keep that cost in mind along with our respective travel budgets.
At the current 1.25% cash back rate, I will continue to buy Visa gift cards from Giftcards.com. It’s cheaper than Simon Mall (which I continue to incorporate into my manufactured spending routine) and I’m using cash back cards to off-set the cost of acquiring points and miles. It works for me and my budget, but I definitely think its important for everyone else to take cost into consideration as well. If the cash back rate drops further than this, I may consider a strike until they are increased. In the meantime, I will continue to churn gift cards, fully aware of the costs and how to off-set them.
Will you continue to buy Visa gift cards from Giftcards.com at the currently reduced 1.25% cash back rate? I’d love your feedback in the comment section.
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