All of the cards we’ve discussed so far involved a three-step process: You buy a reload card, load it onto a prepaid card, then cash out via various methods. There is an easier option: Skip straight to Visa and MasterCard gift cards.
Many gift cards are now PIN-enabled, which makes it possible to unload them via prepaid card loads or money order purchases. These gift cards can be purchased in maximum $500 increments and have fees ranging from $3.95-$6.95.
Purchasing Visa and MasterCard gift cards is becoming one of my favorite manufactured spending due to the following advantages:
1. No purchase limit. You can buy as many of these as you want. The only thing to take into account is whether you have time to unload them all.
2. Easy unloading. Most Visa and MasterCard gift cards are PIN enabled, making them easy to cash out via money order purchases and prepaid card loads. All of the cash-out methods are either free or fairly cheap. The “safest” gift cards to buy are Metabank issues Visa gift cards. These are sold at grocery stores and branded as Gift Card Mall Visas. Check the back of the gift card package to ensure they are indeed issued by Metabank.
In addition to unloading them via money orders, you can also load them onto Bluebird or Serve prepaid cards. These cards can be loaded at Walmart stores and the online bill pay center can be utilized to pay your credit cards and other bills.
Keep in mind that just because a gift card has a Visa logo on it, that does not mean it’s PIN enabled. Gift cards issued by Bancorp, US Bank, and MetaBank are usually PIN enabled.
3. Category bonus potential. You can buy Visa and MasterCard gift cards at grocery stores, office supply stores, and drug stores – all of which are lucrative category bonus merchants. These cards don’t come in very large denominations (mostly in increments of $500 or less), but the bonus points paid out by credit card issuers often makes it worthwhile.
4. Free manufactured spending. Fees vary depending on the card and the denominations you’re purchasing them in. Usually, they don’t exceed $6.95 for a $200 MasterCard gift card (which earns 1,000 points at office supply stores with a Chase Ink Bold card). What decreases the cost significantly are promotions that often eliminate the purchase fees and sometimes even makes buying these cards profitable.
Office Max, for example, often runs promotions on their gift cards. The most recent one was for $20 off a $300 gift card purchase. The largest denominations they carried were $100, which came with a $5.95 fee. The fees came up to $17.85, but with the $20 discount, I pocketed $2.15 (I know, I won’t quit my day job). The significant part of this promotion isn’t the change you pick up as a result, it’s that you’re earning miles without any fees. With my Ink Bold card, I earned 1,500 Ultimate Rewards points. That’s not enough for a trip anywhere, but if I do this two more times, it’s enough for a one-way short-haul flight (using 4,500 British Airways Avios). You can unload these cards using the methods outlined above, or simply use them to pay your bills.
Another option is to buy Visa gift cards through Gift Card Mall by going through a shopping portal like TopCashBack or Extrabux. Currently, the payout on Visa gift cards is just 0.5% and with the denomination of these cards being reduced to $250, this can get expensive. I would keep an eye out as TCB had a pretty good promotion a while back that made purchasing gift cards profitable. (UPDATE: As of November 3, 2015 Visa gift cards purchased from Gift Card Mall are no longer PIN-enabled, so buying them is no longer a viable manufactured spending option.)
As you can see, Visa and MasterCard gift cards can be great manufactured spending tools. Not only is there unlimited earning potential, but you can also reduce expenses by factoring in online shopping portal houses and in-store promotions.
Note: I will earn a $10 referral fee if you register using the TopCashBack link in this post, along with $5 from Extrabux after your first purchase. Extrabux pays out additional commission when users who signed up with my link use the portal. Please feel free to include your own referral links in the comment section.
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