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Newbie Guide to Manufactured Spending: Earning Miles with Debit Cards

Update 9/21/14: The Suntrust Delta Skymiles and Alaska Airlines debit cards are no longer available.

Debit cards are a great manufactured spending tool, especially if you have less than stellar credit and can’t get approved for reward cards. For seasoned credit card churners, mile-earning debit cards present a cheap way to supplement and diversify manufactured spending. Below is a list of debit cards that earn miles, along with the different methods of manufactured spending they can be used for:

Suntrust Delta Skymiles Debit Card

The Suntrust Delta Skymiles debit card has a hefty $75 annual fee, on par with most credit cards, but rightly so: It earns 1 mile per $1 on all spending, and 2 miles on purchases made directly with Delta. For the purpose of buying money orders, this card is by far the most lucrative. On the down side, you are earning miles with Delta, which makes it a hassle to redeem miles and seems to be on a never-ending quest to devalue their award chart. There is also a business version of this debit card, though it earns just $0.5 miles per $1 and has a ridiculous $120 annual fee.

Mile-earning debit cards Suntrust Delta Skymiles Debit Card

Suntrust Delta Skymiles Debit Card

UFB Direct Airline Check Card

UFB Direct offers an Airline checking account that comes with a debit card, which earns 0.5 AAdvantage miles per $1 spent. Earnings are capped at just 120,000 miles per year. The card has no annual fee, and since UFB is an online bank, you can deposit money orders using their smart phone app (which has it’s issues, but generally works ok).

Alaska Airlines Debit Card

The Alaska Airlines Debit card is going to be discontinued on May 31, 2014, but those who already have it can put it to good use until then. I wouldn’t even worry about using it moderately to avoid account closures – with two months to go, I doubt they’ll look too closely at your spending patterns. Plus, Bank of America is an awful bank and I wouldn’t mind if they pulled the plug on me. The Alaska debit card earns 0.5 miles per $1 spent.

All of these debit cards can be used to generate miles cheaply with the following tools:

Money Orders. Money orders are most often purchased at Walmart. Most of the Walmart locations I’ve been to will record your personal information (name, address, driver’s license number) if you purchase over $3,000 in money orders. I always stick $2,900 to be safe. The cost for Walmart money orders is $0.25-0.77 cents per $1,000. The amount varies by location.

While you can certainly hop around to different Walmart stores to stock up on money orders, be mindful of what your card provider’s daily limit is on PIN transactions.

$0 fee Greendot MoneyPaks. Riteaid carries Greendot MoneyPaks that have $0 fees. Buy these, load them onto your Paypal account, and either cash out via money orders or bank transfers (keep the latter in moderation).

Bluebird. If you don’t have access to a CVS (for Vanilla Reloads) or Walmart (to buy money orders or load Bluebird with a gift card), you can use your mile-earning debit card to load Bluebird free of charge.

Square Cash. Sign-up, download the app, link your debit card, and use it to send money to trustworthy friends/relatives willing to either transfer you the money or give you cash.

American Express Serve. The American Express Serve card can be loaded with both credit and debit cards. If you’re going to use a debit card, it makes the most sense to use the Suntrust Skymiles card, since it earns the most miles. At 0.5 miles per $1, it makes more sense to use a credit card.

Thoughts or questions about this topic? Please comment below.

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Ariana Arghandewal

21 Comments

  1. Under the green dot section you say to keep the latter in moderation (bank transfer). What about the former?

    Also I see potential across these to rack up hundreds of thousands of points very easily. What is considered a “moderate level” for these?

    • Thanks for pointing that out, Tom. It’s important you keep all manufactured spending in moderation – I generally don’t go above $5,000 per month on any single card, and it’s worked well so far. I’ve emphasized the bank transfer option because that is most likely to get you flagged – if you keep loading/unloading and not using the card, you’re not a profitable customer to Paypal.

  2. Thanks for posting this! Two questions:

    1) What kind of mix of spending/charges, cashing out, etc do you typically use to stay below the radar, and also what kind of monthly limits do you adhere to?

    2) Is the main disadvantage of using debit cards for manufactured spending that you have to float the initial money yourself? I imagine if you weren’t able to float 5k/month, it might be more challenging to do this effectively. On the other hand, do you try to combine credit card spending with debit card for MS and double dip, and use the money the CC is floating you to drive the debit card? ie- Use credit card to buy vanilla reload or gift card, cash out via money order/something, fund debit card with that, and buy money order, back to credit card? Generate CC points and debit card points. Seems kind of convoluted though, is this what you have in mind, or something else?

    • I generally don’t go above $5k in manufactured spending per credit card. Usually I buy Amex gift cards and use those to buy Vanilla Reloads, which I then load to Bluebird. I’ve had no trouble maxing out/unloading Bluebird for almost two years.

      You can certainly float the money the way you described, but you gotta be quick to pay off the credit card and avoid fees. What I do is buy money orders ($2,900 at a time) with my Alaska card, deposit them into my UFB account, then use my UFB debit card to buy mo’s that I then deposit into my Bank of America account. I do this 2-3 times per month and the final time, I walk into a branch and use some of the mo’s to pay off any credit card bills that haven’t been covered with Bluebird (i.e. bills accrued through regular spending).

  3. Since when did Rite Aid have free Moneypaks? I didn’t know that. I think last time I checked, the Moneypaks had values of $500 and a 4.95 fee.

    Also, one deal you forgot about was Venmo, where you can use a debit card to send money to someone. It’s kind of like Square Cash, and I think it has a $12,000 monthly limit.

    One amazing opportunity I’ve seen with mile-earning debit cards is at Staples. In their official policy, it says, “If you paid with cash, check or by debit card but do not have your debit card, and your purchase exceeded $500 pretax, your money will be refunded in the form of a corporate check”. That means you can go through a shopping portal to Staples.com (or buy it in-store), and use a mile-earning debit card to buy a $10,000 digital projector. After it gets delivered, or after you buy it in-store, you can take the projector to a physical Staples store and return it. You would get refunded by check. By doing this one time, you potentially rake in 10,000 miles and shopping portal rewards for free.

    There might be some similar opportunities with mile-earning debit cards at Home Depot, Nordstrom, Costco, and Michael’s. At K-Mart and Walmart, I’ve done legitimate returns and got refunded in cash for small amounts; I don’t know if it Ariana, I would appreciate it if you help experiment with buying and returning at these stores, to find out what works. For the Costco deal, check out this post, if you haven’t already:
    http://first2board.com/themrpickles/2013/09/16/costco-refunds/

    • Yep, Riteaid stores regularly offer these $0 fee Moneypaks. I’m aware of the return scheme at Nordstrom and Costco, but I just don’t have the nerve to do it. I’ll leave the risky stuff to Mr. Pickles. 🙂

      Thanks for the heads up on Venmo! I haven’t thought about that service in years (esp since they tacked on that 3% fee to cc purchases), but I’ll definitely update the post to include the debit option.

  4. Correction: in the last paragraph, I meant to say, “I don’t know if it works for larger amounts”.

      • That option will be dead on March 31 and Visa gift cards are limited to Bluebird at $100 per day and $1000 per month or did I miss a change? And CVS managers I spoke to today indicated that they had indeed seen the memo and it was for real…….CVS is a well run organization and the plan is to hardwire the register so it appears “at this moment” that at midnight on the 31st we’re going to start a New Orleans inspired funeral procession outside my CVS………….

        • You can unload them via money orders too. VR’s going away will suck, but there are comparable options.

          • I respectfully disagree…….the VR cards have a $500 cap and with a quick daily login or call 1k could be loaded to the Bluebird…….with CVS locations very convenient for this blogger it was a daily no brainer…….uploading with money orders requires a location that sells money orders to $500 with comparable fee and with a credit card……while some of the local drug stores that are not hard wired you might be able to buy that money order with a credit card but even if you pull that off there is ZERO reason not to just deposit the funds in a bank account rather than upload it to a Bluebird……..and unless Bluebird changes its’ $100 per transaction upload and $1k monthly limit it will be dead as juice will cease to be worth the squeeze……..now I guess if you live close to Walmart (so sorry for that) I guess other options are available but otherwise the prospects look very glum and NO there are NOT comparable options or we would have all been using them………….

  5. Hi Ariana,

    Your blog has been very very very helpful to me. Thank you so much.

    I have a question about Square Cash, but don’t know where to ask on your blog. So I just posted here.
    Seems if I want to send someone more than $250, Square Cash required me to verify my account (by birthday, last 4 digits of SSN, etc.), then it told me it was successful. But the second day, it would tell me that the fund had been refunded for my own protection.

    Have you ever had this problem?

    Thanks again.
    Jason

    • Thanks Jason. How much did you try to send and what was your method of payment? I’ve sent $1,000 with a debit card with no problems at all. On the other hand, payments funded with gift cards/prepaid cards can sometimes have issues. If you’ll tell me what you used, I can try to pinpoint the problem.

      • I tried to send $500 and $485 to two different accounts using Suntrust debit card. Both got returned. 🙁

        • I looked into this and some folks had this happen to them when they were sending money to family members with the same last name. If that’s the case, see if you can send the money to someone (trustworthy) with a different last name.

          • The receiver had a different last name than me. And I tried $250 today, and just got rejected too. I guess maybe my account (or their accounts) got flagged or something. I was able to sent $200 to the same account two weeks ago. 🙁

          • That may be the case. At least you can still cash them out via money orders at Walmart.

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