How to churn points (or how to meet minimum spend without spending money)

The great thing about credit cards is that when you sign up for them, you’re eligible for large amounts of bonus points/miles. For instance, when you sign up for the Starwood American Express card, you can earn up to 25,000 points, which is enough for 2 nights at a very nice hotel.

The not-so-great thing about earning these bonus points is the amount of money you have to spend in order to get them. To get those 25,000 points you need to spend $5,000 in 6 months.

For those on a tight budget, this can be a little daunting. $5,000 in 6 months is probably doable for full-time professionals, but students may not find it as easy to accomplish. Plus, if you sign up for other cards at the same time, you have multiple minimum spends to meet. Luckily, there is an option available that, while a bit complex, can end up earning you lots of points while minimizing your cost.

The simple version: Bluebird at Wal-Mart

Wal-Mart and American Express have teamed up to create Bluebird, which is basically a bank account without a bank. It’s also completely free. After signing up, you receive a Bluebird American Express card, which is a pre-paid debit card. It can be used like a debit or credit card for purchases anywhere that accepts Amex. Your Bluebird account can also be used to pay off your credit card bills, rent payments, other bills, or to send a check to pretty much anyone, anywhere. At Wal-Mart, you can load your card with funds either using cash or another debit card. Million Mile Secrets has a great post here about loading the card.

The way you load your Bluebird card is where you can meet your minimum spend (and earn some points!). Yes, you can load it using a points-earning debit card, such as the Bank of America Alaska Airlines card, the UFB Direct American Airlines card, or the SunTrust Delta card. That is a fine way to earn some points. But thanks to some recent legislation, you can now essentially use your credit card to load Bluebird.

Without going too much into the details, a lawsuit between retailers and Visa, MasterCard and large U.S. banks has made Visa and MasterCard gift cards required to have PINs, much like your ATM or debit card currently has. So these gift cards now act like debit cards, meaning you can use them to load your Bluebird like you would load it with a debit card. Not all gift cards have this functionality yet, but the Vanilla gift cards you can find at Wal-Mart have been working, according to other blogs. So here’s what you would do:

1. Go to Wal-Mart
2. Buy a Visa Vanilla gift card with your credit card
3. Set the PIN by calling the number on the back
4. Go to a MoneyCenter and load your Bluebird
5. Log onto the Bluebird site and pay off your credit card

Easy peasy!

The only cost to this is the $3.95-$6.95 activation fee per gift card ($500 each), so you’d end up paying $39.50-$69.50 to meet $5,000 in minimum spend.

The slightly more complex version: GiftCardMall via TopCashBack

GiftCardMall.com offers Visa gift cards worth up to $1,000 for a $3.95 fee and $1.99 shipping. That’s $1,005.94 for $1,000 to load onto your Bluebird. Here’s the catch. You can go to TopCashBack.com and go through their portal to purchase the GiftCardMall Visa card. Currently TopCashBack offers 1.5% back on GiftCardMall. So suddenly you’ve gotten $10.05 back on that purchase.

$1005.94 - $10.05 = $995.89 for $1,000 to load onto your Bluebird

For $5,000 spend, you would earn $20. You are literally getting paid to meet your minimum spend. Once you receive your Visa gift card in the mail, you go to Wal-Mart and load it just like you would have in the last scenario.

This second scenario can be a bit complex for first-timers. I recommend testing it out using the first scenario and then graduating to the second scenario once you’re comfortable.

Caveats

There are a few things I would make sure to either do or not do with this Bluebird minimum spend trick:

1. Don’t send yourself a check

If you’re loading money onto your Bluebird and then sending yourself a check to cash, that looks bad. American Express could easily shut down your account

2. Do use Bluebird to pay bills

The point of Bluebird is to use it like a bank account. So pay your credit card, mortgage, rent, electricity, or any other bill with it. Don't abuse it by sending checks.

3. Don’t load more than $5,000 in a month or $1,000 in a day

Bluebird has a $5,000 monthly limit and a $1,000 daily limit.

4. Do use your credit cards and Bluebird for other purchases too

A credit card company may get suspicious if you’re only spending money at GiftCardMall or Wal-Mart. Spread your spending around. Same goes for Bluebird. Use it once in awhile for something other than paying bills. Again, don't abuse the system.

5. Do start small

Don’t go out and buy thousands of dollars worth of gift cards. Take it slow at first. Learn how it works. My first load was with a $25 gift card I bought at CVS. Figure out the game first, then grow to larger amounts.

Links

Bluebird

GiftCardMall Visa

TopCashBack (this is a referral link that earns me a few bucks if you sign up!)