Update: Redbird can no longer be loaded with anything other than a bank-issued debit card, so this information is no longer valid. Unfortunately, shopping portals no longer offer cash back on American Express gift card purchases. Thus, it is no longer profitable to factor Amex gift cards into your gift card churning strategy.
Read Juan sent me a DM on Twitter that I thought would be worth covering in a post: Should you load Redbird with American Express or Visa gift cards? Ever since my Bluebird loading fiasco last year, when I unloaded $4,000 worth of Visa gift cards in $200 increments, I’ve steered clear of Visa gift cards and Bluebird for that matter. Since Redbird doesn’t have any broken kiosks for us to deal with, loading our cards in $200 increments is less of a hassle. It’s also an appealing option for those with a Chase Ink Plus card, since it pays out 5 points per $1 at office supply stores, where $200 Visa gift cards are sold. The fee on these $200 Visa gift cards is higher, so does it makes sense to go this route?
Loading Redbird with American Express Gift Cards
The advantage of purchasing American Express gift cards is that shopping portals like Top Cash Back offer 1.5% cash back on these purchases. Cash back is limited to gift cards purchased in increments of $2,000 or less, up to $10,000 every two weeks. Redbird can be loaded up to $5,000 per month, but let’s assume for the sake of practicality that you have access to two Redbirds (yours and a significant other’s).
On a $10,000 order you will earn $150 cash. Subtract the $3.95 fee per $2,000 card along with $5.95 – $8.95 in shipping fees and you’re looking at a profit of $101.55 – $104.55. Loading these cards onto Redbird is free, so that’s the extent of the fees you’ll be paying. You will also earn 10,000 – 50,000 points, depending on which credit card you’re using. I personally prefer the Barclay Arrival Plus World Elite Mastercard, which earns 2.2% in travel cash. In all, you’d earn a little over $100 cash back and 10,000 – 50,000 points per $10,000 Amex gift card order.
Loading Redbird with $200 Visa Gift Cards Purchased at Office Supply Stores
Office Supply stores sell $200 Visa gift cards for a fee of $6.95. Using your Ink Bold for these purchases would earn 1,000 Ultimate Rewards points, making this method cheaper (though much more tedious than the once-popular Vanilla Reload cards. Purchasing $10,000 worth of Visa gift cards would set you back $347.50 in fees for 50,000 Ultimate Rewards points. Some value Ultimate Rewards as high as 1.8 cents each, so those 50,000 points are worth $900 by that estimation.
Sometimes office supply stores will offer promotions which largely off-set these fees or even result in a small profit. For example, this week Staples is offering $20 off Visa and Mastercard purchases of $300 or more. Not only does this eliminate $13.90 in gift card fees, but you’ll earn a $6.10 profit. These coupons are limited to one per household, but if you manage to purchase $10,000 worth of Visa gift cards over the course of a year, you’d earn a profit of $152.50. Please don’t attempt to buy $10,000 worth of Visa gift cards, even if the one coupon her household rule isn’t upheld. Chances are the manager will make a scene, call your credit card company to verify the purchase and waste your time so you’ll never want to do it again.
So which of these options is best? With Amex gift cards, you’re earning a cash profit of over $100 and 10,000 – 50,000 points. Without a coupon, you’ll earn 50,000 Ultimate Rewards points and pay $347.50 out of pocket by going the Visa gift card route. You won’t realistically be able to buy $10,000 in Visa gift cards with a coupon every month, but pulling it off over the course of a year gets you $152.50 cash and 50,000 Ultimate Rewards points. Clearly, the Visa gift card/promotion route would be ideal since you would earn the maximum points and cash possible.
Now we’re once again down to Amex gift cards purchased through a shopping portal vs. Visa gift cards purchased at an office supply store without a coupon. Most people would value the minimum 50,000 Ultimate Rewards points well above 50,000 Club Carlson points (which is the maximum amount you can earn on Amex gifts). At 1.8 cents each, 50k Ultimate Rewards are worth $900. Subtract the $347.50 in fees and you’re getting $552.50 worth of value from your $10,000 Visa gift card purchases. At 0.4 cents each, 50k Club Carlson points would be worth $200. With the $100+ cash back earned through a shopping portal, you’ll get a little over $300 worth of value out of your $10,000 Amex gift card purchase. These calculations will vary depending on which credit card you’re using, since each reward currency is valued differently.
If you don’t mind paying out of pocket, the Visa gift card route will get you the most points. However, if you’re like me and try to avoid manufactured spending out of pocket, then loading Redbird with Amex gift cards works out much better. If you want to earn points quickly and are willing to pay for it, go with Visa gift cards. If you’re ok with earning fewer points but earning a cash profit, Amex gift cards are your best bet.
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