Getting 2.5x per $ non-bonus spend on any credit card

Discussion in 'General Discussion | Credit Cards' started by RestlessLocationSyndrome, Jun 6, 2013.  |  Print Topic

  1. RestlessLocationSyndrome
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    RestlessLocationSyndrome Silver Member

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    Pretty much everyone knows about the Bluebird (BB) / Vanilla Reload (VR) card tactics and how the value dropped significantly for people once office stores stopped carrying them. However, if you combine that with the Fidelity Rewards AMEX with 2% cash back (or any card with these benefits), you can get 2.5x on your non-bonus spend.

    Purchase $200 in non-bonus spend at Costco with the Fidelity Rewards AMEX. Get 2% back = $4.
    Go to a store that sells VR's and buy a $500 VR card with your rewards card (AA Visa, BA Visa, United Club Visa) and pay $4 fee. Get 1% back = (500 AA, 625 BA, 750 UA)

    So instead of using your SPG card at Costco to get just 1 SPG point for every $ of spend, you can get 2.5 AA, 3.125 BA, or 3.75 UA miles instead.

    Now the caveat to this is that this will only work up to the first $2k in spend that you have monthly and that you have access to VR cards (since only $5k can be loaded monthly to BB) but this is a way to get your 60k+ miles annually with the BB/VR for free instead of paying $474 = (12 months x 10 card/mo x 3.95 /card)
     
  2. kyunbit
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    kyunbit Silver Member

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    am I the only one who didn't understand the link between costco and VR?
     
  3. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    Nope.
     
  4. RestlessLocationSyndrome
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    RestlessLocationSyndrome Silver Member

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    I mentioned Costco as an example of a store where you typically do not receive bonus spend. It tends to be a good example for explaining where to use an SPG card since you can also only use an AMEX for purchases at the store. There is no real link between Costco and VR.

    What I was attempting to explain is that you use a cash back card on non-bonus spend to earn the money that you need to pay for the VR fees. The reason I mention non-bonus spend is that many people making bonus spend purchases will likely just use their miles/points cards and not hassle with the VR/BB to eek out an extra half mile/point on 2% back purchases and definitely would not for 3% or higher ones.
     
  5. kyunbit
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    kyunbit Silver Member

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    Now I get it; what you are trying to say is that the cash back you get from Fidelity Amex can 'fund' the VR fees. $200 on Fidelity Amex will fund the $4 fees on $500 VR. So your logic is that in essence you got 2.5X miles for spending $200?

    However, I could argue that you actually lost your $4 in pursuing the 500 miles, or you bought miles for 0.8 cents.
     
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  6. RestlessLocationSyndrome
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    RestlessLocationSyndrome Silver Member

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    Exactly.
    This is true but only if your goal in the first place was to get 2% cash back. However, if your goal in the first place was to only earn miles/points on your spend, which I think a fair number of people in this community are concerned with, utilizing a cash back card instead of a mile/point card and then applying that cash back to VR fees leads to a significantly higher return.
     

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