5 ms·

I didn't know there was a term for it. I gave it a shot one or two years ago buying $500 gift cards at grocery stores with a 6% cash back card (amex cash prefer

I didn't know there was a term for it. I gave it a shot one or two years ago buying $500 gift cards at grocery stores with a 6% cash back card (amex cash preferred). With the activation fee and taxes, I think each gift card purchase essentially returned ~$22. Surely not the most efficient - but it was simple. Each time I bought a $500 visa gift card I had that uncomfortable feeling like I was doing something illegal - the cashier calls out some code on the intercom and the manager shows up 5 minutes later to allow the purchase to go through. It wasn't worth the hassle - at the end of the year I might have made $150 - whoopty doo. At least I made enough money to pay off the annual fee for the card ($75).

saryant 11y ago
The payoff comes from doing it to hit signup bonuses. If you needed to spend $5000 on a card, you could buy Visa gift cards and spend $59.50, but get 105,000 miles from the bonus. Essentially a round-trip business class ticket from the US to Asia.
- dublidu 11y ago
  And what do you do with the $5000 of gift cards?
  - robzyb 11y ago
    They were visa gift cards. He could use them like a regular credit card.
  - saryant 11y ago
    There are various methods that you can use to unload the cards back to either your checking account or directly to the credit card you used to buy them. Buy gift card with credit card -> Unload gift card back to credit card. Repeat. Send the same $5000 around in a circle (less fees). I'm simplifying of course. Bluebird, a prepaid debit card from Amex and Walmart, has been one of the big methods for some time but I'm not sure if that one is still viable.
  - BorisMelnik 11y ago
    many times what you will end up with is $XXXX in non-transferable gift cards or you will have to sit on them. in those cases you just use them to pay your bills or use them as your spending cash etc.

saryant 11y ago

The payoff comes from doing it to hit signup bonuses. If you needed to spend $5000 on a card, you could buy Visa gift cards and spend $59.50, but get 105,000 miles from the bonus. Essentially a round-trip business class ticket from the US to Asia.

dublidu 11y ago
And what do you do with the $5000 of gift cards?
- robzyb 11y ago
  They were visa gift cards. He could use them like a regular credit card.
- saryant 11y ago
  There are various methods that you can use to unload the cards back to either your checking account or directly to the credit card you used to buy them. Buy gift card with credit card -> Unload gift card back to credit card. Repeat. Send the same $5000 around in a circle (less fees). I'm simplifying of course. Bluebird, a prepaid debit card from Amex and Walmart, has been one of the big methods for some time but I'm not sure if that one is still viable.
- BorisMelnik 11y ago
  many times what you will end up with is $XXXX in non-transferable gift cards or you will have to sit on them. in those cases you just use them to pay your bills or use them as your spending cash etc.