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Maximizing Prepaid and Reload Cards For Miles and Points – The Basics

by on December 17, 2012 · 55 comments

in Amex Bluebird, Prepaid/ Reloads, TPG Contributors, Vanilla Reloads

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Update: You can no longer purchase Vanilla Reload cards using a credit card and Vanilla Reloads are no longer available in Office Depot.

I’ve asked TPG contributor Jason Steele to take closer look at the various prepaid and reloadable card options out there that have allowed him to personally accrue thousands of points cheaply in a series that I’ll be running this week. I hope you’re not only learn the specifics of these products, but can decide which of these strategies might work best for you. Posts in this series include: Maximizing Reload Cards for Points and Miles: Vanilla vs. Green Dot vs. PayPal vs. REloaditMaximizing Prepaid and Reloadable Cards for Points and Miles: Reloadable Strengths and Weaknesses, and Maximizing Prepaid / Reloadable and Reload Cards For Points And Miles – Choosing Which Credit Card To Use.

In the post One Card To Rule Them All, Frequent Miler shared strategies on purchasing Vanilla Reloads at Office Depot for use with American Express prepaid cards. While Vanilla reload cards are no longer sold at Office Depot, they are still available elsewhere and this is still a viable (and potentially lucrative) way to earn points and miles from credit card use. Along these lines, TPG recently shared his experiences Are More Flavors Than Vanilla: Maximizing Miles and Points With Green Dot & Paypal.

Today I’ll be discussing the basics of both reload and prepaid cards before delving into the specifics of each in subsequent posts.

Vanilla Reload cards can be used to fund prepaid cards like the Amex Bluebird.

Vanilla Reload cards can be used to fund prepaid cards like the Amex Bluebird.

What are these products? Here are the basics on reload cards and the prepaid/reloadable cards you can use them to fund.

Reload cards or packs: These are physical cards, sometimes called packs, that are sold at retailers on the gift card rack. Reload cards cannot be used to make purchases directly, but their value is transferred to other financial instruments such as reloadable debit cards or prepaid cards such as the American Express Bluebird. The customer chooses the amount of value to be loaded, typically $20-$500 although some have limits as high as $1,000. In addition, a fee of $3.95 or $4.95 is charged at the point of sale.

There are other reload options besides Vanilla - here on sale at Walgreens.

There are other reload options besides Vanilla – here on sale at Walgreens.

Reloadable debit or prepaid cards: These are prepaid debit cards that are part of a payment network such as MasterCard, Visa, or American Express. Cardholders can add funds from to them from their bank account, through direct deposit, or from a compatible reload card or pack like Vanilla or Green Dot. These products are intended to be a substitute for traditional banking services or debit/credit cards.

What can you do with a prepaid, reloadable debit card?

All of these cards allow you to make purchases from retailers just as you would with a debit card. But in addition, most of these cards can be used at ATMs to withdraw funds, and many can be used for electronic bill payment to any person or business and even to issue checks like you would from a bank account so that you can pay for things like mortgages, car payments and utilities that you might otherwise not be able to with a credit card. Thus you are opening up the possibility of earning points on expenditures you could not have before.

How do you load a prepaid card with your credit card?

First, you need to purchase the reload card from a retailer using your credit card. Next, you visit the reload network’s web site. There, you enter in the card number from a compatible prepaid reloadable card along with the ID number from the back of the reload card. You must scratch off a concealing layer to reveal the ID number. The funds from the reload card are instantly available on the prepaid reloadable debit card.

When your reload has gone through successfully, the funds are usually available instantly.

When your reload has gone through successfully, the funds are usually available instantly.

How to earn points and miles with reload cards and prepaid reloadable debit cards

First, start by finding which stores near you sell one of the four major reload products, Green Dot, PayPal, Reloadit, and of course Vanilla. Next, figure out which ones will actually sell you these cards using a points-earning credit card. For instance, some merchants are now accepting only cash to pay for these reload cards, while others will take debit cards, and only some accept credit cards. In my experience, not only is each store different, but each individual cashier may follow different rules.

Next, obtain a compatible reloadable prepaid card that offers the best features and the fewest fees to make the purchases or issue the payments you will need, while avoiding products that close the accounts of users who cash them out too quickly.

Finally, determine what your cost per point is (factor in those point-of-sale charges) and whether or not this works for your needs. Also consider what your hassle factor is; how far you have to drive, how long you have to wait in line, and how much of a criminal you feel like when a cashier denies your use of a credit card (don’t take it personally!).

Stay tuned

Those are the basic things you should be keeping in mind. This is just the first piece of a series of posts designed to explore how utilize the current products available. In my next post, I will compare and contrast the four different reload cards for sale including a summary of each product and its strengths and weaknesses, drawing from personal experience where possible. Next, I will offer an overview of the various prepaid cards on the market. Finally, I will conclude with an analysis of the costs and drawbacks of earning miles and points with these products.

In the meantime, order an Amex Bluebird card because it takes about a week to get – it’s free and there’s no credit inquiry, so you might as well.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • http://www.facebook.com/karolian Matt Karolian

    Thoughts on using these cards to rack up Starwood points via an Amex Starwood card? Still worth doing when you pass the min. spending threshold? I walk past a CVS daily that sells VR cards.

  • Jmw2323

    just been buying $500 Amex and Visa gift cards at Office Depot

  • Simon

    AllVR cards at my local Walgreens have stickers on them saying “Cash Payment only”. My local CVS store don’t carry them at all… :(

  • MilesRunner

    Where can you buy Vanilla Reload cards with a credit card? Two Walgreens I checked only sell them for cash.

  • http://www.passthedressing.com/ Heather @ passthedressing

    Something I have always wanted to know is, what is the point of reloads? Not the points-earning point, but rather, why did banks or whomever creates these instruments create them. It seems like it’s just another step. Why not allow me to bypass the reload and put money on a prepaid automatically? Just a random musing for today. If anyone knows the answer, yay!

  • Eric

    As Jason says, it depends both on the merchant’s policy and the individual cashier – so it’s a trial and error process. I was just able to buy several at a CVS using a credit card.

  • The Points Guy

    Personally, I value Starpoints at over 2 cents apiece, so buying 500 for $3.95 is a great deal – that’s less than 1 cent apiece, and that’s a good value. Anyone will agree that SPG are worth more than that, and it’s a great way to hit minimum spend.

  • The Points Guy

    They were hoping people would buy these products with cash, and you can buy from a checking account, but for those without bank accounts, the merchants are charging people fees to buy them and making a little bit of money that way – sort of like a check-cashing service charges you to take your money out. It’s just a way to make money off people who don’t have basic bank accounts. And these products do cost something to print and process, so it’s not outrageous that they charge these fees or anything.

  • Jason Steele

    I have visited about 8 Walgreens in Denver. Only one will sell me the Vanilla reloads with a credit card. Even that store will only sell me one a day.

  • Jason Steele

    I am with The Points Guy on the value of Starpoints, but I have a real hard time with the hassle factor of visiting Walgreens 160 times to earn a Business class ticket to Europe. It would be better if they would let me buy them in quantity as they did at Office Depot. But, I will touch on that aspect in another post in the series.

  • Guest

    When you purchase anything with a credit card, the merchant has to pay a fee to their bank/CC company (usually somewhere in the 1%-3% range). so if the fee is 2% on $500.00, for example, the merchant has to pay $10.00. If they only charge $4.95 for the card (some of which goes to say Vanilla), then they are losing at least $5.05 on every card. I thought a savy merchant might figure out how to pass the cost on to me. I’d still gladly pay $14.95 for 2500 miles (0.6 cents/mile), but some research I did (albeit on wikipedia) revealed that rules prohibit merchants from… charging cardholders a fee for using a Visa card. In ten U.S. states, surcharges for the use of a credit card are forbidden by law (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas) but a discount for cash is permitted under specific rules. I believe this is why merchants are refusing to accept credit cards for reloads.

  • Jason Steele

    Merchant fees are certainly part of the equation, but I doubt it is necessarily that cut and dry. Another major factor is fraud. Apparently, these cards are likely purchased with stolen credit cards. I am usually asked for id when I am able to successfully purchase them with a credit card.

  • Sanguy

    @Jason, when you buy your VR at Walgreen’s at that store in Denver… does that mean you get 5x by using your Chase business card? 160 trips would earn more than a biz class ticket. I’m missing something…

  • TravelShooter

    If one is constantly seeking to reach bonus spend-triggers
    on newly approved NON-debit credit cards one-by-one, is
    there still obvious reason to play Vanilla Card Game…?

  • Dag

    Can any card that says “Vanilla” be used to reload a bluebird card, or are there specific Vanilla RELOAD cards? Never gotten involved because I haven’t been sure about this.

  • Foo

    “First, you need to purchase the reload card from a retailer using your credit card.”

    Tiger soup: First, catch a tiger.

  • The Points Guy

    It can still be done! It takes some trial and error, but certain stores and certain cashiers are still processing them.

  • The Points Guy

    It must say “reload” like in the picture above.

  • LAX

    Be honest, did you hire MMS as a contributor?

  • Toadhollow

    I’m in Southeast Pennsylvania…CVS carries the Vanilla Reload cards and you can buy them with any credit card…or gift card…..I visit Office Depot twice a month and buy Visa gift cards ($4.95/$500)..use my Ink Bold….two $500 cards each time…take those cards to CVS and buy VRs and pay the add’l fee of $3.95 with my AMEX Hilton (6x)…local Walgreens want cash (duh, money laundering with cash!)..don’t understand that one! Then download to Bluebird….

  • Brian Cogswell

    And I repeat, can anyone anywhere out there confirm that anywhere in California are any Vanilla Reload Cards? I have searched far and wide and have not found a single retailer selling them. My wife is going to kill me if I pull over and walk into one more drugstore…..

  • AceTracer

    Which is all fine and dandy if you both don’t mind having a wallet full of gift cards and can afford to pay off your credit card at the end of every month with these large gift card purchases.

  • Rmarkoff

    Absolutely. Where the racks at my local CVS stores were continually empty, they are all now full and I have been able to purchase two month’s worth of reloads , though only $1,000 at a time. I had almost given up. I have been to four stores and they all have them.

  • Jerry Mandel

    Walmart will sell prepaid debit cards only for cash. I would like to recycle funds by using Citi credit cards to meet spending requirements but Citi charges fees and interest on anything that smells like a cash advance. Any ideas?

  • DaveS

    It’s useful for a couple of things. One is for getting the 5x with the Ink card and then using the gift card for things that would otherwise only get you 1x. The other is for advancing spend in order to meet a deadline for a signup bonus. Such gift cards don’t give you access to any cash equivalents, so the usefulness is limited by that, but I too have had no luck finding a Vanilla Reload anywhere with a merchant that will take a credit card for it.

  • AceTracer

    I recently got an Ink card and I’m stuck trying to meet the minimum spend, so I know where you’re coming from. The problem is, like I said before, when it comes time to pay off your credit card bill. I could spend $5000 in gift cards over three months; I just can’t pay off my bill then. The reload options would allow me to put that money back into my bank account to pay off the card. As is, I’m stuck trying to find a way to get that bonus now.

  • AceTracer

    There are no CVS stores in Oregon :

  • Pingback: Maximizing Reload Cards for Points and Miles: Vanilla vs. Green Dot vs. PayPal vs. Reloadit | The Points Guy

  • dae

    One way is to use Amazon payments ($1000 free a month in transfers) then stock up on Amazon kindle gift cards at bestbuy which can be used for anything on Amazon. Walmart charges me for things like Toiletpaper I buy is about $21 + tax , I buy them on Amazon for $16 free shipping no tax. You could also buy Sears gift cards, turn them into Ebay cards at the store, and send money to a friend and have them reimburse you. In worst case scenario you can have a friend who owns a business have them process charges weekly and just cover the transaction costs.

  • Jmw2323

    keeping it to 2 cards at $500 each. Wife gets 1 of the 2

  • Jmw2323

    2 @$500 per month = 60,000 ultimate rewards points per year. earning another 30k plus through various other spend.

  • John K

    The banks that offer these preloads make money on “INTEREST FREE” money. The longer an active preload goes unused, the more they make. In some cases, a person may lose/forget their prepaids, which is also a big perk.

  • John K

    Only thing is, don’t get over zealous with using AMEX to load up. I’ve heard numerous report of AMEX Financial Review for those that did…which shouldn’t be a problem for most, but still a pain in the rear end nonetheless.

  • Brian Cogswell

    What city are you in? Don’t worry, I won’t drive to your town to steal your reloads :-) I’m not that into it, just wondering how close to my town you are…I am in Santa Barbara and there ain’t shit here….

  • Pingback: Maximizing Prepaid and Reloadable Cards for Points and Miles: Reloadable Strengths and Weaknesses | The Points Guy

  • Jpointer

    I’m in northern California. Over the last 2 weeks, retailers have simply stopped allowing credit cards to be used for reload card purchases. I have been to 27 CVS (many have VRs) stores, 15 Rite Aids, 21 Walgreens, some 7-11s, Office Maxs, Targets and some others I didn’t write down and don’t remember and NONE of them allowed me to buy a Reloadit, Green Dot, Vanilla Reload with a cc. The Safeways here have tons of Reloadit cards. All of them are imprinted “Cash only.” I’ve tried over 20 times to but them with a cc anyway. ONCE in a line where the manager knew me, he allowed it. In this part of the country, the train has left. Question: Is there anything other than a VR that can be loaded onto a BB?

  • Adam

    I’m curious, under Starwood Amex reward card the terms and conditions state purchases towards a prepaid card or other cash equivalent items are NOT eligible for counting towards the rewards. Do pack cards fall under cash equivalent or do Visa gift cards fall under this too? If so what other cards do not allow this and which ones do?

  • Pingback: Maximizing Prepaid / Reloadable and Reload Cards For Points And Miles – Choosing Which Credit Card To Use | The Points Guy

  • Debra

    Would u mind sharing which Walgreens that is? I am in Denver too and am having no luck. Thanks

  • Pingback: Santa Came… And Allowed Me to Buy Vanilla Reloads at Walgreens! | The Points Guy

  • Cheahuitee

    I have a SPG card too. Should i buy these cards and then withdraw the money?
    What would be the most effective way of collecting starpoints without having a ink bold card?

  • Jpointer

    Can someone answer? I have tried but maybe I’m screwing up. Other than a VR, what other reload cards (if any) can be loaded to BB? (I have an Account Now card-very similar to BB-that works well with Reloadit cards.

  • http://www.facebook.com/donniccolo Nicholas J Nicastro

    Hi PointsGuy!

    Great blog, thanks!

    Would you recommend a points strategy to someone who has > $20k/mo in fixed mortgage and insurance expenses (about a dozen payments) ?

    Thanks-

    Nick

  • Rick Spam Carranza

    I’m thinking of doing the same thing you do. Just curious, are you still having success in buying the Amex gift cards at OD, then buying the VR at CVS? Any problems you’ve faced at OD or CVS?

  • Pingback: Alaska Adds Emirates Award Redemptions: Top Ways To Boost Your Mileage Plan Account | The Points Guy

  • Dude

    Did you ever find out which store it was in Denver ? I have a points earning Debit card that I can use, only if they allow it as pinless txn.

  • Robert

    Will not sending money through Ebay require PayPal transaction?
    Anyway, money can also be send using PayPal account, however, there’s some 30$ in fee for a $1K payment.

  • Pingback: Video SRQ: Does Amex Count Buying Vanilla Reloads as an Eligible Purchase Towards a Spend Bonus | The Points Guy

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  • Guest

    Have a business card for south west—could i charge this card at my business on my terminal and cut the business check to my personal account?

  • Pingback: Reminder: Activate Chase Freedom Bonus Categories by Thursday – Gas Stations, Drugstores, Starbucks | The Points Guy

  • rtwin35days

    Brian,
    Are there any stores in SB area that sell the vanilla reloads and accept CC, before I waist my time driving around trying to find them. I live in SB and saw your remark and wonder what the status is.

  • Brian Cogswell

    NO, nothing here. I gave up long ago. Every once in awhile there are some vanilla reloads in Walgreens but the cashiers don’t even let me get to the register before they tell me no credit cards can be used. Thankfully TPG rarely posts about bluebird anymore since for 95% of us it is useless. The other guy I read Frequent Miler is annoying with how excited about that crap he gets…

  • Mark Freeman

    At 3.95 per $504 miles for most 1x cards, which cards is this the most lucrative to use against, outside of promotional benefits?

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