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Maximize Monday: Introduction to Green Dot MoneyPaks and Reloadable Prepaid Cards

by on May 13, 2013 · 80 comments

in Maximize Monday, Prepaid/ Reloads, TPG Contributors

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For those of you who got in on the one-day Amex Business Gold Rewards 75K sign-up bonus offer and are now wondering how to meet the $5,000 minimum spend requirement in 3 months – and for the rest of us hoping to continue cashing in on prepaid and reloadable cards in order to keep racking up the points on transactions like mortgage payments and rent – TPG contributor Jason Steele presents some ideas on using Green Dot MoneyPaks.

Green Dot MoneyPaks are reload cards that you can use to earn points/miles on all kinds of transactions.

Green Dot MoneyPaks are reload cards that you can use to earn points/miles on all kinds of transactions.

Back in December, I took a comprehensive look at reloadable prepaid cards in a four-part series including the following posts:

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

Maximizing Reload Cards for Points and Miles: Vanilla vs. Green Dot vs. PayPal vs. Reloadit

Maximizing Prepaid and Reloadable Cards for Points and Miles: Reloadable Strengths and Weaknesses

Maximizing Prepaid / Reloadable and Reload Cards For Points And Miles – Choosing Which Credit Card To Use

In this week’s series, I’ll be focusing on one particular kind of reload card, Green Dot MoneyPaks, and how you can use them to maximize the points and miles you earn on everyday transactions as well as tools to meet minimum spending requirements on new credit cards.

I have done a lot of research on how to earn the most points and miles with the least effort, which is a goal that I am sure we all share! What I have concluded is that, at least in my area, Green Dots are superior, but only when purchased with the best credit cards, and loaded onto the optimal prepaid card. So over the course of this week, we’ll look at different options for making the most of Green Dot and the credit cards you use to purchase them.

A Primer on Prepaid Debit/Reloadable Cards

Prepaid debit cards were designed for the sizable number of Americans without a bank account, and these products are exploding in popularity. These prepaid debit cards 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.

The Amex Serve is an example of a popular prepaid card.

The Amex Serve is an example of a popular prepaid card.

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 opening up the opportunity to earn points/miles on transactions you could not previously earn points on. So apart from being great tools for consumers who might not be able to use traditional checking accounts, prepaid debit cards are great for travel rewards enthusiasts since these products offer an irresistible opportunity generate credit card activity to earn points and miles, also known as ‘manufactured spending’.

Not only that, but if you apply for several credit cards at once, or just one with a high minimum spending requirement in order to earn a big points sign-up bonus, then using these cards can be a good strategy to meet that minimum spending in a hurry without having to make tons of random purchases so that you still have the funds you put on the card to spend over several months that might be longer than the minimum spending requirement period.

This is how you can "manufacture spend" to turn cash into points.

This is how you can “manufacture spend” to turn cash into points.

What You Need To Get Started

There are three products one needs to acquire in order to participate in this activity. First, you need to order a reloadable prepaid debit card. There are hundreds offered, and they are often available for free or at a nominal, one-time cost. Others have a monthly fee, but I avoid those products (and I’ll walk you through which ones are best in a later post). Some of the most popular out there include the Bluebird and Serve cards from American Express, both of which you can obtain for free online (although you can only have one of these two particular cards from Amex at a time). Once you register for a card, it is mailed to you, then you just have to call in and activate it like you would with a credit or debit card, and then you can start adding funds and using it.

Next, you need to purchase a compatible reload pack with your credit card. 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 once you buy them by putting money on them, their value is transferred to other financial instruments such as reloadable debit cards or prepaid cards. 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 usually around $3.95 – $4.95 is charged at the point of sale.

There are four primary reload networks that I am aware of: Vanilla, Green Dot, Reloadit, and PayPal. Customers purchase these reload packs from participating retailers, and go to the web site for the reload network in order to apply the purchased funds to the compatible prepaid card of their choice. Note that the reload pack is not a credit card and cannot be used directly to purchase anything. The reload pack can only be used to add funds to a compatible prepaid card. These reload packs are completely separate products from prepaid cards.

And of course, you need to have a credit card to pay for the reload packs, preferably one that offers the greatest possible rewards for your purchase.

Generate Points and Miles With Prepaid/Reloadable Cards and Reload Packs

Once you have the three products necessary here is the process of loading the value from the reload card onto the prepaid card and then using it to pay your bills.

Reload packs come on racks like this at thousands of retailers nationwide.

Reload packs come on racks like this at thousands of retailers nationwide.

Step 1:  Purchase the reload pack from a retailer that accepts credit cards for these purchases. Frankly, this is the hardest part as many retailers will only accept cash. For example, both TPG and I have been able to purchase Green Dot reloads, which they call MoneyPaks, using our credit cards at Rite Aid drug stores, while other folks have reported not being allowed to use credit cards for these purchases. Likewise, Vanilla Reloads are available at many CVS stores for purchase with credit cards, though a lot of people report that their local CVS is either out of them much of the time, or requires them to pay with cash or a debit card – thus making it nearly impossible to earn points on these transactions. However, once you locate a retailer that will let you purchase reload packs using a points-earning card…

Enter your account info and the reload pack number to add funds.

Enter your account info and the reload pack number to add funds.

Step 2: Go to the web site for the reload network. For example, www.moneypak.com is where you apply Green Dot Money Paks to compatible prepaid cards. At this site, you will enter your prepaid card number, the zip code the card is registered to, and the MoneyPak number that is revealed when the protective coating is scratched off of the back of the cardboard reload card. Vanilla Reloads makes it even easier, just enter the number of your prepaid card and the number on your reload pack and the funds are loaded into your almost instantly.

Funding loads usually go through instantly meaning you can spend the money immediately.

Funding loads usually go through instantly meaning you can spend the money immediately.

Step 3: Remove funds from your prepaid card. This is the step that makes all this worth it – being able to use the funds on your prepaid card to pay bills you might not otherwise earn points on, such as car and rent payments, mortgages and utilities.

The easiest way to remove funds is buy using bill pay services that are already included in many prepaid cards. Using this function, you can pay any person or business. You can use this to pay utilities, rent, mortgage payments, or even the credit card account you used to purchase the reload card. With some prepaid cards, you can go to an ATM and withdrawal cash, although there are usually fees associated with these transactions. And finally, you could use your prepaid card to make purchases, but that would offer little benefit over using your credit card unless you were able to buy the reload pack at a merchant offering a category spending bonus, such as a drugstore, supermarket or gas station and then use the card to make purchases you’d only earn 1X points per $1 on anyway.

Many prepaid cards offer bill pay services and even issue checks so you can pay off your bills including rent and utilities.

Many prepaid cards offer bill pay services and even issue checks so you can pay off your bills including rent and utilities.

So those are the basics of using prepaid debit cards and reload packs to your advantage to rack up miles and points and as a useful took for meeting minimum spend in a hurry without actually having to spend a lot of money on random purchases.

I’ll get into specific prepaid and reload products and strategies in additional posts throughout this week starting tomorrow, I’ll explore the differences between the Green Dot and the Vanilla reload networks.

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/michael.carey.3701 Michael Carey

    Can you pay a friend $1000 a few times and have him give you cash in an effort to meet the minimum spend?

  • Flyer

    Sigh. All you’re missing is the arrows and circles.

  • zila

    yes, you can… or you can just write a check to yourself…. it is easy especially with the “Bluebird” system by Amex…I have done myself

  • wcblack34

    I’ve been told that Green Dot won’t work with Bluebird. Is that not true?

  • Points Surfer

    “Many prepaid cards offer bill pay services and even issue checks so you can pay off your bills including rent and utilities.”

    I don’t know of any (other than Bluebird) that have check-issuing bill pay capabilities that can be used to pay rent. Care to enlighten here? Thank you!

  • http://www.facebook.com/bill.barlow.104 Bill Barlow

    I have 2 AMEX cards and applied for a Bluebird card and was rejected! The only thing I can figure out is that at the time I applied for Bluebird, one of my AMEX cards had a fairly high balance. Since then I keep getting rejected. Does anyone have any idea how I can get around this? (I’ve read on other posts horror stories of people being shut down when they call about Bluebird problems….) Thanks

  • MrWho

    Use Serve or AMEX PrePaid for the MoneyPak unless you want to mess with PP (MoneyPak -> PayPal -> BlueBird).

  • http://twitter.com/harlanvaughn Harlan Vaughn

    I’m always nervous about buying Vanilla Reloads, then using Bluebird to pay back the charges for the VRs. It seems wrong somehow. I try to stick to bills that won’t take credit cards, like rent and my student loan payment.

  • MrWho

    BB doesn’t do credit check…Do you have a Serve account? If so, cancel it, then you are ready to go.

  • MrWho

    I heard BuyRight PrePaid MC…PayPal PrePaid MC…etc.

  • INeedaDr

    can amex prepaid -> bluebird?

  • MrWho

    Oh, yes, if you use PP, don’t do self-depositing and/or self-withdrawal. You get shutdown. Just a friendly warning.

  • Jason Steele

    GD does not go to Bluebird, but it does go to Serve.

  • wcblack34

    What do you mean by “self-depositing or self-withdrawal”?

  • Jason Steele

    You can pay any person or business with nearly any bill pay system. So while you can pay your friend, mortgage, etc, you can also just pay the bank that issued the card that you used to make the purchase. I find that is the simplest way to go.

  • Jason Steele

    I agree, it does have an odd feeling to it, but as I’ll show later in this series, the bill pay function is performed by a third party, and the bank isn’t aware of the nature of your purchase. But by all means, only do what you feel comfortable doing.

  • Jason Steele

    This is correct, I meant to include the detail that you can’t have both Bluebird and Serve.

  • Daniel

    If you only have GD in your area and no VR, would it be wise to switch from BB to Serve? can you have Blue Bird and Serve at the same time? Is Serve able to pay by check the same way BB does?

  • Jason Steele

    I am part of the “steer clear of PayPal” crowd as well, but there are some great alternatives that I will discuss this week.

  • Jason Steele

    Serve allows you to link your bank account for transfers in both directions. And when a bill pay system allows you to pay any person or business, that includes yourself.

  • Jason Steele

    Yes, Serve is better than BB if you have no VR access. Serve does not have pill pay, but it does have another way to remove funds. I’ll get to that in the series.

  • Degania

    Green Dots were written about in the Baltimore Sun today! Unfortunately, they were in connection to a federal investigation regarding prison corruption in Maryland. Apparently, prisoners used Green Dots as the preferred form of currency to bribe prison guards into allowing contraband into the prison. Not the best press for this useful manufactured spend tool.

  • Frugal Guy

    You can’t have both Serve and Blue Bird at the same time. It was the case at least early this year. I had to cancel Serve and wait for a couple of days before sign up BB.

  • Jason Steele

    All the prepaid cards have been used for illicit purposes. If I had any doubts about the legality of this, I wouldn’t go near it. I often get asked for ID when purchasing these, and I gladly provide it.

  • Points Surfer

    Awesome! Thank you. I do see the billpay feature publicized for BuyRight, but not for the PayPal one… Perhaps it is something they want to keep on the DL?…

  • Ben

    They are changing serve to include Bill Pay.

    New terms: (taking effect on May 21)
    ATM Transactions – A $2 fee will apply to each ATM withdrawal. This fee will be waived if you are enrolled in direct deposit and you use our MoneyPass® network of more than 22,000 ATMs.
    Pay Bills – A new bill payment function that you can use to make one-time payments from your Serve Account to companies or individuals that you select.

  • Jason Steele

    BuyRight has a $7.95 monthly fee. The ideal cards have no monthly fees. Stay tuned!

  • Jason Steele

    This is correct, I meant to include the detail that you can’t have both Bluebird and Serve.

  • Jason Steele

    there is a better way to cash out Serve than using bill pay. Stay tuned!

  • http://twitter.com/doa61006 Deal Hunter

    Stay away from PayPal! Not only you have to pay an extra layer of fees, PP has been known to hold or even take away people’s money with questionable legitimacy. They treat themselves as the king of the kingdom. A lot of horrible stories are published at paypalsucks.com.

  • Brmass

    TPG, from my understanding this wont could towards the min spend for the recent AMEX 75k offer. In the TC’s it states:

    “Eligible purchases are purchases of goods and services minus returns and other credits, and do not include fees or interest charges, cash advances, purchases of traveler’s checks, purchase or reloading of reloadable pre-paid cards, or purchases of other cash equivalents”

    So any type of prepaid spending will not count towards min spend, is that correct?

  • Jason Steele

    Technically, this is true. But what I and others have found is that the credit card companies have no record of what you purchased, so there is no way to enforce this provision in regards to reloadable prepaid cards.

  • http://twitter.com/doa61006 Deal Hunter

    I did not use Amex Business Gold to purchase Vanilla Reloads in satisfying min spending requirements. But I did use HH Surpass and SPG this way in 2013 and received sign-up bonus without problem. I assume their T&C should be the same.

  • zila

    well…I think I read in this website, awhile ago, that that may raise a red flag.

  • Julie

    Hello everyone, I bought a VR tried to load it to the Blue bird card and it stated “card not found” not sure what I could of done wrong. I followed what was on other web sites. please help!

  • Jason Steele

    Have you tried contacted the Vanilla reload company (Incomm)?

  • Jason Steele

    That might have been in regards to PayPal, which is notorious for shutting down accounts. This is a separate program.

  • hc

    Can any of these Prepaid debit cards work well in Europe?? re: do they have a chip, and are there foreign transaction fees?

  • Bill Barlow

    Jason and MrWho…
    Thanks but I do NOT have Serve… Any other ideas….?

  • http://twitter.com/RotterWrites Kimberly Rotter

    This intrigued me, so I googled around. Everyone on other sites is saying that the Vanilla Reload is scarce, and is now virtually impossible to buy with a credit card. Anywhere. And that the card issuer might flag you for suspicious behavior if you engage in a pattern of buying reload cards. So the Rewards Card > Vanilla Reload > Bluebird > Rewards card strategy seems to be quickly losing its viability. Is the Serve strategy a little fresher or will we encounter the same problems?

  • Julie

    I have not tried contacting Incomm. I was not sure if it was
    The blue bird card with the problem or the VR. I was first concerned i got the wrong type of Vanilla card but it is reloadable one. I have 500 on this one. I should of known better for my first try to start with 100 or less. Now if I use it at some places that use a pin there is a transaction fee.
    As some say live & learn!
    Thanks for any info.

  • Julie

    I think I figured it out. I have the My Vanilla reloadable card not the Vanilla reload card. It is so confusing when there are so many cards out there. So many in’s & out’s to all of this takes up a lot time. Thanks though.

  • zila

    I made the same mistake once,,, but you learn fast

  • MrWho

    Serve doesn’t have Bill Pay at the moment. At the end of this month, they will. And, it depends upon how hard you churn.

  • MrWho

    Send money to BB from Serve?

  • Jason Steele

    @Kimberly: I don’t think banks know what item you purchased.
    @MrWho, you don’t need bill pay to cash out Serve.

  • Jason Steele

    These are poor means to spend in Europe. Some don’t even work overseas, and many have foreign transaction fees.

  • Jason Steele

    Glad you figured it out. Stay tuned, and hopefully this will clear up as we post more info throughout the week.

  • MrWho

    All I can think is information you gave them and what they have about you does not match…unfortunately, I think you need to contact Bluebird to solve it. They were not that bad for me (I called an issue with legit BillPay issue)…”Shutdown” meaning they were manufacturing the spend and got caught sounds like.

  • MrWho

    Yes, send to checking account or send to BB. If you have other ways other than using the Serve for real spend, you have found a good trick.

  • MrWho

    No, as far as I know.

  • Bill Barlow

    Thanks, I’ll bite the bullet, call, and maybe get things cleared up without a problem!

  • MrWho

    Say you use PayPal Reload (or MoneyPak) to fund PayPal account. And then withdraw the money you funded using the PayPal Reload (or MoneyPak) to checking account linked on the PayPal.

  • Points Surfer

    Ouch! That is tough. Bluebird FTW – although low VR supply can make it problematic as noted above… Still the best regardless

  • Dee

    I’m looking forward to learning even more. I’ve been using Vanilla Reload cards and Bluebird for several months and love it. I use my Capital One card that pays me 2 pts/$ . I figure for every $1000 in Vanilla cards, that’s 2000 pts = $20 to reimburse myself for travel. I pay $8 in VRC fees for $20. That’s $12 for free. Maxing out both Hubby’s and my accounts every month can be tricky to find enough Vanilla cards. But CVS is great about it. The stores I’ve been to let you buy $1000 worth per day per person. The clerks all know the policy and have been very friendly.

  • Neel

    Julie,
    If what you have got is a debit card,it is still possible to load into BB at Walmart for free.

  • MrWho

    You are maxing out only on VRs…so you must be spending $5000 @ CVS monthly. Wow! Thank goodness CapOne isn’t AMEX…you are asking for a FR with AMEX. You can mix with VISA/MC Debit Gift Card if you have a WalMart near you, so that you don’t have to spend $5k @ CVS, you know.

  • Mike U

    Same thing happened to me. The CSR said I was rejected because AMEX had my address down as “RD” but I typed “Road” and “APT 518″ but I typed “#518″ in the application. CSR said information has to match exactly or you will be rejected.

  • Julie

    Thanks for the info.

  • Bundy

    How would we unload the greendot cards to pay mortgage, rent, etc? There is no BillPay feature.

  • MrWho

    Find the right PrePaid that can be loaded with MoneyPak and have a BillPay feature. If not, you have to transfer fund from one PrePaid to another. I’m sure TPG will give you tricks later in the series.

  • johnny

    @Flyer – Sigh. All you’re missing is the fact that we don’t care what you think about arrows and circles. Get over it.

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  • michaelspain

    I did the same thing my first time. If you call the number on the back of the Vanilla Reloadable, you can get them to assign you a PIN…though this took more than a few calls and some diligence on my part. Once you get a PIN assigned, take it to your bank and get a Cash Advance for the full amount on the card. Then turn around and deposit that cash back into your bank account. Hang in there with Vanilla Customer Service. They’re ATROCIOUS.

  • hc

    Thanks Jason. I live in and travel mostly in europe, (but I’m American), but I’m always looking for more ways to build up points if I can. It’s quite difficult to do that here. So if you have any advice in future articles it would be greatly appreciated.

    Thanks

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  • Jason Steele

    Green Dot Money Paks do not work with Bluebird. However, they work with many, many other cards.

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  • LlamaOfDoom

    If you’re still paying attention-

    Neither the AmEx prepaid nor the Bluebird charge foreign transaction fees, though without a chip their usefulness may be limited. I find it a good way to dodge the 3% foreign transaction fee on some of my cards.

  • http://twitter.com/harlanvaughn Harlan Vaughn

    I just saw that today, thank you! I dunno, I’m always a little leery of Amex in general. I did load up from a VR and immediately withdraw most of it as cash from an ATM today… the whole time I felt like Amex was gonna get me lol

  • EatMoreChcken

    Just got my AccountNow card. There’s no option to order checks to pay bills, unlike Blue Bird, correct?

  • JW

    Jason, which RiteAid in NYC has this worked at? Tried at the one on the UWS 72nd and broadway and was told Cash/Debit only.

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  • Mr. Cool

    party pooper

  • Mr. Cool

    yeah amex shut down 2 of my accounts. but ill be back!

  • Shawn Amkr Dickinson

    Is there ANY way to load our personalized greendot visa card with your debit/credit card from your bank – the whole reason I got this card was so I woudldn’t HAVE to go to the store and get the retarded reload paks or wait 3 days for my bank to transfer the funds. Why can’t they just make it SIMPLE AND INSTANT? I dont wanna have my whole check on there either so the direct deposit thing is retarded. My bank card doesnt work at the south african retailer I use online, after many blocks (although my bank denies this, as does visa the BASTARDS) they told me to get a personalized greendot card and load it up – and it always goes through but now I have to go to freakin walmart to load any money onto it – seems like a big waste of time. Thats not convient thats a pain in the ASS! It would be convient if I could for a fee just load it from my VISA debit bank card to my VISA greendot personalized card – I SEE NO REASON why this isn’t an option on ANY of the cards (serve doesn’t count as it won’t work at my SA retailer). I’m rather pissed atm because of this. I dont like stores, I dont like bank transfers. I bought this so I wouldn’t have to jump through hoops to buy something online but it seems Ill have to anyway goddamnit. >:O

  • Provoking

    Where can you purchase Green Dots with Credit Card? I tried CVS and when I went to pay with the CC, the computer came back saying restricted tender…

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