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Strategies For Maximizing Green Dot MoneyPaks

by on May 16, 2013 · 34 comments

in Prepaid/ Reloads, TPG Contributors

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All this week, TPG contributor Jason Steele will be covering Green Dot MoneyPaks and how you can maximize the points and miles you earn using them. In Part 1 of his series he introduced us to Green Dot and covered the basics of prepaid reloadable cards. In the second post, he compared Green Dot to Vanilla Reloads. In yesterday’s post, he took a look at the best Green Dot-compatible reloadable prepaid cards. Today he’ll discuss key strategies to maximizing Green Dot MoneyPaks including pitfalls to avoid, leveraging prepaid cards’ bill pay services and which credit cards to consider using to buy MoneyPaks.

Knowing the basics about how to manufacture spending with Green Dot Money Paks is essential, but you are bound to have a few issues along the way. Here are the main issues I have faced, and how I overcame them.

Sometimes it looks like your MoneyPak doesn't load properly - don't panic!

Sometimes it looks like your MoneyPak doesn’t load properly – don’t panic!

1. Activation failures. On occasion, Green Dots MoneyPaks will fail to activate. Worse, their website will indicate that the card has a $0 balance!  If this happens, don’t panic. Also, don’t bother calling the number of the back of the MoneyPak, as you will wait on hold for someone who has no authority to assist you. Instead, call Green Dot special services at 888-267-9413 to immediately speak with a supervisor. They somehow double check that the purchase was authorized, and your funds will be available within hours, 24 hours at the most. It took many calls to their regular number to finally get the direct line to special services, and I wish I had it the first time!

2. Bill payment technique. The bill pay system used by every one of the prepaid cards that offers it is from the same vendor used by Bluebird as well as the bank and a credit union I belong to. This company is called Fiserv (formely CheckFree) and it issues paper checks from a processing center in Hickory, NC to persons or businesses that do not accept electronic payments. I have held accounts with online banks since 1995, and all of them have used this company as their bill pay provider. And while some people like to utilize this service to pay their mortgage or other bills, it is possible that they are overthinking this issue. I usually just pay the credit card that I used to purchase the MoneyPak and this has not raised any red flags doing so.

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.

I’m sure a lot of readers will raise the alarm over that statement, but the fact of the matter is, these prepaid cards are offered by third parties and the bill pay company is another third party (or a fourth party, I guess). I don’t think that they have the time or interest to care who or what I am paying, any more than my bank does. Fiserv processes millions of payments a day, and absent any illegal activity, the issuer of the prepaid card doesn’t care who you pay. Besides, the prepaid card issuer has no way of knowing that you are paying the credit card account that you used to purchase the reload.

Likewise, the credit card issuer doesn’t know what I am buying. Citi has issues with over-the-top spending at bonus category merchants, but anecdotal evidence appears to suggest that the people who have had issues are those charging six figures a month!I spend less than $10,000 a month using this method and have had no issues.

Payments take three to four business days before being credited to my accounts.

You can also issue checks directly to your bank account of the account of another person. Just find your bank’s address for accepting deposits, and make a small test deposit first. It works for me just fine when I sent money to my own account.

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

Because of how Bill Pay works, you can even use your prepaid card to pay off your credit card balance.

3. Best credit cards to use. Your first priority should be to use card that offers the largest bonus points or miles at the store you purchase MoneyPaks. I get mine at Rite Aid drugstores, so I have been using my American Express Hilton HHonors card that offered 6x. But since the HHonors devaluation and American Express ended the 6x bonus at drugstores, I went with a Citi ThankYou Preferred that offered a 5x introductory offer. That particular offer is no longer available for that card, and the most aggressive spenders have seen their accounts closed by Citi according to anecdotal evidence , tens of thousands of dollars a month. I don’t come close to that, and I have not had any problems with my Citi card.

That leaves a few other options. If you can purchase Green Dot MoneyPaks from a supermarket (I have had mixed results, at best) such as Safeway or Kroger stores, then consider the Amex Premier Rewards Gold that offers double Membership Rewards points on these purchases. American Express Blue Cash Everyday offers 3% cash back at supermarkets, but only on up to $6,000 spent each year. Another option worth considering would be the US Bank FlexPerks Visa card. It offers double points on the category you spend the most at each month (from gas, grocery or airline purchases), and each point can be worth up to two cents each for airline tickets, so you are looking at as much as a 4% return on your spending.  In addition, the tickets you receive are in a revenue fare bucket, so you earn miles and credit towards elite status while being eligible for upgrades. That makes these rewards worth nearly 5x.

But Green Dot MoneyPaks can be worth purchasing even with a card that only earns 1 mile or point per dollar, such as the Starwood Preferred Guest Amex. Sure, your costs will be about one cent per point, or .8 cents per mile after the 5,000-mile transfer bonus on 20,000-point transfers, but that is well below what most people value these points at. It is just that it would take considerable time and effort to earn points in quantity, so this method is best used to top off accounts not to try to earn hundreds of thousands of points.

But the best use of Green Dot MoneyPaks is probably for meeting minimum spending requirements for sign up bonuses and spending thresholds for additional perks. For example, I received HHonors Gold status from my no-fee Hilton American Express after I reached $20,000 spending on in a year, and I am hoping for Starwood Gold when I reach $30,000 of spending on my American Express Starwood Preferred Guest card. My spending isn’t entirely at Rite Aid, but it sure helps.  Furthermore, many cardholders are reluctant to apply for business credit cards with large minimum spending requirements. But if they are able to use Green Dots Money Packs to more easily meet these requirements, that can help them churn. With Green Dots, it is only a matter of spending $50 and making few trips to Rite Aid.

Tomorrow, I will wrap it all up and look at the fees it costs, the time it takes, and how many points can be generated by purchasing Green Dot MoneyPaks with various travel credit cards.

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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{ 33 comments… read them below or add one }

Dee May 16, 2013 at 8:56 am

Thanks for this series. I just ordered an Account Now silver card with your referral code. I’ve been using Bluebird/Vanilla, but happy to have additional options.

Cgriffiths May 16, 2013 at 9:16 am

Pardon my ignorance, but can you use Green Dot MoneyPacks with the Bluebird card or do I have to get a different card to reload into? I just got the Bluebird, but I don’t have any Walmarts anywhere near where I live, so haven’t figured out how to use the Vanilla reloads with this card, and would like to give Green Dot MoneyPacks a try. Thanks!

Akira May 16, 2013 at 9:27 am

I’m not sure if this has been covered. Is there a way to specify which credit card account for the bill pay service. Assuming you have multiple credit cards with the bank. Thanks!

Winner88 May 16, 2013 at 9:52 am

Blue Cash Everyday (BCE) offers 3X on Groceries NOT 6X. Blue Cash Prefered (BCP) offer 6X

Richard Ingersoll May 16, 2013 at 9:56 am

great series Jason . thank you

Jason Steele May 16, 2013 at 10:07 am

You are right, we’ll make the change. Thanks for pointing that out.

Jason Steele May 16, 2013 at 10:09 am

You can have many different credit cards set up for bill pay at once, so that won’t be a problem. If you have multiple accounts with the same bank, just use different account numbers.

Jason Steele May 16, 2013 at 10:10 am

Green Dot Money Paks are NOT compatible with Bluebird. In yesterday’s post, I listed several of my favorite prepaid products that are.

Grant Thomas May 16, 2013 at 10:11 am

BCE card is great cuz you can offset the activation fees of the other cards. Spend $6,000, earn 6% cash back = $360 – $75 annual fee = $285 free money. IDK how much green dot charges for activation fees (never bought one yet), but $285 / $3.95 VRC = 72 cards, or $285 / $6.95 = 41 prepaid gift cards.

Grant Thomas May 16, 2013 at 10:12 am

Yes, you add the card issuer (chase, citi, amex, etc) then enter the account number which is the 15 or 16 digit credit card number or the card you want to pay. Ive done this hundreds of times vith BB and never had any problems.

Grant Thomas May 16, 2013 at 10:13 am

you can get an Amex prepaid reloadable card and use it as a cc, debit card, take cash out via atm. Check it out here: http://americanexpress.com/prepaid

Jason Steele May 16, 2013 at 10:16 am

Thank you, that’s a win-win for both of us!

Akira May 16, 2013 at 10:27 am

Thanks!

DBest May 16, 2013 at 11:08 am

Often overlooked is the 1.25x offered by the Chase BA card which tips the math into more favorable territory. Not to mention the Travel Together Ticket awarded after $30k in annual spend.

Jason Steele May 16, 2013 at 11:24 am

Good example of spending threshold that can be reached with this method.

Jason Steele May 16, 2013 at 11:24 am

Thanks Rick!

CDiddy May 16, 2013 at 11:54 am

Can you provide any hints as to where to buy the Green dot money packs with a CC in Denver?

Damn NYC May 16, 2013 at 11:56 am

Went to CVS, Duane Reade, Walgreens, 7-11…Green Dot not sold if purchasing with CC….WTF! throw me a bone!

Ben L May 16, 2013 at 12:00 pm

I believe the no fee Hilton Amex 6X drugstores is going away (down to 3X because it now falls in the “all other spending” category), but I believe the grocery store category is only changing to 5X. Since these GreenDots can be bought at grocery stores (but not VRs), this isn’t too bad of a redemption. Probably not a way to “buy” a night in a Hilton, but certainly a means of topping off an account (I’ll let your readers do their own math).

Jason Steele May 16, 2013 at 12:04 pm

Try Rite Aid, both Brian and I have had success there.

Jason Steele May 16, 2013 at 12:04 pm

I have no problem at Rite Aid here.

hambone47 May 16, 2013 at 2:37 pm

So CVS will let you buy VRs with a cc but not Green Dots? I wonder what the difference is for them?

Guestivus May 16, 2013 at 3:22 pm

Thanks for all the time and effort you put in to this. I just wish I could buy a reload! Tried four locations in NYC, a combination of Duane Reade (cash only), CVS (cash only) and two Rite Aid’s that didn’t carry the reload cards at all. If anyone in NYC knows a specific store that allows you to buy with a credit card please reply, I would very much appreciate it.

Adam Williams May 16, 2013 at 3:55 pm

There are a couple of 2% cashback cards such as the Barclay’s Priceline Visa and the Fidelity Amex. I wonder if after purchasing fees the MoneyPak’s can still be profitable in $500 increments. Don’t the MoneyPak’s have monthly fees though, and you are limited to having 3?

Jason Steele May 16, 2013 at 4:12 pm

Money Paks don’t have monthly fees. Certainly there are some ways to make this work for dollars, but our focus is on points and miles.

Matt May 16, 2013 at 7:33 pm

Can’t you reload a Bluebird at Walmart using a MoneyPak?

Matt May 16, 2013 at 7:34 pm

At the “Money Center” ATM, that is.

Jerry May 16, 2013 at 7:47 pm

I am not finding anyplace in the DFW area that will let me buy Green Dot Moneypaks with a CC, but I am able to find Vanilla Reloads that I can buy at CVS.

Tell me again , other than just another option, the advantage of Green Dot vs Vanilla reloads ………….

ben May 16, 2013 at 11:58 pm

same here. Hope someone can help out. Thanks.

ben May 16, 2013 at 11:58 pm

Which one in NYC? Have tried a few but without success. Thanks.

hambone47 May 31, 2013 at 5:03 pm

Have you had any success buying CVS or other store gift cards with CCs then later using those gift cards to buy Moneypacks?

quantbuff June 4, 2013 at 10:12 pm

Thanks Jason for a nice series. So basically we are “buying” points which we can redeem for travelling in Business Class ( to make the effort worth it ) Long Haul Flights!

Charlie Franklin April 28, 2014 at 3:02 pm

Can I load my green dot card using a gift card

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