Advertisement

The Time Commitment Of Manufacturing Spend on Prepaid and Reloadable Cards Using Green Dot MoneyPaks

by on May 17, 2013 · 39 comments

in Uncategorized

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 the third part, he took a look at the best Green Dot-compatible reloadable prepaid cards. Yesterday he discussed key strategies to maximizing Green Dot MoneyPaks including how to leverage prepaid cards’ bill pay services. Today he’ll take a look at the time and money involved in maximizing prepaid cards and Green Dot MoneyPaks.

In the first four parts of this series, I have done my best to make it clear how to use prepaid/reloadable cards and reload products to meet minimum credit card spending requirements for sign-up bonuses, hit spending threshold bonuses, and to generate points and miles. Today, I want to wrap things up by calculating the time and money this method takes, and the rewards that it can potentially generate.

Time Factor

Clearly, there is some effort involved in the three steps it takes to purchase reloads, load their value onto a prepaid, and dispense funds, so let me offer my experiences as a guide to making this process as efficient as possible:

One-Time Commitments

First, it takes a little time for this to get set up and running. I would start by ordering one of The Best Green Dot Compatible Reloadable Prepaid Cards. This will only take you few minutes each, and a new card should arrive within 1-2 weeks.

Then count on another 5-10 minutes of your time per card to activate the card and set up the electronic bill pay system to send funds to the persons or businesses of your choice. Yes, you can pay your rent, mortgage, electric bill, or even yourself. But I actually always pay my credit card bill as it is the simplest and quickest way to open up my credit limit so I can repeat the cycle. Note that Serve card from Amex does not have bill pay but does allow you to transfer funds to your bank account.

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

Once you find a store that will sell you reload packs using a credit card your time commitment drops dramatically.

Finally, you have to consider the time it takes through trial and error to locate stores that will sell you Green Dot Money Paks. TPG and I have found that these can be purchased at Rite Aid stores in Denver and New York City, and I have had some limited success at grocery stores here in Denver. Unfortunately, your success is going to vary based on the franchise, the individual location, and possibly even the cashier that happens to be working.  Fortunately, there is no harm in politely asking.

Think of this time as fixed costs; once you have these tasks completed, you don’t have to do them again.

Time Commitment Per Money Pak

So what are the marginal costs to generate points and miles, measured in time?

It takes about five minutes of my time to visit a drugstore and purchase a few reload packs.

Applying the reloads to the prepaid cards takes less than one minute each.

Logging on to my prepaid card account and paying a bill takes about 1-2 minutes.

Without counting any distance I might have to drive out of my way, I spend about 5-10 minutes to complete this entire process.

However, since each additional reload pack I purchase at the same time adds less than a minute to the process, I average less than five minutes of my time for each $500 reload I purchase, redeem, and cash out.

That equates to about $6,000 of credit card spending per hour of effort strictly by the numbers. And not that this always takes longer the first time, but you will get quicker each additional time. So essentially, you can meet the minimum spending requirements for one of the recent limited-time Amex Business Gold Rewards 75K sign-up bonus offers during your lunch hour!

The Cost In Dollars And Time

After you have your the prepaid card ordered and set up, and you’ve located a source of Green Dot MoneyPaks, what can you do:

The total cost for meeting the $5,000 minimum spending requirement for the Amex Business Gold Rewards is $49.50 in fees for 10 Green Dot MoneyPaks at $4.95 each, plus 30 minutes of your time at most (excluding any distance you have to drive out of your way).

To earn Hilton HHonors Gold status and receive free breakfast and Internet, you need to spend $20,000 on the no-fee HHonors American Express card. That would take $198 plus about an hour and a half of your time.

To earn the British Airways Visa’s Travel Together Ticket with the British Airways Visa or Starwood Gold status on a Starwood Preferred Guest card, you will need to spend $30,000 in a calendar year. Each 15,000 MQM Mileage Boost threshold of the Delta Reserve card also requires $30,000 of spending in a calendar year. Each will require $297 and about three hours of your time.

And remember, purchasing these Green Dot MoneyPaks to meet this spending requirement frees up your regular spending for another card.

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

Setting up your bill pay only takes a few minutes.

Manufactured Spend

Whether or not this technique will be worth it depends on your goals and how you value your time as well as the value of award redemptions you get beyond sign-up and spending threshold bonuses. Below are some of best credit cards you can use for manufacturing spend with Green Dot MoneyPaks and the rewards you can reap.

Credit Card Merchant Category Points/Miles per $ Cost Per Point/Mile Time Per 10,000 Points/Miles*
Amex Premier Rewards Gold Supermarket 2 .49 cents 50 Minutes
Citi ThankYou Preferred with 5x offer Drugstore 5 .196 cents 20 Minutes
Starwood American Express (or any other card with 1pt/mile per $) All 1

.99 cents 100 Minutes
U.S. Bank FlexPerks Any, so long as it is the one you spend the most in. 2 .49 cents 50 Minutes
Chase Sapphire Preferred Any 1.07 (includes 7% annual bonus) .944 94 Minutes
British Airways Visa Any 1.25 .8 80 Minutes
United Club Card Any 1.5 .66 66 Minutes

*based on 5 minutes per $500 MoneyPak, although you may do it faster.

So let’s take two quick examples:

If you have the British Airways Visa card, and want to take a roundtrip flight under 651 miles, such as from Atlanta to Chicago, or Miami to Grand Cayman, that would require 9,000 BA Avios for a non-stop flight on American Airlines. To earn those 9,000 Avios, you would need to purchase $7,200 of Green Dot Money Paks since the card earns 1.25 Avios per dollar. This would equate to $72 in fees and approximately one hour and 15 minutes of work.

Your award ticket to Grand Cayman would cost about 9,000 Avios + $85:

Screen shot 2013-05-16 at 6.36.39 PMPurchasing the same ticket would cost $455:

Screen shot 2013-05-16 at 6.37.05 PMSo by spending about an hour of your time and a total of $157, you’re saving about $300 – and that’s just on a short economy flight!

Or, let’s say you need an award night at the Sheraton Times Square, in New York City, which is 12,000 Starwood points. This would require purchasing $12,000 worth of Money Paks with the Starwood Preferred guest card. That works out to $120 of fees and less than 2 hours of work.

Screen shot 2013-05-16 at 6.42.12 PMHowever, as you can see in the screenshot above, where I tried to find a reservation for one night next week, a night at the hotel where you can use points is going for around $600 if you were to pay cash! So you’d be saving around $480. Per night. Now you see why putting a little time and effort into prepaids can pay off in a big way.

While Vanilla Reloads are a great product, they are no longer widely available for purchase with points-earning credit cards. Most CVS stores place limits on Vanilla Relaod purchases – meaning you have to put even more time and effort in to make your return worth it. For people like me without a CVS in my area, it isn’t really an option at all.

However, by considering the Green Dot MoneyPak, researching your prepaid card options, and calculating your cost per mile/point, it can be a great way to meet minimum spending requirements, spending threshold bonuses, to top up your accounts for specific award redemptions you have in mind.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author.s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.

Previous post:

Next post:

  • KPinNYC

    i’ve spent a lot of time in manhattan looking for a pharmacy that will accept cc payment for the money paks. every duane reade and CVS i’ve been to only accepts cash payment. i’m still looking. i think it’s fair to include the time required to track down a source!

  • Jason Steele

    Brian reported success at Rite Aid in Manhattan

  • namtuge

    Has anyone been able to buy GreenDot with cc in Chicago area? I pretty much gave up on that.

  • http://twitter.com/DavidRaeCFP David Rae

    Anyone have luck buying Green Dot in LA with credit card?

  • SummerDay

    Went to Rite Aid at Manhattan yesterday after work, no go — cash or debit only….

  • Ali

    Just was at a CVS in LA and tried to purchase a moneypak for $500 and swiped my CSP and the cashier said “oh it requires cash or debit for that. Sorry I forgot to mention it”. So it appears it is coded into the registers to not allow credit cards as a payment for the moneypak at this location.

  • MoneyPak

    Tried Duane Reade in Manhattan fidi. Cashier were willing (or unaware) to proceed the transaction. We went to the point of swiping the card. After swipe, she declared that I shall rather pay with cash. Must be hardcoded to their system. So no luck. I see temporary authorization for 4.95 on my cc account…

  • Johnny

    The moneypak at Wal-Mart has $$ range of $20 to $1000 with a $4.35 service fee. However, its a no go, cash and debit only.

  • Dee

    I’m in CT. CVS requires cash for Green Dot.

  • Frugal Guy

    Jason, while VR may not be available to everyone, everywhere, it looks like Greendot are even more so. I am in Boston. All CVSs requires cash. Look at the comments. It looks rare any success story other than yours.

  • guest

    You guys do realize there was just a $45M heist using pre-paid debit cards, right? The crackdown on this will be felt

  • Brian

    Is Visa Power Pay the same thing? I just bought one today at a gas station in Idaho. I was originally told only debit card.. but the manager said credit would work with ID. The fees looked like 3.95 to purchase, and 3 to use ATM, with at last 13 and change stranded for time being.

  • MoneyPak

    The same experience with duane reade, see my other comment.

  • SoRa

    Tried 2 CVS in the San Diego area, both had VR + MoneyPak and both accept CC for either. No problems here.

  • jason

    Another long article that misses the key point: These cards are not sold using credit cards. Waste of time.

  • Jason Steele

    Just bought some last night myself, and the previous commenter also reports success. So while not available everywhere, they can definitely be bought with credit cards. Sorry you did not get lucky.

  • Jason Steele

    I am not familiar with that product.

  • Jason Steele

    I did read about it. Prepaid cards, like cell phones and all sorts of other products have both legal and illegal uses. There is not much we can do about it.

  • Jason Steele

    Brian first reported success in NYC last year, so I tried it here in Denver. And it works, not just at one store but every store (Rite Aid) I have visited. Sorry others haven’t been so lucky.

  • Jason Steele

    Walmart is a definite no go.

  • SANbound

    Haven’t tried MoneyPak yet, but will give it a try. Lots of CVS in my area still take CC for VR’s, but I’m limited to the $5k cap on Bluebird. Might as well give MoneyPak a whirl.

  • MYRflyer

    Great series, but I’ll stick with vanilla reloads at cvs until more success stories are reported.

  • disqust101

    “To earn those 9,000 Avios, you would need to purchase $7,200 of Green Dot Money Paks since the card earns 1.25 Avios per dollar.”

    Grr. I hate this oft-repeated nonsense that is never stated correctly on these blogs

    Avios ONLY get 1.25x at EXACTLY 20K, 40K and 60K. Below $20K, you get 1x. Anywhere btw $20-40-$60K, you get less than 1.25x (as low as 1.125x)

    As such, you couldn’t just ring up $7,200 in GDs and then get 9K Avios. You’d need to ring up $9K in GDs to get 9K Avios. ONLY when you got to $20K, could you then get the additional 5K bonus.

  • disqust101

    VRs are $1 cheaper. With hundreds of loads, that saves a ton of $. But if you’re in areas without VRs, you just have to eat the added cost.

  • disqust101

    Don’t tell him he can buy them w/CCs if he doesn’t think he can. The less competition the better.

  • disqust101

    You “can” buy at RA if you can find cashiers who will do it. Many just repeat the mantra “can’t buy gift cards with credit cards” and they won’t even let you swipe. That’s why VRs at CVS are so much easier (not to mention cheaper)

  • disqust101

    Nice that you pointed out that it takes twice the time (and cost) to get an SPG point as to get an MR. SPG may be modestly more valuable (not for my purposes) but they can’t overcome the 2:1 advantage you can get earning MRs at 2x. Now if only we’d see bloggers stop pimping SPG we’d be making progress…

  • Jason Steele

    Actually, I was referring to the British Airways Visa, which earns 1.25 Avios points per dollar, not the Starwood card, which as you pointed out, requires transfers in 20k increments to realize 1.25 pts/$

  • Jason Steele

    I am not pretending that one reload card works for everyone, just that GDMP might work for some readers who can’t get VR, or who want to earn more miles by doing both.

  • Jason Steele

    That is the strength of GDMP, that you are not reliant on a single card.

  • Pingback: Google Alert – keeping chickens | Chicken Ark

  • Slim

    I have purchased green dot and added them to PayPal and then to bluebird… But when I purchase green dot, they were $0. Do they cost $4.95 now?

  • Grant

    That’s my thinking too. It sucks when you max out BB after only the first 1-2 weeks of the month… I need an alternative source to earn points.

  • Ali

    However, today in San Diego I was able to purchase a MP from Rite Aid and pay with a CC.

  • Geoff

    Just bought a VR with $500 at a local CVS using AMEX. Cashier didn’t bat an eyelid.

  • http://www.tukwilatalk.com Chuck Parrish

    Nope, bought 3 VR at CVS just off the Boston Common between May 4 and May 11.

  • Mike

    Hi Jason, Thanks so much for your series. I was inspired and set up the AccountNow account and then sought out CC-friendly establishments for MoneyPaks. To my surprise, I was successful at the first two RiteAids that I tried. However, it turned out to be beginner’s luck, as I quickly hit a cold streak. My one “go-to” cashier was recently advised of the “cash only” rule by her manager, so I think I may be done as a regular. But I have a no-fee AMEX BlueCash card that offers 5% cash back on groceries, gas, and drugstores (this card/benefit combo is not offered anymore). Given that potential, are there other means of manufactured spending that I could explore that would meet less resistance?

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

  • Jon Quan

    Problem with the whole thing…………………………..you have to pay cash to purchase you retards….

Print This Page