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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 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.
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:
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.
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.
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:
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.
However, 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. With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game.
With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game.