Updated Strategies For Earning Points and Miles With Prepaid and Reloadable Cards

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A lot has changed in the world of checking/debit alternatives like Bluebird, as well as prepaid/reloadable cards in the past year, so I asked TPG Contributor Jason Steele to write up some updated strategies on turning these products into points-earning powerhouses.

Screen Shot 2014-03-09 at 3.55.52 PM Among travel rewards enthusiasts, prepaid cards and checking/debit alternatives have long been used to maximize the points and miles earned from their credit cards. Prepaid debit cards come in two kinds. One kind is the disposable, non-reloadable prepaid cards that are often sold as “gift cards” and are part of the Visa, MasterCard, or American Express payment networks.

The second kind are the products that are meant for continuous use and are compatible with products like Vanilla Reloads and Green Dot Money Paks.

Using reloadable prepaid cards to maximize credit card rewards

There are hundreds of reloadable prepaid cards available, but most are not ideal for earning points and miles. Since these products are typically marketed to the so-called “unbanked” population, they often contain a bill payment service which is especially useful for those of us who collect points and miles. If you can find a store that allows you to purchase reload packs with your credit card, you can then use the bill pay feature to pay your rent, mortgage, or even the credit card bill itself. The three major reload networks are Vanilla Reloads, Green Dot Money Paks, and the REloadit network.

The largest downside of these products is that some of these card issuers will shut down the accounts of those who use this feature too aggressively. If this happens, you will not lose any money, but you will be unable to reload the card.

Is Bluebird under increased scrutiny?
Bluebird is one of the most popular checking/debit alternative products.

The most popular cards with bill payment features include:

1. Bluebird. This is a checking/debit alternative offered by American Express. It accepts Vanilla Reloads, which can often be purchased from CVS stores with a credit card. Once loaded, cardholders can pay any bill online or transfer money to a linked bank account.

2. Serve. Like Bluebird, this card accepts Vanilla Reloads, but it also accepts up to $200 in loads per day from any debit card, up to $1,000 a month. Serve also features online bill payment.

3. AccountNow. The Silver AccountNow Classic card can be reloaded from Green Dot Money Paks or REloadit cards. This card has no monthly fees and a free bill pay service.

4. H&R Block Emerald Card. This card can be obtained in person from an H&R Block branch office, of which there are thousands. This card can be loaded with Green Dot Money Packs, and bill pay is $0.99 cents each.

5. Rush Card. This card offers a “Pay as you go” plan with no monthly fees. The card can be loaded with Green Dot Money Paks and offers free bill pay service.

Non-reloadable prepaid card basics

Non-reloadable prepaid cards, also known as gift cards, can be purchased at a surprising variety of stores including gas stations, super markets, drug stores, and some home improvement and department stores. There are two kinds of prepaid cards, fixed-value and variable load. A fixed-value card has its value printed on it, typically in $25, $50, $100, and $200 denominations. On the other hand, variable load cards can be purchased in any denomination the customer wants, typically between $20 and $500.

With nearly all prepaid card purchases, there is a one-time activation fee, typically $3.95 to $7.95. This fee is paid at the time of purchase, and credit card users earn rewards on both the value of the card and any fees paid.

A relatively new feature of these cards is the ability to create a PIN number. This feature is necessary for some uses since it allows the card to function as a debit card. Finally, most prepaid cards will offer the ability to register the card with a zip code, which is also necessary for some types of transactions.

It won't take long to max out the $1,500 cap on gas!
Maximize the points you earn on gift cards by knowing where you can get a category spending bonus on them – like gas stations.

Note: Some credit card companies, like Citi, will charge gift card purchases as cash advances. Other cards specifically exclude gift card purchases from bonus spending categories in their terms, though in practice that’s not always the case. You should always do a test order before purchasing large denominations or quantities to see how the purchase is reflected on your statement.

Where to buy prepaid cards to earn travel rewards

Here are the types of retailers that typically sell prepaid cards and the credit cards that offer the most travel rewards for purchases there:

Gas stations

  • IHG Rewards Club Select Visa offers double points.
  • Amex Premier Rewards Gold Card offers 2X Membership Rewards points at US gas stations.
  • Hilton HHonors card from American Express offers 5X HHonors points.
  • Hilton HHonors Surpass card from American Express offers 6X HHonors points.
  • Mercedes-Benz Credit Card from American Express offers 3X Membership Rewards points.
  • Amex EveryDay Preferred offers 2X Membership Rewards points plus a 50% bonus when cardholders make at least 30 transactions in a month
  • Citi Hilton HHonors Visa Signature Card earns 3x rewards.
  • Asiana Airlines American Express Card from Bank of America earns double miles.
  • The Business Gold Rewards Card from American Express offers double points at standalone gas stations.


  • IHG Rewards Club Select Visa offers double points.
  • Premier Rewards Gold Card offers double Membership Rewards points at US supermarkets.
  • Hilton HHonors card from American Express offers 5X HHonors points.
  • Hilton HHonors Surpass card from American Express offers 6x HHonors points.
  • Amex EveryDay offers 2X Membership Rewards points plus a 20% bonus when cardholders make at least 20 transactions in a month, but only on cardholder’s first $6,000 spent in a calendar year.
  • Amex EveryDay Preferred offers 3X Membership Rewards points up to $6,000 a calendar year plus a 50% bonus when cardholders make at least 30 transactions in a month.
  • Citi Hilton HHonors Visa Signature Card earns 3X points
  • Asiana Airlines American Express Card from Bank of America earns double miles.


  • Citi Hilton HHonors Visa Signature Card earns 3X points.
Liquidate your gift cards with payment services like Evolve.
Liquidate your gift cards with payment services like Evolve.

How to liquidate prepaid cards

If you are trying to manufacture spend, instead of just shift it, you will need a way to get cash out of your prepaid cards. Here are some of the most popular ways:

1. Amazon Payments.This service allows users to make personal payments to other Amazon Payments accounts using a credit card, and prepaid “gift cards” will also work. To use a prepaid card, you must first register it with your zip code. After receiving a payment, users can directly deposit their balance into a linked bank account. There is no charge for this service, but there is a monthly limit of $1,000 sent and received per account.

2. Evolve Money. This is a new bill pay service that allows you to use a debit card to pay a bill online. Available billers include utilities, insurance, telephone, mobile, cable, internet, auto loan,  and rent bills. Unfortunately, credit card issuers and mortgage servicers are generally not included.

3. Wal-Mart Money Orders. Wal-Mart will accept PIN based debit cards as payment for a money orders up to $1,000, which it charges a fee $0.70 each. Money orders can then be deposited at most banks, just like a check.

4. Wal-Mart Bill Payment. This option allows customers to use their PIN based debit cards to pay nearly any biller. The service uses a company called Fiserve (formerly known as Check Free), which is used by the electronic payment systems of most banks. Therefore, nearly any biller will be available including credit card issuers. The fee for this service is $1.00 per payment.

5. American Express Bluebird. This product is best known for its ability to accept Vanilla Reload packs, but it can also be loaded from a prepaid card. Loads can occur at the register, at a kiosk, or by staff at one of their Money Stores. There is a limit of $1,000 per day, and $5,000 per month in total loads from these sources. Money can then be transferred directly to a linked bank account, or used to pay bills to any person or business.

6. American Express Serve. This prepaid card is a lot like Bluebird. Serve lets you load up to $200 a day from a debit card, with a $1,000 limit each calendar month. Then, the money can be withdrawn for free at ATMs, or used to pay bills to any person or business. Just note that one person can’t have both a Bluebird and a Serve account at the same time.

7. American Express For Target. American Express offers a prepaid card at some Target stores, and each person is limited to two cards each. There is a $3 fee to load up to $1,000 on each card, with a limit of $2,500 per month, per card.  $1,000 can be loaded per card, per day. There is one free ATM withdrawal per month, and additional withdrawals of up to $400 are $3 each. The total costs averages out to $9 in fees per $1,000 if you load $2,000 a month per card. Nevertheless, it is time consuming to purchase the debit cards, visit Target, and then go to an ATM several times.

8. Paying taxes. This is more of a spend shifting than manufactured spending technique, but you can pay taxes with your debit cards and the rewards can be greater than the fees. The IRS posts a list of the companies authorized to accept federal tax payments on its behalf, along with the fees charged. The flat fee for debit cards is substantially less than the percentage fees charged for credit card payments, so it makes sense to purchase debit cards.

In my experience, many of the payment companies will have trouble accepting more than two debit card payments online or over the phone.  Nevertheless, Choice Pay representatives have gladly accepted multiple debit cards from me over the telephone, but their fee is slightly higher at $3.48 per card. You will also need to register your debit cards with a zip code first.

9. Cash back. Many retailers will offer cash back when customers pay with a debit card. There is typically no fee for this service, but it would be time consuming to liquidate a large volume of debit cards this way.

Costs for liquidating gift cards in both time and money:

Method Monthly Limit (per user account.) Cost per $1,000 of gift cards: 2 cards @ $4.95 fee each Cost in Time per $1,000 Work with Amex?
Amazon Payments $1,000 $0 ~10 min. Yes
Evolve Money none $0 ~1 No
Wal Mart Money Oder none $.070 <5 minutes No
Wal Mart Bill Pay none $1.00 <5 minutes No
Load Blue Bird $5,000 $0 <5 minutes No
Load Serve $1,000 $0 ~10 minutes No
American Express for Target 2 accts @ $2,500 each As low as $9 per $1,000 plus ATM fees if any. ~15 min. No
Pay Taxes none $6.96/$1,000 <5 minutes No
Cash back none none <5 minutes No

So as you can see, there are plenty of options and avenues available to the points collectors out there to maximize their spend using points-earning credit cards if they’re willing to put in the legwork for a couple extra steps. These are the ones I’ve had the most success with, but if you have any to add, please feel free to share in the comments below.
For more information on Bluebird, check out these posts: Bluebird From American Express – The Basics Maximizing American Express Bluebird FAQ’s Maximizing Prepaid / Reloadable and Reload Cards For Points And Miles – Choosing Which Credit Card To Use Maximizing Visa Prepaid Gift Cards Maximizing Prepaid and Reload Cards For Points and Miles

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