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Maximizing American Express Bluebird to Earn Miles and Points: FAQ

Nov. 01, 2012
11 min read
Maximizing American Express Bluebird to Earn Miles and Points: FAQ
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Update: You can no longer purchase Vanilla Reload cards using a credit card and Vanilla Reloads are no longer available in Office Depot.

Last week, I wrote about the new Bluebird card from American Express and Walmart. A lot of other bloggers have written about it and its a hot topic in the forums, so I apologize to anyone annoyed by the Bluebird coverage.
In short, it's a checking/debit alternative that you can load with reload cards (like the famous Vanilla cards) purchased with credit cards. So put simply, you earn points on the Vanilla card purchase- the max you can load per card is $500, so 500 points on most credit cards. The Vanilla cards cost $3.95, so you are "buying" miles for less than 8/10th of a cent each. It gets even better with the Ink Bold and Ink Plus at Office Depot, which earn 5 valuable Chase Ultimate Rewards points per dollar spent at office supply stores). So for the $3.95 cent Vanilla card you earn 2,500 Chase points. Once the funds are loaded into Bluebird at no cost, you can then pay any bill- including mortgages/ rent/etc at no fee. Normally paying rent with a credit card will cost 2%+, negating the value of the points earned. However, Bluebird allows you to earn 5 miles per dollar on everything, including mortgages and other expenses that are normally off limits to credit card spend. Truly game-changing.

I've gotten a ton of reader emails and comments about Bluebird, so here are the most common questions answered. Feel free to ask more and I'll do my best to find answers- especially once I finally get my card and begin really leveraging the service.

Q: Am I missing something here? Why not buy the Vanilla Reloads on the ink card, load up the Bluebird card, and then close the loop using the Bluebird card to pay off the ink card?

A: You can do that. However, American Express will shut down your account if it suspects you are laundering money (which is what that would look like). So I recommend a healthy mix of spend with Bluebird so you don't look like a drug dealer trying to turn "dirty" money into legitimate funds.

Q: Why pay bills? Just buy the cards reload them and then take out the cash at an ATM and keep doing it over and over again on the side on a monthly basis.

A: You could do that, but once again if American Express sees suspicious activity, they will likely close down your account.

Q: The Vanilla reloads have a restriction of $5,000 per month, is that not correct?

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A: Yes- You can load up to $1,000 per 24-hour period and up to $5,000 per month using Vanilla Reloads.

Q: I got this message when trying to sign up: "Thank you for choosing Bluebird. Sorry, but we cannot approve you for a Bluebird Account at this time because you have an existing Serve Account. If you have any questions, please contact us by calling Customer Service at 1-877-486-5990."

A: Yes, If you have an Amex Serve card you will have to cancel it in order to get a Bluebird. In my opinion, Bluebird is a much better product.

Q: The Bluebird card itself doesn't offer a point structure on spend does it?

A: No. That would be too good to be true! Still, being able to earn 5 Chase points per dollar spent on everything is incredible.

Q: Do you know if the Direct Deposit must be set-up through an employer or can you set up an automatic deposit from a checking/savings account?

A: Per the Bluebird Member Agreement FAQ it states that the only direct deposits that can be sent to Bluebird are from employer payrolls. Other deposits like, government payments like Social Security (even wages), cannot be direct deposited to Bluebird. You can fund Bluebird with transfers from your checking or savings account, but it won't qualify as "direct deposit", which waives the $2 ATM fee.

Q: Will Chase treat the purchase of a Vanilla Reload card as a cash advance, or is it treated like any other Office Depot purchase?

A: It will be treated as a normal purchase, with no sales tax.

Q: I am new to this and not sure how the Vanilla Reloads works, but can I load $5000 (since it cost $3.95 per load) using Ink Bold or Ink Plus and load to Bluebird Card $1000 every 24 hours?

A: The max you can load per Vanilla Reload card is $500 and there is a $3.95 fee per card. $5,000 worth of cards would cost $39.50, but not bad for 25,000 Chase Ultimate Rewards points, which conservatively valued at 1.25 cents a piece are worth $312.50!

Q: Can you clarify- will the Bluebird be easier to use for rental cars, etc. than an actual prepaid debit card? For example, I used a prepaid debit card a couple of weeks ago. Up front, they pended around $170 and when I returned the car, they pulled the pend and only charged the actual $60 that the car was. Would there still be a large pend of money up front with the Bluebird card?

A: While the Bluebird is a checking/debit alternative it is similar to a prepaid card, so the similar situation would happen. Note, some car rental agencies will charge larger deposits for using a debit/prepaid card.

Q: Can you reload with Amex Gift Cards?

A: No.

Q: In doing deeper research, can you explore the possibility of using the Bluebird card to make student loan payments? That is by far my biggest expenditure each month and it would be great to earn miles on the payments without the exorbitant fees charged by ChargeSmart.

A: Student loans can be paid via the free bill pay feature. If the payee is not listed, you can create any customize payee... you can do bill pay to anyone.

Q: So if I'm reading this correctly, it would work like this: An example of $2K /mo spend on mortgage, you can use your ink bold or ink plus to purchase vanilla reloads and get 5x points or 10,000 points per month just by using the ink to load the bluebird and then paying your normal bills from the bluebird with a check.

Isn't it quite possible that this may lead to getting kicked out of the points program if it appears your taking advantage? If not, I'd easily be able to rack up 10-15k points per month using this method, which would definitely be incentive to sign up for an ink card.

A: Correct. From my understanding, this strategy isn't breaking any Chase, Office Depot, Walmart or American Express rules. This could change, but in the meantime many people are raking in tons of points using this sort of strategy. There's a risk to everything, but getting in on this "deal" at a reasonable level doesn't concern me.

Q: Would this be considered a chip and pin card when traveling internationally?

A: No. And there are no foreign transaction fees, but American Express decides the rate in which your purchase is converted into US dollars: "Where permitted, if you use your Card to make a purchase at an establishment or ATM withdrawal in a currency other than U.S. dollars, the transaction will be converted to U.S. dollars on the date it is processed by us or our agents. The exchange or currency conversion rate between the transaction currency and the billing currency will be either (i) a rate selected by us from the range of rates available in wholesale currency markets for the applicable central processing date or (ii) the government-mandated rate in effect for the applicable central processing date."

Q: While there are numerous commenters on your blog that have inquired about whether the Bluebird card will affect your credit score, I believe that there is a much more important issue (i.e., whether becoming a bluebird customer will be viewed as "risky"credit behavior by AMEX). If AMEX considers you a credit risk because you are using Bluebird (regardless of what your credit score may be), you may be severely limited with respect to your ability to churn cards with AMEX in the future. I would imagine that using a product targeted to unbanked customers will reduce the likelihood of instant approvals and, gasp, may even lead to denied credit applications. Please let me know what you think.

A: I do not think American Express will use Bluebird as a factor in deciding someone's creditworthiness. They are heavily promoting this card and while it is geared towards non-premium customers, simply getting it shouldn't have an affect on your ability to get credit with American Express or other credit card issuers.

Q Part 1: I just saw on Twitter that you are buying the Bluebird cards from Walmart with your Vanilla card.

A: Incorrect- I bought my temporary Bluebird starter kit at Walmart using my Suntrust Delta Debit card. Vanilla cards themself can only be loaded onto prepaid cards- you cannot use them to make purchases themselves.

Q Part 2: I have the Chase Freedom card but cancelled the Sapphire card over a year ago. Can you explain the process for me. Do I have to have the Sapphire card and if so can I reapply without the bonus? Once you buy the Bluebird or Vanilla card can you go to an ATM and cash out or do you have to use it with purchases? (The Chase Freedom is no longer open to new applicants)

A: Think of the Bluebird as a car and the Vanilla card as the gasoline. You buy Vanilla cards at Office Depot using any credit card (as mentioned Ink Bold is the most lucrative option) and then load them onto your Bluebird card for free. Once the funds are on your Bluebird card you can use it to make everyday purchases or use the funds to pay bills, like your mortgage or to even send money to someone else. You can also use your Bluebird card to take out cash from ATMs, however there is a $2 fee (which is waived if you have a direct deposit linked to your Bluebird). I recommend reading the full Bluebird rules, but the ATM maximum is $500 a day and $2,000 per month.

As for getting the Sapphire card again, generally you can only get the sign-up bonus once per card, however there are two versions of the Sapphire Preferred- Visa Signature and World Mastercard. If you had the Visa Signature, you may be able to get the Mastercard version here and still get the sign-up bonus. Note: you may get automatically declined, but you can call the reconsideration line at 1-888-245-0625 and you can explain why you'd need the card again.

Q: I called Vanilla and they said that you cannot load Vanilla cards to Bluebird. Is that true?

A: I was once told that as well, but in practice many people have been able to load Vanilla reload packs into their Bluebird account. Remember, you need to wait until you have a permanent Bluebird card, so if you get a starter kit at Walmart and immediately try to load it with Vanilla reloads, you will get errors.

Leveraging Bluebird, Vanilla reloads and points earning credit cards is super lucrative way to rack up tons of credit card spend and points at very low fees. It's a new product, so no one knows just how sensitive American Express and Chase may get to pushing this general strategy to the limits, but I'd recommend exercising sensibility- don't just start buying thousands of Vanilla reloads and then trying to instantly withdraw the money from an ATM. Use Bluebird for everyday bills and spends and if you need to pull some money out within the limits, that's fine too.

I highly recommend reading through the official Bluebird member agreement, which is actually pretty easy to read through. Fellow blogger Frequent Miler is also an excellent resource- he's been experimenting with prepaid and reloadable cards for months, so check him out for more information on Vanilla and Bluebird.