The pace of change in the miles & point world is staggering.  The most recent big change is with the latest and greatest way to earn 5X everywhere.  There was a special link to sign up for the Citi ThankYou Preferred card that offered 5X in drugstores, gas stations, and supermarkets.  That link now appears to be dead:

More than a week ago, at Frequent Traveler University, the theme of my presentation was change.  In that presentation, I highlighted the following developments in the 5X everywhere game:

• May 1 2012: I published “One card to rule them all.”  In that post I showed how to earn 5X Ultimate Rewards points everywhere credit cards are accepted.
• October 16th 2012: I published “Bluebird takes flight and changes the game.” In that post I showed how to earn 5X Ultimate Rewards points everywhere including billers that do not accept credit cards!
• November 10th 2012: I published “Office Depot discontinues Vanilla Reload cards.”  This change made 5X everywhere tough, but not impossible.
• February 3rd 2013: I published “Office Depot discontinues $500 Visa/Amex cards.”  5X everywhere was effectively dead.
• February 6th 2013 (just 3 days later), Personal Finance Digest published “The old Citi 5% gas/grocery/drugstore link is dead, here’s a new one.”  5X everywhere was alive again!!!
• April 6th 2013: Million Mile Secrets published “Breaking News: You Can Now Use Gift Cards For Cash Back, Loading Bluebird, and Buying Money Orders!“  Not only was 5X everywhere alive and well, but there were new ways to do it!

Now, just a month later, 5X everywhere with ThankYou points is effectively dead.  Those who got their cards in time can still enjoy 5X rewards for 12 months (unless they get shut down for perk abuse!).  Others will have to look to other opportunities.

For good or bad, change is coming.  And the game plays on…

This is the third of a three part series showing how you can earn 5X everywhere without gift cards.  In the previous posts I showed how you can earn 5X Ultimate Rewards points and ThankYou points in many categories including telecom, grocery stores, drug stores, and more.  In today’s post I’ll cover what to do with spend that is outside of those popular categories.

Three Part Series

1. 5X everywhere without gift cards, part 1: Ultimate Rewards
2. 5X everywhere without gift cards, part 2: ThankYou Points
3. 5X everywhere without gift cards, part 3: Everything Else
   (this post)

5X Categories

In the previous two posts I showed how you can earn 5 points per dollar (5X) at in the following categories:

Ultimate Rewards

• Office supply purchases
• Cell phone
• Landline
• Cable
• Travel (4.28X)
• Rotating categories

ThankYou Rewards

• Gas stations
• Grocery stores
• Drug stores
• Restaurants
• Bookstores
• Movie theaters
• Video rental stores
• Record stores

5X Everywhere Else

The Club Carlson Premier Rewards Visa Signature (and its twin, Club Carlson Business Rewards Visa) earns 5 points per dollar for all purchases (and 10 points per dollar at Club Carlson properties).  By falling back on this card for purchases that do not fall into the above listed categories, you will earn 5X for all credit card purchases.

Club Carlson point value

Using the Club Carlson card to earn 5X everywhere sounds good until you realize that Club Carlson points are worth much less than ThankYou points or Ultimate Rewards points.  In fact, while it is easy to get at least 1 cent per point value from Ultimate Rewards and ThankYou Rewards, Club Carlson straight up sells points for 7/10ths of a cent each.  So, even though it is sometimes possible to get more than 7/10s of a cent value from Club Carlson points, it is wiser to earn Ultimate Rewards points or ThankYou points, all else being equal.

A few months ago, I looked at Club Carlson hotel prices and redemption rates in a number of cities.  I found that, in my sample, the per point value of Club Carlson points ranged from .22 cents to .89 cents each.  The average point value came to .43 cents.  This is far less than the value of Ultimate Rewards or ThankYou points.

Two Night Stay Sweet Spot

Where Club Carlson points shine is in booking two-night stays.  The Club Carlson credit cards come with a benefit called “Bonus Award Nights” (see “Club Carlson rocks our world… Again“).  With this benefit, when you book a two night or longer stay, the last night of your stay is free.  That means that for a two night stay, the cost in points for your stay is cut in half.  In other words, you will pay for one night (with points) and get the second night free (up to 50 free nights per year).  So, when you have the credit card and you book two night stays, the value of your Club Carlson points is effectively doubled!

Going back to my old analysis:  Where I previously saw Club Carlson point values ranging from .22 cents to .89 cents in value, you can now get .44 cents to 1.78 cents value for the same hotels by booking two-night stays. 

By using your Club Carlson points primarily for two-night stays, and primarily in properties with the best redemption values, you can get value rivaling ThankYou points and (sometimes) Ultimate Rewards.

Diminishing Returns

It’s important to realize that points have value only if you use them.  Since Club Carlson points have specific limited use (e.g. use them for Club Carlson free nights and or Points & Cash awards) and are best used in limited situations (two night stays), you may soon find that you have more points than you know what to do with.  Once you’ve reached that threshold, earning points for someday may not be the best idea.  Instead, consider other options for your “all other” spend…

Other Options

Here are a few good options for maximizing your return on “all other” spend:

Citi Hilton HHonors Reserve 3.94%

The key to maximizing value with this card is to spend exactly $10K per year. At $10K you’ll earn a free weekend night at almost any Hilton property worldwide. You’ll also earn 30,000 points from spend (the card offers 3X everywhere, 5X airline & car rental, and 10X at Hilton properties). If you value the Hilton HHonors points at .48 cents each and the free night at $250, then the earnings per dollar come to 3.94%.  Owning this card is also a great way to ensure getting free breakfast and free internet at Hilton properties (thanks to automatic Gold status).

Delta Reserve Card 3.4%

If you are a big spender and you value Delta elite status, this card is a great choice (it is, in fact, my “all other” card).  At $30K of annual spend (and again at $60K), you’ll earn 15K bonus miles and 15K MQMs (“Medallion Qualifying Miles” are Delta’s version of Elite Qualifying Miles).  If you plan carefully and end the year just above the big spend threshold (either $30K or $60K) you can maximize earnings on this card: you will earn an average of 1.5 miles per dollar and .5 MQMs per dollar.  If you use the 1.29 cents Fair Trading Price of Delta SkyMiles, and 3 cents per MQM valuation, then your earnings per dollar come to 3.435%.  For more details, please see “An analysis of the Delta Reserve credit card” and “How much should you pay for Elite Qualifying Miles?“

Barclaycard Arrival World MasterCard 2.2%

A simpler option for your all-other spend is to earn 2.2% per dollar with Barclays’ Arrival World MasterCard ($89 annual fee version).  This card earns two points per dollar.  Points can be used to pay charges on your credit card statement.  If you use the points to pay for travel expenses, you will get 1 cent per point value plus a 10% rebate in points.  This is a nice no-fuss way to earn very good returns.

Summary

Here, now, is a summary of the cards needed for 5X everywhere without gift cards:

• Chase Ink Bold (or Ink Plus): 5X for office supply purchases, cell phone, landline, and cable.
• Chase Sapphire Preferred: 4.28X for travel (when booking via Travelocity through the Ultimate Rewards Mall).  You must keep the card through February of the next year to earn its 7% annual dividend.
• Chase Freedom: 5X (or 5.5X) in categories that change each quarter.
• Citi ThankYou Preferred: 5X (for 12 months) at gas stations, grocery stores, and drugstores.  To get 5X earnings, you must sign up with the link shown here.  UPDATE 5/7/2013: The Citi Preferred 5X link appears to be dead. Sorry everyone.
• Citi Forward: 5X at restaurants, bookstores, movie theaters, video rental stores, and record stores.  New applications require proof that you are a college student, but some people have reported success calling and asking to switch a different Citi card to the Forward card.
• Club Carlson Premier Rewards Visa Signature: 5X everywhere (10X at Club Carlson properties).  Please see my note about diminishing returns above.
• Other options: Citi Hilton HHonors Reserve, Delta Reserve, BarclayCard Arrival World MasterCard.  For more options, see “Best Big Spend Bonuses“.

Now that most of the “5X Everywhere” techniques are dead or on the ropes, what’s next? 

What went before

For some, the excitement began last April when I published “Almost too good to be true“.  In that post, I showed how it was possible to earn 5 points per dollar when buying Vanilla Visa cards at Office Depot for a 1% fee.  The trick was to pay with a credit card that earns 5 points per dollar at office supply stores.  This made it possible to earn 5X almost everywhere by buying and using these cards.  The only problems were that juggling Visa gift cards was a pain, not all online-merchants would accept these cards for payment, and the cards could not be used outside of the United States.  Still, this was huge.  If a person could move $20K of usual spend to these cards, that translated to 100K points!

Things heated up substantially in May, when I published “One card to rule them all.”  In that post, I showed how to buy Vanilla Reload cards (which are different from Vanilla Visa cards) at Office Depot and use them to load money to American Express Prepaid cards.  This technique overcame the limitations of the Vanilla Visa technique in that the Amex Prepaid cards no longer required juggling gift cards, they could be used with any online merchant that accepted Amex cards, and they could be used overseas with no foreign transaction fees.  Even better, the Amex Prepaid cards could be used to withdraw cash at ATM machines.  So, it was possible to earn 5X points for cash.  This meant that it was possible to earn points for all expenses, not just those that accepted credit cards.  The only problem was that making many trips to the ATM to cover large expenses, could be a huge hassle.

Then, in October, the game became too good to be true.  In the post “Bluebird takes flight and changes the game,” I revealed that the new Amex Bluebird card could be loaded with Vanilla Reload cards just like Amex Prepaid cards, but it was even better.  Unlike the Amex Prepaid cards, Bluebird could be used to pay bills and to transfer money to one’s checking or savings account…. for free.  In other words, once money was loaded to a bluebird card, it could be used for anything.  You could even use the money in your bluebird account to pay the credit card charges that came from buying Vanilla Reload cards.  This was the ultimate perpetual point machine! 

Disappearing opportunities

It wasn’t long after bluebird appeared that things began to change.  The first big blow came in November when Office Depot stopped carrying Vanilla Reload cards.  That hurt, but it was still possible to earn 5X everywhere by buying $500 Vanilla Visa cards or Amex Prepaid cards at Office Depot.  Unfortunately, that opportunity disappeared at the beginning of this month.  As I reported in the post “Office Depot discontinues $500 Visa/Amex cards,” Office Depot withdrew all $500 loadable Visa and Amex cards over that weekend.  It is still possible that those cards will be replaced with similar, higher fee cards, but I wouldn’t hold my breath.

The game is nowhere near over.  It is still possible to buy reload cards at other locations (see “The reload game is on“).  As a result, it is easy to use these to manufacture spend towards big spend bonuses, and for meeting minimum spend requirements when signing up for credit cards (see “Best credit card offers“).  Unfortunately, I think it is just a matter of time before these options dry up as well.

Searching for more

To me, finding new ways to earn miles & points, is a great game.  The thrill of the hunt and the excitement of discovery are almost as good as enjoying the rewards of free travel.  I don’t know what the next discovery will be or where it will come from, but I know that it will be fun searching for it!

Here are some areas in which I’m looking for new opportunities:

Shopping Portals: Online shopping portals offer a way to earn extra points & miles when buying things online.  In some cases, it’s possible to get points for buying gift cards.  And, in some cases, it is possible to use gift cards to buy other, more valuable gift cards such as Visa, MasterCard, or Amex gift cards.  The trick is to find the combinations of portals and merchants and gift cards that come together to present new point-earning opportunities.

Category Bonuses: Office Supplies are not the only valuable category bonuses available.  The trick is to find opportunities to leverage these category bonuses far beyond the narrow case in which they were intended.  See “Best Category Bonuses” for a list of the best credit card category bonuses that I’m aware of.

Savings Programs: Through the OPEN Savings program, American Express offers automatic cash back savings to business card holders when they use the card at certain merchants.  MasterCard offers a similar Easy Savings program.  While these programs offer cash back rather than points, they can still be a great way to save money and potentially earn cash back everywhere. 

Merchant Loyalty Programs: Many merchants offer loyalty programs in which customers earn points that can be used as store credit, gasoline savings, or to earn specific rewards.

Stacking opportunities

The best new opportunities will likely be the ones in which we manage to stack multiple bonuses together.  For example, take OfficeMax.  OfficeMax.com is available through many point and cash-back portals.  It is also an office supply store, so cards like Chase Ink and Amex SimplyCash earn extra points/cash at OfficeMax.  Also, OfficeMax.com is part of the OPEN Savings program.  So, when buying more than $250 worth of stuff at OfficeMax.com with an Amex business card, the customer gets 10% cash back automatically.  By stacking all of these opportunities, it is possible to earn 15% cash back, plus portal points, plus OfficeMax MaxPerks points when buying from OfficeMax! 

For those wondering, yes you can get OPEN Savings when buying gift cards from OfficeMax.com.  I first wrote about that in the post “10% off everything and 7% off everything else.”  Do note that many OfficeMax stores do not allow people to buy other gift cards with OfficeMax gift cards…

It isn’t hard to find great opportunities like the one I just described at OfficeMax, but it is hard to find ways to get those same benefits when buying things other than office supplies.  I don’t like schemes that involve returning merchandise for cash back.  To me, those tricks are just over the line.  That said, if by a store’s rules (written or not) I can buy gift cards and earn portal points and/or category bonuses, I’m all for it.

Join the search

Via the Frequent Miler Laboratory I do my best to keep track of what works and what doesn’t.  Many of the results come from reader reports and many are from my own research.  If you have an idea, visit the laboratory to see if it has already been tried.  If not, please report your experiment and results in the comments of that page.  If it interests you, I also recommend subscribing to the comments of that page (add a comment saying something like “subscribing” and check the box that says “Notify me of follow-up comments by email.”).

I have no doubt that the next big thing is coming.  I can’t wait to see what it is…

Yesterday, in the post “Multiple paths to 5X everywhere,” I showed five different ways to earn 5 points per dollar (or more) on all credit card spend.  Is it worth all the hassle?

Compared to 1X

Many people happily use their favorite airline card or 1% cash back card to earn 1 point per dollar for all purchases.  A person who spends $20,000 per year on their credit card in this way will earn 20,000 miles or $200 cash back.  Either is almost enough for a round trip domestic flight in coach.

If that same person were to shift all of their spend to a “5X Everywhere” approach, they would be looking at earning 100,000 miles per year or $1000.   The latter is in the ballpark of a paid round trip coach ticket to Europe.  The former is enough for a round trip business class ticket to Europe. Clearly this is a big win even if that person spends as much as $400 on prepaid reload fees.

Compared to sign-up bonuses

Some people prefer putting all of their day to day spend on new credit cards in order to hit the sign-up bonus minimum spend requirements.  Some believe that sign-up bonuses are so much better than 5X techniques that it would be crazy to waste your spend on anything but meeting minimum spend.  Is that true?

Let’s take a look at a number of popular current sign-up bonuses.  With each, it is possible to calculate the points per dollar earned by meeting minimum spend…

Ink Bold / Ink Plus

The current offer for the Chase Ink Bold and Ink Plus cards is for 50,000 points after $5K spend.  If we assume that all $5K will be spent within 1X categories, then your earnings on this $5K come to 55,000 points, or 11 points per dollar (11X).

Ink Bold / Ink Plus standard offer

The standard offer for the Chase Ink Bold and Ink Plus cards (which we’ll probably see again in January) is 25,000 points after first use and then another 25,000 points after $10K spend.  So, with this offer, the first 25,000 points is free. For the second 25,000 points, if we assume that all $10K will be spent within 1X categories, then your earnings on this $10K spend come to 35,000 points, or 3.5 points per dollar (3.5X).  Of course, in reality a lot of that spend is likely to be within 2X and 5X categories, but this helps demonstrate how low the sign up bonus multiple can be.

Sapphire Preferred

The current offer for the Chase Sapphire Preferred is for 40,000 points after $3K spend. If we assume that all $3K spend will be within 1X categories, then your earnings on this $3K spend come to 43,000 points, or 14.33 points per dollar (14.33X).

British Airways Visa Signature

The current offer for the British Airways Visa Signature card is as follows: spend $1K in 3 months to get 50,000 points, spend $10K in 12 months to get an additional 25,000 points, and spend $20K in 12 months to get the final 25,000 bonus points for a total of 100,000 points.  Since this card earns 1.25 points per dollar on regular spend, you will earn 51,250 points for your first $1K of spend. That equates to a fantastic return of 51.25 points per dollar (51.25X).  The next $9K in spend results in an additional 36,250 points.  This equates to 4 points per dollar (4X).  The final $10K of spend results in an additional 37,500 points which equates to 3.75 points per dollar (3.75X). 

Starwood Preferred Guest

The standard offer for the SPG card is to get 10,000 points upon first use and then another 15,000 points after spending $5K in 6 months.  I consider the first 10,000 points to be free.  For the extra 15,000 points, if we then assume that all $5K spend will be within 1X categories, your earnings on this $5K spend come to 20,000 points, or 5 points per dollar (5X).

Club Carlson Premier Rewards

The new Club Carlson Premier Rewards card offers 85,000 points after $2500 in spend in 90 days.  This card earns 5X on all standard purchases (and 10X at Club Carlson hotels).  If we assume that all $2500K spend will be at 5X, then your earnings on this $2500 spend come to 97,500 points, or 39 points per dollar (39X).

Sign up bonuses are better, but…

As you can see from the above examples, bonus points earned from meeting minimum spend requirements vary tremendously from offer to offer (and sometimes within a single offer).  At the high end, we have the first $1K of spend on the British Airways card that results in over 51 points per dollar.  At the low end, we have the final $10K of spend on the traditional Ink Bold / Ink Plus offer which earns only 3.5 points per dollar (if spent within 1X categories).  Most offers seem to be in the 5X to 15X range.

So, yes, spend put towards sign-up bonuses does usually result in more points earned than one could earn from 5X everywhere techniques.  It’s worth noting though that minimum spend multiples are not usually orders of magnitude better than 5X everywhere techniques.

What to do?

The best point earning approach, when possible, is to do both.  If you have a strong credit history and the ability to pay off all bills each month, then sign up for the best credit card offers.  When meeting minimum spend requirements, put as much of that spend within bonus categories as practical.  When you’ve met your spend requirements, but are not yet ready to sign up for more cards, then try out the “5X everywhere” techniques (but first read “5X dangers and headaches“).

Another way to think of this is to examine your goals.  Sure you can earn more points with more credit card sign-ups, but would you be earning the points that meet your needs?  If not, maybe “5X everywhere” is a better approach for you.  Conversely, do any of the “5X everywhere” techniques meet your needs?  If not, credit card sign-ups may be the only way to quickly earn the points you need.

Finally, look at what you’re comfortable with.  Some people hate dealing with gift cards and prepaid cards.  If this is you, then don’t do it.  Others hate dealing with multiple credit cards and/or don’t deal with them responsibly.  If that’s you, then don’t use credit card sign-ups as a way to earn points.  If neither of these approaches work for you, that’s fine too!  There are always other point earning options out there (mileage runs, shopping portal bonuses, mega-promotions, etc.) so keep an eye out for those!

A couple of weeks ago I presented at Frequent Traveler University in Los Angeles.  One of the topics I covered was how to earn 5 points per dollar (or more) on all spend.  We started with a moment of silence for the end of Vanilla Reload cards at Office Depot (see “Office Depot discontinues Vanilla Reload cards“).  We then went on to discuss a number of opportunities that still exist.  Below is a brief outline…

1. Buy gift cards and use them

Many grocery stores, drug stores, gas stations, and office supply stores sell gift cards.  The trick is to use a credit card that offers 5X or more at one of these locations to buy gift cards that you can then use elsewhere.  See “Best Category Bonuses” to find credit cards that offer the best bonuses.

Example 1: Suppose you are about to make a big purchase at Lowes.  You can always stop by a different store first to buy Lowes gift cards (usually with no fee and no sales tax) and then use those gift cards at Lowes.  The advantage is that, depending on which card you use, you may earn 5 or 6 points per dollar when buying the gift card compared to 1 point per dollar if you made the purchase directly at Lowes.

Example 2: Go to a store in which your credit card earns a high multiple and buy a bank gift card (e.g. Visa, MasterCard, or American Express).  Use that gift card for all purchases in which you would normally have earned only 1 point per dollar.  Watch out for fees, though!  Most bank gift cards have very high fees as a percent of their overall value.  For example, most $100 cards have $5.95 fees.  That means you would be paying 6% in fees in order to earn 5 points per dollar.  It’s not worth it!  Instead, look for $500 cards with $4.95 fees.  Losing just 1% in order to earn 5 points per dollar is often a great deal.

Caution: When you buy merchandise with a gift card, you do not get the benefits such as extended warranty and purchase protection that many credit cards offer automatically.  Use gift cards only to buy things where you are sure those protections don’t matter. 

2. Buy reload cards

Prepaid reload cards are more versatile than gift cards because they can be used, indirectly, to pay bills that can’t usually be paid by credit card.  The way they work is that they come with a PIN number that is used online to load the money from the reload card into something else.  The “something else” could be your Bluebird account, your PayPal account, or one of many prepaid reloadable debit cards.  For more information, please see “The reload game is on.”  Currently, reload cards are no longer available at office supply stores, but can be found elsewhere.  As with gift cards, the trick is to use a card that earns a high multiple at a place that sells reload cards (see “Best Category Bonuses“).

3. Buy reload cards with bank gift cards

This is a combination of options 1 and 2, above.  The idea is to buy bank gift cards at a place that offers you the best points per dollar, then use that gift card to buy reload cards at a different store.  While I and many others have had success with this, it doesn’t always work. Some stores that sell reload cards won’t allow gift cards as a form of payment.  Note also that you now have two fees involved: there is the initial fee for buying the bank gift card (e.g. $4.95 for a $500 card) and then the fee for buying a reload card (e.g. $3.95 or $4.95 for a $500 card).  Make sure these fees are worth it before doing this!

4. Load a Target Amex card with bank gift cards

Full details of this technique can be found here: The 5X everywhere backup plan

5. Load an American Express Campus Edition card

The American Express Campus Edition prepaid card can be loaded at the register at Barnes & Noble campus bookstores.  Find a card that offers a high multiple at bookstores, and you can earn points by reloading this card.  Yes, it works!  More details can be found here: American Express Campus Edition

Caution

5X Everywhere techniques often involve some risk and hassle.  Please see my post “5X dangers and headaches.”

Discussion

As shown above, there are quite a few ways to continue to earn “5X everywhere”.  In my talk, I described ways to take things ever further, but I’ll leave those details for another day and venue.  Is it worth the hassle?  That really depends on your tolerance for this stuff.  Yes, its possible to earn far more points with these techniques than without them, but at a cost of time and sometimes great frustration.  I’ll follow up soon with a post about putting 5X into perspective.

A couple of weeks ago, at Frequent Traveler University, I showed multiple ways of earning 5 points per dollar for all credit card spend.  Soon, I’ll post an outline of these techniques, but first I find it necessary to warn you of some dangers and headaches these techniques offer…

American Express Financial Review

I don’t have first hand experience with this, but I know a couple of people who have recently had their American Express credit card accounts frozen.  They had been selected by American Express for Financial Reviews.  In each case, these individuals had spent large amounts of money at drug stores in order to buy reload cards.  They had paid with their American Express Hilton cards which earn 6 points per dollar at drug stores.  As part of the Financial Review, American Express asks customers to fill out IRS form 4506-T so that Amex can examine the individual’s federal taxes.  Presumably American Express does this in order to determine whether the individual can really afford as much as they have been spending.  Often, people get through the Financial Review unscathed and with their accounts restored.  Sometimes it doesn’t work out as well and the individual’s American Express credit card accounts are closed altogether.  American Express prepaid accounts are unaffected.

I don’t know what level of spend is likely to trigger a Financial Review.  It probably depends somewhat on your historical spend patterns with American Express.  It may also have something to do with your overall credit line: if you regularly spend right up to your limit, that could look suspicious.  Or, if you pay off your account multiple times per month, that can look suspicious as well.

Chase Account Closure

There have been incidents in the past in which Chase has abruptly, and without warning, closed accounts where they suspected customers of “perk abuse”.  This is where people use credit card benefits in a way that Chase determines is “not as intended.”  One example is where a guy bought thousands of 1 cent e-gift cards in order to earn 10 points per transaction thanks to his Chase Freedom card / Chase checking account combination.  Chase wisely shut him down.  For more details, please see my post “Why Chase cancels accounts (and how to protect yourself).”

So far, I haven’t heard of any confirmed cases in which Chase has shut down Ink cardholders for abusing the 5X perk, but it could happen at any time.  No one knows what levels of 5X spending are safe.

Prepaid Account Closure

Many of the 5X Everywhere techniques rely on prepaid products of one type or another.  If you regularly load and unload large amounts of money to and from these accounts, you run the risk of having your account abruptly closed.  This has happened to many people with the NetSpend card (see “We’re sorry, there is a problem with your account“).  I haven’t yet heard of American Express doing this to anyone, but its always a possibility.  The worst part of having your account shut down is that the issuing bank may not be quick to send you your balance.  I know people who have waited about two months for their NetSpend checks, for example.  On the other hand, when this happens, there is no impact on your credit report so unless you have a lot of money tied up, it’s really not a big deal.

Prepaid Headaches

There are lots of little potential “gotchas” with prepaid products.  Here are a few:

• Reload cards not working.  Many people have reported having trouble loading a Vanilla Reload card onto their new Amex prepaid card.  Sometimes these problems are resolved by simply waiting 24 hours and trying again.  Other times people have had to get everyone involved from Incomm (the company behind Vanilla Reload cards), to American Express, to the merchant they bought the cards from.  This has never happened to me, but it sure sounds like a huge hassle!
• Fraudulent charges.  A reader told me about a situation in which he reported to American Express a large fraudulent charge that had appeared on his Bluebird account. American Express put the amount on an 8 day hold while they investigated.  That meant that this individual could not get to these funds (his funds!) for 8 days.
• Fees.  I love the American Express prepaid products since they are almost fee-free, but most other prepaid cards charge fees for just about everything.  The MyVanilla Visa card, for example, charges 50 cents for each credit or debit transaction, and $1.95 for each ATM withdrawal.  The first time I tried to use my MyVanilla card at an ATM, the request was declined and I was charged a 75 cent ATM Withdrawal Decline fee.  When I called to ask why, I was told that there is a $400 limit per day for ATM withdrawals and since I had tried to withdraw $400, the ATM fee put me over $400.  Therefore, the request was declined and I was charged a decline fee.  Nice.
• Limits. Each prepaid product has different limits regarding how much can be loaded, spent, or withdrawn each day or month.  These limits aren’t the end of the world, but they can make prepaid products a pain to use day to day.
• Tracking expenses.  If you like to track credit card expenses through services like Mint.com, you might find yourself out of luck.  With most prepaid products its necessary to log into their own proprietary web site in order to view and track expenses.

Is it worth it?

The rewards in earning 5X Everywhere can be huge, but each person needs to decide for themselves whether the rewards are worth the dangers and headaches.  I do practice these techniques, but in moderation.  Due to recent news about Amex Financial Reviews, I plan to be even more cautious with my Amex credit cards.  How about you?  Has this post changed the way you think about “5X Everywhere”?

I just received my first statement from my new Citi Forward card and found that I had scored a perfect 5!  Let me explain…

The Forward card offers 5 ThankYou points per dollar within the following categories: restaurants (including fast food), bookstores, music stores, video rental stores and movie theaters.  In the past month I’ve used this card at quite a few restaurants, a movie theater, and my local campus bookstore.  When I checked my rewards I found that I had earned 5 points per dollar for every one of my purchases.  There’s nothing really surprising about this, but it was a nice sight to see!

The value of ThankYou points

ThankYou points can be terribly frustrating.  Unlike Ultimate Rewards points, ThankYou points cannot be transferred to airline or hotel programs.  Worse, if you trade in ThankYou points for statement credits, each point is only worth a half a cent.  There are, however, ways to do better….

1 cent per point value

Instead of trading in your points for merchandise or statement credit, you can trade in points for gift cards and get 1 cent value per point.  Fortunately, they do have some very useful gift cards available at that rate including Sunoco, Marriott, Hyatt, Avis, etc.

Another option is to use points to pay your mortgage or student loan.  In either case, you’ll get the full 1 cent per point value.  In fact, people have found ways to use this feature to get cash back at that same rate.  Search SlickDeals or FatWallet to learn how.

Better than 1 cent per point value

The ThankYou program regularly runs specials in which certain items or gift cards are discounted.  Sometimes these can give you more than 1 cent per point value.

A more reliable approach is to get a Citi ThankYou Premier card and use ThankYou points to book flights for 1.33 cents per point value.  The Premier card is expensive ($125 per year after the first year), but if you use all of your ThankYou points for flight redemptions, then the Forward card’s 5X categories become 6.65% rebates towards airfare!

Transferring points

Unlike most other points programs, Citi allows you to transfer points to friends or family for free.  This is great because if you want to take advantage of the extra savings for booking airfare available to Premier cardholders, not everyone in your circle needs to have one.  Just transfer points to a friend with the Premier card and have them book the travel for you.  However, there is a big catch…  Points transferred to another person expire within 90 days.  So, don’t transfer points to anyone unless they are ready to use all of those points within 90 days. 

5X Everywhere

As part of a Frequent Miler Laboratory experiment, I made a purchase at my local campus bookstore for $503.95.  Fortunately, the purchase was correctly categorized as a bookstore purchase and I earned 5X points.  This leads us to a nice easy new way to earn 5X everywhere.  To see what I’m talking about, please read this post.  You will to have a Barnes & Noble campus bookstore nearby, though.  If not, this trick is probably not for you.

On Saturday I reported that Office Depot has stopped selling Vanilla Reload cards.  This came as a shock and disappointment to many because it put an end to the “5X everywhere” technique I first wrote about in “One card to rule them all” and then later refined with “Bluebird takes flight and changes the game.” 

One problem with the 5X everywhere technique was that it was easily available to everyone, and it created a sort of “Tragedy of the Commons.”  As more and more people rushed out to buy Vanilla Reload cards, the cards became harder and harder to find.  Now, regardless of whether the deal was killed by bloggers, FlyerTalk, or, more likely, by thieves who found ways to illicitly activate and steal reload cards, there are now many in our community looking for alternatives.

The new game

What we have now is a new game with a new playing board.  Before, I told you step by step how to win. That contributed to the aforementioned Tragedy of the Commons. I realize that repeating history is inevitable, but let’s try to avoid, or at least delay, that fate this time. With the new game, I’ll describe the rules and the pieces, but I’ll leave it up to you to figure out how to win. 

Start with a credit card

To play this game, you need a credit card with one or more of the following characteristics:

• Earns valuable points within bonus categories. For a nearly complete list, see “Best Category Bonuses“.
• Earns a valuable sign-up bonus after required spend is met (see “Best credit card offers“).
• Earns bonus points or perks with high spend.  A great example is the Delta Reserve card and the Delta Platinum card.  Both award bonus miles and elite qualifying miles to big spenders.  In fact, I use these cards to maintain high level elite status with Delta without flying (see “Mileage running, from home“).  For more examples of cards that offer elite status for high spend, see “Preparing for Miles“.

Find a store

This may be the hardest part of the game.  You need to find a store that sells reload cards and will let you pay with a credit card.  If your goal is to increase spend to earn a signup bonus, or to reach a high spend threshold, then it doesn’t matter what store you find.  Try supermarkets, drug stores, convenience stores, and gas stations.  The interesting thing here is that there doesn’t seem to be a set rule for where you can find and buy reload cards. For example, some Walgreens stores will let you buy Vanilla reload cards with a credit card, but other Walgreens stores have registers that are hard-coded against it. 

If your goal is to earn a high category bonus (e.g. “5X everywhere”), then this step gets a bit more complicated.  If you can find a reload card in a store that gives you a category bonus, then you’re all set.  If not, then an alternative is to go to a store that gives you a good category bonus (such as Office Depot) and buy a prepaid Visa or Amex card.  Then, use that card elsewhere to buy a reload card. 

Buy a reload card

Vanilla Reload cards are not the only reload cards around.  Below is a roundup of all of the cards that I’m aware of that can sometimes be bought with a credit card. 

	Vanilla Reload cards cost $3.95 each and can be loaded up to $500.  Use the card to load an American Express Bluebird card and then you can use the Bluebird card for everyday expenses, to pay bills, to transfer money to your bank account, or to withdraw money from ATMs.
	PayPal Load Money cards cost $3.95 each and can be loaded up to $500.  Use the card to load money to your PayPal account.  From your PayPal account, you can use the money for online purchases, to transfer money to others, or to withdraw money to your bank account.
	Green Dot MoneyPak cards cost $4.95 each and can be loaded up to $500.  Use the card to load a compatable permanent prepaid card such as the AccountNow Prepaid Card (which has bill pay features), or load directly to your PayPal account.  You can find more information about this card here.
	PayPower REloadit cards cost $3.95 each.  Some of these cards can be loaded up to $500.  Others can be loaded up to $950.  Use the card to load a permanent prepaid card such as PayPower, NetSpend, AccountNow, etc.  Of all of the reload cards in this list, this is the only one that I haven’t personally bought with a credit card, but I’ve heard from quite a few others who have succeeded.  You can read more about buying and using this card here, here, and here.

Despite the recent news from Office Depot, reload cards are a big, growing business.  I expect that the list of cards shown above are just a drop in the bucket compared to what is now or will soon be available.

Use caution

History has proven time and again that many people will gorge on great deals when they’re found.  There are many reasons not to go to extremes:

• Credit card account closure: If you abuse the perks available to you as a credit card holder, you run the risk of the issuing bank shutting down your accounts.  It has happened before.  Please see “Why Chase cancels accounts (and how to protect yourself).”
• Prepaid account (or PayPal) shutdown: In order to use the reload cards shown above, you need a reloadable prepaid card or a PayPal account.  If you load money onto one of these accounts, then completely withdraw all the money, and repeat over and over, you run the risk of getting shut down.  Your activities will appear to be fraudulent.  Plus, the bank behind the account would probably not be making any money from you and so would be happy to lose you as a customer.
• Killing the deal: If you go hog wild buying and liquidating reload cards, you may inadvertently draw unwanted attention to what you’re doing and the deal may be killed either locally (i.e. your local store will stop selling the cards) or nationwide. 

Some people went hog wild with Vanilla Reload cards because they believed the end was in sight and they wanted to get as much out of it as they could before the deal died.  I don’t think this is a good approach.  It increases your chances of account closure and it ignores the fact that there are, and always will be new great deals.  Take your time, go at a pace you’re comfortable with, and be ready to adapt as things change (which they will!).

Huh?

If you’ve gotten to this point in the post and are totally confused about the information presented above, that’s OK!  Yes, normally I walk people step by step through point-earning opportunities.  And, I will continue to do so with many other deals, but not with reload cards.  If you don’t understand how to take advantage of the game presented here, start with simpler schemes or network with others at in-person events.  A good way to find in-person events near you is to keep your eye on FlyerTalk’s Community Buzz forum.

Let the game begin!

I have no doubt that many readers have already been playing the game described above.  Others will rush out to different stores to see what they can find.  If you learn about new useful products, please let me know.  If you find a great store for buying those products, consider keeping the details for yourself and some friends.

Earn 6X (or more) everywhere by not using your Bluebird card.

A year ago we thought it was pretty cool to earn 2 points per dollar for travel and dining with our Chase Sapphire Preferred cards.  And, thanks to the card’s 7% annual dividend, we were really earning 2.14 points per dollar for those expenses.  That was way better than 1 point per dollar earned with most other cards.

Then, six months ago, I wrote “One card to rule them all.”  Suddenly, 2.14X was laughable compared to 5X everywhere.  By buying Vanilla Reload cards at Office Depot with our Ink Bold cards we were able to earn 5 points per dollar for essentially buying money.  And, then we would load the money onto our American Express Prepaid cards in order to indirectly earn 5 points per dollar everywhere.

Then Bluebird changed the game…

On the surface, Bluebird looks like an incremental improvement over older American Express Prepaid cards.  It has higher Vanilla Reload limits ($5,000 vs. $2,500), it provides a way to have always free ATM use, and it has a built in Bill Pay feature.  So, most people rightly see this as a great way to extend “5X everywhere” beyond credit card charges to also include bill payments where payees don’t accept credit cards. 

When it comes to credit card transactions, though, things have changed.  With the old prepaid cards, using them for regular credit card transactions was the easiest and cheapest way to cash them out.  With Bluebird, on the other hand, cashing out is trivially easy.  Not only can you pay bills, but you can link a bank account and withdraw money directly.  With either approach, you can use Bluebird (directly or indirectly) to pay your credit card bills.

When it comes to paying a merchant, using Bluebird is not an optimal strategy.  You’ve already earned 5X for money you’ve deposited to Bluebird, but you won’t earn more by swiping your Bluebird card.  The optimal strategy, is to use the best point earning card you have for the situation. It’s time to dust off those old cards.  Use your Sapphire Preferred for travel and dining.  Use your Ink Bold for 2X for gas.  Use a Blue Cash Preferred card or Hilton HHonors Amex for groceries. For any spend, use a new card with which you are working towards minimum spend requirements. You get the idea.  By paying the credit card bills directly or indirectly with your Bluebird card you will earn 6X or more, in total, for those purchases!  Plus, by using a real credit card you’ll get extended warrantees and other protections that many consumer credit cards offer.

Will Amex shut us down?

One reason you may want to disregard the advice I gave above is fear that American Express will shut down your Bluebird account if you are an unprofitable customer.  American Express surely counts on credit card transaction fees to make money from Bluebird.  If you don’t use the card as a credit card, they won’t make as much money and they could shut down your account for not using it as intended.  If you’re worried about this, then by all means continue to use Bluebird everywhere.  5X everywhere is still awesome!  Alternatively, use Bluebird for any purchase in which you would not get a category bonus from another card.  If half of your spend is within bonus categories and half with Bluebird, then you should still average 6X or more.

Personally, I believe that American Express will be happy with us as long as we maintain a balance in our Bluebird accounts.  They are marketing this as a checking account alternative, after all.  If you load up your account and completely cash it out, time after time, that will look suspicious.  But, if you load it up and then pay various bills, and use an ATM occasionally, and withdraw some money now and then to another bank account, I think you’ll be OK — as long as you maintain a reasonable sized balance.  Caution: This is just my educated guess!  We do not yet have enough experience to know if or when American Express would shut down accounts.  As I said before, 5X everywhere is still awesome.  So, if you’re more comfortable using Bluebird for credit transactions to keep Amex happy, then by all means do so.

But I can’t buy Vanilla Reload cards!

Many people have expressed frustration with not being able to buy Vanilla Reload cards.  Either they don’t have any nearby Office Depot stores or their local Office Depot store doesn’t carry Vanilla Reloads.  If you’re in that situation, look for Vanilla Reload cards in other places.  People have reported success buying reload cards at certain drug stores and gas stations.  You won’t earn 5X with your Chase Ink card at those locations, but you can earn 2X or more with various cards at gas stations; and you can earn 6X at certain drug stores with a Hilton HHonors American Express card.  Better yet, buy reload cards as a way to meet minimum spend requirements for new credit cards. 

If you really can’t find any Vanilla Reload cards that can be purchased with a credit card, you’re not totally out of luck.  See “The 5X everywhere backup plan.”

Related posts and links

• How to sign up for the Ink Bold (or Ink Plus)
• One card to rule them all
• Bluebird takes flight and changes the game
• The 5X everywhere backup plan

I recently posted “The 5X everywhere backup plan” where I showed how people unable to buy Vanilla Reload cards could still earn 5 points per dollar everywhere by making use of the American Express for Target card.  I consider it the backup plan to the “One card to rule them all” trick.  I also plan to follow-up with one or more additional posts showing how best to leverage this card.

In this post, I’ll tell you how to go about getting one of the Target Amex cards.

Unlike the regular American Express Prepaid cards and the new Bluebird card, the Target Amex cards cannot be ordered online.  Instead, you need to first buy a temporary card at a participating Target and then wait for a permanent card to (hopefully) arrive.  I found the whole process surprisingly difficult.  To save you some headache, I’ve laid out below everything you need to know:

Find a participating Target

In order to get the American Express for Target card, you need to go in person to a Target store that carries them. You can find those stores here.

Find the temporary card in the store

Finding the card isn’t easy.  In my case, I had to ask four or five employees before I found someone who knew what I was talking about. Most employees pointed me towards regular Amex gift cards. In the end, I found the card I wanted by one (and only one) of the many checkout lanes. Here is what to look for:

My advice is to look at all of the displays near and above the checkout lanes until you find a card that looks like the one pictured above.  Make sure it says “reloadable prepaid card.”  Otherwise you may be buying a simple, uninteresting gift card.

Buy the card

Now that you’ve found the card, it should be easy to buy it right?  I wish!  The surprising thing here is that when you buy this card, the cashier will be prompted to ask you all kinds of questions that you probably don’t really want to answer while a line of angry customers forms behind you. They’ll ask for your full name and address. They’ll ask you to input your SSN on the keypad.  I can’t remember all of the questions I had to answer, but I’m pretty sure they asked me to describe my life’s most embarrassing moment (“easy – this one!”).  Finally, after sharing all of your personal information with the cashier and the angry mob behind you, you can pay for the initial card load with any credit card. There is a $3 fee for each load.

NOTE: In case you’re worried that a credit card load will be treated as a cash advance: I have tested loads and reloads with Chase, Amex, and Citi credit cards.  All transactions were credited as regular Target purchases, not as cash advances (that’s a good thing).

Wait and hope

The card you just bought at Target is a temporary card that cannot be reloaded. You can use it for regular credit purchases, but not for ATM withdrawals. If all goes well, you will receive your permanent card in the mail in a few weeks. If not, you’ll receive a letter or email stating that they were unable to verify your identity. That’s what happened to me.  So, I called and they resubmitted my application.  A few weeks later I received another letter stating that they were unable to confirm my identity (Really?  You know I carry a gazillion Amex cards, right?).  Ultimately I had to buy another temporary card in order to try again. The second attempt succeeded. I have no idea why the first attempt failed, but I’ve heard from others who have had similar experiences so don’t be surprised if it happens to you too!

Good luck!