Does anyone use Amex Bluebird?

[WestchesterFrugal]

...

[jhartt3]

i use this in conjunction with an AMEX HHonors card.  I buy my Vanilla Reloads at CVS and get 6 points per dollar.  I use it to pay my mortgage or other bills where i need to send a check.  Works out to getting hotel rooms for ~40 bucks per night or less for a 200+ dollar a night room.  Its a pretty good deal if you travel as much as we do.  i wouldnt use it otherwise

[mjb]

Yep, I use it to pay my rent, mortgage, taxes, etc. No issues so far.

I buy Vanilla Reloads at CVS, usually to reach spending bonuses on new credit cards.

[mjb]

The cards cost $3.95 each, up to a value of $500. I always buy $500 cards in order to maximize their value.

The net cost ($3.95/$500.00) = $0.0079 per point. As I try to get at least $0.02 per point in redemptions AND it's on spending I couldn't earn points on otherwise, it works out for me.

[Mister Fancypants]

I never even thought of using Bluebird to leverage cashback from my credit cards, I did a little research today and found this link:

http://saverocity.com/travel/best-credit-cards-use-bluebird-vanilla-reload-strategy/

This guy did a ton a research on how to maximize this. I plan on setting up BlueBird accounts for my wife and myself, we already have a Fidelity AmEx so this will net us about $1500's just for doing cash transfers.

This kicker is I will then put the cash in my HELOC to reduce my interest payment until the credit card payment is due so my savings will be even greater.

[Saverocity]

You guys want a Q&A here from my findings? Happy to help answer anything to help keep you living the good life.

First off:

HHonors card is a big mistake, too little ROI
Fid Amex, barely qualifies but OK
What you need... 5x  There is a legacy Amex Blue link somewhere that has 1x for the first $6500 in spend per year, then 5x for anything else, that is gold.

With a true 5x card you make a net profit of $210 per month ($250 for $5K spend, minus $40 in fees) per card.

1 card per SSN...

Better than Bluebird is its sister card called the Serve, it offers the same PLUS you can load it with without any fees:

http://saverocity.com/travel/bluebird-vs-serve-calculations/

Additionally, I don't go into it in this post, but you can load another 2K via online (1K Credit 1K Debit)

It ties into the concept of Manufactured Spending, I am currently running a competition to help people understand this a bit better, you can check that out below, we gave a bankroll of $5K to the players, and the top guys are earning a net profit of between $1000-$1700 in cash and points.  Per week...

Link to the guy who earned $1700 ($1K in real money, $700 in a mix of travel points and cash) in just one week.  Net. For a few hours work.

http://saverocity.com/travel/meet-player-big-milemadness/

[Saverocity]

I never even thought of using Bluebird to leverage cashback from my credit cards, I did a little research today and found this link:

http://saverocity.com/travel/best-credit-cards-use-bluebird-vanilla-reload-strategy/

This guy did a ton a research on how to maximize this. I plan on setting up BlueBird accounts for my wife and myself, we already have a Fidelity AmEx so this will net us about $1500's just for doing cash transfers.

This kicker is I will then put the cash in my HELOC to reduce my interest payment until the credit card payment is due so my savings will be even greater.

PS, since your link alerted me to this thread (thanks!) you might want to take a look at something called Evolve Money.  It is a similar manufacturing program, but this one allows certain payees to HELOCs, if yours is listed it means that you don't need to use Vanilla Reloads, which means you can increase your options in this field.

I never play around with Bluebird or Serve, here is the process I use:

Buy Vanilla Reload with 5x card
Load Vanilla Reload to Bluebird
Pay 5x Card with Bluebird

Done.

[MustachianAccountant]

So I read about the Vanilla Reload/Bluebird hack in another thread, and checked my local CVS. They do have them, but they also have PayPal money cards. It looks like the same thing (for the same price) except it loads your PayPal account vs. a Bluebird account.

Is there a pro/con to using PayPal vs. Bluebird? I only ask because I already have a PayPal account, and if it's the same hack, I wouldn't have to set up a Bluebird account.

[Saverocity]

So I read about the Vanilla Reload/Bluebird hack in another thread, and checked my local CVS. They do have them, but they also have PayPal money cards. It looks like the same thing (for the same price) except it loads your PayPal account vs. a Bluebird account.

Is there a pro/con to using PayPal vs. Bluebird? I only ask because I already have a PayPal account, and if it's the same hack, I wouldn't have to set up a Bluebird account.

The first rule of Manufactured Spend in any way is that you cannot 'play' with money you cannot afford to lock up.  Generally speaking that is the highest risk you will face.  Paypal locks up money if not done correctly, you need to float through enough real transactions to make it work.  If you open a new Paypal, or revive an unused one and start pushing through these cards they will lock you down, holding your money for a short while until they release it.  They often terminate accounts at this time.

People I know are using Paypal, but they are 'warming' accounts first by having a lot of genuine transactions.

Also, it shouldn't be an either or, it should be a 'great and' everyone should get a Serve, and then also if you want to tinker with paypal or any of the many other options add them on.

Serve is the best card out there, they have the strongest record for not shutting accounts/locking funds and can load the most per month ($7000)

[Mister Fancypants]

You guys want a Q&A here from my findings? Happy to help answer anything to help keep you living the good life.

First off:

HHonors card is a big mistake, too little ROI
Fid Amex, barely qualifies but OK
What you need... 5x  There is a legacy Amex Blue link somewhere that has 1x for the first $6500 in spend per year, then 5x for anything else, that is gold.

With a true 5x card you make a net profit of $210 per month ($250 for $5K spend, minus $40 in fees) per card.

1 card per SSN...

Better than Bluebird is its sister card called the Serve, it offers the same PLUS you can load it with without any fees:

http://saverocity.com/travel/bluebird-vs-serve-calculations/

Additionally, I don't go into it in this post, but you can load another 2K via online (1K Credit 1K Debit)

It ties into the concept of Manufactured Spending, I am currently running a competition to help people understand this a bit better, you can check that out below, we gave a bankroll of $5K to the players, and the top guys are earning a net profit of between $1000-$1700 in cash and points.  Per week...

Link to the guy who earned $1700 ($1K in real money, $700 in a mix of travel points and cash) in just one week.  Net. For a few hours work.

http://saverocity.com/travel/meet-player-big-milemadness/

I didn't realize you were on the forum, first off thanks for the research you have done on the cards and how to run the Manufactured spending strategies.

Another card you can examine which I have and will probalby leverage and is easily accessible to everyone is from PenFed here is the link https://www.penfed.org/Platinum-Cash-Rewards/, it offers 5% cash back as a statement credit at gas stations, if you have another qualifying product there is no annual fee otherwise $25 which is nominal. A checking account with direct deposit is a qualifying account.

A question regarding BlueBird and/or Serve as you have them both, can you wrtie checks to yourself? Can you transfer money to your own bank account that was loaded via Vanilla Reload?

The AmEx website is unclear on both points, just curious to see how this work as far as options. Cleary these services were not designed for how people like us plan on leveraging them, so in time I am sure they will attempt to close loopholes or at least make it more complicated, but in the end the will still probalby be available to be taken adavantage of.

[Mister Fancypants]

I never even thought of using Bluebird to leverage cashback from my credit cards, I did a little research today and found this link:

http://saverocity.com/travel/best-credit-cards-use-bluebird-vanilla-reload-strategy/

This guy did a ton a research on how to maximize this. I plan on setting up BlueBird accounts for my wife and myself, we already have a Fidelity AmEx so this will net us about $1500's just for doing cash transfers.

This kicker is I will then put the cash in my HELOC to reduce my interest payment until the credit card payment is due so my savings will be even greater.

PS, since your link alerted me to this thread (thanks!) you might want to take a look at something called Evolve Money.  It is a similar manufacturing program, but this one allows certain payees to HELOCs, if yours is listed it means that you don't need to use Vanilla Reloads, which means you can increase your options in this field.

I never play around with Bluebird or Serve, here is the process I use:

Buy Vanilla Reload with 5x card
Load Vanilla Reload to Bluebird
Pay 5x Card with Bluebird

Done.

Your welcome from bringing the thread to your attention, clearly your insight is helpful the conversation.

Why would you not use the money loaded on Bluebird to pay a HELOC? I didn't mean the actual monthly payment, I meant pay down extra principal. To me that is a huge savings, to WestchesterFrugal who started this thread it would be even bigger.

I have a balance on my HELOC at 2.49%, if I can load $10k onto Bluebird accounts (my wife and I) staggard over a 5 day window and then pay down my balance on my HELOC by $10k I save 2.49% for about 35 days until my credit card is due in which time I can borrow the money back from the HELOC to pay the credit card back.

I have many credit cards with limits well over what I would ever use, I can easily charge the $10k every month and not have any cash flow or credit score issues. I currently use my HELOC as a sweep or accelerator account anyway, I deposit all of my income there and borrow back the money when bills come due to reduce the interest owed.

So did you have any reason in particular not to use Bluebird/Serve in connection with a HELOC?

I have been looking for the longest time for a way to pay my mortgage with a credit card as it is my largest monthly bill and the cash back would be so worth it. This trumps it as the Manufactured Spending is far greater than my mortgage payment and I get both the cash back and then and interest free loan until the credit card is due which I can use to reduce the interest due on my HELOC, so the total amount earned/saved is compounded.

In reality, I would be buying the following months VR cards before paying the credit card back and would never actually be borrowing addtional money from HELOC as new deposits would come in before the previous months bill is due.

How would Evolve be better than Bluebird for this?

[thepokercab]

You guys want a Q&A here from my findings? Happy to help answer anything to help keep you living the good life.

First off:

HHonors card is a big mistake, too little ROI
Fid Amex, barely qualifies but OK
What you need... 5x  There is a legacy Amex Blue link somewhere that has 1x for the first $6500 in spend per year, then 5x for anything else, that is gold.

With a true 5x card you make a net profit of $210 per month ($250 for $5K spend, minus $40 in fees) per card.

1 card per SSN...

Better than Bluebird is its sister card called the Serve, it offers the same PLUS you can load it with without any fees:

http://saverocity.com/travel/bluebird-vs-serve-calculations/

Additionally, I don't go into it in this post, but you can load another 2K via online (1K Credit 1K Debit)

It ties into the concept of Manufactured Spending, I am currently running a competition to help people understand this a bit better, you can check that out below, we gave a bankroll of $5K to the players, and the top guys are earning a net profit of between $1000-$1700 in cash and points.  Per week...

Link to the guy who earned $1700 ($1K in real money, $700 in a mix of travel points and cash) in just one week.  Net. For a few hours work.

http://saverocity.com/travel/meet-player-big-milemadness/

I'm a total N00B at this, so apologies if these questions are basic, but i'm just tying to wrap my head around the strategy. 

So the strategy here would be to sign up for an AMEX serve account, then purchase Vanilla Reload cards at CVS (with the credit card).  Then transfer the money from the Vanilla Reloads card to your AMEX serve account. 

Then- from the serve account- you can do things like pay rent, pay off the credit card, etc. 

Is that the gist of it? 

[MustachianAccountant]

You guys want a Q&A here from my findings? Happy to help answer anything to help keep you living the good life.

First off:

HHonors card is a big mistake, too little ROI
Fid Amex, barely qualifies but OK
What you need... 5x  There is a legacy Amex Blue link somewhere that has 1x for the first $6500 in spend per year, then 5x for anything else, that is gold.

With a true 5x card you make a net profit of $210 per month ($250 for $5K spend, minus $40 in fees) per card.

1 card per SSN...

Better than Bluebird is its sister card called the Serve, it offers the same PLUS you can load it with without any fees:

http://saverocity.com/travel/bluebird-vs-serve-calculations/

Additionally, I don't go into it in this post, but you can load another 2K via online (1K Credit 1K Debit)

It ties into the concept of Manufactured Spending, I am currently running a competition to help people understand this a bit better, you can check that out below, we gave a bankroll of $5K to the players, and the top guys are earning a net profit of between $1000-$1700 in cash and points.  Per week...

Link to the guy who earned $1700 ($1K in real money, $700 in a mix of travel points and cash) in just one week.  Net. For a few hours work.

http://saverocity.com/travel/meet-player-big-milemadness/

I'm a total N00B at this, so apologies if these questions are basic, but i'm just tying to wrap my head around the strategy. 

So the strategy here would be to sign up for an AMEX serve account, then purchase Vanilla Reload cards at CVS (with the credit card).  Then transfer the money from the Vanilla Reloads card to your AMEX serve account. 

Then- from the serve account- you can do things like pay rent, pay off the credit card, etc. 

Is that the gist of it?

That is the gist of it. FWIW, I'm new to this idea as well. Apparently there are ways to optimize the strategy as well (which CC you use, where you buy the Vanilla Reload, etc). Google "Manufactured Spending" or check out Saverocity's blog (linked above) to get into the (what seems to me to be a) head-spinning game...

[MustachianAccountant]

Another card you can examine which I have and will probalby leverage and is easily accessible to everyone is from PenFed here is the link https://www.penfed.org/Platinum-Cash-Rewards/, it offers 5% cash back as a statement credit at gas stations, if you have another qualifying product there is no annual fee otherwise $25 which is nominal. A checking account with direct deposit is a qualifying account.

If that's the same Penfed CC I have, the cash back as a statement credit only counts for gas purchases paid at the pump. (It's what we use for a gas card). I doubt that bonus would trigger if you tried to buy a Vanilla Reload in the convenience store.

[Mister Fancypants]

Another card you can examine which I have and will probalby leverage and is easily accessible to everyone is from PenFed here is the link https://www.penfed.org/Platinum-Cash-Rewards/, it offers 5% cash back as a statement credit at gas stations, if you have another qualifying product there is no annual fee otherwise $25 which is nominal. A checking account with direct deposit is a qualifying account.

If that's the same Penfed CC I have, the cash back as a statement credit only counts for gas purchases paid at the pump. (It's what we use for a gas card). I doubt that bonus would trigger if you tried to buy a Vanilla Reload in the convenience store.

Damn... I never read it that closely... I always just use the card for gas at the pump exclusively. I just assumed it meant all gas station purchases.

There goes that idea... Still love the card for gas even at the stations where cash is cheaper, that card works out in my favor.

I have the AmEx Blue 6% card too... But no supermarkets near me carry Vanilla Reloads or MoneyPak's...

Gonna need a new high percentage card... Wish there was something for pharmacies...

[Saverocity]

You guys want a Q&A here from my findings? Happy to help answer anything to help keep you living the good life.

First off:

HHonors card is a big mistake, too little ROI
Fid Amex, barely qualifies but OK
What you need... 5x  There is a legacy Amex Blue link somewhere that has 1x for the first $6500 in spend per year, then 5x for anything else, that is gold.

With a true 5x card you make a net profit of $210 per month ($250 for $5K spend, minus $40 in fees) per card.

1 card per SSN...

Better than Bluebird is its sister card called the Serve, it offers the same PLUS you can load it with without any fees:

http://saverocity.com/travel/bluebird-vs-serve-calculations/

Additionally, I don't go into it in this post, but you can load another 2K via online (1K Credit 1K Debit)

It ties into the concept of Manufactured Spending, I am currently running a competition to help people understand this a bit better, you can check that out below, we gave a bankroll of $5K to the players, and the top guys are earning a net profit of between $1000-$1700 in cash and points.  Per week...

Link to the guy who earned $1700 ($1K in real money, $700 in a mix of travel points and cash) in just one week.  Net. For a few hours work.

http://saverocity.com/travel/meet-player-big-milemadness/

I didn't realize you were on the forum, first off thanks for the research you have done on the cards and how to run the Manufactured spending strategies.

Another card you can examine which I have and will probalby leverage and is easily accessible to everyone is from PenFed here is the link https://www.penfed.org/Platinum-Cash-Rewards/, it offers 5% cash back as a statement credit at gas stations, if you have another qualifying product there is no annual fee otherwise $25 which is nominal. A checking account with direct deposit is a qualifying account.

I think the terms state a Direct Deposit of $500 per month to avoid fees on said account

A question regarding BlueBird and/or Serve as you have them both, can you wrtie checks to yourself? Can you transfer money to your own bank account that was loaded via Vanilla Reload?

Yes to both

The AmEx website is unclear on both points, just curious to see how this work as far as options. Cleary these services were not designed for how people like us plan on leveraging them, so in time I am sure they will attempt to close loopholes or at least make it more complicated, but in the end the will still probalby be available to be taken adavantage of.

If you read the terms for the Penfed card it states 'at the pump' and you can't buy giftcards at the pump, so probably not a great option for you.  The best card is the old style Amex Blue Cash, links for it are hard to find - half the game is finding an application link that is not supposed to be active anymore - that card is not the Blue Everyday nor the Blue Preferred but the Blue Cash... 1x at Drugstores for the first $6500 then it offers 5x after that.... a gold mine.

Other 5x  cards that are active would be the TD Ameritrade card and the Wells Fargo card, I think both are only for the first 6 months.... so not perpetual. 

[Saverocity]

Another card you can examine which I have and will probalby leverage and is easily accessible to everyone is from PenFed here is the link https://www.penfed.org/Platinum-Cash-Rewards/, it offers 5% cash back as a statement credit at gas stations, if you have another qualifying product there is no annual fee otherwise $25 which is nominal. A checking account with direct deposit is a qualifying account.

If that's the same Penfed CC I have, the cash back as a statement credit only counts for gas purchases paid at the pump. (It's what we use for a gas card). I doubt that bonus would trigger if you tried to buy a Vanilla Reload in the convenience store.

Damn... I never read it that closely... I always just use the card for gas at the pump exclusively. I just assumed it meant all gas station purchases.

There goes that idea... Still love the card for gas even at the stations where cash is cheaper, that card works out in my favor.

I have the AmEx Blue 6% card too... But no supermarkets near me carry Vanilla Reloads or MoneyPak's...

Gonna need a new high percentage card... Wish there was something for pharmacies...

Just FYI, the Serve can be loaded without VR, upto 1K per day straight swiping. It can be done with the Amex Blue cash for 5x with no fees at a CVS

[Saverocity]

I never even thought of using Bluebird to leverage cashback from my credit cards, I did a little research today and found this link:

http://saverocity.com/travel/best-credit-cards-use-bluebird-vanilla-reload-strategy/

This guy did a ton a research on how to maximize this. I plan on setting up BlueBird accounts for my wife and myself, we already have a Fidelity AmEx so this will net us about $1500's just for doing cash transfers.

This kicker is I will then put the cash in my HELOC to reduce my interest payment until the credit card payment is due so my savings will be even greater.

PS, since your link alerted me to this thread (thanks!) you might want to take a look at something called Evolve Money.  It is a similar manufacturing program, but this one allows certain payees to HELOCs, if yours is listed it means that you don't need to use Vanilla Reloads, which means you can increase your options in this field.

I never play around with Bluebird or Serve, here is the process I use:

Buy Vanilla Reload with 5x card
Load Vanilla Reload to Bluebird
Pay 5x Card with Bluebird

Done.

Your welcome from bringing the thread to your attention, clearly your insight is helpful the conversation.

Why would you not use the money loaded on Bluebird to pay a HELOC? I didn't mean the actual monthly payment, I meant pay down extra principal. To me that is a huge savings, to WestchesterFrugal who started this thread it would be even bigger.

I have a balance on my HELOC at 2.49%, if I can load $10k onto Bluebird accounts (my wife and I) staggard over a 5 day window and then pay down my balance on my HELOC by $10k I save 2.49% for about 35 days until my credit card is due in which time I can borrow the money back from the HELOC to pay the credit card back.

I have many credit cards with limits well over what I would ever use, I can easily charge the $10k every month and not have any cash flow or credit score issues. I currently use my HELOC as a sweep or accelerator account anyway, I deposit all of my income there and borrow back the money when bills come due to reduce the interest owed.

So did you have any reason in particular not to use Bluebird/Serve in connection with a HELOC?

I have been looking for the longest time for a way to pay my mortgage with a credit card as it is my largest monthly bill and the cash back would be so worth it. This trumps it as the Manufactured Spending is far greater than my mortgage payment and I get both the cash back and then and interest free loan until the credit card is due which I can use to reduce the interest due on my HELOC, so the total amount earned/saved is compounded.

In reality, I would be buying the following months VR cards before paying the credit card back and would never actually be borrowing addtional money from HELOC as new deposits would come in before the previous months bill is due.

How would Evolve be better than Bluebird for this?

Yeah, your idea is fine.

But...

The evolve is better because it then allows the Bluebird (or serve) to also operate.

So say you are pushing 10K on that Heloc, you do it through evolve, then you do another 10K through Bluebird.... all of a sudden you are running 20K, and since we said each $5K earns about $210 in profit, you are now making a profit of $840 per month, along with the savings.

Personally I am not sure that I would do the monthly, but I did write a post about something similar on an annual basis.

Here is one where I use the Bluebird to create a 12 month interest free loan, and then put that into a high interest saving account in order to generate a profit as follows:

New cardholders:

Travel Cash $550
Real Cash $151.10

http://saverocity.com/finance/credit-card-arbitrage-paypal-prepaid-mastercard-barclaycard-arrival/

Only potential issue with your plan:

You may end the month carrying a large balance on your credit card prior to wiping it down, if you do that you will trigger high utilization alerts (depending on your line of credit) that can dent your credit score, which should be considered if you are applying for credit.

[Saverocity]

You guys want a Q&A here from my findings? Happy to help answer anything to help keep you living the good life.

First off:

HHonors card is a big mistake, too little ROI
Fid Amex, barely qualifies but OK
What you need... 5x  There is a legacy Amex Blue link somewhere that has 1x for the first $6500 in spend per year, then 5x for anything else, that is gold.

With a true 5x card you make a net profit of $210 per month ($250 for $5K spend, minus $40 in fees) per card.

1 card per SSN...

Better than Bluebird is its sister card called the Serve, it offers the same PLUS you can load it with without any fees:

http://saverocity.com/travel/bluebird-vs-serve-calculations/

Additionally, I don't go into it in this post, but you can load another 2K via online (1K Credit 1K Debit)

It ties into the concept of Manufactured Spending, I am currently running a competition to help people understand this a bit better, you can check that out below, we gave a bankroll of $5K to the players, and the top guys are earning a net profit of between $1000-$1700 in cash and points.  Per week...

Link to the guy who earned $1700 ($1K in real money, $700 in a mix of travel points and cash) in just one week.  Net. For a few hours work.

http://saverocity.com/travel/meet-player-big-milemadness/

I'm a total N00B at this, so apologies if these questions are basic, but i'm just tying to wrap my head around the strategy. 

So the strategy here would be to sign up for an AMEX serve account, then purchase Vanilla Reload cards at CVS (with the credit card).  Then transfer the money from the Vanilla Reloads card to your AMEX serve account. 

Then- from the serve account- you can do things like pay rent, pay off the credit card, etc. 

Is that the gist of it?

That is the gist of it. FWIW, I'm new to this idea as well. Apparently there are ways to optimize the strategy as well (which CC you use, where you buy the Vanilla Reload, etc). Google "Manufactured Spending" or check out Saverocity's blog (linked above) to get into the (what seems to me to be a) head-spinning game...

Yep - but KISS just buy them on your card, pay off the card, rinse, repeat.

[MustachianAccountant]

Gonna need a new high percentage card... Wish there was something for pharmacies...

I was exploring this as well, and noticed that the Citi Dividend Platinum Select currently has 5% cash back at Drugstores. The categories rotate, so that's only good till the end of the month.

[Mister Fancypants]

Another card you can examine which I have and will probalby leverage and is easily accessible to everyone is from PenFed here is the link https://www.penfed.org/Platinum-Cash-Rewards/, it offers 5% cash back as a statement credit at gas stations, if you have another qualifying product there is no annual fee otherwise $25 which is nominal. A checking account with direct deposit is a qualifying account.

If that's the same Penfed CC I have, the cash back as a statement credit only counts for gas purchases paid at the pump. (It's what we use for a gas card). I doubt that bonus would trigger if you tried to buy a Vanilla Reload in the convenience store.

Damn... I never read it that closely... I always just use the card for gas at the pump exclusively. I just assumed it meant all gas station purchases.

There goes that idea... Still love the card for gas even at the stations where cash is cheaper, that card works out in my favor.

I have the AmEx Blue 6% card too... But no supermarkets near me carry Vanilla Reloads or MoneyPak's...

Gonna need a new high percentage card... Wish there was something for pharmacies...

Just FYI, the Serve can be loaded without VR, upto 1K per day straight swiping. It can be done with the Amex Blue cash for 5x with no fees at a CVS

I called AmEx tonight my Blue Cash Preffered gives me 6% at Supermarkets, 3% at stand alone gas stations and 1% everywhere else. The 6% is limited $1500 cash back annually. There is no cash back at CVS. There is an annual fee if $75, but i usually get that waived, I've been with AmEx awhile and charge a lot. I didn't ask if the card can be switched to the old rewards program however.

[Mister Fancypants]

Yeah, your idea is fine.

But...

The evolve is better because it then allows the Bluebird (or serve) to also operate.

Just being able to use both doesn't make one better... What is better about evolve? Their website didn't impress me in fact it kinda sucked. In have no idea who the company is, AmEx is  worldwide financial leader, you have to give some real argument for it being better not that I can use both.

So say you are pushing 10K on that Heloc, you do it through evolve, then you do another 10K through Bluebird.... all of a sudden you are running 20K, and since we said each $5K earns about $210 in profit, you are now making a profit of $840 per month, along with the savings.

Personally I am not sure that I would do the monthly, but I did write a post about something similar on an annual basis.

Or I just do $10k on AmEx Serve and call it a day and be happy.

Here is one where I use the Bluebird to create a 12 month interest free loan, and then put that into a high interest saving account in order to generate a profit as follows:

New cardholders:

Travel Cash $550
Real Cash $151.10

http://saverocity.com/finance/credit-card-arbitrage-paypal-prepaid-mastercard-barclaycard-arrival/

I don't care about travel $ only real money, if its not cash I'm not interested. I know there is lots if good deals in travel, but I can't be bothered, cash is king.

Only potential issue with your plan:

You may end the month carrying a large balance on your credit card prior to wiping it down, if you do that you will trigger high utilization alerts (depending on your line of credit) that can dent your credit score, which should be considered if you are applying for credit.

I have more than enough limit to avoid utilization issues and the cash is always available in the HELOC to pay the card off if need be.

[Saverocity]

Yeah, your idea is fine.

But...

The evolve is better because it then allows the Bluebird (or serve) to also operate.

Just being able to use both doesn't make one better... What is better about evolve? Their website didn't impress me in fact it kinda sucked. In have no idea who the company is, AmEx is  worldwide financial leader, you have to give some real argument for it being better not that I can use both.

So say you are pushing 10K on that Heloc, you do it through evolve, then you do another 10K through Bluebird.... all of a sudden you are running 20K, and since we said each $5K earns about $210 in profit, you are now making a profit of $840 per month, along with the savings.

Personally I am not sure that I would do the monthly, but I did write a post about something similar on an annual basis.

Or I just do $10k on AmEx Serve and call it a day and be happy.

Here is one where I use the Bluebird to create a 12 month interest free loan, and then put that into a high interest saving account in order to generate a profit as follows:

New cardholders:

Travel Cash $550
Real Cash $151.10

http://saverocity.com/finance/credit-card-arbitrage-paypal-prepaid-mastercard-barclaycard-arrival/

I don't care about travel $ only real money, if its not cash I'm not interested. I know there is lots if good deals in travel, but I can't be bothered, cash is king.

Only potential issue with your plan:

You may end the month carrying a large balance on your credit card prior to wiping it down, if you do that you will trigger high utilization alerts (depending on your line of credit) that can dent your credit score, which should be considered if you are applying for credit.

I have more than enough limit to avoid utilization issues and the cash is always available in the HELOC to pay the card off if need be.

I posted to tell you how you can make more money by using the evolve card because you have a HELOC.  The Bird or Serve is a self contained operation that anyone can use 10K, if you have a HELOC you should use Evolve (if it works with your HELOC, it doesn't with all) and then you can earn REAL money of an extra $400 per month which for someone with debt should be interesting.

If you don't care about 'travel money' then what if you take the same principle and use a different card?'

Do it your way and earn X do it my way and earn 2X.

I'm giving you knowledge on how to make more money so you can get out of the debt you are in, maybe this is standard response for these forums, but I think you should tone down the attitude, because when I get replies like that I lose any interest in continuing to help.

[Mister Fancypants]

Yeah, your idea is fine.

But...

The evolve is better because it then allows the Bluebird (or serve) to also operate.

Just being able to use both doesn't make one better... What is better about evolve? Their website didn't impress me in fact it kinda sucked. In have no idea who the company is, AmEx is  worldwide financial leader, you have to give some real argument for it being better not that I can use both.

So say you are pushing 10K on that Heloc, you do it through evolve, then you do another 10K through Bluebird.... all of a sudden you are running 20K, and since we said each $5K earns about $210 in profit, you are now making a profit of $840 per month, along with the savings.

Personally I am not sure that I would do the monthly, but I did write a post about something similar on an annual basis.

Or I just do $10k on AmEx Serve and call it a day and be happy.

Here is one where I use the Bluebird to create a 12 month interest free loan, and then put that into a high interest saving account in order to generate a profit as follows:

New cardholders:

Travel Cash $550
Real Cash $151.10

http://saverocity.com/finance/credit-card-arbitrage-paypal-prepaid-mastercard-barclaycard-arrival/

I don't care about travel $ only real money, if its not cash I'm not interested. I know there is lots if good deals in travel, but I can't be bothered, cash is king.

Only potential issue with your plan:

You may end the month carrying a large balance on your credit card prior to wiping it down, if you do that you will trigger high utilization alerts (depending on your line of credit) that can dent your credit score, which should be considered if you are applying for credit.

I have more than enough limit to avoid utilization issues and the cash is always available in the HELOC to pay the card off if need be.

I posted to tell you how you can make more money by using the evolve card because you have a HELOC.  The Bird or Serve is a self contained operation that anyone can use 10K, if you have a HELOC you should use Evolve (if it works with your HELOC, it doesn't with all) and then you can earn REAL money of an extra $400 per month which for someone with debt should be interesting.

If you don't care about 'travel money' then what if you take the same principle and use a different card?'

Do it your way and earn X do it my way and earn 2X.

I'm giving you knowledge on how to make more money so you can get out of the debt you are in, maybe this is standard response for these forums, but I think you should tone down the attitude, because when I get replies like that I lose any interest in continuing to help.

First off let me apologize if I came across with an attitude I was replying late at night from my iPhone after just getting off the phone with my insurance company filing a claim for a car accident I was in earlier in the day. All that being said it really is no excuse for an attitude if I came across as having one as that was not my intention. You have been providing a lot of useful information and I would hate for you to stop because of my late night response.

Now back to our regularly scheduled post...

So basically Evolve isn't really "better" than Serve/Bluebird it is just an alternative and to the point you were making something you can operate independently to double up the amount you make in cash back rewards.

Now I agree I am not sure I really don’t want to push $20k a month through something like this, at least not right away so if I were to do it I would pick AmEx as my go to company as they are a known player compared to Evolve, not that I would rule out doubling up in a few months if this worked out to be as lucrative as it seems like it can be, I would start with $10k using most likely AmEx Serve for both my wife and I.

Regarding the HELOC as debt, I actually have the assets to clear it 100% if I chose, but it’s a low rate 2.49% so I don't same thing with my mortgage. Actually in my last refinance, I split my mortgage into a mortgage and the HELOC to get out of a Jumbo for a lower rate and put the remaining balance on the HELOC. I have about $200k of free borrowing capacity on my HELOC.

What I do is pretty much dump all of my income into the HELOC to temporally lower the balance to reduce the monthly interest payment and borrowing the funds back to pay my bills, the 2.49% beats any money market accounts etc… So in essence by saving 2.49% on depositing my income that is my savings rate. Now the rate is lower because the 2.49% gets reduced for the tax benefit as the first $100k is considered home acquisition debt and I have never had over another $100k of home equity debt so it is all tax deductible. However I am also not paying taxes on interest earned so that counters the tax savings so it nets out to an effective rate of just shy of the 2.49%, so I call it that to make it simple.

I overpay my mortgage basically to the amount of my initial mortgage payment prior to all of my refi's, I have done 2, so the formula is original mortgage payment - current mortgage payment - minus HELOC interest = monthly overpayment. So my end game is larger overpayments to my mortgage which is also quite low at 3.375%.

Now I agree using both Evolve and Serve would have a bigger impact on the front end and then the backend however like you said pushing $20k a month through 3 cards just seems excessive although when running the numbers all the way through with the savings being compounded into the mortgage the earnings/savings are probably upwards of $1000 per month.

As far as the travel cards, I don't like them because they seem good on the front end, but when it comes time to use them not so much. SPG 5x earning is great except that it locks you into Starwood properties and the rooms that go for 20,000 points per night are far cheaper to pay for in cash and earn cash back on credit cards, not just singling out SPG just using that as an example. You have to spend a god awful amount of money to earn enough points to get the travel perks we would use, it is far more cost effective to maximize cash back and pay for travel than try to spend my way into travel rewards. My father in law did this analysis a few years back (he's retired and travels extensively) and we all switched all of our cards to cash back. That is a topic for a whole other thread... I think I might start that actually...

My current best play is using my AmEx Blue Cash Preferred and/or my Costco AmEx which both get 3% back at gas stations, I am going to call AmEx again see about the AmEx Blue with the old reward program. When speaking with them last night there is a new card coming out soon called AmEx Everyday, they have not listed all of the details yet, so not sure if it will be useful in Manufactured Spending.

[Saverocity]

Yeah, your idea is fine.

But...

The evolve is better because it then allows the Bluebird (or serve) to also operate.

Just being able to use both doesn't make one better... What is better about evolve? Their website didn't impress me in fact it kinda sucked. In have no idea who the company is, AmEx is  worldwide financial leader, you have to give some real argument for it being better not that I can use both.

So say you are pushing 10K on that Heloc, you do it through evolve, then you do another 10K through Bluebird.... all of a sudden you are running 20K, and since we said each $5K earns about $210 in profit, you are now making a profit of $840 per month, along with the savings.

Personally I am not sure that I would do the monthly, but I did write a post about something similar on an annual basis.

Or I just do $10k on AmEx Serve and call it a day and be happy.

Here is one where I use the Bluebird to create a 12 month interest free loan, and then put that into a high interest saving account in order to generate a profit as follows:

New cardholders:

Travel Cash $550
Real Cash $151.10

http://saverocity.com/finance/credit-card-arbitrage-paypal-prepaid-mastercard-barclaycard-arrival/

I don't care about travel $ only real money, if its not cash I'm not interested. I know there is lots if good deals in travel, but I can't be bothered, cash is king.

Only potential issue with your plan:

You may end the month carrying a large balance on your credit card prior to wiping it down, if you do that you will trigger high utilization alerts (depending on your line of credit) that can dent your credit score, which should be considered if you are applying for credit.

I have more than enough limit to avoid utilization issues and the cash is always available in the HELOC to pay the card off if need be.

I posted to tell you how you can make more money by using the evolve card because you have a HELOC.  The Bird or Serve is a self contained operation that anyone can use 10K, if you have a HELOC you should use Evolve (if it works with your HELOC, it doesn't with all) and then you can earn REAL money of an extra $400 per month which for someone with debt should be interesting.

If you don't care about 'travel money' then what if you take the same principle and use a different card?'

Do it your way and earn X do it my way and earn 2X.

I'm giving you knowledge on how to make more money so you can get out of the debt you are in, maybe this is standard response for these forums, but I think you should tone down the attitude, because when I get replies like that I lose any interest in continuing to help.

First off let me apologize if I came across with an attitude I was replying late at night from my iPhone after just getting off the phone with my insurance company filing a claim for a car accident I was in earlier in the day. All that being said it really is no excuse for an attitude if I came across as having one as that was not my intention. You have been providing a lot of useful information and I would hate for you to stop because of my late night response.

Now back to our regularly scheduled post...

So basically Evolve isn't really "better" than Serve/Bluebird it is just an alternative and to the point you were making something you can operate independently to double up the amount you make in cash back rewards.

Now I agree I am not sure I really don’t want to push $20k a month through something like this, at least not right away so if I were to do it I would pick AmEx as my go to company as they are a known player compared to Evolve, not that I would rule out doubling up in a few months if this worked out to be as lucrative as it seems like it can be, I would start with $10k using most likely AmEx Serve for both my wife and I.

Regarding the HELOC as debt, I actually have the assets to clear it 100% if I chose, but it’s a low rate 2.49% so I don't same thing with my mortgage. Actually in my last refinance, I split my mortgage into a mortgage and the HELOC to get out of a Jumbo for a lower rate and put the remaining balance on the HELOC. I have about $200k of free borrowing capacity on my HELOC.

What I do is pretty much dump all of my income into the HELOC to temporally lower the balance to reduce the monthly interest payment and borrowing the funds back to pay my bills, the 2.49% beats any money market accounts etc… So in essence by saving 2.49% on depositing my income that is my savings rate. Now the rate is lower because the 2.49% gets reduced for the tax benefit as the first $100k is considered home acquisition debt and I have never had over another $100k of home equity debt so it is all tax deductible. However I am also not paying taxes on interest earned so that counters the tax savings so it nets out to an effective rate of just shy of the 2.49%, so I call it that to make it simple.

I overpay my mortgage basically to the amount of my initial mortgage payment prior to all of my refi's, I have done 2, so the formula is original mortgage payment - current mortgage payment - minus HELOC interest = monthly overpayment. So my end game is larger overpayments to my mortgage which is also quite low at 3.375%.

Now I agree using both Evolve and Serve would have a bigger impact on the front end and then the backend however like you said pushing $20k a month through 3 cards just seems excessive although when running the numbers all the way through with the savings being compounded into the mortgage the earnings/savings are probably upwards of $1000 per month.

As far as the travel cards, I don't like them because they seem good on the front end, but when it comes time to use them not so much. SPG 5x earning is great except that it locks you into Starwood properties and the rooms that go for 20,000 points per night are far cheaper to pay for in cash and earn cash back on credit cards, not just singling out SPG just using that as an example. You have to spend a god awful amount of money to earn enough points to get the travel perks we would use, it is far more cost effective to maximize cash back and pay for travel than try to spend my way into travel rewards. My father in law did this analysis a few years back (he's retired and travels extensively) and we all switched all of our cards to cash back. That is a topic for a whole other thread... I think I might start that actually...

My current best play is using my AmEx Blue Cash Preferred and/or my Costco AmEx which both get 3% back at gas stations, I am going to call AmEx again see about the AmEx Blue with the old reward program. When speaking with them last night there is a new card coming out soon called AmEx Everyday, they have not listed all of the details yet, so not sure if it will be useful in Manufactured Spending.

Hey, thanks for the reply, sorry to hear about that day!

I got irked by it because I actually became aware of this forum initially by someone posting me up in the 'hall of shame' and I found certain attitudes around here lacking, there is a little vibe of 'holier than thou' but I don't see it from what you wrote here, and it was presumptuous on my behalf. My apologies.

As for your strategy, you are thinking the right way, start small, ramp up.  Now, Evolve is not as pretty as Amex, agreed, and it isn't as stable, but it seems to be a valid option for many.  Your challenge of it actually has prompted me to explore its financial standing and robustness and I will dig into this.

What you will quickly find is that once you are comfortable with $10K you will want $20K, then $100K and so on.  The top 'players' (though not the ones in my tournament) that I know are doing $1M+ per month on a variety of programs.

You sound in good shape regarding your debt management, but lets remember that even with 'good debt' being able to pay it down is better than paying interest in the most optimized manner, if you could bring an extra $5K+ per year to reduce your debt levels from additional methods (such as evolve and others) then they offer a lot of value.

As for your travel analysis... not necessarily true, just like with money there are two sides of every coin, how you earn and how you spend.  Let's actually use SPG:

20,000 points can transfer to huge list of airlines at a 1:125 rate, making 25K American Airlines miles.  You can then fly from New York to Tokyo in Coach (or in Biz if you double that) for that, which I think is valued at more like $500 (that is very conservative).

Taking that further, fly back from Tokyo (another 20K SPG) to NYC, and use their free stopover rule to stay in NY for 8 months, then fly one way to St Thomas for free.

So by optimizing both the earning and the spending you get WAY better value.

For travel, cash back is only really useful for domestic flights and for some hotels, for international flights it doesn't make sense.  I personally fly the wife an I in Business Class internationally all the time for free like this, leveraging the various stopover rules to make 3 trips for the price of 2.

[Mister Fancypants]

Hey, thanks for the reply, sorry to hear about that day!

I got irked by it because I actually became aware of this forum initially by someone posting me up in the 'hall of shame' and I found certain attitudes around here lacking, there is a little vibe of 'holier than thou' but I don't see it from what you wrote here, and it was presumptuous on my behalf. My apologies.

I feel ya, sometimes the forum is a bit rougher than it should be.

As for your strategy, you are thinking the right way, start small, ramp up.  Now, Evolve is not as pretty as Amex, agreed, and it isn't as stable, but it seems to be a valid option for many.  Your challenge of it actually has prompted me to explore its financial standing and robustness and I will dig into this.

What you will quickly find is that once you are comfortable with $10K you will want $20K, then $100K and so on.  The top 'players' (though not the ones in my tournament) that I know are doing $1M+ per month on a variety of programs.

I'm fairly conservative, and my wife even more more than I, so in all likelyhood I doubt we would ever ramp up much more even it were proven to be very lucrative. We would also stick with working with companies that are more stable. She would never use some random company, if I tell here this is through AmEx she won't think it is anywhere as shady as it really is.

You sound in good shape regarding your debt management, but lets remember that even with 'good debt' being able to pay it down is better than paying interest in the most optimized manner, if you could bring an extra $5K+ per year to reduce your debt levels from additional methods (such as evolve and others) then they offer a lot of value.

I have crunched some numbers, correct me if you think I am doing this wrong, this is back of the napkin math. Lets say right now I use AmEx Serve with my AmEx Blue Cash Prefered and get 3% cash back. So I use VR at Sunoco for $10k and get $302.37 cash back, then I swipe another $2k at CVS on my Fidelity AmEx for $40, subtract the $79 for VR fees and have a net total of $263.37 in cash back. I now have $12k on my 2 Serve cards which I will transfer to my bank account and then make a principal payment to my HELOC. Hypothetically, lets say the whole process takes 5 days, and I started on the first day of my AmEx Blue billing cycle the 11th. As of the 16th I have now reduced my HELOC by $12k at  2.49% which is is roughly $.82 per day. My statement closes on the 11th of the following month and the payment is then due the 6th of the month afterwards. Normally, I wait until the day the payment is due to keep the money in the HELOC as long as possible, but now I think I would pay it off as soon as the statment closed on the 11th, roughly 26 days for a total reduction of interest of $21.32. My AmEx Blue payment would be for $9,697.63. I will keep it simple and assume the Fid AmEx is the same cycle and pays the $2k same day even though it doesn't, I get those funds transfered to my Fidelity account and they wind up in the HELOC eventually as well in a few days. I would then have an extra $21.32 toward mortgage principal, a permanent reduction of $302.37 to my HELOC and cleared all the CC debt, and ready to start over again.

As for your travel analysis... not necessarily true, just like with money there are two sides of every coin, how you earn and how you spend.  Let's actually use SPG:

20,000 points can transfer to huge list of airlines at a 1:125 rate, making 25K American Airlines miles.  You can then fly from New York to Tokyo in Coach (or in Biz if you double that) for that, which I think is valued at more like $500 (that is very conservative).

I have spend $4,000 to earn 20k SPG points which is then becomes 25k AA miles. Or I can earn 2% and get $80. The problem is you assumption that I can get a flight from NY to Tokyo for 25k AA miles and as an AA platimum member it is far and few between that I have ever been able to claim a flight that I needed for under 100k miles, so I am either buying up or paying for my flight instead. Same goes for United (it was Continental last time I flew them). If you have lots of flexiblity and book around deals then you make that work, if you need to book within parameters that are more rigid and my life/travel is usually not geared around travel perks then the perks just don't add up. I understand how people can make them work, but you have to be very flexible and jump through hoops, I am not a hoop jumper. I will take a consistent simple reward over something that might be beneficial but I might never be able to leverage.

[Saverocity]

Hey, thanks for the reply, sorry to hear about that day!

I got irked by it because I actually became aware of this forum initially by someone posting me up in the 'hall of shame' and I found certain attitudes around here lacking, there is a little vibe of 'holier than thou' but I don't see it from what you wrote here, and it was presumptuous on my behalf. My apologies.

I feel ya, sometimes the forum is a bit rougher than it should be.

As for your strategy, you are thinking the right way, start small, ramp up.  Now, Evolve is not as pretty as Amex, agreed, and it isn't as stable, but it seems to be a valid option for many.  Your challenge of it actually has prompted me to explore its financial standing and robustness and I will dig into this.

What you will quickly find is that once you are comfortable with $10K you will want $20K, then $100K and so on.  The top 'players' (though not the ones in my tournament) that I know are doing $1M+ per month on a variety of programs.

I'm fairly conservative, and my wife even more more than I, so in all likelyhood I doubt we would ever ramp up much more even it were proven to be very lucrative. We would also stick with working with companies that are more stable. She would never use some random company, if I tell here this is through AmEx she won't think it is anywhere as shady as it really is.

You sound in good shape regarding your debt management, but lets remember that even with 'good debt' being able to pay it down is better than paying interest in the most optimized manner, if you could bring an extra $5K+ per year to reduce your debt levels from additional methods (such as evolve and others) then they offer a lot of value.

I have crunched some numbers, correct me if you think I am doing this wrong, this is back of the napkin math. Lets say right now I use AmEx Serve with my AmEx Blue Cash Prefered and get 3% cash back. So I use VR at Sunoco for $10k and get $302.37 cash back, then I swipe another $2k at CVS on my Fidelity AmEx for $40, subtract the $79 for VR fees and have a net total of $263.37 in cash back. I now have $12k on my 2 Serve cards which I will transfer to my bank account and then make a principal payment to my HELOC. Hypothetically, lets say the whole process takes 5 days, and I started on the first day of my AmEx Blue billing cycle the 11th. As of the 16th I have now reduced my HELOC by $12k at  2.49% which is is roughly $.82 per day. My statement closes on the 11th of the following month and the payment is then due the 6th of the month afterwards. Normally, I wait until the day the payment is due to keep the money in the HELOC as long as possible, but now I think I would pay it off as soon as the statment closed on the 11th, roughly 26 days for a total reduction of interest of $21.32. My AmEx Blue payment would be for $9,697.63. I will keep it simple and assume the Fid AmEx is the same cycle and pays the $2k same day even though it doesn't, I get those funds transfered to my Fidelity account and they wind up in the HELOC eventually as well in a few days. I would then have an extra $21.32 toward mortgage principal, a permanent reduction of $302.37 to my HELOC and cleared all the CC debt, and ready to start over again.

As for your travel analysis... not necessarily true, just like with money there are two sides of every coin, how you earn and how you spend.  Let's actually use SPG:

20,000 points can transfer to huge list of airlines at a 1:125 rate, making 25K American Airlines miles.  You can then fly from New York to Tokyo in Coach (or in Biz if you double that) for that, which I think is valued at more like $500 (that is very conservative).

I have spend $4,000 to earn 20k SPG points which is then becomes 25k AA miles. Or I can earn 2% and get $80. The problem is you assumption that I can get a flight from NY to Tokyo for 25k AA miles and as an AA platimum member it is far and few between that I have ever been able to claim a flight that I needed for under 100k miles, so I am either buying up or paying for my flight instead. Same goes for United (it was Continental last time I flew them). If you have lots of flexiblity and book around deals then you make that work, if you need to book within parameters that are more rigid and my life/travel is usually not geared around travel perks then the perks just don't add up. I understand how people can make them work, but you have to be very flexible and jump through hoops, I am not a hoop jumper. I will take a consistent simple reward over something that might be beneficial but I might never be able to leverage.

You are more or less right.  A couple of optimization ideas might be: swipe reloading with a higher multiple (5x at groceries) would make 10K worth $500.  As for swiping, I have to confirm but I think that if you swipe you reduce the amount you can load with vanilla, the $7K actually comes like this:

5K swipe or vanilla
1K online load (200 per day) from a Credit Card
1K online Load (200 per day) from a Debit Card

Regarding the SPG, sadly that is actually spending 20K to earn 20K - they earn at 1X but they transfer at 1.25X this raises a split in the mindset of the manufactured spenders - one is more mustacian than the other...

One camp (lets call them the Devils Children) like to buy cheap flights, IE they would earn those SPG in order to fly at a discounted price. They operate in a net cash negative (mainly)
Another camp (lets call them the Cherubs) like to earn a net profit, so they tend to go for cash back.

There is a guy that I featured (the guy who earned 1700 in a week) that actually brought both together.  He made a system where he bought $5000 in gift cards earning 3% online cash back for $150, and paid with the SPG for 5000 points, and to liquidate paid another 70 cents per $1000.  He was netting a profit of 5000 points and $146.50 per transaction.  Now the people who say there was an opportunity cost on the spg vs 2% cash are correct, but also you can kinda see the point of saying screw it, take the points, travel business class and pocket the profit (well I can anyway!)

As for your booking problems... SPG transfer to dozens of carriers, so you could search in advance and find the best, then transfer. I am positive you could find a way to get there if you had that flexibility (from the options to spend) even if your schedule is tight.

[Mister Fancypants]

You are more or less right.  A couple of optimization ideas might be: swipe reloading with a higher multiple (5x at groceries) would make 10K worth $500.  As for swiping, I have to confirm but I think that if you swipe you reduce the amount you can load with vanilla, the $7K actually comes like this:

5K swipe or vanilla
1K online load (200 per day) from a Credit Card
1K online Load (200 per day) from a Debit Card

I called AmEx again last night and spoke to them about the old Blue card rewards program, they do not actively offer the card but I had no problem getting it, I've a member for a while and my monthly spend with them is fairly high, YMMV. My new Blue Cash card with 5% cash back at CVS will be arriving on or before 3/29. The card will have a limit of $15k which is perfect for $12k monthly charges as the utitlization is only 80% which will never impact my credit report and the the $12k will have no impact on my overall credit utilization. It also leaves me with $750 of normal spend at CVS for prescriptions at 5% which is well over what I normally spend. I will most likely role over most of my limit from the my other Blue Cash Prefered card to this card and drop that card, the extra 1% at grocery stores with a $1500 cash back limit isn't really worth the $75 annual fee, especially since I will crush the $6,500 thresehold in the first month with Manufactured Spending. So the limit will never be an issue.

As another point, I read the terms of service on AmEx Serve and plan on calling to day for clarity but it seems like paying your mortgage is a legit use for the card, so this would be 100% on the level, not even in the scam category at all, which is completely suprising. There is however a $5,000 bill pay limit to all payees per month, so the final $1,000 would have to be a cash withdrawal from the ATM or ACH to my bank and payment to the HELOC at the bank, which is no big deal.

So now to the numbers, excluding the first month where I need to clear the $6,500 hurdly, I would

Swipe $10k ($1k per day, 2 cards, 5 days)
Online $2k ($200 per day , 2 cards, 5 days)

Debit card, I have no rewards program on my debit cards, so just skipping that...

Total of $12k @ 5%, no fees is $600 clear, monthly or $7,200 annually.

The bill pay will take 4 days according to AmEx Serve website , so lets call it 5 to be safe and I will normalize months to 30 days, so I will get 25 days of $.82 interest savings or $20.50 per month. I will actually move the money incrementally as I load it, so I will build up to $.82 and get a little more.

I will leave the $7,200 as a permanent reduction to the HELOC as it is pretty much free money and use this entire process as a mortgage accelerator.

I am going to call AmEx Serve tonight with a few questions and setup my accounts, this is actually going to be so simple, my wife is going to complain that she has to go to CVS 5 days in a month to swipe a card, I am hoping you can swipe without an ID check and I can just hold onto both of our cards and she doesn't actually have to do anything, that will make my life so much easier...

Regarding the SPG, sadly that is actually spending 20K to earn 20K - they earn at 1X but they transfer at 1.25X this raises a split in the mindset of the manufactured spenders - one is more mustacian than the other...

At 1x earnings there is no comparison, $20,000 in spend to get a free flight that I can book for a fraction of that, give me 2% back on the $20k, $400 which I can use on anything.

One camp (lets call them the Devils Children) like to buy cheap flights, IE they would earn those SPG in order to fly at a discounted price. They operate in a net cash negative (mainly)
Another camp (lets call them the Cherubs) like to earn a net profit, so they tend to go for cash back.

There is a guy that I featured (the guy who earned 1700 in a week) that actually brought both together.  He made a system where he bought $5000 in gift cards earning 3% online cash back for $150, and paid with the SPG for 5000 points, and to liquidate paid another 70 cents per $1000.  He was netting a profit of 5000 points and $146.50 per transaction.  Now the people who say there was an opportunity cost on the spg vs 2% cash are correct, but also you can kinda see the point of saying screw it, take the points, travel business class and pocket the profit (well I can anyway!)]

As for your booking problems... SPG transfer to dozens of carriers, so you could search in advance and find the best, then transfer. I am positive you could find a way to get there if you had that flexibility (from the options to spend) even if your schedule is tight.

I understand the dynamics and how people can make it work, to me that is just too much work with not enough incentive, I will be happy with my contant optimized cash rewards, and I will look for optimal travel deals and just pay for them. My wife is a excellent shopper anyway. For the return on time invested I would rather spend it looking at something other CC travel rewards etc... there is much better returns to be had.

I have spent a fair amount of time doing research and responding on this dialog on the manufactured spending, but this looks like it will yield a very nice cash return for very little actual effort, the travel stuff I have already looked into in the past and my conclusion is the same, it is better to go with cash and not worry about it. I know there are people who do some crazy travel hacking with CC and gift cards etc... More power to them, I just find the time involved is not worth the savings compared to just taking the cash in respect to my asset base and time commitments etc...

Thanks again for all your help, I may never have known about AmEx Serve or even thought about getting the old Blue cash card again to make this a home run without your blog or posts here. 

[Saverocity]

Awesome!  That serve/5% is going to make a massive difference, glad I could share the news on it.

For travel, my method is simple, I do what you are planning to do for the 5% Cash back, then when I need to fly I sign up for a Credit Card and snag their bonus, I don't use travel cards for either regular or 'irregular spend'.

Enjoy!

[thepokercab]

You are more or less right.  A couple of optimization ideas might be: swipe reloading with a higher multiple (5x at groceries) would make 10K worth $500.  As for swiping, I have to confirm but I think that if you swipe you reduce the amount you can load with vanilla, the $7K actually comes like this:

5K swipe or vanilla
1K online load (200 per day) from a Credit Card
1K online Load (200 per day) from a Debit Card

I called AmEx again last night and spoke to them about the old Blue card rewards program, they do not actively offer the card but I had no problem getting it, I've a member for a while and my monthly spend with them is fairly high, YMMV. My new Blue Cash card with 5% cash back at CVS will be arriving on or before 3/29. The card will have a limit of $15k which is perfect for $12k monthly charges as the utitlization is only 80% which will never impact my credit report and the the $12k will have no impact on my overall credit utilization. It also leaves me with $750 of normal spend at CVS for prescriptions at 5% which is well over what I normally spend. I will most likely role over most of my limit from the my other Blue Cash Prefered card to this card and drop that card, the extra 1% at grocery stores with a $1500 cash back limit isn't really worth the $75 annual fee, especially since I will crush the $6,500 thresehold in the first month with Manufactured Spending. So the limit will never be an issue.

As another point, I read the terms of service on AmEx Serve and plan on calling to day for clarity but it seems like paying your mortgage is a legit use for the card, so this would be 100% on the level, not even in the scam category at all, which is completely suprising. There is however a $5,000 bill pay limit to all payees per month, so the final $1,000 would have to be a cash withdrawal from the ATM or ACH to my bank and payment to the HELOC at the bank, which is no big deal.

So now to the numbers, excluding the first month where I need to clear the $6,500 hurdly, I would

Swipe $10k ($1k per day, 2 cards, 5 days)
Online $2k ($200 per day , 2 cards, 5 days)

Debit card, I have no rewards program on my debit cards, so just skipping that...

Total of $12k @ 5%, no fees is $600 clear, monthly or $7,200 annually.

The bill pay will take 4 days according to AmEx Serve website , so lets call it 5 to be safe and I will normalize months to 30 days, so I will get 25 days of $.82 interest savings or $20.50 per month. I will actually move the money incrementally as I load it, so I will build up to $.82 and get a little more.

I will leave the $7,200 as a permanent reduction to the HELOC as it is pretty much free money and use this entire process as a mortgage accelerator.

I am going to call AmEx Serve tonight with a few questions and setup my accounts, this is actually going to be so simple, my wife is going to complain that she has to go to CVS 5 days in a month to swipe a card, I am hoping you can swipe without an ID check and I can just hold onto both of our cards and she doesn't actually have to do anything, that will make my life so much easier...

Regarding the SPG, sadly that is actually spending 20K to earn 20K - they earn at 1X but they transfer at 1.25X this raises a split in the mindset of the manufactured spenders - one is more mustacian than the other...

At 1x earnings there is no comparison, $20,000 in spend to get a free flight that I can book for a fraction of that, give me 2% back on the $20k, $400 which I can use on anything.

One camp (lets call them the Devils Children) like to buy cheap flights, IE they would earn those SPG in order to fly at a discounted price. They operate in a net cash negative (mainly)
Another camp (lets call them the Cherubs) like to earn a net profit, so they tend to go for cash back.

There is a guy that I featured (the guy who earned 1700 in a week) that actually brought both together.  He made a system where he bought $5000 in gift cards earning 3% online cash back for $150, and paid with the SPG for 5000 points, and to liquidate paid another 70 cents per $1000.  He was netting a profit of 5000 points and $146.50 per transaction.  Now the people who say there was an opportunity cost on the spg vs 2% cash are correct, but also you can kinda see the point of saying screw it, take the points, travel business class and pocket the profit (well I can anyway!)]

As for your booking problems... SPG transfer to dozens of carriers, so you could search in advance and find the best, then transfer. I am positive you could find a way to get there if you had that flexibility (from the options to spend) even if your schedule is tight.

I understand the dynamics and how people can make it work, to me that is just too much work with not enough incentive, I will be happy with my contant optimized cash rewards, and I will look for optimal travel deals and just pay for them. My wife is a excellent shopper anyway. For the return on time invested I would rather spend it looking at something other CC travel rewards etc... there is much better returns to be had.

I have spent a fair amount of time doing research and responding on this dialog on the manufactured spending, but this looks like it will yield a very nice cash return for very little actual effort, the travel stuff I have already looked into in the past and my conclusion is the same, it is better to go with cash and not worry about it. I know there are people who do some crazy travel hacking with CC and gift cards etc... More power to them, I just find the time involved is not worth the savings compared to just taking the cash in respect to my asset base and time commitments etc...

Thanks again for all your help, I may never have known about AmEx Serve or even thought about getting the old Blue cash card again to make this a home run without your blog or posts here.

So- you can take your AMEX serve card to CVS and swipe reload it with an AMEX credit card, and AMEX won't count that as a cash advance?  That just seems crazy...  I can see buying the VR cards since that's probably categorized as a drug store purchase, but the swipe reloads are counted as drug store purchases as well? 

[thepokercab]

Furthermore, you can go online and put $1000 on your AMEX serve, using an AMEX credit card, and they'll categorize that as a purchase as opposed to a cash advance?!  My brain might explode...   

[Mister Fancypants]

So- you can take your AMEX serve card to CVS and swipe reload it with an AMEX credit card, and AMEX won't count that as a cash advance?  That just seems crazy...  I can see buying the VR cards since that's probably categorized as a drug store purchase, but the swipe reloads are counted as drug store purchases as well?

The CVS and 7-11 swipes are charges at the stores that are processed through the VR network the same way as if you brought cash to the register.

So the credit card company I this case AmEx just sees a charge from CVS no idea what for.

That is how I understand it anyway... YMMV depending on your credit card carrier.

[Mister Fancypants]

Furthermore, you can go online and put $1000 on your AMEX serve, using an AMEX credit card, and they'll categorize that as a purchase as opposed to a cash advance?!  My brain might explode...

Processed through ISIS Wallet I believe also obscures the charges.

[thepokercab]

So- you can take your AMEX serve card to CVS and swipe reload it with an AMEX credit card, and AMEX won't count that as a cash advance?  That just seems crazy...  I can see buying the VR cards since that's probably categorized as a drug store purchase, but the swipe reloads are counted as drug store purchases as well?

The CVS and 7-11 swipes are charges at the stores that are processed through the VR network the same way as if you brought cash to the register.

So the credit card company I this case AmEx just sees a charge from CVS no idea what for.

That is how I understand it anyway... YMMV depending on your credit card carrier.

Got it- I guess it just seems like something that AMEX could kill pretty easily. I could see Chase, for instance not knowing that your $1,000 CVS purchase is funding your Serve account- but in this case, since both the serve account and your credit card are administered by AMEX- I would think they could put 2 and 2 together pretty easily (a $1000 charge on your AMEX blue (at CVS no less) and then a $1000 deposit into your serve account)

But hey- if it works.  Awesomeness.   

[Mister Fancypants]

So- you can take your AMEX serve card to CVS and swipe reload it with an AMEX credit card, and AMEX won't count that as a cash advance?  That just seems crazy...  I can see buying the VR cards since that's probably categorized as a drug store purchase, but the swipe reloads are counted as drug store purchases as well?

The CVS and 7-11 swipes are charges at the stores that are processed through the VR network the same way as if you brought cash to the register.

So the credit card company I this case AmEx just sees a charge from CVS no idea what for.

That is how I understand it anyway... YMMV depending on your credit card carrier.

Got it- I guess it just seems like something that AMEX could kill pretty easily. I could see Chase, for instance not knowing that your $1,000 CVS purchase is funding your Serve account- but in this case, since both the serve account and your credit card are administered by AMEX- I would think they could put 2 and 2 together pretty easily (a $1000 charge on your AMEX blue (at CVS no less) and then a $1000 deposit into your serve account)

But hey- if it works.  Awesomeness.   

Actually it would be highly unlikely if not impossible for them to put the transactions together. I am a software engineer by trade, financial software in fact. For starters AmEx is the parent but I am sure Serve (Prepaid reloadable card) and Blue (credit card) are actually seperated companies wholly owned subsidiaries, at the bare minimum they are seperate divisions.

They absolutely don't share infrastructure for compliance reasons, and the only key piece if data connecting the 2 accounts is social security number which is absolutely not crucial in either transaction or in day reconciliations.

So someone would have to have access to both businesses to even make the request which is a high level exec and then you would need to find programmers who have access to both who could generate a report that cross references the data.

The cost involved in trying to find out if people are complying with the TOS of several of their products would probably not be justified compared to the cost to there bottom line.

They are well aware of the capability and for the small percentage of people who use the product like we have discussed the cost is absorbed by the profit made overall by the users they have targeted.

Trust me AmEx is smarter then us

[thepokercab]

Interesting.. that wouldn't occur to me because I've had Bank of America Credit cards and a checking account, as well as a Chase checking account and Chase credit cards, and on each site i've been able to view and access my credit card info along with my checking account info. As well as do simple transfers between credit card and checking account.  They certainly seem to interact to me. 

Is Serve and AMEX different, or is what I'm describing something different?  Not trying to argue, but really just curious.   

[Saverocity]

Interesting.. that wouldn't occur to me because I've had Bank of America Credit cards and a checking account, as well as a Chase checking account and Chase credit cards, and on each site i've been able to view and access my credit card info along with my checking account info. As well as do simple transfers between credit card and checking account.  They certainly seem to interact to me. 

Is Serve and AMEX different, or is what I'm describing something different?  Not trying to argue, but really just curious.

Amex offers two products, one is called Serve, one is called Bluebird.  They are intended solutions for the 'unbanked'

[Mister Fancypants]

Interesting.. that wouldn't occur to me because I've had Bank of America Credit cards and a checking account, as well as a Chase checking account and Chase credit cards, and on each site i've been able to view and access my credit card info along with my checking account info. As well as do simple transfers between credit card and checking account.  They certainly seem to interact to me. 

Is Serve and AMEX different, or is what I'm describing something different?  Not trying to argue, but really just curious.

Well that is a little different; let me explain in a little more detail, you are thinking like a customer not like a bank, which is fine as you are a customer not a bank. In the consumer banking division of Chase of BofA there is the traditional depository business of checking savings accounts and then there is the Credit card division which is revolving lines of credits. I actually have accounts both checking/savings and credit cards with both banks, I will use Chase as the example as there website is easier to show how it works.

Back in the beginning of the internet age you would have had separate banking and credit card usernames websites which were not connected because in fact banking and credit cards are separate divisions or possibly entities within the same bank depending on structure. However to make things more convenient for customers as technology has progressed the websites have merged into one to provide seamless integration across product lines.

On Chases website once you are logged on you will notice the web address is https://chaseonline.chase.com/MyAccounts.aspx the bold part being the subdomain that is the master authentication site for online access to the Chase banking world, they use something referred to as Single Sign On (SSO) to pass credentials between different internal applications.

If you select a bank account the web address will begin with something that looks like this https://banking.chase.com notice the bolded word banking, this subdomain is the banking world for checking and savings account etc...

If you select a credit card the web address will begin with something that looks like this https://cards.chase.com/ notice the bolded word cards, this subdomain is the credit card world for Chase.

I don't have a chase mortgage but my guess is https://mortgage.chase.com/ would be the subdomain etc...

Now here is where it gets really cool https://payments.chase.com is where all transfers and payments are made, now since all of these companies are internal they know any internal transfer is legit and can make it instant as they can verify the funds, so that is a courtesy to their customers, even though the reconciliation is probably not as instant.

I do not work for Chase (or BofA for that matter), I am just able to discern this information from understanding in general both how banks work and how software for banks is built, this is my best guess, I of course can be off in some of the details.

Now on to how AmEx and Serve are different, well AmEx is a holding company, one of its subsidiaries is actually the American Express Centurion Bank; this is where it runs its consumer banking and credit card business from.

AmEx Serve is not a banking product; it is a prepaid debit card which is acting like a full service bank. The funds are held in custody at either AmEx Centurion or Wells Fargo, they are insured indirectly via pass through FDIC insurance and your limits are jointly tied to the limits you have with the underlying institution. You can also scroll all the way to the bottom of the Serve website and the copyright is actually for the following company name "2014 Serve Virtual Enterprises, Inc.". Both Serve and Bluebird are sister products and I am sure share infrastructure and this is why you can have only or the other.

AmEx probably cannot even legally share data between its credit card business and its prepaid card business, even if you are a customer of both, in fact I called this morning again and Serve confirmed they are a separate entity from the credit card business. Separate website, separate logon.

Banking is an extremely complex and profitable business, as much as there are plenty of avenues for smart consumers to reap benefits from the system, trust me the banks do more than their share of analysis to determine that each product is profitable, they don't look at it like we do they look at the profitability of a product across all consumers if it will make money then it is a good product and that accounts for the slippage due to whatever small percentage of people can game the product. So if Serve is a profitable product and Blue Cash is a profitable product they will not care that x number of people are getting the best of them by combining them that would make their models too complex, they made their margins.

When their models show they are not making the numbers they expect they change the program, Chase Freedom for example used to have much better rewards, I was grandfathered in, it has gradually sucked more and more that I barely use the card only for its rotating categories now. Over time if a program costs them too much like the Blue Cash/Serve deal might, we will get squeezed out of it, so the more it is published the more likely that will happen... At this point I am not too worried. The likely change will be to the Blue Cash card, but in reality they have already changed that they no longer market the card, the percentage of people who will do this is probably small in comparison to the card base in the entire Blue program which is what they probably model.

Sorry if this way more information than you were expecting :)

[thepokercab]

Interesting.. that wouldn't occur to me because I've had Bank of America Credit cards and a checking account, as well as a Chase checking account and Chase credit cards, and on each site i've been able to view and access my credit card info along with my checking account info. As well as do simple transfers between credit card and checking account.  They certainly seem to interact to me. 

Is Serve and AMEX different, or is what I'm describing something different?  Not trying to argue, but really just curious.

Well that is a little different; let me explain in a little more detail, you are thinking like a customer not like a bank, which is fine as you are a customer not a bank. In the consumer banking division of Chase of BofA there is the traditional depository business of checking savings accounts and then there is the Credit card division which is revolving lines of credits. I actually have accounts both checking/savings and credit cards with both banks, I will use Chase as the example as there website is easier to show how it works.

Back in the beginning of the internet age you would have had separate banking and credit card usernames websites which were not connected because in fact banking and credit cards are separate divisions or possibly entities within the same bank depending on structure. However to make things more convenient for customers as technology has progressed the websites have merged into one to provide seamless integration across product lines.

On Chases website once you are logged on you will notice the web address is https://chaseonline.chase.com/MyAccounts.aspx the bold part being the subdomain that is the master authentication site for online access to the Chase banking world, they use something referred to as Single Sign On (SSO) to pass credentials between different internal applications.

If you select a bank account the web address will begin with something that looks like this https://banking.chase.com notice the bolded word banking, this subdomain is the banking world for checking and savings account etc...

If you select a credit card the web address will begin with something that looks like this https://cards.chase.com/ notice the bolded word cards, this subdomain is the credit card world for Chase.

I don't have a chase mortgage but my guess is https://mortgage.chase.com/ would be the subdomain etc...

Now here is where it gets really cool https://payments.chase.com is where all transfers and payments are made, now since all of these companies are internal they know any internal transfer is legit and can make it instant as they can verify the funds, so that is a courtesy to their customers, even though the reconciliation is probably not as instant.

I do not work for Chase (or BofA for that matter), I am just able to discern this information from understanding in general both how banks work and how software for banks is built, this is my best guess, I of course can be off in some of the details.

Now on to how AmEx and Serve are different, well AmEx is a holding company, one of its subsidiaries is actually the American Express Centurion Bank; this is where it runs its consumer banking and credit card business from.

AmEx Serve is not a banking product; it is a prepaid debit card which is acting like a full service bank. The funds are held in custody at either AmEx Centurion or Wells Fargo, they are insured indirectly via pass through FDIC insurance and your limits are jointly tied to the limits you have with the underlying institution. You can also scroll all the way to the bottom of the Serve website and the copyright is actually for the following company name "2014 Serve Virtual Enterprises, Inc.". Both Serve and Bluebird are sister products and I am sure share infrastructure and this is why you can have only or the other.

AmEx probably cannot even legally share data between its credit card business and its prepaid card business, even if you are a customer of both, in fact I called this morning again and Serve confirmed they are a separate entity from the credit card business. Separate website, separate logon.

Banking is an extremely complex and profitable business, as much as there are plenty of avenues for smart consumers to reap benefits from the system, trust me the banks do more than their share of analysis to determine that each product is profitable, they don't look at it like we do they look at the profitability of a product across all consumers if it will make money then it is a good product and that accounts for the slippage due to whatever small percentage of people can game the product. So if Serve is a profitable product and Blue Cash is a profitable product they will not care that x number of people are getting the best of them by combining them that would make their models too complex, they made their margins.

When their models show they are not making the numbers they expect they change the program, Chase Freedom for example used to have much better rewards, I was grandfathered in, it has gradually sucked more and more that I barely use the card only for its rotating categories now. Over time if a program costs them too much like the Blue Cash/Serve deal might, we will get squeezed out of it, so the more it is published the more likely that will happen... At this point I am not too worried. The likely change will be to the Blue Cash card, but in reality they have already changed that they no longer market the card, the percentage of people who will do this is probably small in comparison to the card base in the entire Blue program which is what they probably model.

Sorry if this way more information than you were expecting :)

You learn something new everyday.  Thanks!

[kkbmustang]

MIND. BLOWN.

[Simple Abundant Living]

Following this thread until I can wrap my head around whether this would work for me or not.

Thanks Saverocity!

[Mister Fancypants]

MIND. BLOWN.

If you are really interested and really want your mind to be blown here is a link for a "somewhat" easy to follow generic credit card profit model...

Trust me the actual models will be far more complicated and they are run with a lot more variability.

http://blegrange.wordpress.com/2010/10/11/a-generic-credit-card-profit-model/

Basically, it breaks down credit cards users into 2 groups "revolvers" those who carry a balance who make the lion’s share of profit for the credit card companies and "transactors", those who pay their balances in full every month.

Of the "transactors", the subset who really play the credit card game to maximize cash/reward returns is very small, here are some basic stats according to Creditcards.com:

In 2012 the average household has 1.96 credit cards (clearly not optimized for maximum rewards).

In 2012 39% of Americans carried credit card debt month to month "revolvers".

In 2012 the average balance per card that carries a balance month to month is $8,220.

In 2012 the average balances per card that is paid in full $1,037.

Total credit card debt in the US at the end of 2012 was approximately $850 billion.

So you can figure out for yourself that the amount of people and their transaction sizes that take advantage of bonuses and rewards or cash back optimally is very small compared to the whole credit card industry in general that it is probably really no big deal in the scheme of things, unless a card program in general is not profitable than you really don't have to worry about it. You personally will never raise a red flag as being a problem user from a rewards perspective, unless you are blatantly committing fraud.

Charging Serve/Bluebird and immediately paying it off probably isn't considered fraud.... But is probably not highly regarded, transferring to your bank account would be construed as a cash advance and would most likely be considered fraud under their TOS, I wouldn't want to have to prove it isn't. I plan on paying my HELOC which is a considered a mortgage and Serve's TOS clearly allows that, so I am well within their guidelines. I then will pay the credit card back with the HELOC, well actually from my checking account which will be funded from my HELOC when I borrow funds to cover the bill.

[arebelspy]

Following this thread until I can wrap my head around whether this would work for me or not.

Thanks Saverocity!

+1

I've read the whole thread, but I don't even understand half of what was said.  I think I need some context for some of this. 

Essentially the optimal strategy takes an old AmEx 5% Blue card and swipes that to then load up a card with cash and then pay bills with that card?

So all of your bills are basically 5% less, to a limit of 7.2k/year or something?

Can you tell I have no idea what I'm typing?  :P

[kkbmustang]

MIND. BLOWN.

If you are really interested and really want your mind to be blown here is a link for a "somewhat" easy to follow generic credit card profit model...

Trust me the actual models will be far more complicated and they are run with a lot more variability.

http://blegrange.wordpress.com/2010/10/11/a-generic-credit-card-profit-model/

Basically, it breaks down credit cards users into 2 groups "revolvers" those who carry a balance who make the lion’s share of profit for the credit card companies and "transactors", those who pay their balances in full every month.

Of the "transactors", the subset who really play the credit card game to maximize cash/reward returns is very small, here are some basic stats according to Creditcards.com:

In 2012 the average household has 1.96 credit cards (clearly not optimized for maximum rewards).

In 2012 39% of Americans carried credit card debt month to month "revolvers".

In 2012 the average balance per card that carries a balance month to month is $8,220.

In 2012 the average balances per card that is paid in full $1,037.

Total credit card debt in the US at the end of 2012 was approximately $850 billion.

So you can figure out for yourself that the amount of people and their transaction sizes that take advantage of bonuses and rewards or cash back optimally is very small compared to the whole credit card industry in general that it is probably really no big deal in the scheme of things, unless a card program in general is not profitable than you really don't have to worry about it. You personally will never raise a red flag as being a problem user from a rewards perspective, unless you are blatantly committing fraud.

Charging Serve/Bluebird and immediately paying it off probably isn't considered fraud.... But is probably not highly regarded, transferring to your bank account would be construed as a cash advance and would most likely be considered fraud under their TOS, I wouldn't want to have to prove it isn't. I plan on paying my HELOC which is a considered a mortgage and Serve's TOS clearly allows that, so I am well within their guidelines. I then will pay the credit card back with the HELOC, well actually from my checking account which will be funded from my HELOC when I borrow funds to cover the bill.

Thanks Mister Fancypants. I've got the Amex Costco card which gives me cash back to be spent at Costco. A nice bonus every February. But I don't regularly use it and most of our transactions are debit purchases. I could just as easily pay everything with a cash back card and then pay the balance. Definitely something to consider.

[Saverocity]

Has anyone been using the bluebird or serve to pay bills for long enough to be able to recommend it or give it the stamp of approval?

Yes, it happened for me the first month I made $420 profit from the account.

[Saverocity]

Following this thread until I can wrap my head around whether this would work for me or not.

Thanks Saverocity!

+1

I've read the whole thread, but I don't even understand half of what was said.  I think I need some context for some of this. 

Essentially the optimal strategy takes an old AmEx 5% Blue card and swipes that to then load up a card with cash and then pay bills with that card?

So all of your bills are basically 5% less, to a limit of 7.2k/year or something?

Can you tell I have no idea what I'm typing?  :P

No no... this goes against all thing Mustachian until you see through the smoke and mirrors.

What players of this game attempt to do is to spend as much as humanly possible each month on a Credit Card.  By which I mean 5-6 figure amounts.

In tandem, I try to spend as little as possible on wasteful stuff, the balance between the two numbers is what is considered 'manufactured spend'.

The profit from this activity can equate to a 6 figure salary at the extreme.

For your average Joe and Joanne as a couple, just doing the Serve with say $6K per person per month = $12K*5%  = $600 net profit per month, or $7.2K net per year.

Not 5% discount from groceries, but an extra $7.2K in your pocket, which is why I have been trying to bash heads on this forum to make people realize what this could do your FIRE plans.

[arebelspy]

For your average Joe and Joanne as a couple, just doing the Serve with say $6K per person per month = $12K*5%  = $600 net profit per month, or $7.2K net per year.

Does that mean you need to be spending 6k/person/month, aka 144k/yr?  My spending is like .. 1/10th that.

Not 5% discount from groceries, but an extra $7.2K in your pocket, which is why I have been trying to bash heads on this forum to make people realize what this could do your FIRE plans.

You may need to write up a Simple Beginners Guide then, like I.P. had to do for cell phones for us slow folks.. ;)

[Saverocity]

For your average Joe and Joanne as a couple, just doing the Serve with say $6K per person per month = $12K*5%  = $600 net profit per month, or $7.2K net per year.

Does that mean you need to be spending 6k/person/month, aka 144k/yr?  My spending is like .. 1/10th that.

Not 5% discount from groceries, but an extra $7.2K in your pocket, which is why I have been trying to bash heads on this forum to make people realize what this could do your FIRE plans.

You may need to write up a Simple Beginners Guide then, like I.P. had to do for cell phones for us slow folks.. ;)

It doesn't matter what you spend now, the increase in spend is completely false.  In other words, if you currently spend 14.4K per year (your arbitrary 10%) then using this system you will reduce your actual spend by 50%....

I'd be happy to write up a post, can I get some more questions here (nothing is too stupid) so I can start to frame something that the Mustachian might be able to wrap their head around more easily?

[arebelspy]

Are there any intro guides to wtf this is even all about? 

Like, I start reading a blog post linked above and am immediately lost.

I don't know what a vanilla refill is, unless you mean one of those giant metal cups when you order a milkshake and can pour the extra from that into your cup.

I don't know what manufactured spend is.

I'm guessing some kind of spending to earn CC rewards, like the Loyal3 stuff, but with some amex debit card too and then you pay bills and stuff.. idk?

Here's what would help:

1) A basic "here is what is being done" big picture overall strategy, then
2) a step by step how to of "1) sign up for this card at LINK 2) buy these refills at X store every Y days 3) purple monkey dishwasher 4) transfer this money to the card 5) ??? 6) profit"

The second part, step by step, I can probably parse from posts and blogs once I understand the big picture, but it would still be a great reference for those not reading all these posts.

Sorry I'm apparently real dense.  Tough trying to puzzle through it when half the posts make no sense.  :P

can I get some more questions here (nothing is too stupid)

Oh good.  :P

[arebelspy]

Okay, I found this that helps explain somewhat:
http://boardingarea.com/dealswelike/2014/02/04/my-vanilla-reload-amex-bluebird-strategy/

Only I guess now you use "Serve" instead of Bluebird.

Some remaining confusions:
1) I'm not sure how you're turning it into cash, rather than juggling a dozen airline cards for miles like the guy above.
2) He is using the loaded up money (5k/mo) to pay his bills.  This implies a spending of 60k annual.  But you said the spending didn't matter.  How does that work?