The Money Mustache Community
General Discussion => Share Your Badassity => Topic started by: tskzes on August 24, 2014, 10:41:53 AM
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I'm not sure if this is a well documented "hack" but does anyone else buy gift cards at the grocery store using high rewards credit cards such as the AMEX Blue Preferred card?
At my local supermarket (Kroger) you can buy gift cards at face value for most retail stores, AMAZON, and even can get AMEX, VISA, or MASTERCARD gift cards that are as good as cash with a 6% c.c reward. Kroger also often has 4X bonus fuel points on gift card purchases which if you have a kroger gas station can also help you save up to $1/gallon on gas
I wonder if you use the cash equivalent gift cards to then purchase other discounted gift cards such as those from RAISE.COM then you could reap an extra 4.5% savings for your dollars over just buying the giftcard straight with a 1.5% reward capital one quick silver card or if you use them to buy stock at loyal3.com you could effectively get more c.c rewards for buying stock if you are into that service.
Any thoughts or experiences using these types of strategies appreciated
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I didn't know Kroger had 4x on fuel with gift card purchases! I've been thinking about buying some gift cards because Sams does not take my credit cards and I buy my meat there.
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I'm not sure if this is a well documented "hack" but does anyone else buy gift cards at the grocery store using high rewards credit cards such as the AMEX Blue Preferred card?
At my local supermarket (Kroger) you can buy gift cards at face value for most retail stores, AMAZON, and even can get AMEX, VISA, or MASTERCARD gift cards that are as good as cash with a 6% c.c reward. Kroger also often has 4X bonus fuel points on gift card purchases which if you have a kroger gas station can also help you save up to $1/gallon on gas
I wonder if you use the cash equivalent gift cards to then purchase other discounted gift cards such as those from RAISE.COM then you could reap an extra 4.5% savings for your dollars over just buying the giftcard straight with a 1.5% reward capital one quick silver card or if you use them to buy stock at loyal3.com you could effectively get more c.c rewards for buying stock if you are into that service.
Any thoughts or experiences using these types of strategies appreciated
I use the Amex with 6% back on groceries to buy Amazon cards. We buy a good bit from Amazon, so this is easy to do and makes sense. The only other stores we shop much at are Target and Lowe's, but since we already have their 5% back store cards, it's not worth buying gc's for them. Plus, Amazon cards are so easy to use (just load into account when purchased and the account will automatically apply to one's purchases until gone), so I don't have to worry about remembering to use them, or have a small amount left on a card, etc.
I will try to keep this strategy in mind if we have any other larger purchases at other stores (like at xmas)? But so far, we don't buy much else.
The other thing that I have to keep in mind is that for the Amex, the 6% is only for up to $6k of grocery spending a year. We spend about $5k just on groceries, so buying more than $1k or so in gc's won't be worth it (unless we get a second card, pay a second $75 annual fee, and keep careful track making sure to switch to it).
As far as buying Visa gc's with a cc, don't those usually have activation fees? How much does one really come out ahead?
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We use that BCE card for gift cards at the grocery store all the time. Once we were on the way to Sears to get a TV that was on closeout and stopped in the grocery store to get enough Sears GCs to cover the cost. Then when we got to Sears we panicked that the cards might not yet be activated, but it turned out OK.
Bought quite a few GCs this summer as graduation presents, and the 6% cash back is mighty handy. But we don't buy Visa or MC cards because of the activation fee, unless they have a special going on where the fee is waived. If they had high-value GCs we would consider it, but the highest value they carry is $100 and the activation fee would come to 5%.
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If they had high-value GCs we would consider it, but the highest value they carry is $100 and the activation fee would come to 5%.
You are right about the fees on the Visa, Mastercard, and AMEX gift cards, I just got back from the grocery and checked. If they are high value enough (I have read online some can be loaded with 500$) then the activation fee of 5.95$ would be 1.2% so the total reward would be 6%-1.2%=3.8%. Therefore, compared to just straight using your Capital One Quicksilver cards that gives 1.5% on everything you could come out with an extra 2.3% reward. Factoring in the activation fee for the GC and what you could just get from using the quicksilver card for a 500$ G.C this would end up being added benefit of about $11.50 per 500$. So i guess the question is whether it is worth the hastle to buy and use VISA giftcards at grocery stores to get that extra 2.3% c.c reward.
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I do this!
I've had some major purchases in the last few months starting up my life (first bike, first tv, furniture) and I've used the Visa Gift Cards for all of them. I buy them in denomination of $500, and the math actually works out to 6% - 1.2% = 4.8%, so $24 for a $500 gift card. This is huge for me since I am a single guy and buy a lot of groceries at Sam's Club, so I'm nowhere close to the $6000 cap from AmEx BCP. I actually need to play the gift card game to make it worth the $75 annual fee over the 3% cash back no annual fee card. Unfortunately, these Visa cards don't count towards the Kroger fuel points.
A couple more notes:
- I get antsy with random leftover balances on my cards, which I drain by sending them via Amazon Payments to my SO
- A better solution to the above would be to open up a Bluebird and load gift cards directly to BB. This isn't an option for me since I have an AmEx Serve.
- There are a lot of other gift cards that are great to stock up on. I have not yet but intend to buy Verizon gift cards to pay my cell phone bill and Southwest gift cards to book flights!
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I did this a few days ago. I replaced my ancient (rear projection) tv after 10+ years of use. I knew Best Buy would match prices so here is what I did:
-purchased $850 worth of best buy gift cards at our grocery store, getting 6% cash back from my Amex Blue
- grocery store gave 5x value in gift card purchases for their gas rewards program
- drove 30 miles to Delaware to skip the 6% Pa sales tax
- matched the Costco price which was $50 less than best buy
- filled my 15 gallon gas tank twice for free (used some existing grocery gas rewards from my normal grocery purchases)
All told, I saved about $200 on a $850 purchase
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I did this when we put a new roof on our house a few years ago. My capital one card gave back 3% on groceries at the time and price chopper had a gas promo of .40 off a gallon of gas for every $100 you spent. I bought $1500 worth of Lowe's cards in a couple of batches, went to Lowe's with the cards and a 10% off coupon and bought supplies. I managed to get a couple of tanks off almost free gas, $45 back on my card and $150 off at Lowes. My husband thought it was too much of a pain until he realized that we saved almost $300 for about 5 minutes worth of bother.
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I did this when we put a new roof on our house a few years ago. My capital one card gave back 3% on groceries at the time and price chopper had a gas promo of .40 off a gallon of gas for every $100 you spent. I bought $1500 worth of Lowe's cards in a couple of batches, went to Lowe's with the cards and a 10% off coupon and bought supplies. I managed to get a couple of tanks off almost free gas, $45 back on my card and $150 off at Lowes. My husband thought it was too much of a pain until he realized that we saved almost $300 for about 5 minutes worth of bother.
Yes, many people act like it is a waste of time to save 10 or 20$ bucks here and there but when you figure it takes you about 5 minutes of effort and planning ahead just to save 10$ then its essentially like making 120$/hr based on the money you saved versus time spent.
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I must admit... I would have never thought of this strategy.
Thanks!