Mustache that American Express card into a mini money maker!

[Alex in Virginia]

This one's quick and easy.  If you've got any flavor of American Express card in your wallet, do what I just did.  Grab the card, dial the phone number on the back, and tell the customer service rep that you want your card converted into a Blue Cash Card.  The conversion happens on the spot.  And from then on, every time you use that card to pay for something you'll get 3% cash back on groceries, 2% cash back on gasoline and some other retail stuff, and 1% cash back on everything else.  And you won't be paying an annual fee on this card, either.

If you don't have an American Express card, it could even be better.  Call them up or go on the web, get yourself a Blue Cash card, and American Express will give you a $100 bonus if you use the card to pay for $1000 worth of anything in your first 3 months.

Every dollar helps, you know.  ;)

Alex in Virginia

[JahWontPaytheBills]

Nice! I have a Gold Card that is pretty lean on rewards. I'll give it a shot! I didn't realize that you could convert a card like this. Thanks for the tip.

[grantmeaname]

This one's quick and easy.  If you've got any flavor of American Express card in your wallet, do what I just did.  Grab the card, dial the phone number on the back, and tell the customer service rep that you want your card converted into a Blue Cash Card.  The conversion happens on the spot.  And from then on, every time you use that card to pay for something you'll get 3% cash back on groceries, 2% cash back on gasoline and some other retail stuff, and 1% cash back on everything else.  And you won't be paying an annual fee on this card, either.

If you don't have an American Express card, it could even be better.  Call them up or go on the web, get yourself a Blue Cash card, and American Express will give you a $100 bonus if you use the card to pay for $1000 worth of anything in your first 3 months.

Every dollar helps, you know.  ;)

Alex in Virginia

Puzzle me this: will it still work at Costco?

[arebelspy]

Puzzle me this: will it still work at Costco?

If Costco accepts Amex, yes, otherwise no.  Still could be worth doing to use at other places, since it's free (no annual fee or anything).

I've had an Amex blue card for about 8 years and have hundreds of dollars worth of cash built up.  It's linked to my Amazin account, so whenever I buy anything on Amazon, it uses those points, so I haven't paid for anything from Amazon for a year or two (since I realized they could be linked like that).

[grantmeaname]

Costco accepts the Costco Amex and does not accept any non-Amex credit cards. I haven't had much luck looking in the fine print to see if they accept all American Express cards or only their own, and I figured if any community knows, it'll be the community of Costco fanatics.

[BlueBeard]

I have used my amex blue cash card at Costco.

[grantmeaname]

Interesting. I'll have to look into upgrading to go from 3% gas (earning me a stuning $1.20 a month), 1% other to 3% groceries, 2% gas, 1% other. I spend enough on groceries ($400/month, I'm the grocery buyer for the whole house) that I could be looking at $100/year more rewards from this.

[Will]

IIRC, while the card will "work" at Costco, I don't think it gets separated out as "groceries" to earn the 3%.

[grantmeaname]

I didn't think of that, but it's a good point. The Costco Amex doesn't either, so before and after I'd be earning 1% on the Costco groceries (probably about 80% of the total value).

[JahWontPaytheBills]

Turns out my Gold card is a charge card, and not in their credit card family, so I can't bump it over to the Blue. Ahh well, was worth a shot, and interesting to note that AMEX customer service was open on Easter Sunday here in the states!

[grantmeaname]

The Costco card can't be upgraded either -- I'd have to close it and apply for a new one. I don't know that that would be worth it.

[Dee]

I had no idea Amex had credit card options in addition to charge card options.

[JahWontPaytheBills]

Yep! They've had them for years. I got a Blue Card when they first came out, over 10 years ago, I'd guess.

[arebelspy]

Turns out my Gold card is a charge card, and not in their credit card family, so I can't bump it over to the Blue. Ahh well, was worth a shot, and interesting to note that AMEX customer service was open on Easter Sunday here in the states!

I don't even know what a charge card is.  If I heard the term, I'd have assumed credit card.

The Costco card can't be upgraded either -- I'd have to close it and apply for a new one. I don't know that that would be worth it.

Why would you have to cancel it?  Why not open a new Blue Amex, use the Costco one at Costco, and the new one everywhere else?

[grantmeaname]

Because the only category for which the Costco card is better is stand-alone gas stations (not grocery store or Costco-operated), where I never shop, and only by 1% at that. I suppose I could always keep it around for the credit score effects.

[Nords]

Costco accepts the Costco Amex and does not accept any non-Amex credit cards. I haven't had much luck looking in the fine print to see if they accept all American Express cards or only their own, and I figured if any community knows, it'll be the community of Costco fanatics.

We used to use the Fidelity Rewards Amex at Costco, and now we use a Costco Amex.

I don't know how Amex sorts out the purchase categories, and our Costco sells gas as a loss leader that's worth the Amex. 

The reason we switched out of the Fidelity Amex is terrible customer service... nothing to do with Amex or Costco. 

[grantmeaname]

The Costco by my parents in Cincinnati has loss-leader-cheap gasoline, as does the Sam's Club. Here in Columbus the Costco gas typically a bit above the market price, and our grocery store does a gas price rebate program based on your food shopping, so I think I've only actually filled up at Costco instead of the grocery store twice in two years.

[mm31]

Too bad there is not an option for debit cards. My favorite grocery store only accepts debit cards and cash. The last time I filled up was... in january

[cosmie]

I don't even know what a charge card is.  If I heard the term, I'd have assumed credit card.

A charge card is non-revolving and must be paid in full, vs. a credit card with a revolving line of credit which can be carried (for the price of interest). The only time you can carry a balance on a charge card is for promotions, such as "12 months same-as-cash on a new bed".

Charge cards are convenient first cards, as they're easier to qualify for and force you into the habit of not carrying a balance.

One thing to note is that virtually all charge cards have "no pre-set spending limit". This refers to the fact that the limits can change month-to-month. This can really screw with your credit, depending on it's weight of your credit size. For example, if you balance was $1,000 on a line of $2,000 in January, your utilization is at 50%. However, they decide to lower your credit line to $1,000 in February. If your monthly payment hasn't been accounted for when they update the credit bureau, it'll post as $1,000/$1,000, or 100% usage.

[madage]

You can actually earn 3.52% cash back net of fees using the Blue Cash Preferred card to purchase $500 Amex gift cards at grocery stores and using those gift cards for your Costco purchases.

This was a better deal before Amex started capping the grocery spending at $6,000 annually, but I'll take 3+% cash back on my Costco purchases.

*edited to add the cap amount

[EveningNewbs]

You can actually earn 3.52% cash back net of fees using the Blue Cash Preferred card to purchase $500 Amex gift cards at grocery stores and using those gift cards for your Costco purchases.

This was a better deal before Amex started capping the grocery spending at $6,000 annually, but I'll take 3+% cash back on my Costco purchases.

*edited to add the cap amount

Would you mind explaining how you got the 3.52% number? Do they charge a fee on the gift card?

[madage]

Would you mind explaining how you got the 3.52% number? Do they charge a fee on the gift card?

Yes. There's a $5.95 fee on each Amex gift card, regardless of the amount loaded (for the variable-load cards). $500 is the max load on the gift card, so always go for that.

[EveningNewbs]

Would you mind explaining how you got the 3.52% number? Do they charge a fee on the gift card?

Yes. There's a $5.95 fee on each Amex gift card, regardless of the amount loaded (for the variable-load cards). $500 is the max load on the gift card, so always go for that.

Thanks, but I'm still not getting how you got the 3.52%. $5.95 is 1.19% of $500, and the card gives 6% back, so wouldn't that be 4.81% off? Or is my math wrong somewhere?

[madage]

Thanks, but I'm still not getting how you got the 3.52%. $5.95 is 1.19% of $500, and the card gives 6% back, so wouldn't that be 4.81% off? Or is my math wrong somewhere?

My math includes the annual fee for the card.

Purchase 12 $500 Amex gift cards at a total cost of $6071.40
Receive cash back of $360 on the first $6,000 and $0.71 on the last $71.40. Total cash back: $360.71
Subtract out the $71.40 in fees paid on the gift cards. The new cash back amount is $288.60.
Now, subtract out the annual fee on the card itself ($75). The total cash back amount is $213.60.

$213.60 cash back / $6071.40 total charged = 3.518%

[EveningNewbs]

Thanks, but I'm still not getting how you got the 3.52%. $5.95 is 1.19% of $500, and the card gives 6% back, so wouldn't that be 4.81% off? Or is my math wrong somewhere?

My math includes the annual fee for the card.

Purchase 12 $500 Amex gift cards at a total cost of $6071.40
Receive cash back of $360 on the first $6,000 and $0.71 on the last $71.40. Total cash back: $360.71
Subtract out the $71.40 in fees paid on the gift cards. The new cash back amount is $288.60.
Now, subtract out the annual fee on the card itself ($75). The total cash back amount is $213.60.

$213.60 cash back / $6071.40 total charged = 3.518%

Aaah, now I gotcha. You can still get 3% back at gas stations (uncapped, even?), so I wasn't thinking to include the fee. If you're maxing out the 6%, though, that makes sense. Thanks for sharing! Now, how do I buy $6000 worth of gift cards without looking like I'm laundering money?

[matt_g]

Fidelity Rewards AmEx is 2% cash back on everything, no fees.  I haven't had to deal with the customer service like Nords so I can't speak to that. I love free money.

[madage]

Aaah, now I gotcha. You can still get 3% back at gas stations (uncapped, even?), so I wasn't thinking to include the fee.

The only cap is on groceries.

Now, how do I buy $6000 worth of gift cards without looking like I'm laundering money?

Don't buy them all at once. I only buy one when my current card is low and I'm headed to Costco anyway. Note that some grocery stores now restrict gift card purchases to cash-only. Personally, I've never had a problem at Kroger, though the policy where I live is to verify ID on gift card purchases over a few hundred dollars.

Fidelity Rewards AmEx is 2% cash back on everything, no fees.  I haven't had to deal with the customer service like Nords so I can't speak to that. I love free money.

I had a problem with FIA Card Services, which administers both the Fidelity 1.5% Visa and 2% Amex, where someone made a fraudulent charge and managed to change all the information in my online account without me being contacted. In fact, FIA detected the fraudulent activity and declined subsequent charges on the card (Good!), but I had to call them to find out what was going on (Bad!). I canceled the card soon after getting a new account number, making sure the fraudulent charge was removed and cashing out my accumulated rewards. This was in 2011, so things may have changed since then.

[EveningNewbs]

Note that some grocery stores now restrict gift card purchases to cash-only. Personally, I've never had a problem at Kroger, though the policy where I live is to verify ID on gift card purchases over a few hundred dollars.

Thanks again for the tips! Bought a $500 card today at Winn-Dixie with no problem. The cashier didn't even check my ID. I was even able to buy a Visa prepaid card with the American Express credit card, since it seems like nobody here wants to accept American Express.

Now, is there a way to add the prepaid card account to Mint? I can log in at gowallet.com to view purchases made with the prepaid cards, but Mint doesn't support that site. That's also not the issuing bank, so...anyone know if it's possible?

[AJ]

Thanks, but I'm still not getting how you got the 3.52%. $5.95 is 1.19% of $500, and the card gives 6% back, so wouldn't that be 4.81% off? Or is my math wrong somewhere?

My math includes the annual fee for the card.

Purchase 12 $500 Amex gift cards at a total cost of $6071.40
Receive cash back of $360 on the first $6,000 and $0.71 on the last $71.40. Total cash back: $360.71
Subtract out the $71.40 in fees paid on the gift cards. The new cash back amount is $288.60.
Now, subtract out the annual fee on the card itself ($75). The total cash back amount is $213.60.

$213.60 cash back / $6071.40 total charged = 3.518%

Does this actually work in practice? They have a disclaimer about it on their site:

"Eligible purchases do NOT include fees or interest charges, balance transfers, cash advances, purchases of travelers checks, purchases or reloading of prepaid cards, or purchases of other cash equivalents. Additional terms and restrictions apply." (emphasis mine)

[CanuckExpat]

Does this actually work in practice? They have a disclaimer about it on their site:

"Eligible purchases do NOT include fees or interest charges, balance transfers, cash advances, purchases of travelers checks, purchases or reloading of prepaid cards, or purchases of other cash equivalents. Additional terms and restrictions apply." (emphasis mine)

I do it fairly often (throw and extra $500 giftcard on with my groceries) and have always got the extra cash-back credited. The grocery store doesn't send your list of items to AmEx, so I'm not sure how that would be enforced.

[rosarugosa]

This looks like a great place to get some input on a decision I'm pondering.  I've got an offer from Amex for a Premier Rewards Gold Card.  The $175. annual fee is waived for the first year, and they will give me 50,000 points if I spend $1000. in the first three months.  Points can be redeemed for gift cards at places where we do shop, and it looks like those 50,000 points would translate to $500.  They award double points on gas and groceries, and we could easily hit the $1000 requirement assuming our preferred grocery store and gas stations will take Amex (this needs to be researched).  I would hate to pass up $500. free dollars.  So I'm wondering about signing on and then cancelling when that $175.  renewal comes due.  What do you think?  Some relevant info:  we use cards responsibly and pay off balance every month.  We have an e-fund, a good-sized HELOC available, and no debt, so I'm not really worried about the hard pull on our credit report because I don't anticipate us needing credit in the forseeable future.  Would this be a slimy thing to do?  For some reason, it makes me feel like a bit of a weasel, although I keep reminding myself that MMM referred to the credit card companies as "evil demons," or something along those lines.  Can weasels take unfair advantage of evil demons? :)

[D-T]

Can weasels take unfair advantage of evil demons? :)

I do.

I've opened up quite a few cards for the ($500+) rewards/miles and just cancel before the first annual fee fits.

[FitStash]

I also use the blue cash preferred card, and I buy giftcards for Amazon/ebay/etc for anything non-food.  Even so, I doubt I will come close to the 6k cap.  Despite the $75 annual fee, I end up ahead compared to the free version with lower %.

Of course if something better comes along, I have no problem jumping ship.  :-)

And as far as the weasels vs demons thing, I'm sure they predict a certain small percentage of people will eek out a meager benefit while they rake in money from the less-savvy.

[madage]

Despite the $75 annual fee, I end up ahead compared to the free version with lower %.

Just about anybody will come out ahead with this card, even just for groceries. Subtract the annual fee from the cash back and the Blue Cash Preferred card is better than a 1% back on everything card after just $1,500 in annual grocery spending, better than a 2% card after $1,900 and better than the "Everyday" card at $2,500. Even most Mustachians (those with families, for sure) spend more than $210 per month on groceries.

[grantmeaname]

better than the "Everyday" card at $2,500. Even most Mustachians (those with families, for sure) spend more than $210 per month on groceries.

That excludes Costco, Aldi, Amazon, and ethnic grocery stores from the list of things that are grocery stores. We only spend like $50/month for my whole household at an actual grocery store, because we do so much of our grocery shopping at Costco.

[simonsez]

Thanks, but I'm still not getting how you got the 3.52%. $5.95 is 1.19% of $500, and the card gives 6% back, so wouldn't that be 4.81% off? Or is my math wrong somewhere?

My math includes the annual fee for the card.

Purchase 12 $500 Amex gift cards at a total cost of $6071.40
Receive cash back of $360 on the first $6,000 and $0.71 on the last $71.40. Total cash back: $360.71
Subtract out the $71.40 in fees paid on the gift cards. The new cash back amount is $288.60.
Now, subtract out the annual fee on the card itself ($75). The total cash back amount is $213.60.

$213.60 cash back / $6071.40 total charged = 3.518%

Little bit of semantics but I didn't get 3.518% either.  Doing it your way, I got 3.5298%.  It looks like when you subtracted the $71.40 in fees, you took it from $360 instead of $360.71.  That subtotal should be $289.31, and then on down to $214.31.  However, I don't think this is even optimal.  Due to the $5.95 fee, I found you get a higher % if you subtract that amount from the initial $500.  Basically, if you buy 12 gift cards at $494.05 each, plus the $5.95 fee, you get a total cost of $6000.  Receive cash back of $360.  Subtract the $71.40 in fees and the annual fee.  You are left with $213.60.  $213.60/$6000=3.56%.

The bigger question is that it even works.  Like others have said, it is outlined on the card policy that you don't get any rewards for buying gift cards but I guess that is just a scare tactic since they don't have the time/staff to go through millions of itemized receipts every year.  As of right now, I only have the 3% back Costco Amex so it would be a losing proposition given the fee and size of the gift card in question.  Interesting, though.

[madage]

Little bit of semantics but I didn't get 3.518% either.  Doing it your way, I got 3.5298%.  It looks like when you subtracted the $71.40 in fees, you took it from $360 instead of $360.71.  That subtotal should be $289.31, and then on down to $214.31.  However, I don't think this is even optimal.  Due to the $5.95 fee, I found you get a higher % if you subtract that amount from the initial $500.  Basically, if you buy 12 gift cards at $494.05 each, plus the $5.95 fee, you get a total cost of $6000.  Receive cash back of $360.  Subtract the $71.40 in fees and the annual fee.  You are left with $213.60.  $213.60/$6000=3.56%.

Thanks for fixing my math - you've optimized it better than I. Less resistance just telling the checker you want $500 on the gift card, though.

The bigger question is that it even works.  Like others have said, it is outlined on the card policy that you don't get any rewards for buying gift cards but I guess that is just a scare tactic since they don't have the time/staff to go through millions of itemized receipts every year.  As of right now, I only have the 3% back Costco Amex so it would be a losing proposition given the fee and size of the gift card in question.  Interesting, though.

It definitely works right now. Perhaps someday it won't.

[simonsez]

...Less resistance just telling the checker you want $500 on the gift card, though.

True, that could be a little telling asking for $494.05 on the first Saturday of every month or whatever routine.  It sorta reminds me of a scene from Seinfeld (in that the people you interact with during these transactions likely don't give 2 shits).

[Jerry and Elaine are at the coffee shop.]
ELAINE: (to the busboy) Oh, thanks very much, the soup was really good.
JERRY: What are you telling him for?
ELAINE: What?
JERRY: He's the busboy, you think he cares about the soup?
ELAINE: Yeah, why? Wouldn't he want the soup to be good?
JERRY: Elaine, it's all this guy can do to keep from killing himself. You think he's back there, talking to the chef, going, "Hey, they like the soup! Keep it up!"?

[RedMaple]

This one's quick and easy.  If you've got any flavor of American Express card in your wallet, do what I just did.  Grab the card, dial the phone number on the back, and tell the customer service rep that you want your card converted into a Blue Cash Card.  The conversion happens on the spot.  And from then on, every time you use that card to pay for something you'll get 3% cash back on groceries, 2% cash back on gasoline and some other retail stuff, and 1% cash back on everything else.  And you won't be paying an annual fee on this card, either.

If you don't have an American Express card, it could even be better.  Call them up or go on the web, get yourself a Blue Cash card, and American Express will give you a $100 bonus if you use the card to pay for $1000 worth of anything in your first 3 months.

Every dollar helps, you know.  ;)

Alex in Virginia

Thanks so much for recommending this! The entire process took less than 5 minutes and they were very happy to do it. Best of all, it takes less than 2 business days for my card to become active with the new features - even though it can take up to 7 days to get the actual card.

[madage]

Thanks so much for recommending this! The entire process took less than 5 minutes and they were very happy to do it. Best of all, it takes less than 2 business days for my card to become active with the new features - even though it can take up to 7 days to get the actual card.

RedMaple - I hope you did the math to figure out if it makes sense to choose the Blue Cash Preferred instead. It only takes $2,500 in annual spending at grocery stores for the Preferred card to come out ahead.

[RedMaple]

Thanks so much for recommending this! The entire process took less than 5 minutes and they were very happy to do it. Best of all, it takes less than 2 business days for my card to become active with the new features - even though it can take up to 7 days to get the actual card.

RedMaple - I hope you did the math to figure out if it makes sense to choose the Blue Cash Preferred instead. It only takes $2,500 in annual spending at grocery stores for the Preferred card to come out ahead.

As I recall, you end up breaking about even if you spend $210 per month; my food budget is less than that (YTD average roughly $186) & I don't want to feel pressured to spend more money just to break even. I got the Everyday 3%.

[madage]

As I recall, you end up breaking about even if you spend $210 per month; my food budget is less than that (YTD average roughly $186) & I don't want to feel pressured to spend more money just to break even. I got the Everyday 3%.

That is a very impressive food budget. Well done!

[oldtoyota]

Thanks! I just did this.

My yearly fee of $95 is now gone. My skymiles will no longer accrue, but I barely used them anyway.

Delta will let me use the Skymiles I already have so that's cool.

It's much better for me to get cash back than to get Delta Skymiles.

Based on my budget, I'll get $192 back per year just for groceries and gas.

[RedMaple]

As I recall, you end up breaking about even if you spend $210 per month; my food budget is less than that (YTD average roughly $186) & I don't want to feel pressured to spend more money just to break even. I got the Everyday 3%.

That is a very impressive food budget. Well done!

It's just for me and I excluded my dining out budget. So I could do a lot better.

[oldtoyota]

Thanks so much for recommending this! The entire process took less than 5 minutes and they were very happy to do it. Best of all, it takes less than 2 business days for my card to become active with the new features - even though it can take up to 7 days to get the actual card.

Does the preferred card offer the 1% on everything that is not groceries, gas, department stores? The rep did not mention that, and I would like to find out.

For me, the every day works out better--esp since I will get 1% (which I think the preferred does not offer) on "everything else" that is not gas/groceries/dept store.


RedMaple - I hope you did the math to figure out if it makes sense to choose the Blue Cash Preferred instead. It only takes $2,500 in annual spending at grocery stores for the Preferred card to come out ahead.

As I recall, you end up breaking about even if you spend $210 per month; my food budget is less than that (YTD average roughly $186) & I don't want to feel pressured to spend more money just to break even. I got the Everyday 3%.

[madage]

The Preferred card rewards structure:

6% cash back on groceries
3% cash back on gasoline and department stores
1% cash back on everything else

[oldtoyota]

Thanks, Madage. That changes the story. It might be better for us to have preferred.

[madage]

Thanks, Madage. That changes the story. It might be better for us to have preferred.

You're very welcome. I'm always happy to share my knowledge and experience. I think about maximizing my credit card cash back more often than is probably healthy.

[fmzip]

Great info, just changed converted my Amex Optima to a Preferred Blue Card.

Now I need to find the best Visa card for cash back where AMEX isn't accepted.

Any suggestions?

[Mr. Sharma]

Now I need to find the best Visa card for cash back where AMEX isn't accepted.

Any suggestions?

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