For deal hunters, the rewards game has spiced up with the introduction of AmEx’s Vanilla Reloads. These cards are all the rage—and now a rare find—because they give you the opportunity to earn rewards on more than the usual—groceries, gas, travel and department stores; even your bill payments can earn rewards, too, if you do it right.
In a nutshell
The theory: You can use a credit card to purchase Vanilla Reload packs for the nearly no-fee American Express Bluebird prepaid card from CVS or another drugstore, earning bonus rewards. You can then use the money on your Bluebird card to pay off your credit card bill. That way, you get bonus rewards for free!
Where to buy Vanilla Reloads: CVS, Walgreens and Office Depot (though, anecdotally, many bloggers reported that the packs have been pulled from the shelves) as well as other locations.
Which cards to use: The following cards give 1.5% or more at CVS and Walgreens. In parenthesis is the minimum amount you’d need to put on the reload pack to offset the $3.95 purchase fee.
- American Express Hilton HHonors and HHonors Surpass: estimated 3% on drugstores ($128)
- Starwood American Express: estimated 2.3% on all purchases ($168)
- U.S. Bank Cash+: 2% on drugstores* ($194)
- *Earn 2% rewards on either gas, groceries or drugstores
- Capital One Venture Rewards: 2% on all purchases ($194)
- Capital One Cash: 1.5% on all purchases ($259)
- Citi Hilton HHonors Visa Signature: estimated 1.5% on drugstores ($259)
- Citi Hilton HHonors Reserve: estimated 1.5% on all purchases ($259)
- Managers at my local CVS and Walgreens told me that they don’t accept credit cards for the reload packs. It seems that these two stores now accept only cash for Vanilla Reloads, which obviously won’t earn you any rewards.
- There is also a limit on how many you can pick up. The Amex Bluebird limits your loads to $1,000 a day and $5,000 a month, and caps the card value at $10,000.
- If the POS terminal won’t take your card, it’s possible you can have a manger override the system. Tell them you’ve paid with a credit card before, and that you can’t imagine why the POS terminal isn’t accepting your card.
- Get multiple Bluebird cards to work around the load limits.
The Reloads’ principal appeal is that they allow your rewards to cross borders. Pay for a Reload with your rewards card at an eligible location, put the funds on your prepaid debit account and then use it to pay bills, which wouldn’t earn rewards on most cards anyway.
A bit more about the Bluebird…
While these prepaid cards and their accompanying reloads can be a worthwhile alternative to the standard checking account, they aren’t fail-safe: unlike an account you open at the bank, these cards are not FDIC-insured and therefore will not be protected in case AmEx goes under—an unlikely scenario, but still one to keep in mind. Normally, we recommend that you stay away from prepaid debit cards, as they often nickel and dime you on the most basic of transactions; however, the AmEx Bluebird, which was introduced last month, is a game-changer. Unlike many of its competitors, the Bluebird is fee-free but for a $2 ATM fee if you don’t use direct deposit.
While it’s becoming increasingly difficult to pay for Vanilla Reloads and earn rewards, it’s still a nifty hack to take advantage of while you can. Remember that American Express recently nixed unlimited supermarket rewards on the Blue Cash (our theory is that they wised up to our gift card trick) so get on it while you can.
Sign up for the NerdWallet rewards newsletter for deals of $300 or more.