We recently wrote about the game-changing American Express Bluebird and its potential to reshape the prepaid conversation around cost, not marketing materials. But as the Frequent Miler points out, the Bluebird isn’t just for people who don’t want or can’t get free checking. It’s also the base of a nifty rewards hack: With cards that give a bonus on office supplies, you can score big rewards just for paying off your bills.
Update November 13th, 2012: According to Frequent Miler, this deal is no more: Office Depot managers have been given notice to pull their inventory of Vanilla cards.
How it works
- Order the Bluebird online (it costs $5 in-store).
- Get a card that gives bonus rewards on office supplies.
- Buy a Vanilla reload pack from Office Depot for $3.95. Since the Ink cards give 5% back on office supply purchases, you’ll need to load the card with at least $80 to turn a profit on any given load.
- Make sure you’re buying a Vanilla Reload pack, not a Vanilla prepaid gift card.
- You can load up to $1,000 a day or $5,000 per month – that’s $46.05 a day or $230.25 a month in rewards, after accounting for the Vanilla reload pack fee.
- Use the money on the Bluebird to pay off your bills – perhaps the bill for the same credit card you used to make the purchase.
- Hope that Amex doesn’t take this perk away, like they did the unlimited 6% rewards on groceries.
This idea of buying card loads or prepaid cards to earn rewards can also be applied to gift cards for other merchants. If you shop often at Starbucks, let’s say, you can pick up a prepaid gift card at the Office Depot register and effectively earn 5% rewards on Starbucks purchases.
Cards to use
- The American Express SimplyCash, which gives 5% on office supplies up to $12,500 spent annually
- The Capital One Venture, which gives an unlimited 2% rewards on all purchases. You’d have to load about $200 each time to make up for the Vanilla’s fees with the Capital One Venture Rewards.
What makes the Bluebird different in this trick is that you can cycle your money through by paying $1,000 ($1,003.95 with the fee) to load the card, and then using that $1,000 to pay off your credit card balance, picking up $50 along the way.
The downside – no FDIC insurance
The biggest drawback of the Bluebird its that its funds aren’t FDIC-insured. If American Express goes under, you’ll lose all the money in your account.
The upsides – there are a lot of ’em
On the bright side, you do get a number of checking-account-style perks and protections
- Fraud liability. If you notify Amex within 2 days of your card being lost or stolen, your liability is limited to $50. If you don’t, liability could be as high as $500.
- Mobile check deposit. You can deposit checks into your account via an iPhone or Android app.
- Multiple accounts. You can set up multiple accounts for family members, with different daily spending limits and the ability to turn ATM access off or on.
You also get some perks that are normally reserved for premium credit cards:
- Purchase protection, if something you buy is damaged within 90 days of purchase
- Global Assist and roadside assistance
- Customer service, which, while not ideal for getting flowers on February 14th, is a nice thing to have on a prepaid card
- Entertainment access, which includes priority or exclusive access to concerts, sporting events, etc.
It’s quite an exciting card, and this hack simply reinforces the mantra: The Bluebird is for everyone.