By now, you’ve probably heard the news. You can currently buy $300 Visa gift card online at Staples.com Why is this a big deal and why should you care? Well, if you have Chase Ink Plus, then you probably know that it earns 5 points per dollar on office supply store purchases.
Yes, it is a business card and you are technically supposed to only use it for business-related purchases. But many leverage this bonus category to buy gift cards for various retailers. I wrote about it in this post to show that this strategy can be quite lucrative in certain situations.
Just a reminder: A bonus on this product is temporarily increased to 60K points, and you can read about it in this overview of business cards. In all likelihood, it will be increased again at some point in the future. This offer pays me referral.
But what if you don’t live near office supply store? I don’t. Up until now, you could only buy $200 Visa gift card from Staples.com and the math to me just wasn’t worth the headache. But $300 gift card is a totally different story. It comes with $9 fee, and you will be getting 1,500 Ultimate Rewards points on each card. I speculatively value UR point at 1.25 cents, so 1,500 points are worth almost $19.
So, if we deduct $9 fee, that’s a profit of $10 or an equivalent of 3.3% overall return. Do make sure you take into account Chase Ink Plus’ annual fee of $95. Speaking of, my reader Nancy has mentioned in her blog post that she was able to call and get 10K points at renewal time. It never hurts to ask.
Of course, you may value your UR point at 1 cent, or what you would be able to redeem it for cash. In which case, you are earning an equivalent of 2%, not bad. Plus, since it’s a flexible point, there is always a possibility to redeem it for travel or transfer it to partner program, thereby extracting more value. It looks like an especially attractive proposition if:
- You plan to transfer points to Southwest, more so if you have a Companion pass. Those 1,500 points will give you $24 in airfare or $48 with Companion pass since you can bring another traveler for free. This would be the most compelling scenario, no doubt.
- You are looking to transfer to Hyatt and redeem points at a category 1 or 2 property (costs 5,000 and 8,000 points respectively). Most of these hotels go for at least $100 per night, so it could be a very good deal, but ONLY if you would pay cash anyway.
Of course, there are other lucrative scenarios, but I wanted to highlight those two particular programs. Why? UR has monopoly on Hyatt and Southwest. It’s true, the same goes for United, but there are ways to redeem miles on United flights via other programs, and at times, come out ahead on mileage cost.
But what if you don’t really care about Hyatt or Southwest? You might want to stick to Amex Blue Cash Preferred and Amex EveryDay Preferred. This is an overview I made in a post awhile back:
Say, both you and your spouse got each of these cards. Majority of my posts assume monthly family spending of $2,000 to $2,500. You would get the best bang for your buck when purchasing one $500 Visa gift card with each Amex. That’s because the extra bonus only applies on up to maximum of $6,000 per year/ per account. Of course, if you need to get groceries anyway, you can just use the credit card.
But even if you shop at Walmart, this is probably the most lucrative/easy strategy for most busy families. You can just stop once a week by your grocery store, get a few things you need anyway, and pick up a gift card. Then use it for your regular bills. Obviously, you would be better off using credit card for things that might have issues down the road, like expensive electronics and appliances.
Here is how your awards would stack up:
1. Grocery spending alone will yield 27,000 Membership Rewards on each Amex Everyday Preferred. The total would be 54,000 Membership Rewards. You can add your spouse as an authorized user, and they will be allowed to transfer points to their own mileage account.
I wrote about some possible uses of MR program when it comes to family travel. This amount will take care of 4 one-way (at times, roundtrip) tickets in most loyalty schemes. If there is a transfer bonus, you will do even better. So, after 2 years, you should have enough miles to fly your family of 4 roundtrip in economy domestically, excluding Hawaii.
2. Grocery spending bonus will yield $360 on each Blue Cash Preferred. The total on both would be $720.
So, if you maximize grocery store bonus, you will have $720 AND 54,000 Membership Rewards points (which I speculatively value at $675). Of course, there are fees:
1. You will pay $95 annual fee on each Amex Everyday Preferred and $75 on Blue Cash Preferred. Grand total of $340. But if you are familiar with Amex, you know you can make up for those fees via various promos. Yes, it will take some work, but it’s not unreasonable to assume that.
2. You will pay around $240 in fees if you buy gift cards and spend very little at a grocery store.
Even if we assume that you will get zero value out of Amex offers, there is a compelling argument to stick with this combo. Say you pay $580 in fees. You would still have 54,000 MR points, and $140, all via spending of $24,000 per year. That’s a terrific return, all things considered.
By comparison, if you used Citi Double Cash, you would have $480. Plus, remember, we are assuming that you will get zero out of Amex offers. Of course, some of your bills will be paid with credit card, but this breakdown should give you a general idea on possible return following this scenario.
Overall, I do think this new $300 Visa gift card is a game changer, but only if you can maximize UR points for travel redemptions, specifically Southwest. If you are a lover of Hyatt (nothing wrong with that), you should definitely look into it as well.
Otherwise, you might be better off going after plain ole’ cash via Amex Blue Cash Preferred and collecting MR points via Amex EveryDay Preferred when it comes to your regular spending.
Readers, are you excited about this new development?
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