I have many things I would like to do in my spare time: learn Spanish, compete in a triathlon, redeem myself on the company’s spelling bee team. Never has that list included “Master the whereabouts of scarce prepaid cards.” Yet I find myself doing just that, scouring blogs and seeking insider advice so that I can find these treasured objects that hold the key to my dream vacation.
It all started with an innocent email from our rewards columnist, Tony Mecia: “Have you seen this deal for the Citi Executive AAdvantage card?” he asked. Yep. Who could miss it? The card comes with a sign-up bonus of 100,000 American miles. Plus, you get Admirals Club lounge access and a host of other goodies.
I’d quickly dismissed the offer, however. The card costs $450 a year and, unlike many other rewards cards, this one does not waive the annual fee for the first year. There is some mercy — you get a $200 statement credit, bringing the cost down to $250. Not bad for 100,000 miles.
The real barrier for me, though, was the spending requirement. To earn the bonus points on the Executive AAdvantage, you have to spend $10,000 in three months. Let’s just say that does not fit my normal spending pattern — especially since I’d instituted an austerity plan at the beginning of the year so I could throw every spare penny toward retirement savings.
Dreaming of Pampas
Yet Tony’s words haunted me. Travel rewards are about dreams. They tap into our aspirational desires for escape and worldly adventure. As Christopher Barnard, president of Points.com, explained to Cathleen McCarthy in her CreditCards.com column, “Travel rewards vs. cash back,” travel “makes people feel better that they’re striving for something a little bigger than $8.42 back on a purchase.”
I checked the American Airlines award chart. For 100,000 points, I could horseback ride with the gauchos in Argentina, climb Japan’s Mt. Fuji or splurge on a first-class flight to Hawaii that would normally cost $5,000. My whole bucket list flashed before my eyes.
There was the thrill of the deal, too. Besides visions of riding through the Pampas, I love the idea of beating the system — scoring more than the 1 percent earning rate that’s become the baseline standard for rewards credit cards.
But how was I going to meet that $10,000 spend requirement? There was a way I’d heard about, but I wasn’t sure I wanted to try it. It would mean joining a subclass of manic miles chasers who have learned how to game the system. These folks swap strategies on blogs such as The Points Guy and online forums such as FlyerTalk with a fervor I wasn’t sure I found healthy.
Nevertheless, they are a font of information. I reviewed the basic strategy.
Step one: Get a Bluebird card. A Bluebird card is a prepaid reloadable debit card issued by American Express and it is a key element in earning credit card rewards for items you normally can’t put on credit, such as rent and car payments. You can buy a Bluebird at Wal-Mart for a one-time fee of $5 and reload it a number of ways. The most straightforward is to take it back to Wal-Mart and ask a cashier to add more money to the account — but you have to use cash if you go that route. That’s useless in terms of rewards-chasing.
Step two: Buy Vanilla Reload cards. The other, more credit-card friendly way to load value onto a Bluebird card is by using Vanilla Reload cards. These are separate plastic cards that you can buy at different retailers. Many shops won’t let you use a credit card to buy a Vanilla Reload card, but most CVS drugstores will. You tell the cashier how much value you want on the Vanilla card (up to $500) and pay a $3.95 fee for each card. CVS limits how much you can spend on Vanilla Reloads each day (some people say $1,000 a day, some say $5,000) and I’ve heard the cards fly off the racks quickly.
Step three: Pay bills with Bluebird. You can use the Bluebird card for any kind of spending – groceries, online shopping, gas. It works just like a regular debit card. But the whole reason for using Bluebird as opposed to, say, a gift card, is that you can pay larger bills online from your Bluebird account, much as you would from a bank account. It’s a workaround that lets you indirectly earn credit card rewards on mortgage, rent, utilities and car payments. You can also get Bluebird checks to use for bills you can’t pay online.
The whole process seemed like a lot of work. I would have to cancel automatic payments for rent, car and utilities, and remember to pay them on time through Bluebird online. More challenging would be hunting down the elusive Vanilla Reload cards.
Hobbies are good
I consulted with my coach again. “Personally, I justify all this in my mind by considering it a hobby, and it allows me to take trips I would never otherwise take,” Tony reasoned. “I think the money you save by doing all this is much more than, say, couponing, which is far more widespread, has TV shows about it, and so on. And you don’t wind up with 20 boxes of Ritz crackers in your pantry.”
All right, so it’s not a hobby I’d want to list on my resume, but I can buy the logic. Mind you, I wouldn’t even consider such a pastime if I didn’t have a very good credit score and didn’t pay off my credit cards in full every month. The interest charges would outweigh any rewards I’d earn.
Fortunately, my score and payment habits are in good shape. The clincher for me: free access to American’s airport lounges for a year. Being able to wait for a flight in a quiet place where I don’t have to cram cheek-to-jowl with the madding crowds and fight over electrical outlets is divine, even if I fly coach.
I checked, and you can use the lounge even if you’re flying a different airline. I will be flying United Airlines on a multi-stop trip to Jordan later this year. Lounge access could make the 24-hour trek bearable.
With that thought, I was sold. I embarked on what I’m calling the Amazing $10k Race, which I will be sharing with you in coming blogs. I applied and the card arrived within days in a beautiful black box that radiates status and privilege. I can hear the tango music playing when I pull it out. First stop, however, is that discount big box retailer down the road.