[update] Currently AMEX has suspended cashback on gift card denominations above $200, thus effectively removing any advantage of buying AMEX gift cards. You can still use the Gift Card > Target RedCard > $$ approach and be profitable.
Manufactured spend can be quite financially rewarding: churning through $10K-$20K in AMEX Gift Cards every month, if using a 2% cash back card, can yield just shy of $4,800 annually. Given that you do not have to pay taxes on rebates, depending on your tax bracket, this can be considered almost an $8,000 “raise.” This doesn’t even take into account the hundreds of thousands of miles and points that can be earned by a combination of hitting minimum spends or portal cash back.
But in addition to the simple wash, rinse, repeat methods of buying prepaid AMEX gift cards through TopCashBack once or twice a month (for between 1.5% and 2.25%), purchasing OneVanillas at CVS, loading said Vanillas onto the prepaid Target RedCard, and then either paying mortgages, credit cards or transferring that money to my bank account, there are some other “fun” side games that can be played.
One of which I learned from Doctor of Credit include Gas Rewards. Now, there are a number of different gas rewards programs – from Fuel Network, to Safeway, to Giant. The most lucrative, for me, which means in both dollar bills and time, is from Giant. Over the summer, Giant ran a 2X or 3X gas rewards on Visa Gift Card purchases. What does that mean? Let’s take a 2X promotion as an example.
Giant Gas Rewards
2X Visa Gift Card Promotion:
- Every dollar spent on a prepaid gas card gives you $0.002 off of gas
- A $500 gift card then gives you $1.00 off of gas
- A $500 gift card costs $5.95 in fees
- Giant caps at $2.20 off per gallon
- Purchasing 2 Visa Gift cards gets you $2.00 off each gallon of gas and costs $11.90
- You can pump up to 35 gallons of gas
- My car takes 17 gallons when empty
- 17 x $2 off per gallon = $34 – $12 in fees = $22
- 2% cash back with credit card = ~$20
OK – $42. Big deal. Well, if you have two cars, and fill both of them up, you are up to $84. Do this twice a month, and you save $168/month, or $2,016/year. Not bad for roughly 8 minutes of “work” a month.