Back in good ol’ days of 2012, the answer was unequivocally YES!
At first, you could easily buy Vanilla Reload cards at Office Depot with your Chase Ink Bold or Ink Plus and get 5x per $1 spent. A $500 gift card cost only a $3.95 activation fee netted you 2,500 Chase points!
When Office Depot got keen to that racket and stopped selling Vanilla Reload cards, you could still buy regular Visa gift cards at Office Depot and earn 5x with your Chase Ink card.
Then, you could head to CVS and buy Vanilla Reloads with the gift card you just purchased. It was an extra step and extra work, but you could still earn 2,500 Chase points for $8.90 ($4.95 for regular card, $3.95 for Vanilla Reload).
But my oh my, how times have changed.
Office Depot has stopped selling $500 gift cards. Now, the largest gift card you can buy is $200 and the activation fee has increased, from $4.95 to $6.95.
With this change in place, is buying gift cards still worth it?
Let’s look at three options for buying gift cards and determine, mathematically, if they makes sense.
To help add some perspective, I’ll use a trip from North American to Europe as a real-life example of what you could do with your points and how much it would cost in activation fees.
Option #1: Buying Regular Visa Gift Cards at Office Depot With a Chase Ink Bold or Plus
Like I said, the largest Visa gift card you can buy is $200. Each one of these cards will charge you a $6.95 activation fee.
If using your Chase Ink card, each $200 gift card will earn you 1,000 Chase points (5 x 200).
You’re paying $6.95 for 1,000 Chase points.
Price per point: 0.7 cents
Real life example
Chase points transfer to United at a 1:1 ratio, which is usually the best transfer option.
To fly from North America to Europe, it will cost you 60,000 United miles. To earn 60k United miles through buying gift cards, it would cost you $417 in activation fees.
Also, if you use United miles, you are allowed a free stopover on roundtrip tickets.
This means you can get 2 vacations for the price of one. An itinerary like New York–>Paris (stay for up to 364 days)–>Istanbul (final destination)–>New York would only cost 60k.
Is it Worth It?
- Considering that United allows a free stopover on roundtrip tickets, $417 is pretty cheap for a ticket to Europe. An itinerary like New York-Paris-Istanbul is pretty enticing!
- You only need to go to one store, so effort is minimal.
- The regular Visa gift card is super flexible because it can be used anywhere Visa is accepted.
- You need to have a Chase Ink Bold or Plus to make this work.
- You’ll have to use the gift cards to pay for things, meaning that you won’t be using your credit card (and earning points) for those purchases.
This isn’t a bad option, but it’s hardly an awesome option like it was before, when you could get $500 gift cards.
I’d definitely use this option to meet the minimum spend on the Chase Ink cards.
I’d also use this whenever I wanted to quickly earn some Chase points or needed to top off my United miles balance for a trip.
However, as an every day spend strategy, I would no longer use it. Now that the activation fee is $6.95 the cost is too prohibitive.
Option #2: Buying Restaurant or Gas Gift Cards at Office Depot with a Chase Ink Bold or Ink Plus
This is a similar option to the one listed above, but instead of buying a regular Visa gift card, you’ll be buying a gift card that is affiliated with specific restaurant, like Applebees, Chilis, or Starbucks, or with a specific store, such as Old Navy, Home Depot, or iTunes.
The math here is super simple. None of these gift cards have an activation fee, so you won’t be paying anything extra.
Price Per Point: 0.0
The one major issue is that most of the cards only come in small denominations. Applebees and Starbucks offer a $50 gift card but all other restaurants were capped at $25.
Of the stores, Old Navy, Home Depot, Barnes and Nobles, and Game Stop (yeah gamers!) all offered $500 gift cards.
Macy’s offered a $200 one and all the other stores were capped at either $50 or $25.
Of course, you are more than welcome to purchase as many of them as you like, so nothing is stopping you from loading up on gift cards to a place you frequent often.
The only real problem is that you’ll have to be lugging around all those gift cards!
Since there is no activation fee, the cost of earning 60k United miles to fly roundtrip to Europe is $0.
Woohoo for free miles!
Using your Chase Ink card, you’ll earn 5x per $1 spent. In order to earn the 60k miles needed, you’d need to purchase the following amount of gift cards:
$25 gift card (netting you 125 points each)- 480 gift cards
$50 (netting you 250 pts. each)- 240 gift cards
$200 (netting you 1000 pts. each)- 60 gift cards
$500 (netting you 2,500 pts.e ach)- 24 gift cards
Is it Worth It?
- You’re earning FREE miles since you aren’t paying a cent for the activation fee.
- Earning 5x per $1 spent is much better than the typical 1x for using your credit card and will add up very quickly.
- You only have to go to one store, so it’s pretty painless.
- The gift cards are restricting since they can only be used at one place.
- You’ll need to be diligent about using the gift cards and not forget about them.
- If you are purchasing gift cards in small denominations, you’ll be lugging around a bunch of them.
This is absolute must do for anyone who can find gift cards for places they frequent and who feels comfortable keeping track of a few gift cards.
You are getting free points!
If you go to Home Depot anyway, then by all means, make sure to grab a gift card first and earn 5x instead of the standard 1x. Those points will add up quick.
It makes a lot of sense for restaurants as well. Sure, the Chase Sapphire Preferred earns you 2x when dining out, but with buying gift cards, you’ll be earning 5x. It’s a no-brainer!
The only people who shouldn’t take advantage of this are people who don’t want the hassle of keeping track of a their gift cards and might fail to use them. If you forget to use them, you’re throwing away money.
Personally, I don’t do a lot of shopping, so I won’t use this too often as others.
However, Heather loves Starbucks, so I do usually pick her up a $50 gift card or two when I find myself at Office Depot. Helps take a little bit of the sting away when she purchases a $5 mocha grande whatever the heck they are.
Option #3: Buying Vanilla Reload Cards at CVS
The major benefit of Vanilla Reload is that they can be loaded on to a Bluebird card and used to pay your mortgage or student loans, expenses that can not normally earn you frequent flyer miles.
Currently, CVS allows you to buy Vanilla Reload gift cards with a credit card (at least in the Philadelphia area), so by using a credit card to buy them, I’m earning points for paying my mortgage.
The largest Vanilla Reload you can buy is $500. The activation fee is $3.95.
Since most cards will only give you 1x per $1 spent at drugstores, for 1,000 miles, you’re paying $7.90.
Price per point: 0.8 cents
If you use a card that earns United miles, you’d need 60k miles for a roundtrip ticket to Europe. Those 60k miles would cost you $477 of activation fees. Remember, with United miles you’re allowed a free stopover on a roundtrip ticket.
However, if you use a card that earns AA miles, you can get an even better deal. American Airlines costs 60k roundtrip during peak season, but only 40k off-peak (Oct 15-May 15th).
40k AA miles would cost only $316.
It gets even better. If you use a SPG card, you can transfer to AA and you get a bonus. Every 20k SPG points becomes 25k AA miles.
So 40k SPG points would cost you $316 in fees, but would earn you 50k AA miles. That’s some great value!
Is it Worth it?
- Vanilla Reloads can be used to pay bills that won’t normally earn you frequent flyer miles, so you’re earning EXTRA miles.
- You can use any credit card you want to buy them, which makes it great for minimum spends.
- Some cards (listed below) offer some incredible value.
- Most cards only earn you 1x per $1 spent at drugstores, so you aren’t getting a bonus.
- 0.8 cents is starting to get a little pricey.
Since you can use any credit card, I definitely recommend this for anyone wishing to meet a minimum spend. Also, you are getting points for paying things you can’t normally get points for, like mortgage or student loans, so this is still a good option for many people on a monthly basis.
The key is making sure you are using a card that earns you valuable points. Cards that I’d suggest include the Amex SPG, cards that earn Chase points (Sapphire Preferred, Ink Bold, or Ink Plus), and any card that earns American Airlines, United, or USAirways miles.
Paying 0.8 cents for any of the above type of points is a pretty good deal, since you can use them to get some pretty sweet flights that are worth much more than that.
Personally, I buy $2,000 worth of Vanilla Reload cards each month to pay off my mortgage and student loans. This earns me 2,000 points a month and only costs a little under $16.
All of these options are still worth taking advantage of when you are trying to make a minimum spend on a card.
They can also still be viable in certain situations, but unfortunately, aren’t as lucrative as before.
Buying restaurant or store gift cards at Office Depot with a Chase Ink Bold or Ink Plus is by far the best value, seeing as you won’t pay anything extra. Take a look at your local Office Depot, see what cards they have, and if you can use any of them, definitely grab them and earn 5x.
I’d also still recommend that most people consider buying Vanilla Reload cards at CVS and loading them on to a Bluebird card to pay their mortgage and student loans.
These are things you can’t normally earn miles for, and while you are paying 0.8 cents per mile, if you know how to maximize your miles fairly well, you’re still coming out way ahead. $316 to get to roundtrip to Europe? Yes, please!
Are you still using gift cards to earn frequent flyer miles or have you given it up now that it’s less lucrative? What gift cards do you typically buy, and what credit cards do you use to buy them? Let me know in the comments below!
(first picture courtesy of 401k 2013, all others my own)