Worth it?
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!
Wow!
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
The largest Visa gift card, $200, which costs $6.95 in activation fees.
In order to make this worthwhile at all, you’ll need to use a Chase Ink Bold or Chase Ink Plus because you’ll earn 5x per $1 spent at office supply stores.
The Math
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?
Pros:
- 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.
Cons:
- 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.
Consensus
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
The gift card rack at Office Depot.
Once again, you’ll need a Chase Ink Bold or Ink Plus to receive 5x at office supply stores to even consider this option.
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
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.
Old Navy and Home Depot, along with Gamestop and Barnes and Nobles, offers $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!
Real-life Example
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?
Pros:
- 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.
Cons:
- 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.
Consensus
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
Make sure to pick the Vanilla Reload card that looks exactly like this.
This option can be done with any credit card, although I suggest using cards who earn you valuable points, like a Chase Sapphire Preferred or Starwood Preferred Guest (SPG).
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 Math
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
Real-life Example
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!
AA also allows stopovers but is more specific about their rules.
Is it Worth it?
Pros:
- 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.
Cons:
- 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.
Consensus
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.
Final Word(s)
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)
Any way you look at it, you still have to spend $12K buying those gift cards. Getting 5x is easy as you noted, but figuring out how to liquidate those gift cards for no/minimal fees would be the real trick.
@Travel Summary- Yeah, but spending $12,000 to get those miles (and getting 5x) is much better than having to spend $60,,000 to get those miles (getting 1x). I haven’t really focused on liquidating gift cards because then there is even more cost involved. I’d rather get them and use them for my every day shopping. Also, if you buy VR cards, you can use those to actually pay off your credit card balances, which in essence, means you aren’t spending anything. Although I’d be careful doing that too much!
Great post. Thanks for sharing!
@DEALYST- No problem! Do you buy any gift cards?
thank you for all the good information. I did not know that there was no activation for all cards except visa,amex, etc. The one thing that is going to help me is that I get 2×1 for all purchases on the Capital One Venture, so I can buy the $2000 vanilla card and get 4000k points, and I can but the other gift cards at Office Depot and get the 5×1 point.
I appreciate the heads up
@Ron- Yep, no activation fee, at least at Office Depot. Getting 2x for Cap 1 points isn’t bad, but I always prefer Chase and SPG points over Cap 1 points. Maybe I’m being shortsighted, but I like the value they can give with getting tickets to expensive places or during expensive times (and also with stopovers and open jaws), whereas with Cap 1 you are tied to whatever the price of the ticket is.
Hey Travis,
What are your thoughts on the value of buying VR cards at CVS using a Hilton HHonors Amex, that currently (until May 1st) offers 6 points per dollar at drugstores?
Thanks!
@Elliot- I think you should ride that Hilton Hhonors Amex at CVS until the deal dies on May 1st! Even with the Hilton devaluation, 6x is pretty nice. I’d put that on par with 1 Chase point or 1 SPG point.
great post! i personally haven’t gone the gift card route; i just might have to try it now.
@benjamincahn- No harm in dabbling a little bit. Just don’t go overboard and buy only gift cards on your credit card and nothing else or it could raise red flags. Try it out, see if you like the “excitement” of it (wow, I’m a nerd) and then decide whether you want to keep doing it!
Curoius about your comment. Why would buying gift cards with other items raise a red flag?
@Greg- Not sure what you mean…what I meant was if you only buy gift cards with your credit card, and no other purchases during the month, that might raise red flags.
Frequent reader, first time commenter. This comment concerns the Freedom card 5% and Bluebird
Have been using my Chase Freedom card at CVS to get Bluebirds. 5% right now. Q2 has no good options for taking advantage of the 5% via gift cards (movie theatres and restaurants I think)
Q3 is gas stations so will visit Valero to get $1500 of them (5% capped at 1500).
Q4 is amazon so might be able to take advantage of it through Amazon payments (?? yes?)
After purchasing a house in August or so I’ll get the ink plus and convert the points to United miles.
@Peter- Glad to have you commenting…the more the merrier, so keep ‘em coming! Yeah, definitely max out that Chase Freedom at CVS before the next quarter if you can. Q2 is pretty weak unless you have a restaurant or two you go to a lot. Agreed that Q3 should be good with gas; just buy some gift cards at your local gas station. I’m not sure whether Amazon Payments will count in Q4 or if it will only be Amazon purchases. Guess we’ll find out, something to remember to try!
Freedom has actually added Lowe’s for Q2
@Elliot- Hmmm, makes it a tad more interesting.
I’ve had a hard time finding VR cards at CVS in NYC recently. I have checked a rotation of 4 stores on multiple occasions and have found the stock depleted. Now either CVS is not restocking them, or they get snatched up like hotcakes from people reading these blogs. I am not sure which. Has anyone else had luck finding VR cards in stock at a CVS in NYC?
Enjoy the blog. Am new to this way to collect points. I can’t get Bluebird. Applied while in Thailand. Got a message -”Unable to verify info.” Back now in US and Bluebird told me I would have to reapply, but it still does not work. They said it is a security issue. So….What about cards for points with PayPal? I am going to study in Kyrgyzstan soon, and the school accepts PayPal, but not credit card payments. I would love to get points somehow. What are your thoughts? Thanks again for a great blog!
@Michael H.- A security issue? Did they specify what they meant by that? It might take a little bit to get the Bluebird card, but I wouldn’t give up on it, especially if you would be able to pay your school with it. If you find out specifics about why you can’t get a Bluebird card, I might be able to help.
As far as Paypal cards, I don’t have any experience with them, sorry. If you do try to go that route, I’d love to hear what you find out though. Kyrgyzstan, huh? Pretty wild…why’d you choose to go there?
Glad you enjoy the blog, and I’d be happy to help in any way possible.
Thanks Trav!
Bluebird would only say it is a security question and refused further details when I asked some questions. I don’t want to try using a different email……much too complicated.
My hotmail account was shutdown while I was in Kyrgyzstan 6 months ago, so perhaps that was an issue that caused security concerns for Bluebird. My Amex membership rewards also was shut down about 5 months ago while I was in the Ukraine. Perhaps the “red flags” go up with Amex. Otherwise, I have never had a problem with Amex in 30 years. I can get their cards easily.
Went to Kyrgyzstan 3 times last year using USAir miles…….a real “sweet” spot on their awards chart -60,000 econ or 90,000 biz. Will miss it after the merger with AA. Kyrgyzstan is great…. still so untouched by tourism. Beautiful mountains, Silk Road history, and I can use Russian language I studied some years ago. I’m a retired teacher ………. so this is for me. The blog always helps me travel well.
Thanks again…!
@Michael H.- Yeah, that does seem like a hassle. Wonder why all your stuff got shut down while you were over there?
I’ll have to start looking at Kyrgyzstan as a destination. 60k roundtrip is a steal! And when I do, I know just the man to ask! Have a great time, and enjoy your studies there!
I have done pretty well buying Shell gas cards at Staples, using the Ink card, also plan on buying Marriott cards for an upcoming paid stay. Thanks for doing the math for us!
@Margo- Yeah, I’m going to head out to Staples to see what they have today. Seems like Office Depot’s selection was lacking, especially with no gas cards. Nice to know that Staples allows you to pay with a credit card.
I have spent the last two months checking every CVS store i could find in LA and i was only able to get my hands on one VR card. I have pretty much gave up on it now. I mean jesus i have hit over 20 different stores through out the LA area… the time ive wasted is just not worth it to me. It looks like i got in the game a few months too late.
Has anyone else had any luck finding VR cards in LA?
@Chris- Man, that’s a bummer. Seems like they are less prevalent in big cities? I’ve seen them at all the CVS stores near me in suburban Philadelphia, but I have noticed they aren’t restocked or full on the shelves. I’m hoping that they aren’t just letting the last ones be bought and not restocking. I guess time will tell.
I have two CVS stores in NJ 2 miles from my house in different directions. One is empty and continues to be empty and the other one I have hit now for about 11k in VR. They had to have restocked as I’m sure I’m not the only person taking advantage of this deal. Limit is 1k per day but on the weekends I usually hit them in the AM and then at night as it is always different people working. I also change credit cards as well.
Matter of time before it dries up so I’m stocking up even if I go over the $5k in one month.
@Steve- Hmmm, that is really interesting. It seems weird that some would have them and others wouldn’t.
I’d be a little careful how many you buy…CVS or Bluebird won’t have an issue with it, but the credit card companies might start to wonder why you have so many big purchases at CVS. Make sure to mix in other regular spends on those cards as well. Again, do what you feel comfortable with, but I try to keep it to about $2k a month of Vanilla Reloads, just to be safe. But if you are spending a lot on your credit card, you could get away with more.
That isn’t a Home Depot GC pictured, it’s a Home Improvement card. It can be used at Sears, Lowes, Home Depot, and thousands of smaller retailers.
@Ken- Eagle eyes! Oh wow, what an oversight on my part. Thanks for catching that…it makes it even more useful.
FM referenced link for a Citi ThankYou preferred card that pays 5X spend for ONE year after you get the card at drugstores, gas stations & grocery stores. So could use to buy VR at CVS and get 5X, GCs at gas & grocery stores. Points redeemed for air at 1.33, so each purchase gets 6.65% towards air travel and can book on any airline! Here is the link.
http://creditcards.citicards.com/usc/thankyou/Preferred/external/Apr2011/Default.htm?BT_TX=1&ProspectID=1F2352614A8F4BFEA0EF13609C9B954D
@Marshall- Very, very interesting. I actually have a Citi Thank You Preferred (I downgraded my Citi TY Premier) but I’m not sure whether it gets 5x at drugstores and grocery stores. If it does, I’d start using this immediately. Looks like I’ll have to call and find out.
Thanks for the heads up on this. 6.65% is huge!
Apparently this is a special link for a new Citi TY card and doesn’t apply to other Citi TY cards. Only get 6K bonus. Idea – why not apply for this card as additional Citi card?
@Marshall- I’m wondering if I could call them and talk them in to switching my card over to the other one. Probably not, but it’s worth a try.
Staples also carries Groupon gift cards, combining with ultimate rewards works out really well.
@Margo- Very nice. I’ll need to check out Staples.
I agree gift cards are still good for meeting minimum spend, but I don’t see it as worthwhile beyond that right now with the cards I have. I was using AMEX Hilton for 5k of VR a month at CVS but with Hilton’s recent award chart devaluations, I’ve lost my enthusiasm for that program. The INK at Office depot was great when you could buy VRs. I wish I had hit that a lot harder. I’m going to be more aggressive the next time something as good as that deal shows up.
@Jack- Agreed that to make minimum spends, the gift card route still makes a lot of sense. But with the changes, the only one that I’ll still utilize on a day to day basis is buying VRs at CVS to pay my mortgage and student loans. Like you, I’m gearing up for when the next big opportunity comes up and will it hard now that I’m back Stateside.
Hi Travis. Thanks for your very helpful advice! I was able to do the visa gift to vr to bb one time, before office depot stopped selling the $500 visa gift cards. I am not sure I am understanding the procedure now if I want to simply buy the vr cards from cvs. It seems you need to load something onto the card, eg a visa gift card. Are you saying that we should buy a different vr card from cvs. If I simply buy the exact card you were suggesting in your other post, I am told by cvs that this $3.95 card doesn’t have a swipe so they can’t load anything onto it in the store. Could you please show me exactly which card to buy now and how to put money on it if we are not buying the visa gift card first. Thanks!!!
@Kay- If you aren’t buying the Visa gift card first, you need to go buy a Vanilla Reload card at CVS. Then, you have to load that Vanilla Reload card on to a Bluebird card, which you can use to pay for things. Here’s is exactly how you should do it:
How to Use Vanilla Reload Cards with Your Bluebird Card