Wednesday, December 19, 2012

Bluebird and Vanilla Reload Cards for Bill Pay Means Free Money

American Express has recently come out with a number of prepaid cards in the last year.  There is Serve ($25 of free money until the end of the year), AMEX Prepaid, and by the far the most exciting is Bluebird.

How is Bluebird different?

Bluebird has two differences that work together to separate it from all other prepaid cards.

  • Bluebird has a bill pay feature
    • You can pay bills that normally require a check with your Bluebird card.  This means that tuition, mortgage, rent, utilities, which all cannot be paid by a credit card can by paid through your bluebird account.

  • You can add funds through the Vanilla Reload Card
    • The Vanilla Reload card is another prepaid card.  A $500 Vanilla Reload card can be bought for $3.95 (let's call that 1% in fees).  The $500 can then be added to your Bluebird account here.  
      • Once you are on the Vanilla Reload site, just add your bluebird account number as the card number and the pin on the back of your vanilla card as the pin.

Therefore, you can buy the Vanilla Card with a credit card, add the money from the Vanilla card onto your Bluebird account and use your Bluebird to pay whatever bills you want, including your original credit card.

Who Cares?

This is a valid question, but there are some major benefits that can be had.  In my opinion, the greatest usage of Bluebird is to meet spending thresholds for credit card bonuses.  Spending $10,000 can be daunting in 3 months, but if you can buy prepaid cards and cash them out, it is a lot easier.  Another usage is that even though you lose 1% in doing this, many credit cards will pay more than 1% in specific categories.  For instance, if you find a reload card at a:

  • Grocery Store 
    • Use the American Express Blue Preferred and get back 6% for grocery store purchases, even gift cards.  You will effectively get 5% cashback on payments with your bluebird.  If you pay your credit card bill, you will get back $25 without spending anything for buying just one card
  • Office supply store (Office Depot)
    • Some cards, like the Chase Ink Bold, Ink Plus, Ink Classic or Ink Cash give 5% back at office supply stores for a 4% net gain.
    • There has been a major run at the vanilla reload cards at Office Depot for this very reason. They seem to be off the shelves and not coming back anytime soon.  Sorry
  • Anywhere
    • If you have a Fidelity AMEX, you get 2% cash back everywhere.  This means you can get back 1% after fees and effectively pay anyone or any company with a credit card.  

Here is a great tutorial on how to load money from your Vanilla Reload Card to a Bluebird card.  There are also some great pictures of what everything looks like.

A Word of Caution

Don't be an idiot.  This advice will solve many of life's problems, but it is very specific here.  There is such a thing as "perk abuse" which is using too much of your spending in one type of category.  There is nothing illegal about it, but it certainly does look fishy.  The credit card companies can, and will, shut down your account if they think you are taking advantage.  Don't buy $5,000 a month of Vanilla Prepaid cards at Office Depot on your 5% credit card.  I can't tell you how much is too much, just don't be an idiot.

I have found Vanilla Reload cards at both Walgreen's and CVS, but I have only been able to buy them with a credit card at CVS.