Monday, August 11, 2014

Paypal Business Debit, Old Amex Blue and Serve - The Power Trio!

A word of caution before this plan is laid out:  Paypal is known to shut people down for manufactured spending activities.  Normally, it involves withdrawing directly to your bank account or logging in from outside of the country, but this manufactured spending gem will likely get you shut down.  You also make get a Financial Review from American Express if you continuously spend a lot of money on any one of their cards.  You are forewarned.  You can now enjoy some fictional reading.

The New Power Trio

The following accounts are necessary for The Power Trio:
  1. Paypal Account with a Paypal Business Debit Card
    1. You will get 1% cashback on signature transactions (non-pin transactions).  You need to activate the 1% cashback from your Paypal account or you won't be eligible.
    2. No hard pull, no maintenance fee.
  2. Old American Express Blue Credit Card
    1. Unlimited 5% cashback at Pharmacies, Grocery Stores and Gas after you spend $6,500 at these categories.  The first $6,500 of the year will be 1% cashback, the rest of the year will be 5% cashback.
      1. If the application doesn't load, try browsing incognito.
  3. Serve Prepaid Card
    1. The relevant point for our discussion is that you can load funds onto Serve via a Debit Card and use those funds to electronically pay your credit card bill.  I think I see where you're going here ;)
How it Works

It's actually relatively straightforward.  Here it is step by step once you have all the accounts.

  • Go to a Pharmacy (like CVS) and buy a Paypal Reload Card with your old Amex Blue.  They cost $3.95 for a $500 card.  Let's talk about buying $1,000 at a time for round numbers sake.
    • Cost = $7.90
    • Rewards = $50.39 into your American Express account
  • Load the funds onto your Paypal account.  You now have $1,000 in Paypal
  • Load money onto Serve from your Paypal Business Debit Card, which you can link at Serve's website.
    • Cost = $0
    • Rewards = $10 from Paypal for signature transaction on your Business Debit Card.
  • Pay your bills
    • Cost = $0
    • Rewards = $0
Total Cost = $7.90
Total Rewards = $60.39

Net Profit = $52.49 per $1,000 spending.  Let's call it $52.50 for simplicity.  That's 5.25% cashback on your original $1,000!  Not too shabby!
As you see, you only have to go into one store.  Everything else is done online.  That is key to me.

How Much Can I Make?

There are two limiting factors, Paypal and, more significantly, Serve.  You can only load up to $1,000 a month from your Paypal Debit Card to Serve without ISIS.  Therefore, you are limited to $52.50 per month.
You can load up to $4,000 a month onto paypal.  You can be more creative at withdrawing the money from Paypal.  You can buy Money Orders using the Business Debit card in stores that allow Money Orders with Debit Cards.  The advantage here is that the Debit Card has your name on it and it doesn't say Gift Card on it so sales associates are likely going to be nicer to you.  If you max out at $4,000 a month, you will be getting $210 every month!  If you have a spouse and/or have access to another Paypal account, you can make $420 every month!  Not too shabby indeed!

You can even go further, you can buy plain Visa Gift Cards once you reach your Paypal limit.  Use them to load onto Serve at Family Dollar (Serve has a different set of limits for "cash reloads"), use Evolve Money, Amazon Payments or Money Orders as a Debit Card.  These all require an extra trip to a store so the time to money ratio is not as favorable, but you can still do well.