All the best credit cards require you to spend a couple thousand dollars in order to receive the sign up bonus. Credit cards do this to recoup a little bit of money from the transaction fees they charge the retailer. They are also hoping you won’t pay your balance off in full and you will end up paying interest. (big no no!)
These spending requirements can be daunting if you don’t have a lot of expenses that would require that level of spend (IE $2,000 in 3 months). I am going to show you a ‘hack’ that will help you minimize your transaction fees and speed up the time it takes to meet your minimum spend.
American Express (Amex) offers a prepaid card that you load with money and acts as a gift card, it is called the Amex REDcard. This card is much more flexible than a gift card, it is actually a credit card that has a full number, expiration date, CVV number, ect. You can use this card anywhere they accept Amex, gas station, restaurant, movie theater, etc.
This card is FREE and they DO NOT run your credit in order to get the card. You load the card so you are not borrowing money like a traditional credit card. The card gives you 5% off a target anytime, anywhere. It also gives you free shipping on target.com.
What does this have to do with meeting a minimum spend?
The Target REDcard allows you to pay bills online with money that you load on it. When I say pay bills, I mean pay bills. You can add ANY payee and once you put in their name and address you can cut them a check online for free. Amex will mail the payee a check and deduct the check amount from your balance. If you mail a check to your landlord, you can now do it with your REDcard account. Car payment, cell phone, water bill, IRS, baby sitter, your spouse. Yes, you can cut a check to anyone you want and they will receive it in the mail in 2-3 days.
How do I load the REDcard with a credit card that I need to spend $2,000 on in 3 months?
Since you can’t load the REDcard with a credit card there is a loop hole to this. You CAN load the REDcard with a debit card. If you go to your grocery store, walmart, CVS you will see mastercard gift cards with the “debit logo”. You can purchase these debit gift cards with CREDIT because the transaction just shows as a POS purchase at your grocery store, for example. These gift cards only cost $5.95 to purchase. If you buy a $500 gift card that is only a 1.2% fee. Make sure the gift card you purchase has the ‘Debit’ and ‘MasterCard’ logo.
Let’s say you just signed up for the Chase Southwest credit card, it requires you spend $2,000 in 3 months. You would walk into your grocery store, buy a gift card for $500 and swipe your Southwest credit card. You now have spent $505.95 on your Southwest credit card, only $1,494.05 to go to meet your $2,000 minimum spend. You can buy as many of these gift cards as you want, however I usually space them out a few days.
Now, once you have your $500 loaded on gift card, you will need to walk into target with your debit gift card and your REDcard. Walk over to customer service and ask to load your prepaid REDcard. Hand the clerk your REDcard and let them know how much you want to load on it. You can load up to $1,000 per transaction, $2,500 per day, and $5,000 per month. Your gift card will have a pin number in the package along with the card, choose ‘debit, type in your pin and you are done! Those funds are immediately ready for use in your REDcard online account or at an ATM. YES, you can withdraw cash money from the REDcard from AllPoint ATM’s with no fee. Check out the ATM locator here. You can essentially get cash from money that originated on your credit card with only a 1.2% (the gift card fee of $5.95 per $500)
How do you acquire this Amex REDcard you speak of?
This is the tricky part. They don’t sell the Amex REDcard at many Targets in the country. Here is a locator. If you can purchase a REDcard at your local target, definitely go that route. I didn’t want to drive to Tucson, my nearest Target, in order to get one so I went to eBay.
What you are essentially buying on eBay is a dummy card that gives you an account number that you need to fill out your application and have Amex send you the REAL card. I purchased my REDcard on eBay for about $25 and the eBay seller emailed me the account number within 15 minutes. Make sure you are buying the Amex Prepaid REDcard and make sure you are buying from somebody with good feedback. My transaction went flawless and the seller was very helpful.
Here is an example of the card you will want to buy on eBay:
Once you get the temporary card number from the Ebay seller, you will go here to the Amex site. Input the information that the seller provided and it will send you to the next page where you will fill out your details. Again, you are not applying for credit and they don’t run your credit. Amex is just getting information for your card since they want it registered to you. Once you fill out that information you will receive your physical card in the mail from Amex in about 7 days. Once you receive it, activate it and take it to Target to start loading with your Debit gift cards 🙂
Here is what it looks like when you are ready to go pay your bills, is it super easy to navigate and use. You can pay electronically to major retailers or mail a check to an individual for no fee!
You can even pay the bill of your credit card that you used to load the card, LOL!
I pay my car payments, mortgage on rental property, as well as my landlord, all with no fees. (If I wanted to cash out the $341.40 I could go to an ATM or mail a check to my wife)