03-30-2013 08:40 AM
I purchased VRs to meet my minimum spend on my PRG and BCE, that being said I routinely buy $2500 worth per month on my CSP to pay for 2 car payments, rent and utilities. I really don't want to provoke any AA from Amex and in the future intend to pay after the full statement cuts and treat my accouns like 99 percent of the credit using population. There's no wording in the T&C of my CSP that exempts the purchase of reloadable cards and I feel that as long as I'm using them for an actual purpose and not to manufacture spending I should have nothing to worry about. Amex on the other hand...
Yep, there are definitely instances (paying rent, etc.) where reloads are legitimate spend. If the card doesn't actually prohibit it (including prohibitions on "cash-like" purchases) then it's absolutely fine. But if the card agreement does have a prohibition on those kinds of purchases then even though the purchases are legitimate, they're not allowed to be made on that card. I didn't mean for my original comments to be rude or to be an indication that I thought that everyone who made those purchases was gaming the system. Only the peopel who are violating the card agreements are "cheating."
For whatever it's worth, I looked at the CSP terms and conditions and I believe reloads and etc. fall under the umbrella of "cash-like transactions" that are supposed to incurr cash-advance charges and interest without earning UR points. If Chase decides to start checking on those transactions, you might be in for a nasty surprise. If they don't check, you're in the clear!
03-30-2013 08:45 AM - edited 03-30-2013 08:50 AM
What I've seen is that at a certain level, if an Issuer gets sick of it, they'll just invoke the "circumventing" cash advance fee violation of the T&C.
Any cashlike transactions are not eligible for points, though many times they just don't bother and let it go. However, if your profile fits into a certain "high" risk corrleated category, Chase will just close the account. Amex will FR, and then take away the points earned and implement the "cash advance" fee portion of the T&C.
PS - Vanilla Reloads are "cashlike" transactions, but count as purchases when made through CVS, Walgreens or a Supermarket because of the coding. AP payments are counted as services and purchases when selected as such. In FRs, Amex can and has requested receipts for the purchases to ascertain if they were cash advances. If they see Vanilla, prepaid Visa/Mc cards and lack of AP invoices, they will clawback all the points, reinsert cashadvance fees according to T&C and charge retro interest.
PS 2 - Issuers tolerate this more if you have a longer profile, no risk of fraud and long relationship. New credit profile and short work history, be very careful. In either case, as the old saying goes, pigs get fat while hogs get slaughtered.
03-30-2013 08:47 AM
This is the best example I've seen recently of rewards abuse, Chase Freedom
A monthly statement containing 360 *pages* of micro-transactions to get the 10 points per transaction. Chase shut him down!
04-09-2013 02:08 PM
My FR account hold has been lifted !
I submitted 4506T a week back and today I am good to continue using my Amex cards.
I am happy that this turned out positively. Thanks for everyone who shared their views.
04-09-2013 02:48 PM
Glad it worked out for you.
BTW, following on from my Chase abuse 2 posts up, the description giving earlier about using VR to get the 5% and then use it other stores isn't really the issue.
If you look on various threads, some charged $160K per month on their card (Citi I think) before being shut down.
You buy the cards with a small flat fee, get 5% off, load onto bluebird or similar and do a bill pay to your credit card to free up the credit limit, repeat until you are caught.
So on $1K per visit (max allowed when they allow it, by CVS) you are makign about $45 per time. Do this twice a day, for a month.....
Hence the temptation and why retailers and credit card companies are clamping down.
04-09-2013 03:46 PM
04-09-2013 04:01 PM
Some of my observations and personal experience:
1. Amex - very intolerant with cashlike purchases and the most proactive of all issuers on ferreting out and stopping this sort of activity, especially on MR and SPG cards.
2. Chase - moderately intolerant, but not nearly as much as Amex. They are more intolerant of transfering UR points to another's accounts, or if they suspect you're selling the points. Will close accounts suddenly with no recourse if and when they detect something they don't like.
3. Citi and Barclays - the most tolerant on fabricated spending. They don't seem to care how and what one uses his cards on.
4. BofA, Discover, etc... - no idea, since no one in his right mind would allocate valuable manufactured spending limits these issuers.
As always, what one can or can't do is also predicated on history, relationship with lender and a variety of other factors. But, the above is in general.
Also add cap1. They don't seem to care what the account is used for.
04-09-2013 04:16 PM
04-09-2013 04:40 PM
Congrats on getting the hold off! Moral of the story is 'if you have nothing to hide, the result will be positive. ' 😉
Well, a moral for a different set of circumstances! In this case, the OP had, um, misrepresented his income on the app (which strictly speaking is a crime) and used manufactured spend, which probably violates the T&Cs. So there was quite a bit to hide, but the results were still positive.
But others MMV of course!
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.>> About myFICO