Citi Thank You 5x

[longtimelurker]

There are lots of different considerations.   In some cases, notably the Amex BCP (and the BCE suffered along), Amex just put a cap on this category, as probably easier than policing purchases or asking all their merchants to code gift cards differently so that they wouldn't receive any cashback.   Even so, the terms and conditions state, among other things:  Eligible purchases do NOT include fees or interest charges, balance transfers, cash advances, purchases of travelers checks, purchases or reloading of prepaid cards, or purchases of other cash equivalents.

and gift cards may count as equivalents.

Others, like Citi now and Chase in the past, shut down accounts of those who earned large numbers of points, citing abuse.

But one viewpoint is that some of the activity that is done to get lots of points/cash back, is very similar to what is done by criminal money launderers, and with recent fines, no bank wants to be accused of enabling such activity.  It is easier and safer for them just to close all these users down, rather than investigate more!

So, to answer your question, with "small" amounts, you are probably OK, but in general there is no way of knowing what is small enough.

[Revelate]

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@longtimelurker wrote:

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@jsucool76 wrote:
No such thing as excessive abuse. Abuse is abuse and it is usually all laid out in the T&Cs that you cant do it. :-P

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And that is the problem with Citi.  It doesn't actually prohibit the purchase of cash equivalents, whereas most others do, and instead uses judgement call terms like "abuse".   But if mods don't want it, please delete!

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FYI: It was fine pre-edit.  

This tactic comes up quite often, it just isn't discussed much in the open as lenders shut them down as soon as they can identify it; I'd be stunned and amazed if certain groups inside any lender don't read this and a few other sites.

[indiolatino61]

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@longtimelurker wrote:

While the Citi ThankYou Preferred 5x link (from April 2011) has finally been taken down, The Miles Professor reports that a similar offer is available at (at least some) Citibank branches, see http://themilesprofessor.com/    This gives 5x on supermarkets, drug stores and gas for 12 months  (It is the Thank You card rather than the Thank You Preferred, which doesn't make much of a difference).

The expired offer was just 6K TYP after $300 spend, this is 15K TYP after $1000 which is much better.

So, there are good uses and less approved uses of this card!   On the good side, for 12 months you can get an uncapped 5% off groceries, drug stores and gas.

5% on groceries is better than Amex BCE and Penfed for example, and you can use this once you reach the $6K on groceries on the Amex BCP.  5% off gas is as good as Penfed (and Penfed might reduce to 3%) and is uncapped, beating the rotating cards when they cover gas.  And same with drug stores....

I've been advised not to talk about the bad uses here!

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Thanks for the info!

[navigatethis12]

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@enharu wrote:

it really depends on what is defined as "excessive".

buying 1-2 prepaid gift cards each month? one can easily explain it as legitimate expense and get away with it.

buying 1000+ gift cards? definitely not most of the time, unless you can cook up some amazing convincing story that makes them think otherwise.

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I get one $500 card a month to help with shipping and buying cheap inventory, which gets a 4% return and have not had any issues. I actually was nervous that Citi would catch on, until I saw people were getting one or two thousand dollars in ThankYou points a month by doing this. People who do a little manufactured spend will usually be okay, but there will always be people who take it way too far and then complain when an issuer either puts caps (US Bank) or closes accounts and keeps rewards (Chase). No business is going to sit by and let people take advantage of them. Usually the terms say something about they can keep the points if they determine you are abusing the rewards system.

[SnackTrader]

Just to help update, this poster ( http://ficoforums.myfico.com/t5/Credit-Cards/Getting-CCs-closed-by-issuer/td-p/2169073 ) is apparently getting their card shut down for using similar tactics to what is described in this thread. While those commenting on the thread appear to know the concerns with using these methods, those reading may not. So here is an example of what can happen, and why it is generally not worth the hassle. Rewards can be earned in significant numbers just with normal spending, no need to go out of your way. I have earned over $650 in signup bonuses and rewards just in the last 6 months, and there's another $400 waiting for me on my Barclays card. I like to think that is sufficient, and there is little need to go overboard.

Again, this is NOT directed at the OP or other posters, but rather those innocent bystanders that may get the idea that this activity is reasonable and beneficial. I assure you, having your cards closed is not fun, and getting the few extra dollars in rewards is not worth that risk.

[longtimelurker]

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@SnackTrader wrote:
Just to help update, this poster ( http://ficoforums.myfico.com/t5/Credit-Cards/Getting-CCs-closed-by-issuer/td-p/2169073 ) is apparently getting their card shut down for using similar tactics to what is described in this thread. While those commenting on the thread appear to know the concerns with using these methods, those reading may not. So here is an example of what can happen, and why it is generally not worth the hassle. Rewards can be earned in significant numbers just with normal spending, no need to go out of your way. I have earned over $650 in signup bonuses and rewards just in the last 6 months, and there's another $400 waiting for me on my Barclays card. I like to think that is sufficient, and there is little need to go overboard.

Again, this is NOT directed at the OP or other posters, but rather those innocent bystanders that may get the idea that this activity is reasonable and beneficial. I assure you, having your cards closed is not fun, and getting the few extra dollars in rewards is not worth that risk.

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As the OP, I agree!   Citi has suddenly started getting very aggressive about closing, catching the innocent and those less so in the net.   While legal action is being taken by some to recover losses, we don't yet know how well that will work.

For the average user the advice is: get this card and use it "as intended", it is a very good deal.  But be very sensitive, don't even buy one gift card at the supermarket, as that seems to be the current excuse (the legal action arises because this isn't mentioned in the terms and conditions).

For others, those that like lots of risk, the advice is to use the card as hard as you can, $25K a month plus, cashing out rewards as soon as the statement posts.  Yes, you will probably get shutdown, but before that, you can make a lot!

ALL your Citi cards are at risk, and you will be blacklisted possibly for ever, so probably not the route for most.