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I've seen a few posts recently regarding using rewards credit cards to pay for large items in order to rack up miles/points/cashback/etc.
It looks like there are a variety of ways to do this (Bluebird/VR, ChargeSmart, Squareup). It looks like each requires several steps and depending on your patience/tenacity, you can rack up some pretty nice rewards (assuming the math makes sense). But my question is:
1. How common is this practice?
2. Is this a technical violation of the cardholder agreement? If so, has anyone ever received a sanction (AA? Revoking rewards? Blacklist?)
3. If it's not a violation, is it still frowned upon by lenders? I am probably one of the few people who reads through the terms and conditions from front to back, and at least contained in the language of my agreements, there are several places where it basically states my lenders can revoke credit for well...basically any reason they want (as long as it cannot be deemed to be discrimination on the basis of race, gender, age, etc, etc.).
4. Do lenders know people are doing this, but don't care because the profit they make from the transaction fees, interest, etc far outweigh any rewards that could be racked up with this practice?
I do not currently have any rewards cards, so I am not sure what the 'rules of the road' are in regards to this practice.
All opinions welcomed!
Thx!
@Dw4250 wrote:I've seen a few posts recently regarding using rewards credit cards to pay for large items in order to rack up miles/points/cashback/etc.
It looks like there are a variety of ways to do this (Bluebird/VR, ChargeSmart, Squareup). It looks like each requires several steps and depending on your patience/tenacity, you can rack up some pretty nice rewards (assuming the math makes sense). But my question is:
1. How common is this practice?
2. Is this a technical violation of the cardholder agreement? If so, has anyone ever received a sanction (AA? Revoking rewards? Blacklist?)
3. If it's not a violation, is it still frowned upon by lenders? I am probably one of the few people who reads through the terms and conditions from front to back, and at least contained in the language of my agreements, there are several places where it basically states my lenders can revoke credit for well...basically any reason they want (as long as it cannot be deemed to be discrimination on the basis of race, gender, age, etc, etc.).
4. Do lenders know people are doing this, but don't care because the profit they make from the transaction fees, interest, etc far outweigh any rewards that could be racked up with this practice?
I do not currently have any rewards cards, so I am not sure what the 'rules of the road' are in regards to this practice.
All opinions welcomed!
Thx!
That post came out screwed up!
I've been paying most of my bills with my Iberia Bank card (non-rewards card). The only ones that I have not used the card for are accounts that require direct payment from a bank account (my truck payment), or companies that charge a fee for using a card (my electric company).
I just opened three new rewards cards and I will be using them now instead of the Iberia card. Since your post, I pulled up the agreement for my new Amex card. Here's what it says: "Eligible purchases are purchases made on your Card foro goods and services minus returns and other credits. Eligible purchases do NOT include: fees or interest charges, balance transfers, cash advances, purchases of traveler's che cks, purchases or reloading of prepaid cards, or purchases of any cash equivalents."
I'll be using them for all of my "goods and services",: cable bill, cellphone bill, car insurance bill,, etc...
You would have to use one of the paying services that you can google but the fees with more than likely wipe out rewards but I did recently finish paying off my student loan this way.