Son wants cash for Christmas- How to benefit from a rewards/travel card standpoint

[SouthJamaica]

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@UncleB wrote:

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@Anonymous wrote:
Oh maybe I can redeem myself here. While Costco no longer accepts American Express, Sam's Club now does.

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No need for redemption, Pooka... you've helped so many people on here you'll always be tops in my book. 

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+1

[AverageJoesCredit]

When the tree is green, cash is king. Maybe convince son to then buy some giftcards

[longtimelurker]

Depending how much you are talking about, I think a V/MC gift card is pretty equivalent to cash and is somewhat safer.   Even without fee waivers, a card up to $500 costs  around $4-6

[UncleB]

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@longtimelurker wrote:

Depending how much you are talking about, I think a V/MC gift card is pretty equivalent to cash and is somewhat safer.   Even without fee waivers, a card up to $500 costs  around $4-6

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For some purposes it might be; it really depends on the recipient and what he plans on doing with it.  GCs also tend to be a PITA when you get down to the last few dollars unless you know the 'tricks', and there are some times I really just prefer cash... not often, but it does happen.

If the OP's son is interested in saving up for a larger purchase, I would strongly consider giving actual cash instead of a GC, since it's much easier to add cash to an existing savings than to keep up with a physical card long-term.  Also, if the OP's son is saving for a purchase that will cost more than the GC ordering online could be tricky as well... not impossible, just not as straight-forward as a cash gift. 

As for safety, if a large cash gift is given the recipient only has to carry what is required for any given purchase (or can put it in the bank), where with a GC you basically have the entire amount in your pocket, and unless good records are kept you risk losing any remaining value if it's lost or stolen.

This is one of those cases where the parent (hopefully) has an idea of how the gift will be used, and will know how to best deliver it.  This is probably the only time where points/miles would be pretty far down my list of concerns... assuming I otherwise had the cash available I personally wouldn't let my own concern for 'perks' overshadow the gift itself.  Of course the OP will have to decide what's right for his/her situation.

Just my 2¢. 

[Anonymous]

What about if the OP used the card with Plastiq to pay the rent/mortgage and then in turn take the cash they would use to pay the mortgage/rent and give to the son?

You could use this method with a car payment as well and also many other bills.

This is assuming the OP doesn't already use a CC to pay for these items.

(And I too know very little on Plastiq I just have read some things... so apologies in advance if this is crazy and would never work)

[Gmood1]

How bout open a new bank account?😉
http://www.bankcheckingsavings.com/fund-a-bank-account-with-your-credit-card/
No guarantees, I've done it before I realized I could have did it for more when opening a new account. Lol
Some CC's view it as a purchase and some a cash advance.

[Anonymous]

Slightly off topic here and please excuse my ignorance on this subject, but how does buying gift cards for yourself result in more rewards?  If I go buy a $100 gift card to Wherever, I get rewards on the $100 purchase.  However, when I go to Wherever I'm not using the gift card instead of my CC.  So, instead of getting the rewards when I'm actually at Wherever, I just get them a day or two earlier when I buy the GC?  Is there something obvious that I'm missing here?  I get it if GCs can be purchased at a discount, but if one is paying face value for them how does it result in a rewards benefit when CC spend in the end is the same?

[longtimelurker]

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@Anonymous wrote:

Slightly off topic here and please excuse my ignorance on this subject, but how does buying gift cards for yourself result in more rewards?  If I go buy a $100 gift card to Wherever, I get rewards on the $100 purchase.  However, when I go to Wherever I'm not using the gift card instead of my CC.  So, instead of getting the rewards when I'm actually at Wherever, I just get them a day or two earlier when I buy the GC?  Is there something obvious that I'm missing here?  I get it if GCs can be purchased at a discount, but if one is paying face value for them how does it result in a rewards benefit when CC spend in the end is the same?

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It depends on category bonuses.   So, for example, many credit cards give enhanced rewards at grocery stores , but you might not have a card that gives extra bonuses at say Toys'R'Us.    By buying a Toys'R'Us gift card with a BCP at a grocery store, you get 6% off, whereas buying the stuff at the store might give you at most 2%  (In this case, you do better buying the card from a card exchange, but,,,,,!)

[Anonymous]

Gotcha, that makes sense.  Thanks for the insight.  So basically gift cards would be used only for purchases at stores where one would typically use their general spend (say 2% CB) card.  Do people run into problems with this technique with creditors like Amex if you are using a large portion of your BCP spend on GCs?

[longtimelurker]

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@Anonymous wrote:

Gotcha, that makes sense.  Thanks for the insight.  So basically gift cards would be used only for purchases at stores where one would typically use their general spend (say 2% CB) card.  Do people run into problems with this technique with creditors like Amex if you are using a large portion of your BCP spend on GCs?

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On the low capped cards, BCE/BCP, probably not, as in general the issuer just sees grocery spend without item details.   (Basically Amex is willing to give you 6% on up to $6K, and they don't care exactly what groceries are bought!)  For other cards, especially when OBC was uncapped, they certainly did care!

Of course doing this uses up your grocery allowance, so it may not make sense if you spend close to $6K.   Depending on the gift card, going through a reseller will often produce much more savings