topic Re: Freedom Rewards Strategy for July-Sept? in Credit Cards

Freedom Rewards Strategy for July-Sept?

Dw4250 — Wed, 25 Jun 2014 15:16:40 GMT

I'm trying to decide how to use my 5% categories next quarter and could use some advice.

Looking at next quarter's 5% categories on my cards, it looks like Chase Freedom is gas and Kohl's. I don't have a long commute to work, so my gas cost is already covered by Sallie Mae (I usually stay ~ $200/month for gas). And I don't shop at Kohl's, so the Freedom will get SDed for the quarter unless....

Could I use the Freedom to buy one $500 gift card/month from a gas station? Then use the gift card for whatever comes up...basically a de-facto 5% card ($500 - $4.95 fee for the card)? Could Chase potentially flag this as MS behavior (even though I do not think it fits the strict defnition of MS)?

Using this strategy should net me ~ $60 for the quarter [($500 x 3 months x 5%) - ($4.95 gift card fee x 3 cards)]

Re: Freedom Rewards Strategy for July-Sept?

juggalo9er — Wed, 25 Jun 2014 15:19:26 GMT

random question how many exxon mobil stations are near you

Re: Freedom Rewards Strategy for July-Sept?

Anonymous — Wed, 25 Jun 2014 15:30:33 GMT

@Dw4250 wrote:
I'm trying to decide how to use my 5% categories next quarter and could use some advice.

Looking at next quarter's 5% categories on my cards, it looks like Chase Freedom is gas and Kohl's. I don't have a long commute to work, so my gas cost is already covered by Sallie Mae (I usually stay ~ $200/month for gas). And I don't shop at Kohl's, so the Freedom will get SDed for the quarter unless....

Could I use the Freedom to buy one $500 gift card/month from a gas station? Then use the gift card for whatever comes up...basically a de-facto 5% card ($500 - $4.95 fee for the card)? Could Chase potentially flag this as MS behavior (even though I do not think it fits the strict defnition of MS)?

Using this strategy should net me ~ $60 for the quarter [($500 x 3 months x 5%) - ($4.95 gift card fee x 3 cards)]

Yes, this creates a de-facto 4% card. How safe it is depends on a) your past spending on the card, in particular I wouldn't do this on a new card. I would also spread the three purchases over time. And perhaps not do exactly $504.95 (either put a little less than $500 on the card or buy something else)

Re: Freedom Rewards Strategy for July-Sept?

ACG23 — Wed, 25 Jun 2014 15:36:03 GMT

@Dw4250 wrote:
I'm trying to decide how to use my 5% categories next quarter and could use some advice.

Looking at next quarter's 5% categories on my cards, it looks like Chase Freedom is gas and Kohl's. I don't have a long commute to work, so my gas cost is already covered by Sallie Mae (I usually stay ~ $200/month for gas). And I don't shop at Kohl's, so the Freedom will get SDed for the quarter unless....

Could I use the Freedom to buy one $500 gift card/month from a gas station? Then use the gift card for whatever comes up...basically a de-facto 5% card ($500 - $4.95 fee for the card)? Could Chase potentially flag this as MS behavior (even though I do not think it fits the strict defnition of MS)?

Using this strategy should net me ~ $60 for the quarter [($500 x 3 months x 5%) - ($4.95 gift card fee x 3 cards)]

What's "MS behavior"? And why isn't this a good idea for new accounts?

Re: Freedom Rewards Strategy for July-Sept?

juggalo9er — Wed, 25 Jun 2014 15:37:39 GMT

MS=Manufactured spending and its frowned upon...i do it all the time

Re: Freedom Rewards Strategy for July-Sept?

mongstradamus — Wed, 25 Jun 2014 15:39:23 GMT

I actually went around to see some gas stations if they sell 500 dollar gift card, i don't think i could find any that do. I was thinking of doing something since Discover and chase both have 5% gas this quarter coming up

Re: Freedom Rewards Strategy for July-Sept?

Anonymous — Wed, 25 Jun 2014 15:52:31 GMT

@ACG23 wrote:
@Dw4250 wrote:
I'm trying to decide how to use my 5% categories next quarter and could use some advice.

Looking at next quarter's 5% categories on my cards, it looks like Chase Freedom is gas and Kohl's. I don't have a long commute to work, so my gas cost is already covered by Sallie Mae (I usually stay ~ $200/month for gas). And I don't shop at Kohl's, so the Freedom will get SDed for the quarter unless....

Could I use the Freedom to buy one $500 gift card/month from a gas station? Then use the gift card for whatever comes up...basically a de-facto 5% card ($500 - $4.95 fee for the card)? Could Chase potentially flag this as MS behavior (even though I do not think it fits the strict defnition of MS)?

Using this strategy should net me ~ $60 for the quarter [($500 x 3 months x 5%) - ($4.95 gift card fee x 3 cards)]

What's "MS behavior"? And why isn't this a good idea for new accounts?

Generally you don't want strange looking charges on accounts without much history. Spending $500+ at a gas station, while certainly possible, is somewhat unusual, and on a new card might well generate a fraud alert. Usually they will just ask you to confirm that you made the charge, but they could also ask what you were buying and why. Buying cash equivalents are often excluded from rewards categories in the T&Cs, so you don't want to be asked this question!

Re: Freedom Rewards Strategy for July-Sept?

09Lexie — Wed, 25 Jun 2014 16:13:58 GMT

While other forums may not take issue with MS, myFICO is the exception. We have partnerships and agreements with credit card companies and openly discussing a topic that goes against their policy is frowned upon.

If you have any further comments regarding MS, please PM a MOD.

~Lexie

Re: Freedom Rewards Strategy for July-Sept?

ACG23 — Wed, 25 Jun 2014 16:26:28 GMT

@09Lexie wrote:
While other forums may not take issue with MS, myFICO is the exception. We have partnerships and agreements with credit card companies and openly discussing a topic that goes against their policy is frowned upon.

If you have any further comments regarding MS, please PM a MOD.

~Lexie

Thanks Lexie! But -- can I just ask for more detail about what not to do? I had never heard the term before, and I have a good faith interest in not wanting to break a rule I don't yet understand!! For example, I do use my rewards card to refill a Starbucks card. Is that not okay?

Re: Freedom Rewards Strategy for July-Sept?

Closingracer99 — Wed, 25 Jun 2014 16:27:31 GMT

@Anonymous wrote:
@ACG23 wrote:
@Dw4250 wrote:
I'm trying to decide how to use my 5% categories next quarter and could use some advice.

Looking at next quarter's 5% categories on my cards, it looks like Chase Freedom is gas and Kohl's. I don't have a long commute to work, so my gas cost is already covered by Sallie Mae (I usually stay ~ $200/month for gas). And I don't shop at Kohl's, so the Freedom will get SDed for the quarter unless....

Could I use the Freedom to buy one $500 gift card/month from a gas station? Then use the gift card for whatever comes up...basically a de-facto 5% card ($500 - $4.95 fee for the card)? Could Chase potentially flag this as MS behavior (even though I do not think it fits the strict defnition of MS)?

Using this strategy should net me ~ $60 for the quarter [($500 x 3 months x 5%) - ($4.95 gift card fee x 3 cards)]

What's "MS behavior"? And why isn't this a good idea for new accounts?
Generally you don't want strange looking charges on accounts without much history. Spending $500+ at a gas station, while certainly possible, is somewhat unusual, and on a new card might well generate a fraud alert. Usually they will just ask you to confirm that you made the charge, but they could also ask what you were buying and why. Buying cash equivalents are often excluded from rewards categories in the T&Cs, so you don't want to be asked this question!

Yea ... I got my Discover card in June and with only a $750 limit and had a $550 purchase coming around November I decided to go to Rite Aid and buy myself a $300 dollar Amazon gift card so I can pay for part of the purchase in September and the rest in November. It got flagged and got decline This was also my first purchase over $200. Luckily they only asked if it was me and didn't ask what i was buying

Re: Freedom Rewards Strategy for July-Sept?

09Lexie — Wed, 25 Jun 2014 16:32:27 GMT

@ACG23 wrote:
@09Lexie wrote:
While other forums may not take issue with MS, myFICO is the exception. We have partnerships and agreements with credit card companies and openly discussing a topic that goes against their policy is frowned upon.

If you have any further comments regarding MS, please PM a MOD.

~Lexie
Thanks Lexie! But -- can I just ask for more detail about what not to do? I had never heard the term before, and I have a good faith interest in not wanting to break a rule I don't yet understand!! For example, I do use my rewards card to refill a Starbucks card. Is that not okay?

I'm sure you can google the term MS for more examples of what has already been discussed. Purchasing VRs, gift cards -outside the range of usual spending as LTL mentioned earlier.

Re: Freedom Rewards Strategy for July-Sept?

Dw4250 — Wed, 25 Jun 2014 18:09:20 GMT

Hmmmm...well I just got the Freedom in March, so I think I'll hold off. The $60 dollars is not worth the hassle.

I am curious though WHY this type of spending would be considered out of bounds (MS). If I buy item X at a gas station or store, why would Chase care whether I spend it on gas or another item in the store? If I bought $500 worth of cigarettes (yuck!), would that also be considered MS since it is technically not gas?

Not trying to violate any board rules; just trying to have a better understanding if what is and what is not allowed by CCC.

Re: Freedom Rewards Strategy for July-Sept?

Anonymous — Wed, 25 Jun 2014 18:14:50 GMT

What is considered negatively by the credit card companies is the purchase of cash equivalents. Put simply, you can buy these, collect the bonuses, and use the cash equivalents to pay off the credit card, and repeat indefinitely. This isn't quite possible on the Freedom because of the cap, but the idea is doing this I can much more easily reach the $1,500 cap per quarter than I would by buying gas, cigarettes, or scenic postcards at the gas station, increasing the cost to Chase.

Re: Freedom Rewards Strategy for July-Sept?

IWOL — Wed, 25 Jun 2014 18:27:49 GMT

@Anonymous wrote:
What is considered negatively by the credit card companies is the purchase of cash equivalents. Put simply, you can buy these, collect the bonuses, and use the cash equivalents to pay off the credit card, and repeat indefinitely. This isn't quite possible on the Freedom because of the cap, but the idea is doing this I can much more easily reach the $1,500 cap per quarter than I would by buying gas, cigarettes, or scenic postcards at the gas station, increasing the cost to Chase.

Just purchasing gift cards on a CC, I don't believe is considered negatively by issuers since people obviously purchase gift cards for legitimate reasons other then MS.

OP, in MHO I think it is perfectly fine to purchase a $500 gift card on your Freedom card and use it for general purchases to get the extra 4% cash back. you may trigger a fraud alert because a $500 purchase at a gas station could be considered unusual, but all you would have to do is call them and and let them know it is you making the purchase. They are not going to close your card for making one purchase like that. If you did this several times a month, then that is a different story butt purchasing one gift card should not cause you any problems. I think the hardest thing will be finding a gas station that will sell you a gift card using a CC.

Re: Freedom Rewards Strategy for July-Sept?

Carrie_in_Pa — Wed, 25 Jun 2014 18:54:40 GMT

@09Lexie wrote:
@ACG23 wrote:
@09Lexie wrote:
While other forums may not take issue with MS, myFICO is the exception. We have partnerships and agreements with credit card companies and openly discussing a topic that goes against their policy is frowned upon.

If you have any further comments regarding MS, please PM a MOD.

~Lexie
Thanks Lexie! But -- can I just ask for more detail about what not to do? I had never heard the term before, and I have a good faith interest in not wanting to break a rule I don't yet understand!! For example, I do use my rewards card to refill a Starbucks card. Is that not okay?
I'm sure you can google the term MS for more examples of what has already been discussed. Purchasing VRs, gift cards -outside the range of usual spending as LTL mentioned earlier.

What is LTL ???

I am laughing so hard cuz i thought that had something to do with a labotomy... i'm too amused by that.

Re: Freedom Rewards Strategy for July-Sept?

ACG23 — Wed, 25 Jun 2014 18:54:56 GMT

@IWOL wrote:
@Anonymous wrote:
What is considered negatively by the credit card companies is the purchase of cash equivalents. Put simply, you can buy these, collect the bonuses, and use the cash equivalents to pay off the credit card, and repeat indefinitely. This isn't quite possible on the Freedom because of the cap, but the idea is doing this I can much more easily reach the $1,500 cap per quarter than I would by buying gas, cigarettes, or scenic postcards at the gas station, increasing the cost to Chase.
Just purchasing gift cards on a CC, I don't believe is considered negatively by issuers since people obviously purchase gift cards for legitimate reasons other then MS.

OP, in MHO I think it is perfectly fine to purchase a $500 gift card on your Freedom card and use it for general purchases to get the extra 4% cash back. you may trigger a fraud alert because a $500 purchase at a gas station could be considered unusual, but all you would have to do is call them and and let them know it is you making the purchase. They are not going to close your card for making one purchase like that. If you did this several times a month, then that is a different story butt purchasing one gift card should not cause you any problems. I think the hardest thing will be finding a gas station that will sell you a gift card using a CC.

This is what I was looking for. I actually tried to Google MS, and only came up with ways to do it, not how to avoid doing it -- I'm glad to know I can continue my (legitimate) purchase of Starbucks cards!

Re: Freedom Rewards Strategy for July-Sept?

Carrie_in_Pa — Wed, 25 Jun 2014 18:55:39 GMT

@Carrie_in_Pa wrote:
@09Lexie wrote:
@ACG23 wrote:
@09Lexie wrote:
While other forums may not take issue with MS, myFICO is the exception. We have partnerships and agreements with credit card companies and openly discussing a topic that goes against their policy is frowned upon.

If you have any further comments regarding MS, please PM a MOD.

~Lexie
Thanks Lexie! But -- can I just ask for more detail about what not to do? I had never heard the term before, and I have a good faith interest in not wanting to break a rule I don't yet understand!! For example, I do use my rewards card to refill a Starbucks card. Is that not okay?
I'm sure you can google the term MS for more examples of what has already been discussed. Purchasing VRs, gift cards -outside the range of usual spending as LTL mentioned earlier.
What is LTL ???

I am laughing so hard cuz i thought that had something to do with a labotomy... i'm too amused by that.

Oh wow i got it now, SORRY !!!

Re: Freedom Rewards Strategy for July-Sept?

Dw4250 — Wed, 25 Jun 2014 19:45:26 GMT

Thanks to everyone for their input.

It sounds like one of those YMMV situations...buying gift cards may fall under the technical definition of MS, but I tend to agree with those who say they do not believe Chase would care about such a low monthly spend amount (~$500). However if they have a zero tolerance policy, it may not be worth the $20/month this would net me (sometimes I forget how trivial these reward amounts really are).

So I'm probably going to hold off on trying this for now, just because it is a relatively new card. I'm still getting used to having good credit; the last thing I want is to be red flagged by Chase for such a minor infraction.

Thx again. That's why I love this board!

Re: Freedom Rewards Strategy for July-Sept?

Anonymous — Wed, 25 Jun 2014 20:01:15 GMT

The situation is a little strange in that it's not the buying that is not allowed, generally the T&Cs state that rewards will not be given on such purchases. This would of course mean there was little reason to buy except for valid purposes like buying a gift card as a gift, (wow, there's a concept!) Since most stores still don't provide a detailed breakdown, CCCs can't enforce this, and so dislike all such activity.