Emptying Your 6% Cash Back via ATM and Cash Advance
Two readers, Kelly and Barbara, are taking the 6% from Blue Cash Preferred Card from American Express straight to the bank, literally!
Barbara first came up with the idea to cash out the gift cards for actual cash instead of using the cards for spending in our American Express 6% Cash Back Q & A.
After they reported back on their test runs at the bank, I’m more than excited at the potential this card has!
Cashing Out at the ATM
Kelly was originally working on using the gift cards for large payments but couldn’t resist the challenge of cashing out the gift cards at the ATM. Here’s a summary of Kelly’s adventures:
- Kelly bought a $500 PayPower brand gift card with her Amex Blue Cash Preferred at the grocery store (Safeway) to earn 6% cash back.
- She activated the gift card and established a PIN number.
- She cashed out the gift card at an ATM, paying a $3 ATM fee and $1.95 to PayPower.
In my learning process I ended up making two withdrawals and paying the fees twice. Keep in mind that even though you loaded the card with a value of $500 you’ll probably only be able to withdraw $480 at the ATM because most ATM’s only allow you to withdraw in multiples of $20 and because there has to be enough money on the card to cover both the ATM’s fee and PayPower’s ATM withdrawal fee….
Also, with the PayPower cards they require you to provide your Social Security number to them and from what I’ve read looks like you’re only allowed one PayPower card per person. That’s the other reason I think I’d have trouble repeating this, if I tried to buy another PayPower card I think I’d have trouble with PayPower’s verification process.
I promised Kelly that next time I’m at the grocery store I’ll check to see which brand of gift cards allow ATM withdrawals in our area so we can help Kelly expand beyond the PayPower cards. If anyone else has names of other gift cards that allow ATM withdrawals let me know and we can start a list.
Cashing Out with a Cash Advance
And I’m really excited to report that Barbara is back from her mission and has another way to empty the gift cards: cash advance. Here’s a summary of Barabara’s adventures:
- Barbara bought a $500 Visa prepaid card with her Amex Blue Cash Preferred at the grocery store to earn 6% cash back.
- She paid a $3.95 activation fee.
- She took the card to the bank and asked for a $498 cash advance. She kept $2 on the card to cover the cash advance fee.
In less than five minutes, I had $498 deposited to my account. Then I came home and checked the account online and for whatever reason, Visa did not charge me $2 so I have $2 remaining on the card. Glad I did not cut it up.
I’m glad you didn’t cut it up either! We found the easiest way to empty out small amounts left on various cards was to just add them to our Amazon account for the holidays.
Let’s Do the Math
We covered the basics of the American Express 6% Cash Back Credit Card when buying gift cards for the purposes of spending. Now let’s take a look at the math for cashing out the gift cards instead:
- Earn 6% cash back on the gift card purchase at the grocery store.
- Pay a $3.95 activation fee, and possible $2 cash advance fee.
- Earn $30.24 in cash back, less $5.95 in fees.
- Pure profit for each card: $24.29
- Multiply and repeat: ???
Wow. I’m only imagining at this point, but using just a portion of a $15,000 credit limit (saving some for actual groceries and other purchases), you could buy 20 cards a month for an extra $485 per month in free money….
And this is before we even talk about the gas rewards!
Blue Cash $150 Sign Up Bonus
This card just keeps getting better. American Express increased the sign up bonus for the American Express Blue Cash Preferred card to $150. Just spend $1,000 in the first 3 months… which shouldn’t be too hard now that we can cash out the gift cards!
So with the PayPower cards they do have a “ReLoad” it card that you can purchase at grocery stores. I have been able to repeat this a few times. I keep purchasing the PayPower ReLoadIt cards at various stores and in various amounts to see if I get stopped anywhere. The front of the PayPower cards and the Paypower ReLoadIt packs do specify that you can only purchase them with cash and so does their website, however, I’ve been able to purchase the ReLoadIt cards with my AmEx 4 more times. I purchased one of the ReLoadits at $300, at $700, at $400 and at $500. When you purchase in the larger amounts the cashier often does need to ask a manager/supervisor for an override key (I’m assuming to authorize the large amount) and every one of the above transactions did cause the cashier to ask someone for the ovveride key but it was quick and then the cashier processed the transaction on my AmEx without problem. So, all the stores I’ve gone to in the suburbs have allowed me to purchase the ReLoadIts with my AmEx but I did have a store in the City tell me that they would not accept anything but cash for the ReLoadIt cards.
Also, due to the timing of AmEx reporting cashback one statement behind I have not yet had a cycle with American Express where my PayPower or my ReLoadIt cards have been purchases on a statement where I got to see the cashback credited. All of my Visa Gift Cards and store gift cards have earned the 6% cashback at grocery stores but I still like to see it before I fully believe it. I have a nagging little concern about whether buying cards that allow ATM withdrawals is somehow going to trigger AmEx to say “that’s a cash equivalent, no cashback for you”. My next statement cycles on the 13th and I’ll report back after that to let you know if I did get the full cashback from AmEx.
Last hot tip, I also was able to do a cashback withdrawal from my PayPower at the cash register. I was able to withdraw up to $200 without any fees.
Sadly in my area, Pittsburgh, I’ve been unable to find any store that will sell me a cash equivalent Visa, Mastercard, or an American Express gift card and charge it to a credit card.
They will only accept cash or debit card.
This is to prevent charge backs and fraudulent charges. I guess we have too many thieves around here 🙁
This ‘free money’ all sounds great to me, but it also seems a little ‘dirty’.
My understanding is that is card was intended as a way for people to get a rebate on their grocery shopping. Using it to buy gift cards and especially Cash cards is certainly outside that spirit.
It is easy to justify anything, and easier still if you think you are sticking it to ‘a big corporation’ like AmEx. However, are you really sticking it to AmEx or to your grocery store (who I always understood to have very low profit margins)? You are certainly not sticking it to the bank that owns the ATM or to PayPower.
One can also try to justify it by rightly reasoning that other people will take advantage of this loophole, so why shouldn’t they. But if enough people start doing this, what is the future of this program?
This kind of tip isn’t for me. I’m just happy getting my 6% back on my regular grocery shopping.
Can’t you just buy the prepaid VISA’s and then deposit them at the bank in full. For me there are no charges for doing something like this, but the amount of arbitrage really just isn’t there for me to justify the work involved. Now, if I could buy a $1000 or $5000 VISA at my grocery store for a $5.95 fee, then that’s a different game altogether.
Confirmed. I got all 6% cashback on my latest statement for purchases that included the PayPower card and the PayPower ReLoadIt packs.
Just got my 6% cash back card :-). Kelly, a question: when you go to the grocery store are you buying a new PayPower card each time or are you just reloading the same one over and over again? Thanks!
For the prepaid VISA or Master gift card:
1.The fee is $5.95 not $3.95
2. No way to cash out it because there is no pin can be created.
I tried to get a cash advance of my prepaid Visa card that I purchased at a local supermarket (Tom Thumb…I’m in Dallas/Fort Worth, TX) with no luck @ 3 different banks (Wells Fargo, B of A, and Delta Community CU). Any tips or tricks to make this happen?
I would also like more information on the Reloadable Prepaid cards. Can these be used at ATMS to get cash?
Also, Can someone elaborate more on the cash advances? Does the bank just give you cash? or do I need a checking account with them also?
Has anyone tried bill pay? If I go to wal-mart with this card, can I use it to pay off my Amex account?
Scheme will max out at $288/year as the 6% is only for the first $6000 in grocery spending …