How To: Manufacture Credit Card Spend With Amazon Payments

Update: Amazon Payments will no longer allow person to person transactions starting October 14th, 2014. You can read more about this here. 

Amazon payments allows customers to send money to any other individual with an amazon payment account. You can fund an amazon payment account with a credit card, meaning that this can be used to increase your credit card spend. Funds can be withdrawn from amazon payments by ACH.

There is a maximum of $1,000 that can be added by credit for free per calendar month.

An example of how to use amazon payments is below:

1. Fund your amazon payment with a credit card you want to earn extra miles with/reach a minimum spend with.
2. Send to money to a friend or family member you owe money to. Pay bills to businesses that accept amazon payments.

I have some people that do regular work at my house and business (cleaning, yard maintenance, etc) and I’ve got them to all sign up to Amazon payments. Now I’m able to pay them by credit card without either of us being charged fees.

Some people will suggest using amazon payments a little differently:

1. Fund your amazon payment with a credit card you want to earn extra miles with/reach a minimum spend with.
2. Send money to a trust friend, family member or spouse with the understanding that they’ll give this money back.

I have two issues with this method of using Amazon payments. Firstly you’re relying on somebody else pay the money you send them back. Secondly it’s against amazon payments terms of service and could get you banned.

The decision is yours, but if you do plan on using the second method try to be discreet. Don’t transfer $1,000 to your wife and then have her transfer another $1,000 to you. This is incredibly obvious. Break the payments up into smaller payments and use multiple people.

If you use Amazon payments honestly (like in my first example), there is less chance of you being banned and less chance that amazon will start charging to send and receive payments.

Avoiding Paying Fees

As of 28th, November 2013 there are no fees to send or receive money using Amazon payments (even though the F.A.Q might suggest otherwise). Here are some tips to avoid paying fees:

• Sign up with an “individual” account. Business accounts are charged with a 2.9% fee + 0.3 per transaction.
• When you select send money, make sure you select “goods/services” and not cash advance. This will make it more likely that a cash advance fee won’t be charged.
• Always start with a small payment first (e.g $10) to make sure fees aren’t being changed.

If you’re still struggling to reach your minimum spending requirements we suggest reading our complete guide to increasing your credit card spend.

What Category Does Amazon Payments Come Under?

There are a number of credit cards that offer 5x points or 5% cash back for certain categories (e.g Chase Freedom, Discover it or U.S. Bank Cash+ cards). Different card issuers classify amazon payments as different categories, we’ve listed them below:

Chase cards: doesn’t post as an amazon.com purchase or as a department store purchase, meaning it’s NOT eligible for Chase Freedom’s 5% cashback promo for Quarter 4 2013 (October – December 2013)

Discover cards: posts as “online shopping”, meaning it’s eligible for Discover it’s 5% cashback promo for Quarter 4 2013 (October – December 2013).

U.S Bank: classifies amazon payments as a “professional service” and isn’t included as an option in their 5% or 2% cash back categories. Meaning it’s NOT eligible for any cash back bonuses.

Most other card issuers classify Amazon payments as “business services” and are not eligible for any additional cash back or points bonuses.