Gas and Restaurant Gift cards at 7-17% Discount – Making a Case for the Best Buy Credit Card

We previously wrote Everything you ever wanted to know about Buying Gift Cards at Best Buy. The purpose of that post was to lay out the facts of buying gift cards at Best Buy.

In this post, we’ll mention a new Best Buy credit card hack which works on all Best Buy purchases, including third-party gift card purchases.

Review

First we need to review some points from the previous post.

• Best Buy cardholders earn 5-6% back in Best Buy Rewards when paying with their Best Buy credit card.
• Best Buy recently started carrying gas and restaurant gift cards.
• These Rewards are very valuable since they can be used to buy gift cards, including gas and restaurant gift cards. They can’t be used to buy Best Buy or Visa gift cards.
• The purchase of Visa gift cards and Best Buy gift cards always earn a flat 2% in rewards, and never get more than that.

The Hack

If you buy an item at Best Buy and pay partially with a regular credit card and partially with a Best Buy credit card, the Rewards post to your account based on the entire purchase amount, not based on the amount you paid with the Best Buy credit card.

For example, suppose you purchase $100 in Exxon gift cards. You can pay $99 with a regular credit card, and put the last dollar on your Best Buy credit card. You’ll get Best Buy Rewards at the 5-6% rate on the full $100, instead of the 2-2.5% rate.

It’s unclear if this is intentional or if it’s a coding error, but it worked for me.

The Gravy Train

I first saw this mentioned – totally as an aside – on a Slickdeals thread (which I can’t seem to locate anymore), back in August 2014.

Right after seeing the hack, I applied for the Best Buy credit card. You see, at that time, the stars were perfectly aligned to milk this to the hilt:

• At that time, Visa gift cards were still earning bonus Rewards. They were not limited to a straight 2% Rewards, as they are now.
• Amex was running their $25 off $250 at Best Buy.
• Best Buy was running a limited-time 10% Rewards promo.
• My local Best Buy was stocked with Visa gift cards.

As soon as I got approved for the Best Buy credit card, I headed off to my local Best Buy. You don’t need to have the physical credit card in order to use it at Best Buy – they can pull up your account with your driver’s license and SSN in-store.

I purchased $1000 in Visa gift cards for the cost of $1029.75. I split the purchase between 4 Amex cards, $250 each, and paid the remaining $29.75 on my Best Buy credit card. Besides the $100 which I got back from the Amex Offer, I also received the promotional 10% Rewards rate for Best Buy credit card purchases.

All told, I received:

• $100 from the Amex Offer
• $103 in Best Buy Rewards
• 1029 credit card points

Little did I know that the gravy train would soon come to a screeching halt. By my next trip to Best Buy, a week later, Best Buy had already coded all Visa gift cards to earn a straight 2%, no matter if you pay completely with your Best Buy credit card, or if you pay completely without it.

What’s with the Hack?

I wondered whether the actual hack was still around. Though it will no longer work on Visa of Best Buy gift cards – since they’re coded at a straight 2% – it could still be useful for making real purchases at Best Buy. Since I don’t make many purchases at Best Buy, I never had a chance to check it out.

This changed when Best Buy recently started carrying third-party gift cards to gas stations and restaurants. Now, those gift cards seem to be coded for all things as ordinary purchases. I wondered if we can pay for the gas gift card with a regular credit card, leave over a small amount to pay with the Best Buy credit card, and receive the accelerated Rewards rate of the Best Buy credit card.

I tried it out and it worked. I received the bonus 5-6% Rewards rate on the entire purchase amount of the gas gift card, despite only paying the last dollar with my Best Buy credit card. Of course, this would work on any regular (non-gift card) Best Buy purchase as well.

Scenarios

There’s many different scenarios we can use to show the profitability of this:

1. Suppose Amex is offering $25 off $250 at Best Buy. You can purchase $250 of gas gift cards, and throw in a pack of peanuts for $1.69. Pay the $250 with the Amex card, and the remaining $1.69 with the Best Buy credit card. You’ll get around $13 in Rewards, besides for the $25 Amex Offer credit, and besides your regular Amex credit card rewards.  Net result would be around 17% off Best Buy purchases, including gas and restaurant gift cards.
2. With the US Bank Cash+ card you can get 5% cash-back at Best Buy on $2,000-per-quarter/$8,000-per-year. Similarly, with Citi Dividend, you can get 5% cash-back on Best Buy purchases in the fourth-quarter of the year. You can pay for your Best Buy purchases with your US Bank card or Citi card, and put the last little bit on your Best Buy credit card. You’ll end up getting 11-12% discount on your Best Buy purchases.
3. Suppose Best Buy decides to bring back a limited-time offer of 10% Rewards (I don’t know if this will happen again or not). You can purchase gas and restaurant gift cards and get 10% off. But you can do even better by paying for most of the purchase with your regular credit card and get, say, 2% in regular credit card rewards. Put the last little bit on your Best Buy credit card, and get 12% off your Best Buy purchases.
4. Even without any special promotions, it still could be worthwhile to be able to get 6-8% off your Best Buy purchases, and off gas and restaurant purchases, by paying for your Best Buy purchase with a regular credit card and earning credit card rewards. Just the last little bit needs to be paid with the Best Buy credit card, and you’ll get the 5-6% Best Buy Rewards.

Remember, those Best Buy Rewards can be cashed out by redeeming them on gas gift cards, so they’re almost as good as cash.

Caution: If you’re buying electronics from Best Buy, it may be worthwhile to pay the entire amount on your regular credit card in order to get credit card protections, such as extended warranty, purchase protection, return protection, etc. Certain protections won’t apply when the purchase was not paid completely with the credit card.

Final Thoughts

The idea is a good one, but ultimately it will depend on your spending patterns as to whether it’s worthwhile to apply for the Best Buy credit card or not. If you don’t shop at Best Buy, and you don’t need Shell, Exxon, or restaurant gift cards, then it’s probably not worth applying for.

If you eat out alot, or if you use Shell and Exxon, then it would be something to consider. It would still depend on other factors whether or not it would be worthwhile: Do you use Amex Offers? Do you have Citi Dividend or US Bank Cash+? What credit card do you usually use for gas and restaurants, and what rewards do you usually earn?

Of course, we never know how long something will last, but this has been working for a while, and hopefully it will continue. But be sure to check your local Best Buy to make sure that they stock third-party gift cards.

One additional point: On CreditBoards there’s mixed reports of Equifax and Experian pulls for the Best Buy credit card. I got an Equifax pull.

Let us know in the comments if you’re in for the Best Buy credit card!