Some of you may already be doing this, or pieced it together due to posts we’ve made recently but we thought we’d spell it out for our newsletter subscribers as it may have been missed by some of you. At the moment there is currently an opportunity to get 4%+ cash back on all purchases regardless of their category. Here is how you do it:
Make sure you check e-mails for the password, it was also the same password we used on our last password protected post.
[cspasswordcode password=”secretpassword”]
- Get a credit card that earns at a high rate on bookstore purchases, you can read our list here.
- Get an American Express Campus Edition prepaid reloadable card
- Use the credit card that earns at a high rate to add funds to your Campus Edition card, at a participating campus bookstore. You pay a load fee of $3.95 to load $500
If you use a 5% cash back card (e.g U.S Bank Cash+, Barnes & Nobel or Sallie Mae Rewards) you’ll earn $25 in cash back per load and you’ll pay $3.95, that means you end up profiting $21.05 per load which is a cash back rate of 4.21%. There are unfortunately load limits, you can never have more than $1,000 on your card, you can’t load more than $1,000 per 28 day cycle and there is a load limit of $6,000 per year.
Somebody on Flyertalk has also said that if you apply for a new Campus Edition card the yearly reload limit is reset, so you might be able to do up to $12,000 per person per year – which works out to be a profit of $505.2. Worst case scenario you do $6,000 per year in loading which is a profit of $252.6 per person per year.
You can use this card as a regular credit card for your every day purchases on categories you’re getting less than 4% cash back on. Alternatively you can withdraw funds using an ATM. The first withdrawal is fee free each month and after that you pay $2. You can withdraw a maximum of $400 at a time. You also need to pay ATM owner/operator fees which is why we compiled this list of fee free ATMs. You can also purchase temporary cards with the same activation fee of $3.95 and there are no purchase limits on these.
My strategy is going to be as follows:
- Load $1,000 per month using a card that earns 5% cash back on bookstore purchases
- Withdraw $400 per month using my free ATM withdrawal at a fee free ATM
- Spend $600 per month on expenses I can’t get a high cash back rate on, worst case scenario I can pay $2 for an ATM withdrawal and only have to spend $200
- Rinse & repeat
When I hit the $6,000 yearly loading limit, I’ll try applying for a new card to see if that’ll reset the limit.
Comments
hdawg:Â do you think you will get shutdown with Amex CC if all you do is ATM withdrawals?
I haven’t seen any reports of shutdowns and people have been doing similar stuff with the AmEx for Target card for awhile now without any issues. I’ll likely put a few actual purchases onto the card as well to mix it up (e.g see bullet point three above).
Lively: I used the password to get in. I have an unrelated question….about Barclay’s Sallie Mae Card. Does the 5% cash back sit there until you use it for something (like Discover) or is it a statement credit? Thanks. I love your blog.
You need to redeem the rewards, similar to Discover. More information here.
[/cspasswordcode]
For comments on this page, I’ll add them to the main post if they contain information which would give it away, They will still be left uncensored.
