Charter One Gift Card Opportunity to Diminish?

There’s a rumor afoot that Charter One Bank Gift cards are going to become less lucrative for earning miles. Charter One bank, whose gift cards have been useful for earning up to 5000 miles a month at no or next to no cost, is said to be planning to limit purchases to $1500 per month.

I just entered my order for $5000 for the month, so the offer is apparently still working to its full potential. But it may not last much longer.


The opportunity is described in detail at

    Charter One offers to sell you Gift Cards for no extra fee up front. These are pre-loaded Mastercards which can be used anywhere Mastercard is accepted. They can also be used for PIN transactions for a charge to the card of $1 per transaction, or for withdrawals from an ATM for a charge to the card of $2 per transaction. Purchase of the cards are charged to your mileage earning credit card, usually as a purchase (but see the cautions below). This opens interesting possibilities for cheap miles:


    If you buy two $500 cards and then use them to buy a $996.75 money order at the US Post office, you will have fully depleted the cards, paid the two $1 fees and the $1.25 post office fee, have a money order you can deposit into your bank account, and have earned 1,000 miles for the credit card purchase, for a cost of a cheap 0.325 cent a mile. (Even better, buy a $998 money order, and charge the $1.25 fee to you mileage producing credit card – preferably one that gives you extra miles, like the Delta American Express or the Starwood American express.) Or, you could just withdraw the money at a bank, paying the $2 per card fee, for a cost of a still very cheap 0.4 cent a mile.

Note that this only works for purchases with Visa and Mastercard because American Express treats the transaction as a cash advance (no miles, hefty fees). Also note that several folks have reported getting cash advances with the cards at bank branches for no fee, and purchasing traveler’s checks at AAA with these cards for no fee — making the net dollar cost of the miles zero.

Even at 1500 miles a month, the tactic will still be useful for topping off accounts. But the maximum benefit would then fall to 18,000 miles a year instead of the current 60,000. Alas.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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