Earlier in the week I wrote about a credit union that will sell you $500 Visa gift cards for $3.95 and take a credit card for the transaction.
When you open an account with this credit union you can make an initial deposit charged to a credit card for up to $1500. The credit union confirmed they treat this as a purchase. Any given credit card company may code it differently, but my transaction with a Chase card showed up as a sale and earned points.
Some followups and updates worth sharing:
- You need to make sure you make yourself eligible to join the credit union. If you aren’t an employee of an eligible federal agency, a resident of Washington DC, etc. don’t say that you are.
- Anyone can join via a $20 membership in CityDance. But you actually need to join CityDance. You won’t be able to buy gift cards on an ongoing basis if you don’t.
- All you do is select the CityDance option at the beginning of your joining process when you indicate your eligibility.
- The default funding amount for your account is $5, which is the minimum to open. You need to change this to at least $25. Then if you select the CityDance option they will debit your account $20 for the membership automatically.
- But you probably want to fund the full allowable $1500 since my experience and their confirmation is that it’s coded as a purchase.
- Do not go hog wild on gift card purchases. The credit union is well aware that what they are offering is useful to frequent flyer miles aficionados. They are happy to see the purchases. But the third party they contract with to manage the gift card sales will see large and repeated orders as suspicious. Ordering $10,000 in short order? Not a good idea. Order a thousand or two thousand worth, wait a month, rinse/repeat.
- Look at the other products the credit union offers — historically they’ve offered attractive rates on CDs, on auto loans, and other products. This isn’t just hypothesis, they’ve said they’re looking for customers who take advantage of a diversity of financial products. We want them to benefit along with us.
This is a small to medium-sized credit union, and we’ve already moved the needle on their total membership base. That’s great, and they seem fine with it, let’s just work with them responsibly because this can be really win-win-win.