Part 2: How to Pay Rent with a Credit Card

In Part 1, I went over the types of people who should and shouldn’t try to open dozens of new credit cards in order to harvest the generous sign-in bonuses.  In this article, I’ll go over additional tips and tricks that have worked for me (at least from 2013 – 2015) in further maximizing your rewards if you can pay rent with a credit card.


Yes, You Probably Can Indirectly Pay Rent with a Credit Card


AMEX’s Bluebird offers a special type of checking account that can be loaded using gift cards.  If you buy those gift cards with a credit card, you’ll be able to earn credit card points for the purchase.  And then, you can write a check with your Bluebird account to pay someone who won’t take credit cards.  Rent and mortgages are very popular examples since they are some of the biggest recurring expenses AND often cannot be paid with your credit card.


Once you’ve bought your gift card, you’ll need to transfer the balance to your Bluebird account.  AMEX will provide you with a Bluebird debit card for this purpose.  In the old days (Pre Mid-2014), you could buy special cards called “Vanilla Reloads” (VRs) which can be directly transferred to a Bluebird account online, but now, these VRs can only be bought with cash which defeats the whole purpose.  Instead, you’ll need to buy gift cards and transfer the balance to Bluebird at Walmart’s Money Centers.  If possible, pick a Walmart that has an automated kiosk since the cashiers sometimes won’t allow you to load your Bluebird with a gift card.  Also, keep in mind that some gift cards like those issued by OneVanilla cannot be easily unloaded to your Bluebird account even at Walmart.  You may need to stay up to date if you choose to pursue this route but as of June 2015, the $20-500 US Bank Gift Cards sold at Ralphs and Krogers seem to work fine.


There’s a lot of material to absorb for this tactic but I’ll summarize it here:


Step 0: You’ll need a Bluebird account plus the official Bluebird debit card and checks.  If you received these in the mail, move on to Step 1.


Step 1: Buy the right gift card with the credit card you want to earn points on.  Make sure it can be unloaded at Walmart onto your Bluebird account (search online for the card just in case.)  A safe bet (for now) is to buy the $500 US Bank cards at Ralphs and Krogers.  (These cards will have a pin associated with them on a slip of cardboard enclosed in the package but if not, you can get one by going online and registering your card.  You’ll need this pin for the next step.)


Step 2: Take the debit card(s) you bought in Step 1 to Walmart’s Money Center to load it onto your Bluebird.  If possible, use a kiosk.  If only a cashier is available, pray that he/she will allow you to load using a gift card.  You may need to hit the “change payment” button as soon as it appears on the credit card interface and choose “debit” so that the system will allow you to enter the pin on the card before loading your Bluebird.


Step 3: Once you’ve successfully loaded your Bluebird, it’s time to pay the bill that can’t directly be paid with credit.  Log on to your Bluebird account.  Always search the list of payees Bluebird has in its database and see if your payee is listed; this is the preferred method as it’s least likely to run into problems (especially if you’re paying your mortgage or if the payee will cash your check by converting it to an electronic one, more on that later.)  If your payee is not listed, you’ll have to write a Bluebird check, but before you do that, you must authorize it with Bluebird.  Register the check number and how much you’ll be paying with Bluebird and they’ll give you a code to write on a predesignated field on your check.  Then you can send your check off to your payee after filling it out completely.


Example: Let’s say you just signed up for a new credit card that requires you to spend $1500 in the first 90 days to earn a bonus 15,000 points.  And monthly expenses run at $1500 a month and your rent is $500/mo.   So you’ll want to put all of your expenses on that card even though your landlord doesn’t take plastic.  Let’s assume the other $1000 can be paid using credit cards which you’ve already paid, but in order to pay your rent, you’ll need to buy a US Bank Gift Card from Krogers.  So you purchase a $500 card for $505.95.  Now you’ve met your minimum spending requirement for your card but your landlord hasn’t received the $500 for your rent yet because it’s still on the gift card.  So you go to Walmart and use the Money Center to transfer the balance from you gift card to your Bluebird account.  Then you log in to your Bluebird and issue a check for $500 which you’ll write the authorization code on and make payable to your landlord.  You’ve now earned 15,000 points by only increasing your spending by $5.95 (the gift card’s convenience fee)!  Congrats, you’ve now learned how to pay rent with a credit card and helped earn your fat sign-in bonus for your new card!


Warning: If the payee mentions anything along the lines of “Electronic Check Conversion“, then your Bluebird checks might bounce if you pay them with those!  By US law, they must disclose electronic conversions or else you won’t be responsible for any penalties if the check doesn’t go through.  If your payee is listed in Bluebird’s database (generally bigger companies like banks are), then you can still pay them directly using that.


Note: The above is what worked for me as of 2015.  It’s not rocket science but you need to be careful with all of the details.  In some circumstances, it will not work correctly and you may end up having to to call customer support with Bluebird or the gift card issuer to get it resolved.


P.S. I hear there are some services out there that charge a convenience fee if you use them to pay rent with a credit card.  The fee is generally 2% and higher, compared to 5.95/500 = 1.2% by using US Bank cards + Bluebird + Walmart.  It’s generally a less risky alternative for a negligibly high expense especially if you’re going after those fat sign in bonuses.  But using these services to earn the standard 1-2% cashback or equivalent in points?  Forget it, you’re gonna end up in the red.


A Cautionary Tale About Glitches


One time, I learned the hard way that a US Bank gift card that I bought wasn’t properly activated and could not be transferred or used.  I asked for the manager at the Ralphs where I bought the card but he kept telling me to call tech support for the card.  So I called tech support and they asked me to fax in the receipt and photocopies of the card.  It took over a week for them to finally “receive” the fax in their systems only to tell me the faxes were illegible and to send them again.  And I did, waited another week, and was told the same over and over again.


It seemed like they were trying to flake and get me to eventually give up but I pressed on and escalated by walking into a US Bank branch and explaining the ordeal I had with the gift card including the manager who refused to deal with it and directed me to call tech support and the tech support agents who gave me the runaround.  I threatened to chargeback my credit card or report them to the authorities but they asked me to approach the Ralphs where I bought the card from one last time.


So the second time I inquired with the Ralphs, a different manager was on duty and I explained what I’ve been through with the card and she immediately called the department that was responsible and got my card properly activated (after tying my money up on the gift card for a total of about a month.)


Final Thoughts


You can definitely earn points faster by signing up for more credit cards, earning even more generous sign-in bonuses, and indirectly pay rent with a credit card (or other large expenses that can’t be directly charged.)  Although it’s perfectly legal, there is still a small risk of something going wrong since many different steps are required (as per the anecdote I shared.)  However, the rewards often dwarf the risks or unexpected expenses, not to mention I’ve managed to purchase 2 roundtrip international plane tickets using points I’ve earned and a nominal fee by following the methods I’ve outlined.  In a future post, I’ll discuss how to spend these points, especially if you have an opportunity to combine rewards from multiple programs for maximum benefit.

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