American Express Gift Cards are basically prepaid credit cards that work anywhere that accepts American Express. The good thing is that they have no inactivity fees, no maintenance fees, no balance check fees, and they never expire. Other than for gifts, they are especially useful whenever you need to accelerate or time-shift your credit card purchases to be earlier than they actually are.
Here’s what I mean by that. A common problem you might have is that your credit card that earns frequent flier miles, and need to earn a certain number of miles to reach your next award or qualification tier. However, you want to redeem now, so with these gift cards your miles can show up faster.
Also, recently there have been a lot of great credit card sign-up offers that require you to spend $XXXX within a certain amount of time. For example:
- Chase Sapphire Preferred offering $400 in cash or $500 credit towards any major airline purchase – requires $3,000 in spending within 3 months.
- Starwood Guest Credit Card from American Express offering 25,000 Starpoints worth several free hotel nights or other perks – requires $5,000 in spending within 6 months.
- Citi AAdvantage Visa offering 50,000 American Airlines miles – requires $3,000 in purchases within 3 months.
Whether you have a Visa, MasterCard, or AMEX, you can simply buy these gift cards and they’ll count as rewards-earning purchases now, and you can use them up later at any merchant that accepts American Express. All the grocery stores I frequent take AMEX now. This way, you can either make the deadline or simply meet it early without worrying.
Finally, they can provide some anonymity when shopping, while mostly preserving your flexibility.
There are two additional fees that you have to worry about. First is the purchase fee, which is usually $3.95 per card. There is usually a promotion code floating around to waive these. They send me a promo code via e-mail EMDECWEL that will waive any purchase fees until January 31, 2011.
Next, there is a shipping and handling charge. Right now, 2-day expedited shipping is $5.95. However, if you sign up for their “Premium Shipping Plan”, you can get free next-day air shipping trial for 90 days. You must cancel before the 90 days is up, or get charged $99 per year. I actually opted just to pay the shipping fee this time.
During this promotion, customers who have enrolled in the Premium Shipping Plan may use the Plan at no cost for the first ninety (90) days after enrollment (“Trial Period”). The Premium Shipping Plan membership fee of $99 per year will be charged to customers ninety (90) days after initial enrollment if customer does not cancel membership through the Gift Card Account portal online prior to the expiration of the Trial Period.
By the way, for some reason, American Express does not ship gift cards to the states of HI, LA, and VT.
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When I reached $6500 in purchases for my AMEX blue cash card last year (bumping gas, grocery and drug store purchases to 5% cash back on unlimited spent) I bought a visa gift card at CVS every month that covered my food and entertainment budget. This method helped me with my budgeting, and it made me about $10-15 every month after the transaction fee. I have noticed that some stores do not allow you to buy gift cards with credit any longer.
[ “…basically prepaid credit cards that work anywhere that accepts American Express. ” ]
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Anywhere ??
Online purchases seem very difficult or impossible with these kind of prepaid cards.
Online merchants are naturally very strict about card purchases… and often require data that’s not available on generic prepaid cards (full name on card, expiration-date, card billing address, special security codes, etc).
Ever used these AMEX prepaid cards for online internet purchases ?
You can use it online. All AmEx gift cards come with the security code printed on front as usual, as well as an “expiration date” on front for use at online merchants. You can call the number on the back of the card and register your name/address on the card, so that it has all of the characteristics of a “regular” credit card. You can also order the card with your name embossed on it already.
* The balance never really expires. You can either ask for a replacement gift card at that time, or according to the online terms, you can ask to redeem your gift card balance for a check if the valid-thru date has passed.
“If you ask us to issue you a check for the amount of any Available Funds remaining on the Gift Card after the “valid thru” date, we may hold the Available Funds for ten (10) business days after you request a check to ensure that all transactions have posted to our system.”
The only major restriction is that the card cannot be used to sign up for recurring billing purchases (cell phone bills, subscriptions, memberships). However, you can use them for one-time payments to a bill.
To avoid excess holds when using as a gas station pump, go inside and prepay your amount (i.e. $40 of gas) using the gift card.
Hope that helps!
I’m pretty ticked at American Express right now! I received a gift card as a bonus for work. I went to put time on my phone, it declined, tried again, declined again. Come to find out that that put a hold on the card for 8 business days. It’s 2 days until Christmas, I don’t have time on my phone nor do I have any food. Wish they would drop the hold! I did get a few free days on my phone but that’s all they could do for me. I myself, would never buy one of these for anyone!!!
A bit off topic, but how do you manage multiple small ($25) gift cards that you might receive?
I end up converting them to amazon or other e-gift codes in order to use up the $25. Have yet to see an online merchant that lets you pay with multiple cards/methods.
Are you positive that these purchases get coded as “purchases” and not “cash advances”?? I just applied for the Citi AA card and they actually sent me out two different cards with the opportunity to earn over 150K in airline miles.. the only catch is that I now have to spend $8k in 6 months.. this would be perfect!
Citi cards WILL code this as a Cash Advance. All others should work though.
Why does AmEx not ship gift cards to Hawaii, Vermont, etc? What’s the reason for that?