Gift card cycling

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JackLane
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Gift card cycling

Postby JackLane » Wed Jun 08, 2016 5:02 am

Hello folks,

I have noticed that during holiday season, usually there is more cashback on Amazon. Around the same time, I usually buy a lot of gift cards to give away during holidays and for me to back up to use during the year. While reading through some comments on NerdWallet, I came across an interesting comment by a user to gift card cycling.
'Don't do this gift card cycling. I know two people who are now miserable for two years, as they are barred from ever getting a bank account or any kind of financial account or credit, including savings accounts with Chase, BOA and Citibank and AMEX. They have been recently turned down by Union and also some foreign banks, plus a toyota car loan. You do this and will be on every financial institutions red tape of their version of international no fly list, and there is no getting off of it. Rumors has it that they will link this kind of high risk behavior to credit scores and background checks after they are done compiling data on you.'
Its in the comment section of https://www.nerdwallet.com/blog/top-cre ... dit-cards/ by keepitcool.

I wonder how much is truth to this comment.

Thanks in advance.

Edit: I just realized that I posted this thread in Finance charges section. Mods can feel free to move it to Rewards section. Thanks in advance.
Chase Freedom 04/2012. $6500 | Costco AmEx 10/2012 $8100 | AmEx BlueCash 06/2015, $15000 |Discover It 07/2015, $5200 |Amazon Store Prime 01/2016 $2200
Local Credit Union secured card, 12/2009 - Closed 02/2015
Tu-764, Ex-764


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Vattené
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Re: Gift card cycling

Postby Vattené » Wed Jun 08, 2016 12:00 pm

I'm willing to believe it's possible, but would probably only happen at a very extreme level. I've gotten gift cards for rewards purposes, but at a pretty small scale. With lower activity like that I'm not too worried about it personally.
-Vattené
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plus several store accounts of varying usefulness now

augiedog
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Re: Gift card cycling

Postby augiedog » Wed Jun 08, 2016 2:40 pm

Last year I maxed out the Chase Freedom's 10% cashback on Amazon.com purchases on Whole Foods gift cards ($1500 worth - I've already spent it by February). I never use my Freedom for anything except for category purchases so I would say this is a very extreme example where nothing has happened (other than I saved $150).

I have also used Amex Offers to buy gift cards as long as there was no wording of the exclusion. One of them was for Walmart.com, so I bought Walmart gift cards to use in the store.

They don't have very much of a way to discern a gift card purchase from any other purchase because they only look at the merchant billing category for cashback.
American Express: Blue Cash Everyday (10k), Everyday, ; Discover It (7.3k) ; Target (2.1k)

Citi: Diamond (2k) ; Bank of America: Cash Rewards (2.6k) ; Capital One: Quicksilver (3k) , Sony ; Chase: Freedom (3.7k), Slate (3k), (Amazon) ; Barclay Ring ; Synchrony: Walmart MC, Amazon, Ebates

takeshi
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Re: Gift card cycling

Postby takeshi » Fri Jul 29, 2016 9:44 am

JackLane wrote:I wonder how much is truth to this comment.

I wouldn't rely specifically on the comment you quoted but it's not a simple black and white matter. There are those who get in trouble for it and those who do not. There's always a potential risk with manufactured spend. Whether or not it leads to adverse action by creditors depends on the creditor and on the amount of manufactured spend.

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