The Chase Ink Case business card is one of the best cards you can possibly get. With it, you can get gift cards at office supply stores like Staples and Office Max/Depot and get 5x per dollar. Since they usually have a sale for fee-free Visa or Mastercards, many travel hackers put as much spending as possible on these gift cards. The problem is that despite just about everyone being eligible for business cards, some people are still scared of them despite our best efforts to convince you otherwise. Nevertheless, you can and should use gift cards to optimize your spending and to make sure that you max out all of the bonuses that you can.
Although this strategy can work for a number of different cards, for purposes of this article we are going to focus on the Chase Freedom Unlimited (CFU) and the Chase Freedom Flex (CFF). What’s also nice is that this is so simple. Just buy gift cards at the right place to earn more points. Of course, there’s more to it than that. Let’s break it all down.
Chase Freedom Unlimited
Let’s look at the current CFU rewards and benefits:
Two things should jump out at you here: earn 5% cash back on combined gas station and grocery store purchases up to $12,000 and earn 3% on drugstore purchases. Note that although it says cash back, you’ll actually earn points which could be used as a statement credit which you should never do! Do you spend $12,000 a year on groceries and gas? I’m sure some people do but what if you don’t? How can you maximize this bonus so you get every single point possible? You buy gift cards! I don’t think most people realize that a lot of stores sell gift cards for many other stores and restaurants not to mention the store you’re actually in. Grocery stores, gas stations, home improvement stores, office supply stores, Walmart, Target and pharmacies sell gift cards. Let’s say you wanted to buy something on Amazon but if you use your CFU, you’ll only get 1.5x. If you buy an Amazon gift card at a gas station, you’ll earn 5x on that purchase!
So if this is so easy, why doesn’t everyone do this? Well as we’ve discussed before, the average person has no interest in travel hacking. It’s too much work so travel hackers will always be in the minority of credit card users. However, travel hackers now that a little bit of effort can yield huge rewards. Since one of the goals of travel hackers is to get as many points per dollar as possible gift cards allow you to not only optimize your spending, but it allows you to max out your bonuses as well.
Maxing out the CFU bonus
Let’s get back to the issue of the CFU bonus. Assume you’re gas and grocery expenses per year are only $8,000. Do you just leave the other $4000 on the table and say forget it? NO! The first thing you do is to check the grocery stores near you to see what gift cards they carry. I suggest taking a picture. Then when you get home, write up a list of all of the gift cards there. You can do the same with gas stations. Most people buy stuff on Amazon on a fairly regular business and if this is you, buying Amazon gift cards is a great option. Even if you don’t need to buy anything today, you can load the gift card in your account today and use the balance over time. If you need to buy something at other stores, check your list first. Is it annoying to make a stop to buy a gift card before you buy something somewhere else? Yeah a little but again, travel hacking is about spending a little extra time for a big reward.
You can also buy gift cards for these gas stations and grocery stores if you are a little short at the end of the year. You know you’ll be shopping for groceries over the next few months and same with gas. By buying gift cards, you are just moving these expenses up in order to make sure that you max out that $12,000 bonus.
Using the CFU at Pharmacies
What do you do when the year is up and/or you max out the bonus? You buy gift cards at pharmacies. CVS, Walgreens and other pharmacies usually have a great selection of gift cards for any number of stores that most people shop at. So same basic strategy. Take a picture of the gift cards at your local pharmacies, write up a list and check that list before you buy something somewhere. If you can buy a gift card for that store, stop at the pharmacy and pick one up. You’ll get 3x instead of 1.5.
Chase Freedom Flex bonsues
The Chase Freedom Flex is a unique card as it has different bonus categories every quarter that will earn you 5x up to $1500 per quarter. Travel hackers that have this card make sure to max out this bonus. Sometimes it is pretty easy. Spending $1500 on groceries in 3 months isn’t tough for most people. But what if the category is Lowes and Home Depot and you have absolutely no need to buy anything there? Hopefully by now you know that the answer is to buy gift cards. Surely you’ll need to buy something somewhere or you’ll want to check out a restaurant. Gift cards also make great gifts. Now matter how you put it together, make sure that you are maxing out these quarterly bonuses.
All of that sounds great right? Well yes, but there’s a few things you need to watch out for.
Gift card issues
There’s a few things you need to watch out for before you run out there and buy up a ton of gift cards. The first is to make sure that you don’t go crazy from the get go. Besides possibly setting off alarm bells with Chase, there may be some issue where the purchase does not code as grocery, gas, pharmacy or whatever the bonus category is. I haven’t heard of this happening too much but you don’t want to spend $1000 on gift cards only to find out that you didn’t earn the extra points. When trying something new, start small. Buy at $10 or $25 gift card and then gift it a few days. Login to your Chase account and see how it codes. If it coded the right way, then you know that you can go back and buy more.
Getting back to the alarm bells issue, I don’t think the average person is going to have to worry too much about this but there’s always people in the travel hacking community that have to do everything to the extreme. When they do this, it comes across as fraud. As a result, some people will hear horror stories about accounts being shut down. To avoid this, some travel hackers will make an additional small purchase along with these gift cards to make the purchase seem more legitimate. We’ve never done that and we haven’t had an issue but you can decide for yourself what makes sense.
You should never buy gift cards in the hopes that you’ll use them one day. These gift cards usually expire at some point even if its several years away. Gift cards can also get lost or forgotten about. CNN reported that Americans have $21 billion in unused gift cards! If you buy gift cards and the don’t completely use them up, you’ll have wasted your time and effort. So be sure to use them right away. That doesn’t mean you can’t load the balance onto your account when you know you’ll be shopping there soon as I mentioned before but you don’t want to buy a gift card at a restaurant that you might go to one day. Buy it on the way to the restaurant.
Another issue involves returns. Once you buy a gift card, you’ve basically locked yourself into buying something at that store. Let’s say you never buy anything at Home Depot but they’re having a good deal on something right now so you want to go pick it up. You go get a gift card and then head over to Home Depot to pick up your time. You earned 5x on your purchase; good job right? Well what happens when you get home and realize that this product just isn’t what you thought it was. You’re gonna return it and not even try to buy an alternative. Guess what? Your refund will be another gift card! Now you’re stuck with a Home Depot gift card that you don’t want to use. Don’t put yourself in this position. If you think you might have to return something and you wouldn’t have any other way to use up the gift card, don’t even bother. Just use your CFU or whatever other card that makes sense.
Somewhat related to the above, you’ll want to make sure that you know how much you need. Let’s use the Home Depot example again. You go pick up a $200 card but when you get to Home Depot you find out that the total price is $174 with tax. That leaves $26 on this Home Depot gift card that you don’t have much use for. When using gift cards, you aren’t going to be able to optimize every dollar because of situations like this. Instead, just try to get close enough. Let’s say that the items at Home Depot is $217 with tax. Buy $200 worth of gift cards and put the balance on your CFU. That’s a win.
Another issue to watch out for is that online purchases will often not code the right way. Therefore, you should always buy gift cards in person.
Although this is a Chase focused website, I do want to mention that you should do your research if you want to try this with your Amex. You could run into some issues there.
Conclusion
Using gift cards allows you to max out bonuses and optimize your expenses. Is it a few extra minutes out of your day to do all of this? Sure but serious travel hackers know that every single point counts. If you do this over the course of years, you’ll be earnings thousands of dollars of free travel. Going back to the dilemma of the CFU bonus where you can spend $8,000 a year instead of $12,000. If you didn’t use this gift card strategy, that $4,000 difference would have just been 1.5x so the difference is 3.5x. 3.5 x 4000 = 14,000 points. If you value those points at 2cpp like most people, that’s $280 worth of points! I don’t know about you but I’ll spend a few extra minutes here and there to earn an extra $280.
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