Gift Cards for everyday purchases to double points?

[medhead]

So my post will be relevant if the Everyday Rewards credit card ever earns 2 points per $1 spent. For now just use it as a hypothetical.

They had such a promo back in May.


Sent from the Throne

 

[froggerADL]

I think I'd still choose the extra 100 points over the $5 saving

I do believe you are a long lost cousin of mine. I am prepared to offer you any number of points, up to 100,000, for the discount price of only $4.50 per 100 .

 

[medhead]

If I buy 1 card at $95, I get 95 points via the CC. I then buy $100 worth of groceries, and get my 100 points on my EDR card. $95 = 195 points

That's not right. You get whatever you're credit card earns when you purchase the the gift card. So 95 points with a EDR Card, or maybe 142 points with another card. Then when you spend the gift card you get 1 point per $ over $30 IF you scan you EDR barcode - maximum of 70 points. Total 165 points

If I buy $100 worth of groceries on my CC, I get the 100 points from the CC but also the 2-for-1 Woolies points for a spend over $30, which ends up at $100 = 300 points.

Even if I don't get the 2-for-1 points, it's $100 for 200 points, which is an extra 0.5 point per dollar - which is good, but even with a $1,000 card (which I know you can't buy, but assuming you could do it in one transaction instead of 10) would end up reaping only an extra 500 points for the effort.

Am I correct? Or are there circumstances in which it is actually useful?

Firstly the EDR credit card does not earn 2 points per $. (full stop) So if you spend $100 of groceries the most points you can get is 170. 100 from the EDR credit card spend and 70 from scanning your EDR barcode. That extra $5 is getting you 5 points.

In my case, if I could purchase the gift cards with my platinum amex I would be in front about 40 points by purchasing gift cards.

I do believe you are a long lost cousin of mine. I am prepared to offer you any number of points, up to 100,000, for the discount price of only $4.50 per 100.

I'd be charging about $80 per 100 points and the OP would still be in front.

 

[cove]

If I buy $1000 of gift cards on my EDR credit card I will have 950 QFF points. Then if I spend the whole of the gift cards in one go I will get 970 QFF points by blipping the EDR on the back of the credit card. Of course if I have accepted some bonus by accepting a Woolworths offer I will get more points according to that particular bonus offer.
So now I have 1,920 QFF points from spending $950 and I saved a $50 note. Is that clear?
Repeat as often as you need or until you cannot afford to save any more money (just kidding).

 

[JohnK]

So now I have 1,920 QFF points from spending $950 and I saved a $50 note. Is that clear?
Repeat as often as you need or until you cannot afford to save any more money (just kidding).

If you have a card that earns 3x Amex MR points per $1 spent at supermarkets then the equation is no longer the same and the saving by buying Wish cards is negligible.

Assuming you spent $1,000 at Woolworths in one go then you will earn 3,000 Amex MR points and 970 QFF points and you have spent the $50. Are the extra points earned worth the $50 spend? If you value points at 2c and above then not using Wish card generates more points with higher value.

YMMV.

 

[cove]

Yes an Amex card that does 3 points per retailer dollar would do what you say. Amex has been doing "improvements" to many of their cards and I run Amex Ultimate to pick up 2.5 points per dollar on work Qantas expenses and the free flight to knock out the annual cost. This card still earns 1.5 points on everything else so that is much more than Woolies and Coles purchases.
The 3/2/1/0.5 cards can weigh in your favour from Amex and they only win if the card holder is lax with how they use that card. Good thinking JohnK as I have not found a gift card supplier that will take Amex recently. The last time was when I bought about $20 k of them direct from the retailer but someone posted that this had been closed off.

 

[tocal]

Please forgive me (I'm pregnant and thus my brain frequently stops working like normal). When I was looking at the EDR Qantas CC, I saw that you get a point per dollar over thirty, plus the normal EDR 1-for-1 points. I then thought "great, 2 points per dollar!". Somehow my mind has now changed this to "the CC gives me 2 points per dollar" and my calculations were as such. If only my brain hadn't befuddled itself, I wouldn't have confused everybody! The wish card option now does make sense, unless you get a miracle 3-to-1 on your CC and thus a total of 4-to-1 points per dollar.

My apologies for the confusion!

 

[Deleted User]

While the 5% saving is a good find, I think the savings can be better if you play the "game" harder. The two that come to mind are Dan Murphys & Woolworths Petrol.

a 5% discount at Dan Murphys is a good way to extend your savings, or as I see it "double-dip-savings" i.e you get the cheapest possible price locally, then the pure 5% off. Where as if you used the wish card at BWS or Woolworths Liquor then your purchase would be higher, even whilst using a 5% off wish card.

a 5% discount on fuel is where the real money can be saved IMOH, having 2 large Australian cars our annual fuel bill is ~$4,500 p.a, so paying with a wish card provides a tax free discount "profit" of $225. Fuel should always be purchased at the bottom of the pricing cycle to allow for the "double-dip-savings" Furthermore a 4cpl voucher "costs" via a purchase of goods from Woolworths, $30 spend per voucher, while a ~6cpl discount can be achieved without the supermarket spend at all...! (i.e 1.35cpl X 5% = $0.0675 cpl saving) I personally use the 4cpl discount taken as 2 QFF per litre and take the 5% saving from using the wish card, this comes close to "free" QFF points in my mind

Now if you can claim back the GST on your purchases, if you are a company or sole trader as I am, be it fuel or other, then the savings work even harder for you you actually get to claim the GST of the full payment (as shown on the docket), although you paid 5% less with a wish card. A $2,000 purchase on wish cards that cost you $1900 will allow a $200 GST deduction, this is $10 more than would be claimed if paying the full amount with cash... Is this "free" money...?

 

[medhead]

Apology not required. I know I read the EDR CC marketing and thought it was 2 points per $. Had to read it a couple of times to work out the real story.


Sent from the Throne

 

[Newk]

Can anyone direct me to anyone who sells these (and indeed the Coles ones) and takes Amex?
The Entertainment Book link only does Visa and MC.

 

[Beta4Me]

If I were to buy $100 of groceries on my Plat Edge Amex groceries and compare gift cards bought on my Woolies Qantas CC...

$100 on Amex = 300 points
$70 above $30 on EDR card = 70 points
Total on Amex with no discount = $100/370 points

$95 on Woolies CC = 95 points
$70 above $30 on EDR card = 70 points
Total on Woolies CC with 5% discount = $95/165 points

Therefore $5 more for 205 points or 2.44c/point. Depending on how you redeem your flights and what value you place on your points it may or may not be worth it. Personally, I'd still rather the points. (NB: with a Citi Select card you'd be paying 2.88c/point for the extra points as you would have more base points.)

 

[Deleted User]

If I were to buy $100 of groceries on my Plat Edge Amex groceries and compare gift cards bought on my Woolies Qantas CC...

$100 on Amex = 300 points
$70 above $30 on EDR card = 70 points
Total on Amex with no discount = $100/370 points

$95 on Woolies CC = 95 points
$70 above $30 on EDR card = 70 points
Total on Woolies CC with 5% discount = $95/165 points

Therefore $5 more for 205 points or 2.44c/point. Depending on how you redeem your flights and what value you place on your points it may or may not be worth it. Personally, I'd still rather the points. (NB: with a Citi Select card you'd be paying 2.88c/point for the extra points as you would have more base points.)

Yes, but a another way to look at it...

Using the $5 saved from using the gift card as the credit card payment fee at the ATO (if you can pay your tax that way or have a tax debt to pay) will generate a minimum of 1041 Frequent Flyer Points if using any >1:1 Mastercard or Visa

$1041 x 0.48% = $4.99



Cash in the hand better than points in the bush...?

 

[Beta4Me]

Yes, but a another way to look at it...

Using the $5 saved from using the gift card as the credit card payment fee at the ATO (if you can pay your tax that way or have a tax debt to pay) will generate a minimum of 1041 Frequent Flyer Points if using any >1:1 Mastercard or Visa

$1041 x 0.48% = $4.99



Cash in the hand better than points in the bush...?

But the 0.48% fee would basically be 0.48c/point earn on paying your tax so it's just a better value point earn and you don't need to carry over the $5 saved.

Points in the hand better than cash in the bush...?

 

[Deleted User]

But the 0.48% fee would basically be 0.48c/point earn on paying your tax so it's just a better value point earn and you don't need to carry over the $5 saved.

Points in the hand better than cash in the bush...?

True, but since $5 would be saved, and offset on an ATO payment fee, effective result is FREE points earn up to 1041 frequent flyer points (assumes you have to pay the ATO in the first place)

Why pay 0.48% fee when you don't need to...? Or am I missing something (joking)

Edit:
Your way - $5 for 205 points
My Way - $5 for 1041 points (QFF & assumes an ATO payment is required anyway)

Each to their own though...

 

[Beta4Me]

True, but since $5 would be saved, and offset on an ATO payment fee, effective result is FREE points earn up to 1041 frequent flyer points (assumes you have to pay the ATO in the first place)

Why pay 0.48% fee when you don't need to...? Or am I missing something (joking)

Edit:
Your way - $5 for 205 points
My Way - $5 for 1041 points (QFF & assumes an ATO payment is required anyway)

Each to their own though...

I think the key here is that I value my points enough that I'd pay the higher cost (2.44c/points) to obtain them (my line in the sand is 2.5c/point).
I'd do both ways and pay $10 for 1246 points

 

[Deleted User]

Update 19/1/2013

Wish card purchases since 14/7/2012: - 50 @ $250
Wish card Value: - $12,500
Total Cost: - $11,875

Total Saved: - $625.00

Now if only the ATO accepted wishcards

 

[RWJ777]

Update 19/1/2013

Wish card purchases since 14/7/2012: - 50 @ $250
Wish card Value: - $12,500
Total Cost: - $11,875

Total Saved: - $625.00

Now if only the ATO accepted wishcards

How long will it take you to use $12K of cards? If it's a long period, you'll be forgoing interest on this money or that it could have been applied to a productive investment.

The problem with these schemes is the time value of money -- the devaluation effect from large upfront expenditure for future use.

 

[cove]

Six months to get $625 off an average of $2000 a month is really very good. The average investment at halfway through a month is $1000 and the $625 is not taxable so that rate of return is superior to allow a deluxe lifestyle and can include front of plane travel as a side effect.
I thought you might like this quick summary.
I think you are heading into warp country Shintaro10x.
Mrscove has been telling me that I have been pushing it too far and wants to buy an air ticket.
I sent her off to Coles with a 5% off gift card while I book 4 JASAs with QF so perish the thought of buying a ticket with readies.

$1000 invested at 5% for 6 months earns a wholesome 25 dollar note before the ATO take their share.

 

[markis10]

Surprised no one has factored in the starthere cash back for Dan Murphys, at 5.5% used with click and collect payment via wish card, it's quite handy.

 

[cove]

Yes markis10 I am onto it. Just waiting for Bullcreek to open.
Thanks for the tip on that one.