Daddy Travels Miles & Points

Pay your bills with gift cards & credit cards – earn travel rewards sw

July 13, 2023July 21, 2023 Jason

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Expenses are a norm in my household. We don’t need to make up these expenses. Aside from our daily expenses such as groceries, utilities, gasoline – we also have these huge expenses such as college tuition. We have 4 kids, and 2 are in college. We needed to find ways to mitigate those costs.

For this particular situation, let’s use my daughter’s Fall tuition amount due of $3,539.

Ways to pay for college tuition

• Pay with cash, check, or debit card
• Pay via student loan
• Pay through grants or scholarship
• Pay with credit cards

I think it’s very obvious which payment method we took. Yes. You guessed correctly. We pay with credit cards.

Pay tuition with credit cards

Even at this level, there are still a few options for us when it comes to paying with credit cards.

Use existing credit cards – instead of applying for a new credit card, we could use one of our existing credit cards.I will need to choose which credit card will earn additional points or cash back. I could use a credit card could possibly earn 3,539 points up to 7,078 points (that’s if I use a card that  earns 1x-2x points per dollar). Not bad. But I know I could do better

Sign up for a new credit card – this is what I do many, many times – not only with tuition payments, but I’ve also signed up for credit cards when I have to pay for my income taxes, or property tax dues, or just about any major expense where I know credit cards could be used. The thing I have to consider, fees are usually assessed when you pay using a credit card. In my daughter’s school, the fee is 2.65%. So with my daughter’s tuition due of $3,539, the fees are $93.79. Is that worth it? I’ll explain later.

Pay with Visa Gift Cards or Mastercard Gift Cards – What? Yes, with our college kids, their schools accept these Visa Gift Cards (they work just like any credit card). Same amount of fees are assessed – 2.65%.

But wait, Jason. What’s the activation fees charged by those gift cards?

There are ways around that.

• I purchase these gift cards from office supplies stores such as Staples, Office Depot/Office Max. Why? Every now and then, these gift cards go on sale where the activation fees are waived. Activation fees are typically $6.95, or $7.95
• per card. So if you buy a $200 Visa Gift card, you pay $206.95 (fees added). But when there’s a sale on these VGCs or MCGCs, the fees are waived, therefore, you only pay $200 per card.
• But why buy Visa Gift Cards (VGC) or Mastercard Gift Cards (MCGC)  from office supplies stores?When you use a credit card such as the Chase Ink Business Cash, and you purchase from Office Supplies stores, you earn 5x per dollar. So using my daughter’s tuition of $3539.17 + $93.79 (2.65% in fees) = $3,632.96 is the amount she would need to pay with using credit cards or these gift cards. These gift cards are usually $200 each, that means it would take 18-19 $200 VGCs or MCGCs to pay her tuition of $3,632.96. Ok, pause. 18-19 VGCs or MCGCs?

• What does that mean? My son did this a few months ago, he keyed in 18-19 Visa Gift Cards over the phone and paid for his tuition. Wasn’t that a lot of work keying in the card #, CVV code, expiration dates? Of course that takes work. Perhaps 20 minutes? And what’s the reward for doing this?
  • 18 VGCs at $200 per gift card purchased at Office Supplies stores
  • Earn 5x when you use Chase Ink Business Cash
  • Total # of points earned = 18,000 Chase Ultimate Rewards – that could easily be a roundtrip ticket to Hawaii, or a couple of free nights in a Hyatt that charges 9K per night.

Putting it altogether

So, how did we pay for her tuition?

1. Using an existing credit card?
2. With a new credit card?
3. Or with Visa Gift Cards or Mastercard Gift Cards?

This is exactly how we ended up paying for my daughter’s tuition of $3,539.17.  We used #2 and #3 – a combination of a new credit card, and with a few Visa Gift Cards. Why? Of course I had my reasons.

New credit card – I applied forIHG Rewards Premier Business Credit Card. There was an increased sign up bonus offer at the time:

• Earn 165,000 Bonus Points after spending $3,000 on purchases in the first 3 months from account opening
• Earn up to 26 total points per $1 spent when you stay at an IHG hotel
• Earn 5 points per $1 spent on purchases on travel, hotels (non-IHG), gas stations, dining, social media and search engine advertising, and office supply stores.
• Earn 3 points per $1 spent on all other purchases
• Automatic Platinum Elite Status$100 Global Entry/TSA Pre check credit
• 4th night FREE
• FREE Anniversary Night certificate
• Annual Fee = $95

I had an option to pay for the entire tuition of $3,539 + 2.65% in fees = $3,632.96, but this card only required me to meet a minimum spend of $3,000. So I decided, to pay $3,000 with this new credit card + $79.50 (2.65% fees) = $3,079.50. That still left me with a balance of over $600.

Visa Gift Cards – we had purchased Visa Gift Cards from Staples a few weeks ago, and it gave me the opportunity to use 3 x $200 VGCs to pay the remaining balance (see calculation below).

 

Are the fees of 2.65% of $93.79 worth it? How about the $95 annual fee?

So to keep it simple, by having this new IHG card and the fees tied to paying for the tuition, the total fees were $183.79. Wasn’t that a bit much? You decide.

First of all, with the 3 Visa Gift Cards at $200 each, I earned 3,000 Chase Ultimate Rewards, and I could add that to my stash of Chase points.

The new IHG card gives me 165,000 IHG points. I could use those points and stay at any of these properties when we go to Japan. I could also stretch these points, and book 4 nights and get the 4th night free. Japan accommodations are NOT cheap.

• Intercontinental Yokohama Grand – from 20K per night
• Hotel Indigo Tokyo Shibuya – from 38K per night
• Hotel Indigo Hakone Gora – from 52K per night
• Crowne Plaza ANA Osaka – from 29K per night
• voco Osaka Central – from 27K per night
• Holiday Inn Express Osaka City Centre – Midosuji – from 25K per night
• Crowne Plaza – ANA Kobe – from 16K per night
• Crowne Plaza – ANA Kyoto – from 30K per night

Here’s an entry I wrote that shows where in the world I could use the 165,000 IHG points.

Where can your IHG Reward points take you around the world? | Daddy Travels Miles & Points Where can your IHG Reward points take you around the world? (daddytravelsnow.com)

You will see examples where I could book using the 165.000 points. While I might have paid $183 in credit card fees, in exchange I could stay for quite a few nights in many of these properties around the world.

• New York City (random date in June 2024)
• Washington DC (random date in May)
• New Orleans (random date in November)
• Destin/Panama City 30A Florida
• Cancun/Tulum (random date in May)
• London (random date in June)
• Japan (random date in February)
• Maldives (random date in March)
• Greece and Turkey (random date in Feb)
• South Africa (random date in June)
• Thailand (random date in May)
• Hong Kong (random date in April)
• Seoul, Korea (random date in May)
• Philippines (random date in April)
• Dublin, Ireland (random date in April)
• Dominican Republic (random date in Feb)
• Puerto Rico (random date in Feb)
• Portugal (random date in May)

What’s the takeaway

Expenses no longer scare me. I mean, I’m not thrilled that we have all of these big bills to pay. It doesn’t have to be just on paying tuitions alone. It could be just about any expense. And if there’s an opportunity for you to pay for the expense with a credit card (even if there are fees), I say, weigh your options.

Remember, if you were planning on paying for these expenses in full anyway, you might as well make them work in your favor. In this particular case, my daughter’s Fall tuition just got me a few free hotel nights with IHG.

Oh and for your future expenses, it doesn’t have to be an IHG credit card. It could any credit card that offers lucrative sign up bonus. Here’s a quick link!

Chase Ink Business Cash (for these gift card purchases)

• Chase Ink Business Cash
• Spend $6K in 3 months,
• No annual fee
• Earn $750 or 75,000 points…perfect for those office supplies store purchases

How about you? What ways have you done to reward yourself when you have big bills to pay?