People trying to maximize rewards from premium credit cardshave been stymied by the rules that some retailer shave put in place to preventpeople from cashing out on stolen cards. But that hasn’t stopped them fromasking FoxBusiness how they can use prepaid cards to maximize their rewards.
Generally, the idea is to buy aprepaid debit card using a rewards credit card, earn reward points for that purchase,then use the prepaid card to pay for expenses that can’t be paid for with acredit card — such as rent, mortgage payments and other bills. Sometimes youcan withdraw the money from an ATM or buy a money order and deposit the cashback into your bank account, although making large, unexplained deposits isgenerally not a great idea.
Playing the rewards game and going through gyrations to winpoints seems to be a hobby for some people. For the shoppers, it all looks likefree money, but the rewards need to be covered by someone. Prepaid providersshould watch for strange patterns of use that might indicate people are pumpingload volume through to boost rewards. While it may not be costly in the shortrun, this business is fickle and will move with changing rewards programs.
Overview by Ben Jackson, Director, Prepaid Advisory Service
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