Question
Just been perusing my Costco Amex card statement (part of the Open Savings Network) and I see that I can buy an American Express Gift Card for 3% off:
http://www133.americanexpress.com/osbn/landing/giftCards.asp
I assume there's got to be a catch; otherwise I'm going to save a boatload of money over time. Can somebody tell me what it is? I don't see it immediately. Thanks.
Answer
Just been perusing my Costco Amex card statement (part of the Open Savings Network) and I see that I can buy an American Express Gift Card for 3% off:
http://www133.americanexpress.com/osbn/landing/giftCards.asp
I assume there's got to be a catch; otherwise I'm going to save a boatload of money over time. Can somebody tell me what it is? I don't see it immediately. Thanks.
There is $3.95 fee per card and $12.95 shipping charge. For 10 $500 GCs, your cost is $4850 (with 3% discount) + $39.50 + $12.95 = $4902.45. I don't think AmEx GC comes with PIN, so how do you cash out?
Answer
There is $3.95 fee per card and $12.95 shipping charge. For 10 $500 GCs, your cost is $4850 (with 3% discount) + $39.50 + $12.95 = $4902.45. I don't think AmEx GC comes with PIN, so how do you cash out?
It's not too bad of a bad deal (just under 1.6%), especially if you minimize the fees like you've done, and plan on using the card within a year (say like at gas stations or for insurance payments).
But it is meant to be spent money --- you cannot get cash out from these cards. And after 12 months they start charging a $2 monthly service fee if you still have $$ left on the card. They can do this even in states like CA that prevent expiration dates because this is a multiple use card (can be used anywhere AMEX is accepted) as opposed to a single store card (like a Target gift card).
Also, I think it can only be used for a fixed charge amount -- ie you can't use it at a pump gas station because the card doesn't know the final total in advance. You'd have to go to the station attendent and say you want to charge $40 of gas or something like that. And if you only have $39.24 left on the card, let's say, you must charge $39.24 to get it out --- you can't run a $40 charge and expect to get the $39.24 w/ a balance due of $0.76. The amount has to be exact to get the last drop out or it will be declined.
And it does not have any of the protections or benefits (like rental car insurance) as a normal charge card.
This is all from personal experience, except I never let the card go more than a year w/ any value left on it.