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Update: You can ONLY use Wells Fargo credit cards to fund the Wells Fargo Prepaid card after May 1, 2013.
Credit card minimum spending requirements are always increasing.
After Amazon Payments, prepaid debit cards offer some of the best ways to creatively meet credit card minimum spending requirements. You can also use prepaid debit cards to generate spending to earn extra perks on credit cards.
I wrote an eight part series on the perks of Big Spending on a credit card – from hotel elite status, bonus points, airline elite status to companion passes. Check it out to see which perk matters the most to you and use that credit card when you fund your prepaid debit card.
However, do NOT use a Citi credit card to fund a Wells Fargo prepaid card because it is coded as a cash advance which means high cash advance fees and interest.
how it works
Certain prepaid debit cards can be funded or loaded with a credit card. This means that you usually will earn miles or points when you fund or load your prepaid debit card using a credit card.
You can then use your prepaid debit card for regular purchases, but you can also use it to withdraw money at the ATM. There are usually small fees associated with either loading and/or withdrawing money at the ATM. But these fees could make sense if you have no other way to hit the minimum spending requirements on credit cards to get the sign-up bonus or if you want to get a perk for spending on your credit card.
Some prepaid debit cards (not all of them) also let you get cash back from the store, so you could buy $10 worth of groceries and get $200 cash back. Or you could buy money orders from Wal-Mart, grocery stores, or US Post Offices and then deposit those money orders into your bank account. Yes, this is a bit of work, but it helps with the minimum spending requirements!
You may even be able to link certain prepaid debit cards to your Venmo account, and transfer money directly to your checking account for free.
I can’t tell you what to do or how far to go with pre-paid cards. You’ve got to assess the risk for yourself. As always, do what is comfortable for YOU.
1. Cash Advance Fees. The most obvious risk is that the purchase or funding of prepaid debit cards will be coded as a cash advance and you will pay extremely high cash advance fees and interest. This is almost always the case with Citi cards so do NOT use Citi credit cards to purchase products directly from a financial institution like a bank.
However, purchasing, say, a Visa gift card at a grocery store is okay since that will be coded as a purchase from a grocery store, and banks currently don’t charge cash advance fees for that!
2. Won’t Earn Points. You may earn miles and points the 1st time you buy or load a prepaid debit card with a credit card, but may not earn miles the 3rd or 4th time.
That’s because banks could change the coding for the purchase or loading of pre-paid debit cards at any time.
3. Hard to Keep Track of Fees & Limits. The different pre-paid debit cards have different fees for loading and withdrawing. They also have different limits on the amount you can load and withdraw on a daily, weekly and monthly basis.
Keeping track of all this can be tough, so I suggest using a spreadsheet which lists the various limits and when you fund or withdraw money from the card.
4. Account Closures. Your prepaid debit card could get suspended or closed if the issuer suspects fraudulent activity. In that case, it could take a few weeks (perhaps longer) to get your money back, so don’t fund your pre-paid debit card if you can’t do without the money for a few weeks.
5. Credit Card Closures. The most significant risk is that your bank could close your credit card account and not approve you for future applications. I haven’t heard of this happening to anyone (yet), but it could happen if you push this to the extreme.
Wells Fargo Prepaid Visa Card
DrSifu started a thread on the Wells Fargo prepaid debit card, and I’ve been experimenting with the card over the past month.
The Wells Fargo Visa card is supposed to be a debit card which you load with money. Their website says “use the card for everyday spending or to manage funds for a specific purpose, like travel or entertainment.”
You have to enter a social security number in the application, but I didn’t get a hard credit inquiry for the card.
The terms say that you can load up to $5,000 on the card per month, and you pay $5 per load with a credit card. But at one point, I had more than $5,000 on the card, so I’m not sure this is accurate!
If we assume an average load size of $1,000, we’re spending $25 (5 loads of $1,000 each) to generate $5,000 in credit card spending, assuming you will use the Wells Fargo card to load your American Express Bluebird card at Wal-Mart or use cash back or money orders to withdraw money from the card.
I didn’t test to see if I could sign-up for more than 1 Wells Fargo Prepaid card.
1. Fees. You pay $5 per funding load with a non-Wells Fargo credit card. The maximum which I could load was $2,500 in one transaction. See more on my experience with funding in the section below.
However, after loading $2,500, I was only able to load $1,000 at a time subsequently. If we assume that funding $1,000 is more likely to be approved, we’re paying ~$50 in fees (10 loads of $1,000 at $5 per load) to fund, say, $10,000 in minimum spending.
There is no fee to sign up for the card, but there is a monthly maintenance fee of $3.
There is also a 3% foreign transaction fee among other fees.
2. Funding. Here’s my experience trying different ways to fund my Wells Fargo card:
A. Credit Cards. You can’t use an American Express card to fund the Wells Fargo card, but you can use a Visa or MasterCard to fund the Wells Fargo card.
I WAS charged cash advance fees with my Citi card (don’t use a Citi card!) and didn’t earn points with the Hawaiian Air card.
But I wasn’t really shocked when I was charged cash advance fees on my Citi Thank You card, because Citi usually codes almost every direct purchase from a financial institution as a cash advance which incurs high fees.
Folks on this FlyerTalk thread say that the funding from Chase initially appears as a Cash Advance, but is then converted to a purchase which isn’t charged cash advance fees. As always, be cautious when using a Chase credit card to fund your Wells Fargo card. Chase has the best credit card offers, and you don’t want to be blacklisted by Chase.
You can fund the Wells Fargo card online when you log into your account.
I was charged a $5 load fee for loading the Wells Fargo card with a non-Wells Fargo credit card.
B. Gift Cards. I was not able to fund the US Bank Visa Buxx card with a Visa or MasterCard gift card.
In some instances, I wasn’t able to add my gift card as a funding source online. In other instances, I was able to add a gift card as a funding source, but got an error message when attempting to fund my account with the gift card. Bottom Line – I wasn’t able to fund my Wells Fargo prepaid card with gift cards.
3. ATM Withdrawal Limits. The terms say (bolding mine):
“The ATM withdrawal limit is $500.00 per day, $1,500.00 within any seven (7) day rolling period, and $5,000.00 within any thirty (30) day rolling period.”
I didn’t check to see if these limits were actually enforced or not.
The 1st two ATM withdrawals at Wells Fargo ATMs are free, and costs $1 per ATM withdrawal after that at Wells Fargo ATMs.
Here’s a link to see if there is a Wells Fargo ATM near you.
But you will pay $2.50 per ATM withdrawal at a non-Wells Fargo ATM in ADDITION to fees charged by the ATM owner. This can get expensive quickly, so it likely doesn’t make sense to withdraw money at a non-Wells Fargo ATM to regularly earn miles and points, but could make sense to complete minimum spending requirements.
4. Funding Limits. Here’s where it got interesting! The terms say that:
“the maximum value that may be loaded onto the Card is $2,500.00 per load, per day. Please note that we may limit the amount of funds that you are able to load on your Card and the number of times you may load funds to your Card within a period of time.”
This FlyerTalk post says that the rolling limits are:
- $2,500 in 24 hrs
- $3,500 in 15 days
- $4,500 in 30 days
A telephone representative confirmed these limits for me when I asked about funding limits.
However, I was able to fund $9,500 between November 1 to November 4, 2012. My first load was $2,500 and subsequent loads were $1,000.
While I was trying to see the maximum I could fund, I would make trips to Wal Mart to load my Bluebird, so my balance never got to $9,500 on the Wells Fargo card even though my cumulative funding across 4 days was $9,500.
After 4 days, I wasn’t able to fund my account any more, so I was worried that my account would be closed. I kept on getting the “Maximum number of reloads reached” error message. I could use my card for regular transactions, but couldn’t fund it any more.
However, at the beginning of December, I was able to fund my account again. So I’m still not sure what the funding limits are for the card! In my experience, it is more than the $4,500 in 30 days suggested by the FlyerTalk thread and Wells Fargo telephone reps.
5. Money Orders. The Wells Fargo prepaid card has a PIN number, and I was able to use it to get buy money orders from Wal-Mart, Kroger Grocery Stores, and the USPS.
6. Cash Back. I was able to get cash back when I used my Wells Fargo card to shop for groceries, etc. I selected the maximum cash back each time (~$200) so that I could withdraw as much as possible from my Wells Fargo prepaid card. This helps save money on ATM fees if you want to withdraw money from the Wells Fargo prepaid card.
7. Multiple Cards. I didn’t check to see if you can get more than 1 Wells Fargo prepaid card per person.
8. Changing Funding Source. I was able to change the credit card funding source online 5 times, but never more than twice in 1 day.
9. Fund My Bluebird. I wrote earlier that you can use the Wells Fargo prepaid card to fund your American Express Bluebird.
I used my Wells Fargo card to fund my American Express Bluebird as a debit card load at Wal-Mart. This could be useful for folks who don’t have access to Vanilla Reloads cards, but who are close to a Wal-Mart. You can load your American Express Bluebird at Wal-Mart without a fee with a debit card and then use American Express Bluebird to pay your bills, etc.
There is a daily limit of $1,000 and $5,000 per month with this type of funding (which is combined with the limit for Vanilla Reloads).
You will earn miles and points when you fund your Wells Fargo card with a credit card, but be sure to use a credit card which doesn’t charge cash advance fees.
However, the maximum funding per transaction is $600 with the Wells Fargo prepaid debit card, so you will have to fund your Bluebird in 2 separate transactions if you want to reach the $1,000 daily limit.
There didn’t appear to be a maximum daily limit of purchases with the Wells Fargo, and I funded both Emily and my Bluebird in 4 separate transactions of $500 each on multiple days as a test.
10. Venmo. I didn’t check to see if you can use Venmo to transfer money from the Wells Fargo card directly to your checking account for free. This would be much easier than making ATM withdrawals.
There is a $2,000 monthly limit on the amount you can transfer using a debit card with a Venmo account for free.
Venmo recently started accepting debit cards and they do not charge a fee for “Debit cards issued by major banks.” They do charge a 3% fee for debit cards issued by smaller banks. However, this page says that using debit cards is always free, so I’m not sure which page is accurate.
Please comment if you’ve successfully used Venmo with the Wells Fargo card. Using Venmo makes it much easier because you can fund your Wells Fargo card with a credit card from your computer and withdraw money from Venmo to your bank account from your computer as well!
The Wells Fargo card is another tool to help meet minimum spending requirements even if you don’t have access to a Wells Fargo ATM.
But it is time consuming to go to a Wells Fargo ATM to withdraw money, though you can use cash back while shopping, buy money orders, or fund your American Express Bluebird with your Wells Fargo card.
Please read “The Risk” section above before using prepaid debit cards to meet minimum spending requirements on credit cards. Do NOT use a Citi card with the Wells Fargo prepaid card, and be careful of being suddenly charged a cash advance (with high fees and interest) from banks which currently do not charge cash advance fees on the Wells Fargo card.
Update: You can ONLY use Wells Fargo credit cards to fund the Wells Fargo Prepaid card after May 1, 2013.
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