Thursday, January 16, 2014

Citibank 5% cash back at drug stores

My oldest credit card is my Citibank Dividend card.  I opened this card in the year 2000, when I was a freshman in college.  This card was once one of the best cash back cards out there, earning 5% on all purchases.  I have fond memories of earning hundreds of dollars worth of cash back while I was in college, buying and selling anything I could get my hands on.

Over the years, this card has transformed its reward structure several times. 

Today, this card now earns 5% cash back on rotating categories (like the Chase Freedom cards) and 1% cash back on everything else.  There is now a cash back rewards cap of $300 per year.  This means that any purchases that push your spending beyond the $300 cash back rewards cap don’t earn any rewards at all. 

Because of the $300 rewards cap, the Citibank Dividend card is no longer worth being used as a daily credit card.  Plus, earning miles and points is way more valuable to me than cash back.

This being said, the current 5% cash back offer on rotating categories can make for a quick and lucrative side hustle of bonus income. 

5% Cash Back on drug store purchases
The Citibank Dividend card currently earns 5% cash back for Macy’s, Drug Stores, and Fitness Clubs purchases in quarter 1 (January 1st, 2014 to March 31st, 2014).  With a little help from Bluebirdyou can make a quick $300 worth of cash back with purchases made before March 31st, 2014.  All you have to do is spend $6,000 at drug stores before the 5% rotating cash back for this quarter ends.  5% cash back from $6,000 of drug store purchases equals $300.

How do I spend $6,000 at a drug store?
You can easily achieve this spend by purchasing 12 Vanilla Reload cards loaded with $500 value.  Each card costs $3.95.  The total cost will be $6,047.40 ($503.95 x 12).  You can load your bluebird account with the Vanilla Reload card at  Take your $300 cash back rebate and subtract $47.40 in fees and you have a net profit of $252.60! 
Here's our growing stack of Vanilla Reload cards!
Tips for purchasing Vanilla Reloads and loading your Bluebird 
Many CVS drug store locations around us have enforced a limit of $1,000 worth of Vanilla Reload cards per day.  I’ve found that some stores will scan your driver’s license when making a purchase over $1,000.  If you’re paranoid about CVS scanning your driver’s license, you can avoid this by loading only $495 on each Vanilla Reload card you purchase.  Or you can do two separate transactions of $503.95 each.  To my knowledge, it’s no big deal if they scan your driver’s license as long as you’re spending less than $5,000 a day at CVS. 

Don’t forget that you can only load $1,000 into your Bluebird account each day.  The clock resets at 12pm EST, or 9pm PST in my case since we live in California.  This means that you can load up to $1,000 into your Bluebird before 9pm, then load another $1,000 into your Bluebird after 9pm. 

What do you do with the money in your Bluebird account?
Once money is in your Bluebird account, you can pay your bills, write checks, transfer the money to your linked bank account, or even use the bill pay feature to pay off your credit card bill.

What if my local drug store doesn’t sell Vanilla Reload cards?
You don’t have to maximize your drug store spend all on Vanilla Reload cards, it's just the cheapest and easiest way to knock out $6,000 worth of spending (without really spending money).  You can purchase other gift cards like gas gift cards and store gift cards.  You can make regular drug store purchases.  If your local drug store is out of Vanilla Reload cards, you can even purchase Visa Gift cards and load them onto your Bluebird account.

The fee for purchasing a Visa Gift Card is $5.95 and if you purchase 12 of these gift cards, your total fees would be $71.40 ($5.95 x 12).

When liquidating your Vanilla Reload or Visa gift cards, don’t forget that you can only load $1,000 into your Bluebird account per day and $5,000 into one Bluebird account per month.  It helps if you have access to a spouse, family, or friends’ Bluebird account.  :)

Redeeming your Citibank cash back
You need to accumulate $50 or more before you can request a check from Citibank.  You cannot earn more than $300 cash back from the Dividend card each year.  The last time I used my Dividend card was a year ago when they ran the same 5% cash back bonus on drug store purchases; I earned a quick $252.60. 

As a bonus this year, my wife also used her Citibank Dividend card (converted from one of her previous American Airlines cards) to also earn a quick $252.60.  Together we will earn $600 worth of cash back, and pay $94.80 ($47.70 x 2) in fees.  This quick hustle will earn us a sweet $505.20 profit for very little time and effort!

After we each get our $300 rebate checks from Citibank, we will put our Dividend cards back in the sock drawer until next year.  Without this 5% cash back bonus, earning 1% cash back on Vanilla Reload purchases isn’t as appealing.  It’s worth more to use a rewards credit card like your SPG card, or a Chase Ultimate Rewards card to buy Vanilla Reloads. 

This ~$500 bonus is a great way to kick off a year full of side hustles!
You can apply for a Citibank Dividend card here.  There are different versions of the card: Visa, Mastercard, and American Express.  And if you already have this card, you can activate the 5% cash back here. 
Lastly, don’t forget to earn checkpoints while you’re in the store.  

Disclaimer: I have no affiliation with Citibank, Bluebird, or Vanilla Reloads.

Edit: Logged into my Citibank account after my statement closed and this is what I saw:

I immediately requested a $300 check and it should arrive between 7 to 10 days:

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