This post will extrapolate on a recent Twitter exchange that seemed to confuse several people, so I thought sharing this perspective might prove useful.
The premise is that by using a combination of the Amex Bluebird, Loaded with Vanilla Reloads purchased by a points earning credit card you can then earn points paying your rent by paying via an Amex Bluebird Check. I love the Amex/Vanilla combination and use it a lot these days, I started out using the Barclay Arrival Card, and now am using the old Amex Blue, you might want to check out my analysis of the best credit cards to pair with this here: The best card to use with your Bluebird and Vanilla Reload strategy if you haven’t yet.
Logically speaking, you can, of course earn points by paying your rent this way. The Bluebird loaded with Vanilla allows you to pay for all manner of things that wouldn’t accept a credit card for payment, so you do open the door to creating a points earning rent strategy. However, as much as I hate this term, the opportunity cost kills it.
The problem you face is that each Bluebird card can only be loaded with $5K of Vanilla each month. So, if your rent is say $1,000 per month, that means that you have used up $1,000 of your available $5,000 and can now only spend $4,000 on other things in order to earn your points. If you were using the Arrival Card your ROI would be as follows:
10x $500 Vanilla Cards for $5,039.50 (each card costs $3.95 to purchase)
- $5,000 of money to spend via Bluebird Billpay or Bluebird Checks
- $110.87 Earned Travel Related Cash back from the Arrival
So you could net a profit $71.37, with the caveat that it must be spent on travel, if you use the Arrival card for pure cash back it is worth half of that. Alternatively, if you were to use the Fidelity Amex you could earn 2% cashback (inflows of $100.79, net profit of $61.29) and if you can find a working link to the old school Amex Blue (I don’t have a link for that on my site, but if you have one please leave it in the comments section) you could be earning bunch more than that.
Opportunity Costs Explained
Because the Bluebird has both Online Billpay and Regular Checks available you have endless possibilities to spend your monthly $5,000. Paying rent with this method would only offer increased value to a person who is unable to liquidate $5,000 per month, if somehow their monthly costs were lower than $5.000. Now… if you consider that to load $5,000 onto the Bluebird itself requires greater than $5,000 outflows each month, I think it is easy to see that in such a situation a person would have, by definition, more than $5,000 in bills in a month prior to considering rent payments.
As such, rent cannot offer any additional value in earning points by paying with a Bluebird, as if person A used it to pay rent, and person B used it for regular monthly costs, both people would generate exactly the same number of points in a month.