DEAL IS DEAD AS OF 10/13/14
This is a method that has been around for quite a while now. But I have received a lot of questions and emails around this topic in the last couple weeks so I figured it was probably about time to cover this again as a lot of new people have gotten into this hobby since I last posted on the subject.
Amazon payments is one of the easiest and cheapest methods (its free) to earn a 1,000 extra miles each month and is also an excellent way to help you hit your minimum spending requirements on a new card. This can also be used as a great way to help you hit annual spending thresholds on cards that offer annual spending bonuses.
What is Amazon Payments?
Amazon Payments is an online wallet of sorts that allows you to checkout quickly at many different websites across the web without having to enter payment info every time. Amazon payments is similar to PayPal in nature.
But the reason miles & points fanatics love Amazon Payments is that it allows you to send up to $1,000 each month to anyone else with an Amazon account using a credit card as the funding source. These transactions in turn count as a purchase on your credit card earning rewards just like any other purchase!
What is the cost?
Nothing – Amazon allows each person to transfer up to $1,000 per month and does not charge a fee.
How do I send money using Amazon Payments?
In order to take advantage of Amazon Payments, both you and person you trust will need to have an account with Amazon.
1. Sign up for Amazon Payments using your existing Amazon account or create a new one. You will be required to enter your name, address, email, DOB, & SSN in order to have access to Amazon Payments.
2. Verify your email – If you created a new account, then you will need to verify your email before you can proceed. You will be sent an email with instructions to activate which is pretty simple.
3. Link you bank account and your credit card(s) – located under “Your Account – edit your account settings” or on the Send Money page shown below.
- Depending on your bank you will have the option to instantly verify your bank account by signing in to your bank via Amazon or confirming the amount of 2 small deposits that Amazon will make into your account in the next day or so.
- You must link your bank account or you will not be able to send the full $1,000/mo.
- You can add multiple credit cards if needed.
4. Send Money – Once your account is set up and the person you want to send the money to also has an account set up, then you are ready to go.
- Click Send Money tab 2nd from left at top of screen
- Enter the email address for whom you are sending the money to. Be sure this is the email tied to their Amazon Payments account.
- Enter amount up to $1,000 (once your bank account is verified)
- Select Goods/Services under heading of “Payment is for
- Hit continue
- Select a Payment Method – here you will select the credit card you wish to fund this transaction with from the list or add a new one.
- Hit continue and confirm the payment
- The $1,000 will be charged as purchase on your credit card and you will earn 1,000 miles or points (assuming your card earns 1:1). Your credit card balance is now $1,000.
You will receive a confirmation email that your payment has been sent and the recipient will also be sent an email confirming they have received the money.
5. Cash Out – Once the transaction confirmations show complete, the recipient can then log into their Amazon payments account and select Withdraw Funds under the Your Account tab. From here it is pretty easy.
- Select your bank account from the drop down menu.
- Type in $1,000 and hit continue.
- Confirm your withdrawal on the next page and then wait for the funds to show up in your bank account. This can take a few days before the money is deposited into your bank account.
6. Pay your credit card – Now that the money is in your bank account you simply use the money to pay off the $1,000 that was charged to your credit card back in step 4
7. Rinse & Repeat – You have now sent $1,000 to another person using your credit card as the funding source in order to earn miles for the transaction. You have taken this money and paid off the card used to fund the transfer and are back to where you started.
How does this look in a real example?
Let’s say I have a new card and I need to spend $1,000 to meet the minimum spending requirements to earn a 25,000 point sign-up bonus and let’s just say the card earns 1 point per dollar spent for my example.
1. I use my credit card to send my wife $1,000 via AP.
- My card is charged for a $1,000 purchase.
- Balance on my credit card is now $1,000.
- I earn 1,000 points for purchase (1pt/$ spent) plus I have now met the spending requirement and earned the 25,000 point sign up bonus.
2. Wife withdraws funds from her AP account and deposits into her bank account.
3. I use funds from step 2 to pay my credit card off & now my credit card balance is $0
Now you can turn around and do the same process but in a reverse order. If you sent money from person A to person B the first time, then now you would run through the steps but sending money from person B using person B’s credit card.
Is there a way to charge more than $1,000 in a month?
- As described in the above process you can do a max of $1,000 per person per amazon account per month.
- The key is per person. However, you can actually add your significant other to your credit card account as an authorized user. They could in turn send a payment to you using their auth card as the funding source while you do the same using your card. You will end up with $2,000 in purchases going on the same account per month which will help with hitting larger spending bonuses or thresholds.
Random questions tips & pointers
- The $1,000 monthly limit is per calendar month and is not based on a rolling 30 days.
- Should I break the $1,000 down and send 3 or 4 smaller payments? – The idea here is that Amazon is less likely to notice by doing it this way. I send my wife $1,000 every month in 1 transaction and she does the same. We’ve been doing this for a few years now with no problems. But do what you are comfortable with and know that there is always the potential of getting your account shutdown
- No one really knows what triggers Amazon to shut down accounts but there have been reports of people having their accounts shut down for using the same credit card with multiple Amazon accounts and/or associating the same bank account with multiple Amazon accounts.
What other questions, concerns, or random comments do you have in regards to the use of Amazon Payments to earn miles & points?
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