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Hit your Amex card sign-up bonus by buying ‘no fee’ Amex gift cards

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I have written before about the new range of American Express gift cards.  They were not, to be honest, fantastic value.

However, they are now looking VERY INTERESTING if you have an American Express spending target to hit on a new credit card.  If you don’t have an Amex card with a spend target to hit, this might be a good time to apply for one!

Here is the official site for Amex gift cards.

Amex Gift Card

And here is the special offer that is running until the end of the year:

For Gift Cards purchased online between 16 September and 31 December 2013, no Purchase Fee or Delivery Fee will be charged. Other fees, limits and restrictions apply. To participate in the promotion order your Gift Cards at gift.americanexpress.co.uk and enter the code GCNF1 where prompted at the point of purchase. Then click on Redeem to process the order. This offer is only applicable to online purchases. You may not purchase more than five (5) Gift Cards in one transaction. The offer is available in the UK only.

What this means is that you do not pay the ‘per card’ purchase fee or postage.  You are effectively buying Amex gift cards for face value.  The standard purchase fee on a £100 gift card is £4.45, so this is a substantial saving.

Amex accepts Amex (doh!) plus Visa and MasterCard for the purchase of these cards.  The transfer almost certainly goes through as a ‘purchase’ rather than a cash advance, because Amex would need to disclose it otherwise.

You will only start paying a fee after 12 months.  If there still a balance on the card after 12 months, you will pay a £1.50 monthly fee.  It is highly unlikely you won’t have spent the balance by then, though.

The most obvious use of this promotion is to basically bring forward spending on your Amex card, in order to hit a time-limited sign-up bonus on a new credit card.  If you would struggle to spend £2,000 in three months to get the 20,000 point (=20,000 Avios) Amex Gold bonus, for example, you can simply buy the difference in Amex gift cards.

The cards can be used for normal spending at almost everywhere that accepts Amex cards.  If you end up with a small residual balance of a few pounds, the easy way to cash it out is to buy an Amazon gift certificate (via the Head for Points affiliate link if you like!) and add it to your Amazon account as a credit against future purchases.

It also seems that Amex will ‘cash out’ the spare balance on your gift card.  Note that they will NOT cash out to your original payment card, only by cheque or by a bank transfer.  What a disaster 🙂  Cashing out your balance is free as per the rules:

You may also request the “Redemption” of the Gift Card Balance free of charge. “Redemption” is a payment made by us, American Express, to you, as the Cardholder, of an amount equivalent to the Gift Card Balance. The conditions for Redemption are the following:

  • During the term of this Agreement. During the term of this Agreement, that is, from the date of purchase of the Gift Card until the ‘valid thru’ date, you may request Redemption of the whole or part of the Gift Card Balance by calling American Express Customer Service.
  • Within the 6 years from the ‘valid thru’ date. Following the ‘valid thru’ date and within a period of six (6) years thereafter, you may request Redemption of the whole Gift Card Balance by calling American Express Customer Service.
  • No Redemption after 6 Years. We reserve the right to refuse a Redemption request made more than six (6) years after the ‘valid thru’ date.

Any Redemption is subject to our completing and being satisfied with the outcome of applicable anti-money laundering, fraud and other illegal activity checks (“Successful Redemption”). We will only process your Redemption via cheque or bank transfer to a UK bank account, at our option. This process could take up to thirty (30) working days.

Note that Amex gift cards can only be used in the UK.  There is also no mention of the ability to use them in ATM’s, so you should assume that you cannot do this.

Despite these restrictions, though, this is a very interesting offer indeed.

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Category

American Express Membership Rewards

Comments (68)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • BritBronco says:
    25 Sep25 September 11:38

    I assume there are no MRs earnt on the purchase?
    Is it confirmed this will count towards minimum spend?

    • Rob says:
      25 Sep25 September 12:01

      Yes, you would earn MR points if it goes through as a purchase. It is ‘all or nothing’ – you will earn MR points AND it will count as a purchase AND it will count towards minimum spend. The downside would be no points, treated as a cash advance and not counting towards minimum spend.

      However, if it was not treated as a purchase then you would expect big warning signs from Amex on the website and in the T&C’s telling you not to use a credit card.

      (I’m assuming you didn’t mean ‘do you earn MR points when using the gift card?’. In which case, the answer is No.)

    • Dave says:
      25 Sep25 September 12:07

      If it counts towards minimum spend it’ll also earn reward points.

      In some of the other comments there’s a mention of an anti-money laundering check so it’s best not to go overboard with this.

      But in theory you could buy these with your credit card of choice (mine being the bmi plus Amex at 2.5 miles/£) and then cash them in to your bank account.

  • Emilie says:
    25 Sep25 September 12:59

    Picking up on an old post of ‘manufacturing’ spend – does it still work to order a home delivery of £ travellers cheques from Amex and depositing them in your bank account? Does anyone have experience of doing this recently and especially if it works with an HSBC/First Direct account?

    Thanks!

    • Rob says:
      25 Sep25 September 13:09

      I paid some into HSBC years ago with no trouble and I don’t remember recent reports of any issues – but do a search for the old posts and check the comments.

      Still works fine apart from that, as long as Amex accept your card OK for payment.

      • Steve says:
        25 Sep25 September 16:43

        Hi Raffles

        Is there a way of purchasing sterling travellers cheques completely fee free ? The sites I’ve tried all charge 1.5%

        • Rob says:
          25 Sep25 September 17:51

          Remember that you’d be getting Membership Rewards points / Avios / SPG points (depending on which Amex card you want to hit your spend target on) for the purchase, so the 1.5% fee is fundamentally offset by the reward points on the transaction. And that ignores the fact that it will trigger your sign-up bonus.

    • Trevor says:
      25 Sep25 September 14:31

      Earlier this year I purchased TCs on an Amex card at no fee, counted towards min spend and immediately deposited fee-free into NatWest account.

      • Steve says:
        25 Sep25 September 16:39

        Hi Trevor which site did you use to buy the travellers cheques fee free.? Each one I’ve tried charges 1.5%

        • Trevor says:
          25 Sep25 September 17:17

          Hi Steve

          Sorry, seeing your query makes me realise how misleading my brief answer could be. I purchased from the Amex site using an Amex card (in fact I think it was through the Avios or BA sub-site due to offer at the time for bonus which I received, even on the TCs purchase), and think that is the only site worth contemplating, otherwise there would be “credit card fees” for cash advance etc applicable, which is the “fees” I was referring to by stating rather ambiguously, “fee-free”.

          I think there are some places you can buy TCs that are possibly lower or “TC fee-free” (can’t recall for certain now though – a while since my investigations), but then you’d be paying “credit card fees”, so no point. The best and only option I believe is through the Amex site, but you will pay the “TC fee” for purchases, though not for cashing them at your bank (though do ask first to be sure – I can’t speak for every bank).

          Considering my need to meet a target spend and ability to reduce my pro rata annual fee by being able to cancel the credit card, paying the “TC fee” was worthwhile, especially as I earned the bonus Avios, hence possibly benefited in the end.

          Note that buying “cash” on your Amex card (even though put through as a purchase on the Amex site) doesn’t come without it’s own little intricacies. It seems that it depends on how long you’ve had your card, what you credit limit may be and how much you try to spend or if you have purchased previously as to how much more you can spend on the TCs – good luck. You can also apply for cash advances to be enabled on your card, but that can only be done after 3 or 6 months apparently (can’t quite recall). There are also % of credit limit, daily and rolling cash advance limits to contend with. All the same, not having it enabled doesn’t necessarily stop you from a single purchase.

          Back then we didn’t have 3V cards and Amex gift cards to manufacture spend on, so along with some Tesco gift cards, I met my target pretty quickly. With the Amex gift cards as an option though and the limits you’ll encounter on buying TCs, I wouldn’t bother with them now. There’s no way of knowing in advance if you can buy £500 of TCs or only £250 and you can spend a while trying to find your limit, if you can even buy at all.

          • John says:
            25 Sep25 September 20:24

            “Back then”??? 3V cards have been around for many years… I’ve been happily buying one a week for at least 2 or 3 years now, until all you FTers / H4Pers depleted every store. What’s new may be that Tesco started stocking them and giving the 150 cc bonus?

          • Trevor says:
            25 Sep25 September 22:39

            lol – yes, John, “back then” when you were happily buying them and the rest of us were ignorant 😉 I think the Tesco bonus certainly helped shine some light on them too, but until recently I could hardly find stock. Lately though I’ve been able to take advantage.

  • pazza2000 says:
    25 Sep25 September 13:29

    This could come in handy with trying to meet a couple of min spend requirements due soon. What do you think the ‘cash out to bank account’ turn around time would be? I would certainly be cautious of doing this with more than 2.

  • Donnie Law says:
    25 Sep25 September 13:36

    Wow great deal for the UK!

  • Waribai says:
    25 Sep25 September 14:01

    Ok, so the first person to go down the manufactured spend route….let me know how you get on 🙂

  • Trevor says:
    25 Sep25 September 14:44

    Wikipedia definition:

    “Money laundering is the process of changing large amounts of money that have been gained through illegitimate means.”

    I don’t see how any manufactured spend through any of this really could be considered as money laundering. You’re using a legit credit card to buy legit gift cards. You’re paying off the legit credit card with legit money from your legit bank account. And Amex allows you to buy and then redeem the full value of the gift card to your bank account at no fee.

    This is a great system, can’t see on what basis Amex or anyone could stop you from buying more and more in piles of 5.

    Tedious? Not nearly so much as 3V cards that only come in £25 denominations and then you still have to enable, use and possibly cash-out via NS&I.

    The strange part is that Amex have credited this loophole which people will take advantage of for Amex bonuses!

    • John says:
      25 Sep25 September 15:03

      Yes but if the banks knew what was not legit then there would be no money laundering at all!! Hence they need to check on suspicious cases.

  • Susan says:
    25 Sep25 September 15:08

    Have ordered £500 worth and had confirmation from AMEX. Will report back when they arrive.

  • Johnny5a says:
    25 Sep25 September 15:16

    this is perfect timing for me, I’m one month in on my AMEX Small Business Gold, I’m £226 behind the £1k monthly spend target.

    Actually OT but does the £125 fee count towards the £3000 spend?

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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