One of the most popular ways of generating miles and points is using a technique called “manufactured spending” whereby one purchases a cash equivalent with their credit card, and then offloads that money to repay the credit card bill. Of the most used is the American Express Serve reloadable card where you can load up to $5,000 a month using a debit card, and an additional $1,000 by an American Express credit card, all of which can be transferred directly to your bank account.
Previously, the Serve card could be loaded with any credit card, but a recent change limited this to American Express cards only. Unfortunately “true” American Express cards (those issued directly on the Amex website) will all generate a cash advance trigger for these loads. However, one of the great secrets has been the use of the Fidelity American Express card which earns 2% back on all purchases, and has no annual fee. When used to load the $1,000 per month on a Serve card, you’ll essentially earn $20 free every month which can be used to transfer to any Fidelity brokerage or checking account — think of this like cash.
According to Bloomberg, Fidelity is considering severing this partnership:
Fidelity Investments is reportedly considering ending its partnership with American Express and Bank of America on cash-back credit cards. Visa (NYSE: V) and Mastercard (NYSE: MC) are in talks with the asset management giant to replace American Express (NYSE: AXP) as its card partner, Bloomberg has reported, citing anonymous sources. The cards allow customers to earn 2 percent cash back on purchases, with the option to apply the rewards to their Fidelity brokerage, retirement and cash management accounts. Bank of America (NYSE: BAC), which acts as the lender on transactions made using the card, may also be replaced, according to Bloomberg. The sources told Bloomberg, however, that there’s a possibility Fidelity will still bring American Express and Bank of America back.
If Fidelity does ditch Amex, that will remove the possibility of using this card to generate the free $20 monthly via Serve, all of which can be done conveniently from your computer without a trip to Walmart (which is ordinarily where you must load debit cards via a Walmart MoneyCenter machine).
I’m sad to see this option possibly going away, there are other cards that can be replaced with it, though certainly not as lucrative. Even if Fidelity cuts ties on this card, it will likely still be in use through the expiration date or a date reasonably well into the year.
Reload your American Express Serve accounts now while this card is still in existence.
Jamie Larounis is an avid traveler, blogger and miles/points educator. Traveling well over 100,000 miles a year and staying in hotels for over 100 nights, he leverages miles, points and other deals to fly in first class cabins, and stay in 5-star hotels. The Forward Cabin shares his experiences, musings, reviews, tips, tricks, resources and industry news with you, the fellow traveler.
I think you have misconstured this a bit. Nowhere have I read that AMEX cards incur a cash advance when loading SERVE even though you have written the following:
“Unfortunately “true” American Express cards (those issued directly on the Amex website) will all generate a cash advance trigger for these loads.”
The above is incorrect, as they simply don’t earn any awards e.g. points/miles as the case may be unlike the FIA AMEX.
However, there have been numerous posts that even AMEX issued cards that are used to load SERVE do contribute to threshold spend bonuses — and if people did incur cash advance fees when performing the above maneuver, I think they certainly would have reported same. That they did not leads me to believe that there are no cash advance fees incurred when loading AMEX issued cards to SERVE.
You are completely correct. I do it all the time with no CA fees.
True that. No Cash Advance fees.
Jen —
But how long will we be able to do this, that’s the real question as I have read that Fidelity is thinking of switching its business away from both AMEX and BofA in favor of a MC/Visa issued by someone else!
I hope that they don’t but if they do, I hope they have some transition as I just received my FIA AMEX card last month!