In defense of American Express for Target

American Express for Target prepaid cards were, until earlier this month, one of two popular methods for running up credit credit spend at Target store locations. Loads of up to $1,000 cost $3 each, and it was possible to liquidate the funds on the cards using fee-free ATM's, where the first withdrawal each month (of up to $400 per day) was free, and each subsequent monthly withdrawal cost $3.

When Frequent Miler was reporting on the end of free Prepaid REDcard loads at the beginning of this month, he mentioned in passing:

"Amex for Target is now almost useless

I tried loading it with a credit card.  No luck.  I tried using it to load REDbird first as a credit card and then as a debit card (yes, I knew that wouldn’t work, but figured it couldn’t hurt to try). No luck. The only remaining use I can imagine for the Amex for Target card is if you’re stuck with a bunch of Vanilla Visa gift cards that don’t work at Walmart and you don’t have a REDbird card."

The cost structure of American Express for Target cards hasn't changed

I only had 3 or 4 good months of earning before Target stopped allowing credit cards to be used for prepaid card reloads, but it was a very good 3 or 4 months, and I developed a certain fondness for American Express for Target cards. The loading and unloading limits of AFT cards creates a very simple cost structure:

  • Loading $1,000 costs $3;
  • Unloading $1,000 costs an average of $6 ($4.50 for the first $1,000 each calendar month, $7.50 for the second).

In other words, American Express for Target cards are now a more-expensive-than-usual method of liquidating PIN-enabled debit cards.

The value of American Express for Target depends entirely on your earning rates

There are many reasons why Frequent Miler would reject the idea of paying $9 per $1,000 in liquidated manufactured spend. If you purchased $500 PIN-enabled prepaid Visa debit cards with a 2.22% cash back card, you might pay 1.4% in purchase fees, and an additional 0.9% in liquidation fees would consume the rest of the rebate value of your manufactured spend.

But if you were earning 3.75% cash back on your prepaid Visa debit card purchases, and are able to split payment for your loads between two PIN-enabled debit cards, you're suddenly netting at least 1.9% on each card.


Of course, if you're fortunate enough to be earning 5% cash back on certain prepaid card purchases with an American Express, Wells Fargo, or TD Bank credit card, then you are probably hunting for liquidation options at virtually any cost. A mere 0.9% liquidation fee is small change in the context of a lucrative-enough earning environment, which is yet another reason everyone needs to ask what role non-bonused spend should play in their manufactured spend strategy.