[edit June 28, 2015: this post originally said Bank of America BBR cards pay $20 and $25 per quarter; in fact they pay $25 and $30 for non-BoA and BoA customers, respectively, as correctly indicated on the second mention. We regret the error.]
Via Doctor of Credit, earlier this month Amazon introduced a service called "Amazon Allowance." With Amazon Allowance, you can configure recurring purchases of Amazon gift credit in denominations as low as $0.50, which are automatically deposited into the gift card balance of the recipient.
And yes, you can set yourself up as both the sender and recipient of an Amazon Allowance.
4 ways to use Amazon Allowance
Amazon Allowance simplifies and automates an aggravating problem: how to meet monthly transaction requirements while using the least possible cognitive bandwidth. Here are four use cases for Amazon Allowance:
- American Express Amex EveryDay and EveryDay Preferred. These two cards give a 20% and 50% bonus on all points earned each statement cycle you make 20 or 30 purchases, respectively. By setting up 15-25 recurring monthly Amazon Allowance transactions, you can automate those monthly transaction requirements and get back to manufacturing spend.
- Bank of America BankAmericard Better Balance Rewards. This card gives a $25 ($30 for Bank of America deposit account customers) quarterly cash reward for customers who both make a purchase that posts to each statement during the quarter and who make at least the minimum payment on each statement during the quarter. By automating a $5 monthly Amazon Allowance and payment of your balance each month, you can earn $120 each year without a second thought.
- Waiving monthly fees and triggering high interest rates. I recently opened a Wells Fargo checking account that carries a stiff $10 monthly fee each month I don't make at least 10 purchases with the linked debit card. By setting up ten $0.50 Amazon Allowance transactions, I'll never have to worry about that monthly fee being charged. Likewise, the high-interest checking account offered by Consumers Credit Union requires 12 debit and 12 credit card transactions each month to earn 4.09% APY on up to $20,000 [edit: see the comments for an additional, excellent idea].
- Microhacking! The only purchases I ever make with my Barclaycard AAdvantage Aviator Red card are $0.99 Amazon gift card purchases each month, which are then forgiven each time a statement cuts. I used to make those purchases manually; now it's automated.
Thoughts towards best practices for Amazon Allowance
While it certainly seems possible to simply create all your allowances for the same date, three risks to doing so suggest themselves.
- First, Amazon may have issues processing 50 small transactions on the same date.
- Second, your credit cards and banks may have questions about a flood of identical transactions on the same date.
- Finally, if any issues do arise, you may have trouble telling which same-day Amazon Allowance payments were processed and which were cancelled or otherwise affected.
That's why for now, I have each of my Amazon Allowance transactions set up to execute on different (sequential) dates each month.