AccountNow can supplement Bluebird and Gobank

[edit 6/18/13: It looks like I have an affiliate link for the basic AccountNow card as well. If you are interested in using AccountNow, and want to support the site and the work I do here, feel free to use this link. See the comments below for some of the risks of the technique described here.]

Regular readers of this blog know that one of the simplest ways to manufacture spending on rewards-earning credit cards is by loading Vanilla Reload Network reload cards directly to a Bluebird account, which can then be used to pay bills, including credit cards. This has the advantage of being simple, predictable, and low cost - many rewards currencies are worth manufacturing at 0.78 cents each, and that's before taking bonuses into account. However, Bluebird loads are limited to $5,000 each month, which led travel hackers to seek out similar products.

A slightly more expensive technique that I discovered and reported out is loading a Gobank account with a reloadable debit card, like the MyVanilla Debit Card. This raises (but doesn't eliminate) the limit on the amount of manufactured spending you can do each month, but also raises the cost, since MVD cards charge $0.50 per swipe transaction. Still, at 0.84 cents (a $1,000 load, for simplicity's sake), this is still a great way to earn rewards.

A third, even more expensive version of the same technique uses AccountNow, a reloadable, prepaid debit product (not a checking account). Jason Steele over at The Points Guy reported on AccountNow in the context of Green Dot MoneyPaks – if you're able to buy those using a credit card, then AccountNow is only slightly more expensive than Bluebird (since MoneyPaks have a $4.95 load fee, rather than Vanilla's $3.95).

If you don't have access to MoneyPaks, you can still load your AccountNow account at Walmart using their Rapid Reload Network. However, there is a $3.74 load fee for swipe reloads of AccountNow. The maximum daily load is $1,500 and monthly maximum on total loads is $9,500.

Using my technique of loading MyVanilla Debit Cards with Vanilla Reload Network cards, then unloading them to AccountNow, your total out of pocket cost will be $16.09 ($11.85 in Vanilla Reload fees, $0.50 MyVanilla transaction fee, $3.74 in Rapid Reload Network load fees) for $1,511.85 in manufactured spending, or 1.06 cents per dollar.

On the one hand, that's much more expensive than other existing techniques to manufacture spending. Other than free techniques like Amazon Payments, my cheapest manufactured dollar is 0.185 cents (using the technique I pioneered here).  So the question isn't whether it's worth manufacturing every dollar at 1.06 cents each; the question is whether it's worth manufacturing your last dollar at 1.06 cents each.

That will depend on your specific situation, and especially on whether you have access to Vanilla Reload Network cards at merchants that are bonused categories for your rewards-earning credit cards. All that said, I think there are certainly situations that can make this technique worth using, and I wanted to make sure my readers were aware of it.

 

Gobank's Launch Challenges Bluebird

For the last week I've been experimenting with the beta version of Gobank, the new simplified, smartphone-centered bank product from Green Dot, the same people who sell cash-only Moneypaks at retailers all over the country, which can be loaded to many prepaid products, as well as PayPal accounts.

I'm happy to report that Gobank is a true competitor for American Express's Bluebird banking product.  Unsurprisingly, as a product in beta release, Gobank is still very poorly documented.  That's why I'm here to walk you through all the features I've explored so far.  There's a lot of information here, so read this post carefully, and if you want to know more about Gobank, post your questions in the comments section of this post and I'll do my best to answer.

Getting an Account

Since Gobank is still in beta, you first need to sign up to receive an invitation.  After a few weeks of waiting I reached out to their extremely active social media team on Twitter @Gobank and asked if they could help.  A day later I was able to create an account (although strangely, I didn't receive my invitation until a day or so after that).  This seems to be the main function of their Twitter team, so don't hesitate to tweet them and ask for an invite once you've signed up to receive one.

The best way to get a Gobank account, however, is to have someone who already has an account send a nominal amount of money to your e-mail address.  The notification gives you the option of receiving the money in a newly set-up Gobank account.

Online Debit Card Loads

The first, most obvious feature of Gobank is the ability to load your account online using a debit card.  In principle this is limited to $200 per day and $1,000 per month.  Based on my limited experience (5 successful loads) of unsuccessful and successful debit load attempts, I believe that either the Gobank servers are located on another continent in a different time zone, or the $200 limit is a rolling 24-hour limit.  My unsuccessful load attempts returned an error that only one load "per day" is possible, even if the first load was the previous calendar day.  Later in the evening I was then able to make the load successfully.  This needs to be explored further in order to use this service consistently.  My tentative recommendation is to either leave 2 or more days between loads, or wait 24 hours between loads.

According to some reports on Flyertalk the account can also be funded using credit cards, by ignoring the "debit" prompts throughout the process.  I personally won't be using this option, since I think the risk of having the charge classified as a cash advance outweighs any marginal benefit.  Having said that, this does appear to be a viable option for now.

ATM Withdrawals

One of the most exciting aspects of Gobank is their promise of free ATM usage at over 40,000 ATMs nationwide.  According to the Terms & Conditions,

You may only withdraw up to $500 from an ATM in a single day.

Yesterday I visited one of the ATMs the Gobank iPhone app directed me to, and was able to withdraw $400 without any ATM fee or fee from Gobank.  I only withdrew $400 since that was the ATM's transaction limit, though I do suspect that Gobank would allow a withdrawal of up to $500.

This is in contrast to the Nationwide Visa Buxx card, which is a great product, but which charges $1 per ATM withdrawal (even at their "free" ATMs!), and limits ATM withdrawals to $200 per week (7-day rolling period).

Walmart Rapid Reload Network Loads

Today I visited my local Walmart and loaded my Gobank account with about $800 from a MyVanilla Debit Visa card, one of the true pin-based debit cards I discussed in one of my very first posts.  I was not charged any fee by Gobank or Walmart (although I was charged a $0.50 transaction fee by MyVanilla, one of the reasons it's among the worst prepaid debit card products on the market).  Just like with Bluebird, you can load the card at any Walmart register, even at stores that don't have a dedicated MoneyCenter.

The ability to load cash from a PIN-based debit card is game-changing, since it allows you to avoid the high fees imposed on cash advances, money orders, or ATM withdrawals, and use the money to pay anyone in Gobank's bill pay database.  Be aware that some users have reported having their MyVanilla Debit cards closed by Incomm, the company that issues them, for using their accounts too aggressively.

Bill Pay

Bill pay is one area where Gobank falls short, so far, of American Express's Bluebird banking product.  Bluebird allows you to create multiple "pay to" accounts for a single payee: for example, if you have multiple Chase credit cards, or multiple bills through a single utility company (gas and electric), you can clearly separate each account number as a separate "bill pay" account, and even give each account a different nickname.  

As of now Gobank's bill pay feature doesn't allow multiple account numbers for a single payee.  While this may not seem like a big deal, for those of us with multiple credit accounts at one bank this radically decreases the usefulness of the bill pay feature, since only one account per payee can be paid from the Gobank account, and the others need to be paid through other banking products like Bluebird.

Person to Person Transfers

Like Bluebird, Venmo, and Paypal, and as mentioned about Gobank allows you to send money to a person's e-mail address, cell phone number, or Facebook account, and fund the transaction with your available Gobank balance.  If the recipient doesn't have a Gobank account, they can deposit the money instantly into their Paypal account

Limits

  • ATM withdrawals: $500 per day.  Self-explanatory.
  • Deposits: "The most you can deposit to your account in any day in cash is $2,500."  I interpret this to refer to the sum of online debit card loads ($200 per day) and in-person Walmart Rapid Reload Networks loads ($2,500 per day).  So, if you load $200 online, you should only be able to load $2,300 at Walmart.
  • Person to person transfers: $500 per day ($2,000 starting April 17, 2013), $5,000 per month.

Fees

  • Monthly fee: $0.  Like the Bluebird, Gobank doesn't charge a monthly fee, although they do allow you to pay up to $9 per month voluntarily.
  • Foreign transaction fee: 3%.  Unlike the Bluebird, which charges no foreign transaction fee, Gobank charges 3% on foreign transactions.  This is not a foreign currency fee, so it will still be charged even if the transaction is conducted in US currency.  Additionally, it applies to all transactions, not just purchases, so foreign ATM withdrawals are also assessed this fee.
  • Out-of-network ATM withdrawals: $2.50.  Fortunately Gobank has a very large network of ATMs, and you can get cash back at most grocery stores, so you should be able to avoid this fee.

Summary

Gobank is an exciting new development in the rapidly changing market of alternatives to traditional brick-and-mortar banks, which has so far been dominated by American Express's well-designed and well-implemented Bluebird product.  Gobank has a lot of promise, and a lot depends on the continuing implementation of their product.  Over the next few days I'll be giving some more analysis and suggestions of ways to maximize the value proposition offered by Gobank, as well as a bit of a refresher on the granddaddy of these products, Bluebird.