Alert: JH Preferred limitations and shutdown reports

If you read some of the same blogs I do, you may have noticed a deafening silence here about one new product: the JH Preferred card. That's for a simple reason: while I never hesitate to admit when I make an error, that doesn't mean I'm eager to make as many as possible. 

I first read about the card over at Personal Finance Digest, a truly interesting blog I mentioned just the other day. Having just broken the story of HR Block Emerald prepaid cards finally being Vanilla-reloadable, naturally I was excited to see one of their competitors come out with a similar card that explicitly advertises its compatibility with Vanilla Reload Network reload cards, and has routing and account numbers like the Emerald card.

JH Preferred Does Not Allow ACH Pulls

Ready for this? I'm going to reveal one of my absolute favorite tricks. It's not a secret, it's not a hack, it's just one of my favorite tools in my box: if you have a Fidelity Investment Rewards credit card (2% cash back American Express or 1.5% cash back Visa), you can easily verify whether any product does or does not allow ACH pulls by adding that account in your credit card's online bill payment tab. Fidelity will send out two test deposits — then it will attempt to withdraw them. If the withdrawal isn't allowed, you'll be notified like so:

I do this 5-10 times per month to verify whether various products allow ACH pulls. It isn't fool-proof: while the Netspend Prepaid Visa and the PayPal Prepaid MasterCard both allow ACH pulls, the PayPal account's routing number isn't recognized by Fidelity, so you can't test for ACH-compatibility. But it costs nothing, so it's a great place to start.

JH Preferred Shutdown Reports

As I spent the week patiently waiting for my card to arrive, reports were already trickling in of card shutdowns for the kinds of behavior you might expect from travel hackers. In the comments to Frequent Miler's post on the card, we saw:

  • "JH closed my account as soon as I loaded 5k onto it over two days, without even trying to withdraw anything. Another person I know also got the card closed on him after loading 5k (albeit at smaller pace). Useless garbage."
  • "Had to battle with a lengthy hidden phone tree to finally reach a nice US based CSR. She told me, 'Well sir this card is designed to be loaded and used over time for regular purchases and you just loaded it up fast and then wd the money. You cant do that.'"
  • "Just a warning. I had both of these [HR Block Emerald & JH Preferred]. They locked up my account within a week and it took several weeks for me to get my money back."

Meanwhile over at Flyertalk shutdown reports were likewise appearing:

The Free-quent Flyer's Official Recommendation

The JH Preferred card is essentially the ideal use case for Evolve Money. Unlike the MyVanilla Debit cards which come with a punishing $0.50 transaction fee on purchases and $1.95 cash advance fee, JH Preferred has no purchase transaction fee and no monthly fee if you load $1,000 or more to the card each month.

I would argue that Evolve Money has two distinct advantage over the traditional methods of liquidating PIN-based debit cards, when it comes to these "vulnerable" cards:

  • Since Evolve Money payments are free, you can make multiple, smaller Evolve Money payments throughout the month, reducing the impression of "quick" loads and unloads;
  • Since Evolve Money payments are instantly deducted from your card balance, there's no risk of your funds being frozen between loading a Vanilla Reload Network reload card to the account and your bill payment being deducted.

Ultimately, it's not a race: you can load $5,000 per month, whether you do it in the first 2 days of the month or over the course of 30 days. Since it doesn't cost anything to make as many transactions as you want, do yourself a favor and take your time.

Have you ordered a JH Preferred card yet? Do you have a plan to avoid shutdown?