Buying gift cards with your credit card and then turning around and buying money orders with the gift cards is another popular way to manufacture spend. However, I don’t recommend this. You could be shutdown by your bank or be investigated by the IRS if you’re depositing too many money orders in a short amount of time. Some customers try to stay under the radar by purchasing less than $3,000 or $2,000 in money orders. However, all it takes is your bank to fill out a form and report you as being suspicious.
Here’s what you could do: You could have multiple accounts with different banks and run around and deposit the money orders to stay under the radar, but this just seems like more work to me. I would much rather try and find a family member who would signup for BlueBird by American Express and let me “borrow” their card and account 🙂 This way I can have multiple BlueBird accounts. It’s much easier for me to swipe my BlueBird cards at Walmart and deposit the gift cards that way. Plus you don’t have to spend additional money then by purchasing money orders.
On a side note, I’m with Ally Bank, so I can’t even deposit money orders unless I send them in. That’s even more of a hassle! No thank you!
I have read reports from U.S. Bank customers who’ve been shutdown for depositing too many money orders. Even if you’ve been a customer for over 10 years, it appears U.S. Bank does not take that into consideration. I don’t think I’d want to risk being shutdown by my bank or being reported as suspicious.
So here’s my tip for you: Do not buy thousands in money orders and deposit them into your bank account(s). I would try to find another way to manufacture spend.
Am I being too cautious? Are you doing money orders and never run into any problems? Let me know in the comments!