My Vanilla Debit: Pros and Cons of Using MVD to Earn Miles

A TravelSort reader writes in about the My Vanilla Debit card: “I’m trying to figure out how to pay my estimated quarterly federal taxes and even state estimated taxes via the My Vanilla Debit and/or AMEX Bluebird card. I have lots of Vanilla Reload cards in my area- no problem.

But I owe about $XXK in federal and $XK in state taxes each quarter. I can buy Vanilla Reload cards with my several 2% cash back credit cards.

Is there a way I can get money off the My Vanilla Debit card and get it right into my checking account with ATM withdrawals?

AMEX Bluebird is limited to a $5000 load per month using Vanilla Reload cards, which I guess I can do a little on a regular basis and build it up to lots—or should I just pay taxes each month?

What would you recommend?”

Taking this reader's second to the last question first, it is possible to set up monthly payments using the Electronic Federal Tax Payment System (EFTPS), from your checking account. If you do this, it would come directly from your bank account, so you'd want to get get the money you've loaded onto the My Vanilla Debit card or AMEX Bluebird back into the account you've linked to EFTPS.

What to Do After Reaching the $5000 Monthly Load Limit for AMEX Bluebird?

There are a few options once you reach the $5000 maximum for loading your AMEX Bluebird with Vanilla Reloads:

• Have your spouse or partner also get an AMEX Bluebird, so you can double the amount you load to $10,000 per month. If you have other family members or business partners you trust, get them on board too.

• Load a My Vanilla Debit card with Vanilla Reloads up to $9999 at any given time

• Load an AMEX Prepaid card (maximum of $2500 total balance on the card at any given time)

Which Credit Card to Use to Buy Vanilla Reloads?

While you can certainly use a 2% cash back card, I personally like to use whichever cards I'm working on meeting minimum spend for the signup bonus. See Best Credit Cards to Buy Vanilla Reload Cards

Best Way to Liquidate Funds from the My Vanilla Debit Card?

• Purchase money orders at Walmart. If you're trying to keep your MVD alive for awhile, don't go overboard with the amount of the money order–aim for $1500 or less

• Cash Advance at a bank. While it may be tempting to load your My Vanilla Debit until it reaches $9999 then cash advance $9997 (due to the $1.95 cash advance fee), don't do this or any large amount if you want to try to keep your MVD alive. InComm has gotten quite aggressive about closing the accounts of folks that it perceives as simply loading and unloading cash, particularly through large cash advances or money orders.

• ATM: not recommended. While you can withdraw from an ATM, the maximum you can withdraw is $400 per transaction and $1.95 fee is assessed each time, making this unattractive.

Careful with Large Cash Advances or Money Orders…

As mentioned above, a number of posters on Flyertalk have reported being shut down by InComm after a history of loading funds on to their My Vanilla Debit, then liquidating, especially through high dollar amount cash advances and/or money orders. 

For example, take Flyertalk poster groundhog: “I was doing loads almost every day (2x$500) and cash advance 1-2 times per week ($2500). It took them 3 months to lock my account.”

Lukfilm was shut down after one large money order: “I did just ONE and it wasn't CA, but a MO at WM for $4,000! I was really shocked. Now the other two of my cards are monitored as well, looks like game over for me”

How Do I Avoid Getting Shut Down by InComm?

Avoid only using the My Vanilla Debit card to load and withdraw money. Have a few regular transactions, even though they do cost 50 cents each. And avoid large cash advances and money orders of over $1000 in one transaction.

What Does it Mean if My Account is “On Hold” or “Monitored”?

It means that InComm is on to you and plans to close your account–which could also affect any other My Vanilla Debit cards you have. Typically, however, you'll be given 48 hours to unload/liquidate your account, and some folks manage to get in a last reload before doing a final cash advance for the entire balance. And, per commenter Ron S., below, it's worth continuing to monitor your closed MVD accounts for a few weeks afterwards, to see if they somehow become active again.

My Account Has Been Closed and I Haven't Been Able to Get My Money Out!

If your calls to InComm haven't gotten you your money back, you can file an online complaint with the FDIC, which can speed things up, per commenter Ron S. below and several Flyertalkers.

So to summarize:

My Vanilla Debit Card Pros

• Often more widely available than Vanilla Reload cards
• Can typically be purchased with a credit card and loaded up to $500, even by stores that don't allow credit card payment for Vanilla Reload cards
• Can load up to $10,000 per month on the My Vanilla Debit Card using Vanilla Reloads: twice as much as with AMEX Bluebird
• Some banks will allow a cash advance on a temporary My Vanilla Debit Card that has been registered, even before you receive the permanent card

My Vanilla Debit Card Cons

• Many fees associated with the My Vanilla Debit card. See My Vanilla Debit Fees
• InComm has been shutting down those My Vanilla Debit card users that it deems to be not using the card the way InComm intended–i.e., miles and points hounds that are not sufficiently profitable to InComm
• Maximum of 3 permanent cards allowed per SSN
• Lacks the more robust bill paying and check writing features of AMEX Bluebird