Increase Your Stimulus Payment by 14% (Legally)
With most taxable money market vehicles yielding under 3%, I have my eyes out for safe and painless opportunities to earn a higher yield. Also, the IRS has begun sending the economic stimulus payments via direct deposit this month enabling taxpayers to take advantage of incentives with extra cash flow.
One national grocery company, The Kroger Company, has announced an incentive for all of its customers to receive an additional 10% bonus amount when exchanging tax refunds or stimulus payments into gift cards.
The Kroger Co. (NYSE: KR) said today that beginning May 2, 2008, customers can receive free groceries through a gift card program available exclusively in Kroger stores. The program allows Kroger customers to exchange their tax refund or economic stimulus checks for a Kroger gift card with an extra $30.00, $60.00 or $120.00 added to it. Gift card amounts correspond to the payment amounts outlined by the Internal Revenue Service for the federal economic stimulus program.
Click here to view the full press release.
Increase the Bonus with Credit Cards
According to the press release, customers who do not have a hard copy of their tax refund or stimulus rebate may still take advantage of the bonus offer by paying with cash, credit card, or a personal check.
So not only will Kroger offer a 10% bonus, if a credit card is used to purchase the gift card, there’s the possibility that additional cash back can be earned through the credit card rewards program. I suppose it depends on how the transaction is processed by the credit card company: some gift card purchases are not eligible for cash back rewards while others are. The credit card rebates are usually in the 1% range, but it can be up to 3% for users of the Chase Freedom credit card. Remember to pay off your credit card bill in full at the end of the month!
More Cash Back with Store Rewards
Finally, if the grocery store rewards program is used, most give another 1% cash rebate for nearly all store purchases. So now that $1,200 stimulus payment increases up to a real spending amount of $1,369.20, or just over 14% (I’m omitting the opportunity cost of paying off your $1,200 credit card purchase which might normally earn a 2.5% yield in a money market account; I’ll just assume a generous grace period was used).
Kroger is a large chain and consists of nationwide stores including Kroger, Baker’s, City Market, Dillons, Fred Meyer, Fry’s, Gerbes, Hilander, Jay C, King Soopers, Owen’s, Pay Less, Ralphs, Smith’s and QFC stores.
After reviewing my personal spending at the grocery store, I will use up $1,320 in gift cards over a period of about 3-4 months. So for essentially doing nothing to change my daily routine, I get as much as $169.20 in free groceries for things I typically by anyway.
Let’s face it, wealth managers can be frugal, too!
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June 4th, 2008 at 3:19 pm
Another good use of those gift cards is to use them to purchase gas at Kroger stores that have gas stations on-site. Depending on how much you drive, it could add up to a significant savings, but for some the $300, $600 and $1200 upfront may be diffcult to do.