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Tuesday, February 7 Credit Card Arbitrage Opportunity

Who:  Serve is a new Paypal-like service provided by American Express.  Well, it technically isn't new:  I became a Serve customer when American Express purchased Revolution Money Exchange.  I finally got around to activating my debit card this weekend, so I decided to snoop around their site to figure out why I should use Serve.

How:  Use a credit card that earns rewards to fund your Serve account.  The limit is $100/day and $250/month, so the reward for a card with a 2% reward would be $5 every month you do this.  Link your bank account to Serve and transfer the funds to your bank account.

When:  Through June 1, 2012 you can load money onto your Serve card from a credit card fee-free.  Even though Serve warns you that your credit card issuer may charge a fee for this, it is treated as a purchase.

Why:  Why use Serve?  I'm not a spokesperson, so I won't tell you why Serve is or is not better than Paypal. For now I am just taking advantage of the opportunity to earn a little free cash.  I haven't decided whether Serve could one day replace my Paypal account, but since accepting Paypal for auctions on Ebay is expensive, it would be nice if Serve could take its place.  We shall see.

Update (02/24/2012):  I guess this isn't a great idea, after all.  I received an email from Serve telling me that my account had been cancelled.  Included in the email was a portion of the Serve User Agreement that listed the violations I committed.  Apparently it is against their terms to use Serve to provide a "cash advance" to myself and I might have violated National Automated Clearinghouse rules.


  1. I put one of those visa prepaid debit cards on there so I could get the money off of it and not have to worry about what the balance plus I'd rather have cash to get the cashback on a credit card. I'm wondering did you transfer the money instantly back to your bank account? I'm hoping if I leave in there for a week and only withdraw part of my balance I won't set off any flags.

  2. Quala - yes, I messed up by instantly transferring the funds to my checking account. Maybe if I wasn't greedy it wouldn't have set off any red flags.