Manufactured Spending Overview
Manufactured spending (MS) is the process of purchasing cash equivalents with a rewards earning credit card, where the rewards earned are greater than the fees incurred. It can be used for meeting minimum spend requirements or just racking up frequent flyer miles with your favorite airline or hotel partner.
Below we’ve listed some of the more common manufactured spending techniques, we’ve also ranked them as easy, medium or hard. Before dipping your toes into MS we suggest starting off small, reading a lot about each individual method, testing things for yourself and also only doing what you feel comfortable with.
Difficult level: Easy
Amazon Payments is probably the easiest manufactured spending method to get started with. It’s similar to PayPal in that you can send money to friends and family. You can also fund your account with a credit card with no fees, the only limitation is you can only send $1,000 per month.
All you need to do is this: find somebody you trust, fund your Amazon Payments account with $1,000, send the money to them, have them withdraw it from their Amazon Payments account and send it back to you. I personally like to use Amazon Payments for it’s intended purpose (mostly because I’m not a fan of PayPal at all) and use it to send money to friends when I owe them after a meal or send it to contractors doing work around my house.
Bluebird + Vanilla Reloads Or Visa Gift Cards
Difficultly level: Moderate
Bluebird is a reload-able online checking account offered by American Express. You can use a variety of different prepaid cards to reload your account, up to a maximum of $5,000 per month. The most used method used to be purchasing Vanilla Reloads from CVS for a fee of $3.95 per $500, but CVS no longer allows credit card purchases. Now the most common method is to purchase Visa Gift cards, these have slightly larger fees (usually $6.95 for as little as $200) but you can purchase them from stores which have high category bonuses (such as grocery or office stores), where some people can earn 5% cash or points back – making them a profitable option.
Staples also regularly runs promotions where you receive a free $20 Visa gift card when you purchase $300 or more in Visa gift cards – further increasing the profitability.
Funding Bank Accounts
Difficultly level: Easy to Moderate
A lot of bank accounts allow you to fund the initial deposit with a credit card, this can be a maximum of anywhere from $100 to $1,000 depending on the bank. There are a few downsides to using this method:
- You can only do this for the initial opening deposit
- Most of these bank accounts have monthly fees, which can be waived but either require a direct deposit from your payroll to hit the account or a minimum balance
There is also one massive upside, some bank accounts also come with bonuses. Which means you can also earn up to $600 (a recent Chase checking bonus) by completing some simple requirements.
Reloadits + T-Mobile Prepaid Visa
Difficultly level: Extreme
T-Mobile launched a prepaid visa card which has similar features to that of the Bluebird card, the only difference is that fees are refunded if you reload more than $300 at a time. This fee waiver makes it extremely attractive for people wanting to engage in manufactured spending, the downside is that most locations that stock reloadit cards don’t allow credit card purchases. Safeway was a large grocery store that was allowing credit card purchases, but this seems to be no longer the case.
You’ll need to check locations in your area to see if you’re able to purchase the cards before getting in too deep with this option.
If you’re going to do manufactured spending, it’s important to always look for opportunities to double or even triple dip. This is where you earn rewards points with more than one loyalty program at once. Here are some of the most popular programs that allow you to earn points in addition to what you already earn with your rewards credit card.
We regularly post about new methods & tricks for existing methods. Make sure you keep an eye out on our manufactured spending category for new posts about this topic. We also suggest subscribing to this blogs RSS feed or joining the newsletter to be notified instantly.
If you know of any methods we should cover, why not contact us to let us know!