Intro to Manufactured Spending

I thought I would take a little time and explain the general concepts of manufactured spending for those of you who are new to the miles and points world, or maybe just new to this concept. So here is beginner’s guide to manufactured spending. This is intended to be a great starting point for those who are interested in learning how this is done, but is not intended to be a complete list of every potential method. Please understand that you should do your own research and ensure you are comfortable with anything you choose to proceed with. Also, you are welcome to post in the comments any methods you find success with or any questions you have.

Also, once you have read this page you can click the manufactured spending category, located on the left side of the site, to find any additional posts I may have made recently regarding manufactured spending opportunities.

What is Manufactured Spending?

Manufactured spending is the process of purchasing something that is the equivalent of cash such as gift cards, money orders, and other items with a miles/points credit card. The goal is to earn miles or points for these purchases and then quickly and easily liquidate the funds and use them to pay back the credit card. While it doesn’t necessarily have to be a cash equivalent, these are generally the easiest and most common methods.

Manufactured spending is an ongoing and ever-changing game. Many different methods come and go. The most well know example was purchasing $1 coins from the US Mint and then in turn depositing them into the bank to pay off your credit card. This deal has long since died but many new methods continue to rise up. The most prevalent in recent days are gift cards that can be liquidated via various methods.

What are the Most Common Methods?

This is by no means an all-inclusive list, but rather a small sampling of some common methods. This should be more than enough for you to get your feet wet and start doing your own experimentation to find many other methods that may work for you.

Vanilla Reloads: These were the poison of choice for many when you could buy them at stores that gave you a category bonus such as using a Chase Ink card at office supply stores to earn 5x points/dollar. These days have drastically diminished since Office Depot stopped carrying them and many stores (CVS) are no longer willing to accept a credit card for the purchase. But the opportunities are still there at other stores and with other cards for those who are willing to look hard enough.

Vanilla Reloads are fairly cheap at $3.95 each.

I will discuss how to liquidate the funds further down in the article.

Visa/MasterCard Gift Cards: The Vanilla days are slowly giving way to the Visa & MasterCard days as it becomes harder and harder to find Vanilla’s at stores that give a category bonus. Since April 1st 2013, most Visa & MasterCard GC’s now come with PIN functionality that allows for them to be liquidated via other methods besides purchasing things. Any purchase that requires a PIN based debit card can now (in most cases) be done with these gift cards.

Gift cards come with a purchase/activation fee ranging from $3.95-$6.95 and therefore you are getting the best value per point by purchasing the higher value cards and/or purchasing them at a store that earns some kind of category bonus on your credit card. I do not buy any cards that are less than $500 as a general rule of thumb and at a store that I earn more than 1x points/dollar. Higher value cards can be found online and you can possibly earn money buying them, such as one option discussed in this post: Get Paid $15 to Buy $1,000 Visa Gift Card Through Gift Card Mall!! Other temporary offers come around that allow you to buy the cards at no fee such as the one described in this post: Chase is Temporarily Waiving The Fee For Chase Visa Gift Cards Ordered Online! – No longer available

I will discuss how to liquidate the funds further down in the article.

Amazon Payments: Amazon Payments is one of the simplest options to manufacture spending. You can sign up for a personal account and then send money to any other individual with an Amazon Payments account via credit card up to $1,000 per month. You just need to sign up for an individual account. To send money you just login, select send money, and MAKE SURE you select goods/services rather than cash advance. This will post to your credit card as a purchase and will earn miles and points. Amazon will not charge you a fee if goods/services is selected.

Once the funds have been transferred into the other persons account, they can simply withdraw the funds via ACH directly into their account where the funds can be used to pay back the credit card. Make sure you only do this with someone you trust 100% not to walk away with your money!

For more info on Amazon Payments take a look at this post, “How to Use Amazon Payments to Earn Free Miles and Points“.

Buying and Reselling Items on Ebay/Amazon: I am not going to dive to deep into this, but you get the gist of it. I know many people who shop for highly discounted or clearanced items that they can turn around and sell either at a break-even price or even for a small profit and pocket the miles earned on the initial purchases. You can significantly increase your points earning by utilizing shopping portals such as the Ultimate Rewards Mall and others. Remember to research your purchase to ensure that you will actually be able to recover your money after buying and paying the seller fee’s on Ebay. I do not do this much myself and you should be aware of the inherent risks involved before trying this.

 How Do I Liquidate Vanilla/Visa/MasterCard Gift Cards?

 Bluebird from American Express: Bluebird is a prepaid Amex card that can be loaded via Vanilla Reloads or Visa/MasterCard PIN based debit cards. This can be done at any Wal-Mart with no fee and a daily limit of $1,000 and monthly max load of $5,000. Loading the card online costs $2 per load with lower limits and negates the points earned, therefore should not be done.

Bluebird in turn functions as a typical checking account with the ability to use free online bill pay to send payments to anyone at no cost including paying off credit cards, making mortgage or rent payments, etc.

Money Orders: Money orders can be purchased at Wal-Mart Money Centers for a minimal cost of $0.70 per MO and can be purchased for up to $1,000 each via a PIN enabled debit card such as the Visa gift cards. You can use money orders or Bluebird to pay bills that could otherwise not be paid via a credit card and earn miles/points in the process.

Cash back at Stores: This can be another potential way to liquidate the money on a Visa or MasterCard debit/gift card. This method can be hit and miss and depends on a variety of factors including the bank issuing the card, the store you are using it at, etc. You simply go to the store and purchase something, run the card as debit and enter your PIN, then select the amount of cash-back you want. I find this method too tedious and with the other methods available it seems unnecessary to me, but it can be beneficial to some.

Is the Cost of Manufacturing Spending Worth It?

This is the big question you have to look at before deciding whether or not you will utilize any particular method. First you have to determine how much a particular type of point is worth to you. This is highly personalized and depends on how you redeem your miles/points.

For example, lets say you want to take a trip to Sydney, Australia in 1st class. At the saver level with AA you can get these tickets for 125,000 miles round-trip. That same ticket if purchased with cash would price out between $13,000 and $14,000 depending on the time of year. But for a conservative estimate we will use $13,000.

$13,000/125,000 = $0.104 per point!.

But let’s say I took the same trip but I don’t like to burn more miles than I have to so I chose to fly economy at a price of 75,000 miles round-trip for a ticket that would price out about $2,500.

$2,500/ 75,000 miles = $0.033 per point

This is just one particular scenario and is not an actual valuation for AA miles in general. To me they are worth less per point than either of the above scenarios. Another consideration in determining the value of a miles/points currency to you is what you would actually pay for that ticket, and I’m assuming that most none of us would spend $13,000 on a 1st class ticket making that valuation way over-stated. Domestic award travel is going to have an even lower value per point so you are better off using your lowest valuation and going from there.

For me traveling in coach/economy all the time, I need to acquire my miles at a much lower price per point than the person only flying international 1st class in order to justify the spending and get a great deal. My personal rule of thumb is that it must be at a bare minimum of 75% less than I value that currency at before I will even consider it. So if I value a particular currency at $0.02 per point, I am not going to even consider a scheme to buy or manufacture the points unless the price comes out at less than $0.005 per point.

Also different miles/points currencies will have different values to you and therefore what might be a good price per point for one, may not be a great price per point on another.

Citi® / AAdvantage® Platinum Select® MasterCard®
Citi® /  AAdvantage® Platinum Select® MasterCard®

  • Earn 50,000 American Airlines AAdvantage® bonus miles and 2 Admirals Club® Passes after making $3,000 in purchases within the first 3 months of account opening*
  • Your first eligible checked bag is free*
  • Group 1 boarding and 25% savings on eligible in-flight purchases*
  • Earn a $100 American Airlines Flight Discount every cardmembership year with qualifying purchases and cardmembership renewal*
  • Double AAdvantage® miles on eligible American Airlines purchases*
  • Earn 10% of your redeemed AAdvantage® miles back – up to 10,000 AAdvantage® miles each calendar year*
  • Apply Now!

91 Responses to Intro to Manufactured Spending

  1. Pingback: Manufactured Spending for Miles and Points - La Viajera Morena

  2. corrie says:

    I am a snowbird/non-usa and have a US credit score.I own property and successfully APO’d and have lots of cc.Trying to MS but Bluebird wants a SSN or a state issued ID,or driver’s lic.Any suggestions? Or is it easier to buy Visa/Mc debits and buy money orders at Walmart.I am onto the Amazon program already!Thanks.

    • Jeremy - The Points Traveler says:

      No way around the SSN/ID issue that I am aware. Money orders are good but keep in mind it increases the cost of your MS $0.74 per mo. But if you get V/MC for little to nothing you will still come out ahead

  3. corrie says:

    So ANY V/MC that I can PIN enable will work at Walmart to buy a money order? And I can pay with a CC for the MC/V at any retail outlet? Thanks.I want to get this right!

  4. Trevi says:

    Your mile value calculation of an economy award ticket is wrong. It should be $0.033, lower than the mile value of a first class award ticket redemption

    • Jeremy - The Points Traveler says:

      Looks like I misplaced the decimal, thank you for pointing that out! $0.33/mile would be the greatest value ever! Post has been corrected.

  5. Only u guys in the US can do this, its different here in Canada:)

  6. Jeremy we are going to Europe this summer and most stores and restaurants take cash, how can I load a card with cash and then withdraw against at an ATM?

  7. Bob says:

    Jeremy – this is perhaps a really stupid question but I am going to ask anyway.

    Regarding AP use for manufactured spending:
    1. Say I pay my wife through AP using a mile/point-generating credit card for $1000, I would then generate 1000 miles/points.

    2. My wife as the recipient of that same $1000, would then send a payment to a relative.

    3. My relative would then send payment of that same $1000 back to me in cash.

    4. I get $1000, but I still would need to pay the credit card.

    So for credit card with bonus that kicks in after $10K spend, ultimately I still have to still spend $10K, correct?

    • Jeremy - The Points Traveler says:

      Some feel it is safer to send payment from person A>B>C like you suggest. I have been simply sending payment using my credit card from self to wife and withdrawing the funds. Then I send payment using her credit card to me and withdraw the funds. Thus 2 payments spent = $2k in purchases. Do what you are comfortable with but I have done it this way for a couple years with no worries of getting acct closed by amazon. These would count as regular purchases towards your bonus spending requirements on your card.

      • Bob says:

        OK – but at the end, either I or my wife would still have to pay the credit card company $1000, correct? Because that is the original amount that I sent.

        I am just trying to make sure that I understand. With your example above:
        1. Say I have $1000 in my bank account
        2. I send $1000 credit card payment to my wife’s account.
        3. She withdraws $1000 in cash, assuming she deposits the $ in her bank account, she has an extra $1000.
        4. She makes AP payment to my account using her credit card to me.
        5. I withdraw the funds that she sent me, so I get my $1000 back.
        6. At the end however – my wife would still owe her credit card company $1000, and I would still owe my credit card company $1000, correct?
        7. So at the end of the day, whatever is specified on the minimum spend requirement, that is still the $ that we have to spend out of our pocket.

        Am I getting this right? What I still don’t see is where is the manufactured aspect of this. If I sign up for a card with 100K miles bonus and $10k spending requirements, at the end I still have to spend $10K out of my pocket, or am I not understanding this correctly?

        Also with your example above – if your wife sends you $1K, and you sent her $1K before, how can you have $2K purchase? I thought the cards that you and your wife use have to be different and AP does not allow same card number used on 2 different accounts?

        • Jeremy - The Points Traveler says:

          I’ll send an email with a better explanation :)

        • Vikas says:

          You spent $1000 out of $10,000 requirement of the credit card without doing anything. Most of credit cards have 3K requiremnt in 3 months, so with 1K every month, you have met 3K requirement without spending anything!

        • Jay says:

          Sorry to be blunt but if you are this terrible at Math, other people/businesses are probably taking advantage of you. Please do not even venture to a car dealership alone. I recommend taking Math courses again at a local Community College.

          • Tony says:

            Sorry to be blunt, but if you are this terrible at grammar, other people are probably not going to understand you. Please, do not even venture to write such a scathing critique alone. I recommend taking an English course again at a local community college.

        • Ian says:

          You’re thinking you’re going to be charged twice (once when you send the money, and once on your credit card bill) when in reality you will be charged on your credit card bill and you will have received the extra $1,000 from your wife so you will end up with the same amount you started with. But as previously mention the Amazon option won’t work any more.

  8. Bob says:

    BTW – I’ve been utilizing VR/BB combo to meet the minimum spend since I can get mortgage paid using this method. Still don’t get the AP method …. I think I’m just slow ….. 😛

    • Jeremy - The Points Traveler says:

      check your email. I tried to send a more detailed explanation. Hope it makes sense. Let me know!

    • Jay says:

      No worries. Most people in USA are poor at Math unless they had a engineering, physics, math, finance, computer science or accounting major in college. The high school Math standard in USA is amongst the lowest for a developed country. In other countries, a student in 10th grade can understand what Jeremy is stating here.

  9. mark says:

    Is Amazon Payments $1,000 per calendar month or rolling 30 days? If calendar month, you can do $1,000 on Feb 28 and $1,000 on March 1? Thanks.

  10. Don says:

    Can I make a payment on my Chase Southwest RR card with my Suntrust Debit card (to earn 1:1 miles)?

    • Jeremy - The Points Traveler says:

      Sorry for the late response. Not directly, however you can use your Suntrust Delta card to buy money orders at Walmart for less than $1 and send that in as payment on your Southwest card.

      • becky says:

        If I have a us airways mastercard cc & marriott visa cc I have a mortgage of 2600 a month is there a way I can get points? Can I purchase money orders?

  11. Pingback: Fabrizierte Ausgaben / Manufactured Spending

  12. Don says:

    Is there a way to earn/rewards/points/miles when paying my credit card bills and mortgage?

  13. Don says:

    Can you email me privately?

    • Jeremy - The Points Traveler says:

      I just emailed you

      • AMJ says:

        Hi, can you explain how this can be done ie., how to earn points when paying cc bills. Is it using the methods you explained above, such that it becomes a rolling balance?

        • You are earning the points for whatever you purchase – buying cash-equivalents such as visa gift cards will earn then points and then you use the above processes to get the cash from those cash-equivelants to use to pay the credit cards back off. It can continue on and on in a circle. If you are just starting out, see the Amazon Payments method for an easier method to get your feet wet with.

  14. Will says:

    Which is safer for liquidating bluebird/vanilla between spouse? Transfer money online or writing pre-authorized check? Also how much is safe amount? Thanks

    • Jeremy - The Points Traveler says:

      I have the checks, but honestly haven’t written one yet. I almost always just send the payments straight to my credit cards but have withdrawn to bank account as well with no issues but YMMV. Bill pay sent $3,000 to the wrong account 2 weeks ago but other than that it always worked fine.. I can’t imagine either one would be safer than the other between transfers or writing checks.

  15. Don says:

    Can you call me or can I call you? Donnie Flowers 502-235-0920

  16. Don says:

    Jeremy, do you have a private email?

  17. Don says:

    Can you call me or can I call you?
    Don 502-***-****

  18. Hal says:

    Can you send me the detailed description of using AP as well, Jeremy? Thanks!

  19. Messi Angulo says:

    My rule of thumb is that it must be at a bare minimum of 75% less than I value that currency at before I will even consider it. So if I value a particular currency at $0.02 per point, I am not going to even consider a scheme to buy or manufacture the points unless the price comes out at less than $0.005 per point.

    how do you come to this conclusion and can you describe this a little bit further

    • Jeremy - The Points Traveler says:

      Good question. I did not come up with this by any particular formula. When you get into manufactured spending, you have to draw a line for yourself somewhere. For some people to be able to save 25% or 50% is an awesome deal because they would still be buying the plane tickets even if they didn’t have frequent flyer miles so they are still saving a lot of money. For me, if it wasn’t for loyalty programs/credit card points my family would not be taking these trips, we would be taking closer more affordable road trips instead. So I decided a minimum savings of 75% is where I would draw the line so that my costs wouldn’t be more than they were prior to collecting miles and points. Everyone has to set there own limits and these are mine. For you it might be different. In fact, I rarely if ever actually pay that much for points.

  20. Pingback: how do you do it? | playthepoints

  21. Some other methods:

    Fund bank accounts with the initial deposit using a credit card
    T-mobile and reloadit cards
    Amex withdrawals at target

  22. Pingback: Earn 3 Delta SkyMiles Per Dollar Spent On American Express Gift Cards The Points Traveler

  23. Pingback: Manufactured Spending – a Rookie’s Tale | More Like a Moat

  24. Beth says:

    Jeremy, can you please send me the description of using AP as well? Thanks so much!

  25. Pingback: AWESOME DEAL - 3% Cashback on American Express Gift Cards And No Purchase Fees! The Points Traveler

  26. Pingback: Up to 100k miles Citi Executive AAdvantage offers [Read the wiki before posting] - Page 330 - FlyerTalk Forums

  27. Mel says:

    On the Bluebird, why do you have to buy a gift card to reload your bluebird. Can you just use your creditcard directly to bluebird and then cashout?

    • You cannot load Bluebird directly with a credit card, thus the need to buy gift cards (as long as you get them cheap enough) If you have a points earning debit card such as the suntrust delta card you can use that directly to load and earn miles

  28. Pingback: 3723Archives The Points Traveler

  29. Pingback: Personal Finance | Richard X. Thripp's Website

  30. Justin says:

    Are these MS tips still relevant? Can I still go to Staples or Office Depot and buy a VR card and go load it to BB to pay my mortgage, etc.?

    I dont want to go through the hassle of all that if it isn’t still a legal and useful option =) and I certainly dont want to get stuck with a VR card that I cant even unload for 500 bucks!

    Also, is AP still a safe option for a brand new credit card? I have the Chase Preferred and havent used it yet. Will it flag me if my first purchase is a 1k transfer to my own bank account?

  31. You can’t buy them at Staples or OD as mentioned in the post.

    I would have no concerns about using a new Chase card w/ AP. I’ve used AP many times to meet spending requirements right off the bat w/ no problems. You should be fine.

  32. Justin says:

    Can you PM me with some other ways you meet your spending limits and other points strategies that are still relevant? I have been browsing this site and other blogs as well as FT and it seems that most of the information is either outdated, not currently relevant, or is not being posted because the flyer community is nervous their methods will be used by too many and therefore be shut down. Any insider tips you can provide to help me get a my miles climbing faster would be GREAT. I currently have 156k UR points, but that doesnt buy much for a family of 4 =(

    • I buy Amex cards first going through shopping portals to earn 2-3% back and then use the Amex cards to buy VGC’s at my local Simon mall. You can check http://www.simon.com/search and see if you have one in your area. They sell up to a $500 card and only charge 2.95 fee. I do a ton this way and end up still making a small profit plus points. You can also use the Amex cards to buy VGC’s from giftcardmall but fees are hefty which is why you have to do the Amex cards first so the cashback covers the cost. Staples sells VGC’s but only up to $200 making them not worth the cost to most people (except when they have a rebate deal). A lot of it can simply be finding deals by trying locations and see if they take cards.

  33. Mark Nelson Jr says:

    I’m with Justin, Where can I get pin enabled visa/mc giftcards with a cc. I’ve spent countless hours on countless blogs over the past few months and everything I read seems to be outdated.

    • Justin says:

      Mark, shoot me an email at jhunniecutt@yahoo.com and I’ll give you some tips I found that still work.

    • I buy Amex cards first going through shopping portals to earn 2-3% back and then use the Amex cards to buy VGC’s at my local Simon mall. You can check http://www.simon.com/search and see if you have one in your area. They sell up to a $500 card and only charge 2.95 fee. I do a ton this way and end up still making a small profit plus points. You can also use the Amex cards to buy VGC’s from giftcardmall but fees are hefty which is why you have to do the Amex cards first so the cashback covers the cost. Staples sells VGC’s but only up to $200 making them not worth the cost to most people (except when they have a rebate deal). A lot of it can simply be finding deals by trying locations and see if they take cards.

  34. Pingback: 3% Cash Back On American Express Gift Cards Via Topcashback - The Points Traveler

  35. Pingback: Explaining Manufactured Spending and Why Its Irresponsible

  36. Pingback: Why I Don't Churn Credit Cards (And Why I Never Will) - Single Moms Income

  37. Pingback: 1p – Intro to Manufactured Spending – Offeryour.com Blog

  38. Pingback: How I Earned 8.68 In Cash Back Rewards

  39. Pingback: Manufactured Spending for Travel Point Accrual - McCool Travel

  40. Ljk says:

    Can this all work with the American Express SERVE card?

    (I got a serve card then applied for a blue bird card and AMEX said I can’t register the Blue bird card because I’m already a serve card holder).

  41. Ljk says:

    Ok,
    But loading my Serv card from my cc doesn’t ean me points does it?

    So I have to use my reg amex to purchase a Visa gc. Then use that visa gc to load the serve card? Do I do this online? Once I load the visa gc onto my serve card I can use serve bill pay to have a check sent to ex.pay my rent. Use my cash(that i normally would have used to pay rent) to pay the Amex.

    How do I make sure I don’t get flagged or get my reg amex card shut down? My amex is my primary card right now. And I need it.

    I’m not in a position to open new cards right now but I’d still like to try and earn as many Amex points as I can.

    Also, when I am able to open new cards….how often should we open and close cards? I imagine this not only hurts our credit a little but companies would be against repetitive opening and closing of cards for perks.

  42. thelmascudi says:

    need a valid purchase w/ card that will load to serve. everywhere I look in tucson has gone cash only. I don’t think my wifi, even though password protected, is secure enough, let alone net connections secure enough to buy on line. all help appreciated. thank you.

    • It is getting harder. If just trying to hit a small minimum spend then try staples or office max/office depot. If you are looking for something ongoing source of cards you might be better off considering switching from serve to redbird which you can load straight from credit card at Target. Also if you frequent Tempe or Chandler there are a couple Simon malls there that sell $500 visas for 3.95 which may be worth it depending on what card you use.

  43. thelmascudi says:

    well, tempe and/or chandler are a two to three hour drive. the closest office depot wants cash for everything. Will investigate redbird. thanks,

  44. Pingback: How I Sent My Parents to Las Vegas for Free Using Points and Airline Miles | Matthew Paulson

  45. theprophet says:

    get $1000 free in credit card processing from square which will give you 1000 miles for free! you can then get your own link and get 1K per person!!! that’s technically unlimited amount of free cc processing! https://squareup.com/i/5475F087

  46. Jay says:

    I dont like driving store to store. Im looking for in-home, living-room strategies, such as Square.

  47. Khan says:

    Guys how about if I only want to earn cash back? Will this scenario still apply? Can I purchase a Vanilla card or Amex Bluebird using my chase freedom and than somehow use the vanilla/Bluebird to pay off the freedom card?

    Thanks

Let me know what you are thinking!