For those of you that are new to the miles game, the idea of manufactured spending may seem foreign. For those that have been in the game for awhile, this is an essential method in meeting spending requirements, fulfilling bonus spending categories and the key to building a ton of points consistently. After awhile, it’s almost as if the points just start to grow on trees.
Since several of my readers are new to the game, I’m going to make this a beginners guide to manufactured spending. Several of you reached out to me after my post on spending $5000 at CVS in one shot with questions.
First off, what is manufactured spending? It’s an ever changing method of purchasing something with your miles earning credit card, solely for the purpose of gaining points, then liquidating whatever you purchased for cash. You would then use that cash to pay off your credit card, resulting in a net balance of 0, but gaining as many points as you had spent on your credit card.
“Wow, that seems like a lot of work. Is it even worth it?” Let’s go over one example that made this insanely popular because of how many points people manufactured. People were able to attain millions of points through buying dollar coins from the US Mint with their credit card, and then lugging the coins to the bank, and depositing them back into their account. They would then simply pay off their credit card from that same bank account.
This method became so lucrative it hit several news outlets. Daily finance reported how Brad from bradsdeals earned 4 million miles doing this. The Wall Street Journal reported on it in 2009, and Yahoo Finance wrote about it in 2011. This was becoming a big deal as people were racking up more miles than they could imagine for free. Before you go and try the same thing, the US Mint put an end to this, but this is a great example of how lucrative manufactured spending can be.
Sadly, I did not earn 1 point from the US Mint since I got into this afterwards.
Nowadays, manufactured spending isn’t as easy since more and more frequent flyer junkies enter the game, but opportunities will always be there. Things like the mint will come and go, but the underlying principle of buying/liquidating to gain miles will be here for a long time. You just have to seize the opportunity when it’s in front of you, and not wait until the deal is over.
Now onto some good news you could use. I’m going to share my two “golden eggs” to manufactured spending. They aren’t a huge secret, but if you’re just getting into the game, this is going to be eye opening.
Earlier in the year, during my March Madness AOR, I signed up for 4 cards and promised to pay $15,000 in the next 3 months if I wanted all those bonus points. I don’t know about you, but that’s a lot to promise to pay for me, and if it weren’t for manufactured spending, I’d have some really cool new toys, but be in serious credit card debt. These are my main two methods I used to cover that $15k in just over 1 month.
1. Amazon Payments – this is by far the best current method in manufactured spending. It costs you nothing, and you can gain up to $1000/month in spending. This account is directly linked to your regular Amazon account.
Step 1: go to payments.amazon.com here, & create the payment account
Step 2: verify your bank information so that they lift the limit, and you’ll be able to send $1000 to someone you know via credit card for “goods & services”. This won’t show up as a cash advance, so it will count towards your normal spending, and earn you miles. If you have a significant other, make them create an account too. DO IT NOW!
No, seriously, do this immediately. There are no fees. I do NOT suggest sending from A – B, then directly back from B – A. Send one way, then have B give cash back to A. If you have a 3rd person you can trust, then I would say it’s ok to send it in a circle. (A-B, B-C, C-A) and everyone will have their money back and earn 1000 points.
Even if you don’t care to sign up for new credit cards, you should still do this. Most of you either have an AMEX membership rewards card or Chase Sapphire card. If you do this for a year, its 12,000 free points. At the very least, just as statement credit or gift cards, that’s $120 free for a few minutes of your time. If you’re too lazy to even do this, you might as well just stop reading my blog.
Rules for Amazon Payments are:
1. This can be done once per calendar month
2. The max sending/receiving per month is $1000
3. Must be sent as “goods/services”
4. Make sure your Amazon Payments account doesn’t have funds in the account when sending, or else it won’t use your credit card as the payment method
You can follow the Flyertalk thread on Amazon Payments here. People will post the most up to date information on the latest posts.
2. AMEX Bluebird & Vanilla Reload Cards – this method is a little more involved & will cost you a small fee, but can get you up to $5000 in manufactured spending per month. I’ve written about my experience with it here.
Step 1: open up an AMEX bluebird account here. It’s free, won’t check your credit, and will take about a week to get to you.
Step 2: find a CVS around you that has Vanilla reload cards. (pictured below). You can buy them with a load of up to $500 per card. Each card carries a $3.95 fee.
Step 3: go to the Vanilla Reload site here. you’ll be prompted to scratch the back of the Vanilla reload card to enter the PIN, then prompted to enter your AMEX Bluebird card you want to load it to.
Step 4: go back to the AMEX bluebird site. Your account will now have $500 loaded (per card). You can write yourself a check, or go to Bill Pay, and pay for your credit card after setting them up as a payee. For me, this has worked for Citi, AMEX, and Chase without a problem.
Rules for AMEX/Bluebird are:
1. $5000 per calendar month load per person on Bluebird
2. Finding a CVS that will allow you to purchase via credit card will be tough (unless you’re in the middle of no where). In generally in large cities like New York and San Fran where people are savvy, they’re going to be scarce.
3. If you find one, they may limit you to $1000/day. They usually check ID after the $1000 limit so if you don’t want them to check yours, buy 1 at a time. The register will probably accept $5000 at one time, but the clerk may not want to try it. It worked for me though. I recommend only buying $1k at a time as not to draw too much attention.
You can follow the Flyertalk thread on purchasing Vanilla Reloads at CVS here. People will post the most up to date information on the latest posts.
In summary, following these two methods will net you 6000 points every month. If you have 2 people following these methods or if you yourself are managing this for yourself and someone else, that becomes $12,000/month in manufactured spending.
Now, do you still feel like meeting minimum spending requirements is a difficult task?