What is manufactured spending and should I do it?
Manufactured spending is a term that is used to describe methods that allow you to spend money with a credit card and then somehow get the money back as cash. Most of the current ways to do this involve buying gift cards such as visa and mastercard that can somehow be liquidated as cash.
While the methods people use to do this are legal, banks don’t really like their customers doing it. Criminals sometimes use manufactured spending to launder money-which is illegal, so if you’re doing a lot of manufactured spending the bank could flag it as suspicious activity. This is part of the reason these methods often get shut down. You can thank the criminals. This is why we can’t have nice things!
The best advice I can give if you’re wanting to do this is start out small and figure out what methods work for you.
Although we do not do this anymore, we used one of the methods when we first started getting multiple credit cards because we had lots of minimum spend to meet.
- There is an AMEX program called Bluebird that basically functions as a bank/checking account.
- At the time, we could load 1000$ a day or $5,000 per month. Then we could use the Bluebird bank account to pay any bill that you could pay with cash or debit, but that normally you would not be able to pay with a credit card.
- These are things such as your car note, mortgage, rent, student loans, and many others. You could even withdraw cash from their ATMs (which are pretty much nonexistent these days)
- We could buy a certain type of cash equivalent (vanilla reloads) at CVS with a credit card for $4 per $500. We could then load the vanilla reload onto the Bluebird account from home.
- This deal died when CVS stopped allowing Vanilla Reload purchases with credit cards.
- There was another way to load a Bluebird account, but this was more time consuming. You could buy a certain type of Visa or MasterCard gift card for $4-6 per $500 and as long as it has a pin, you could reload it at a Bluebird kiosk/ATM.
- Having a Visa or MasterCard gift card with a pin essentially makes it a debit card in certain situations. These kiosks are located in some Walmarts, but there are very few kiosks/ATMs left as most have been removed.
- Since most of these have been removed, you would most likely have to go to the money center at Walmart to reload your Bluebird account, but you have to hope the cashier does not notice it’s a prepaid gift card because they’re trained to not accept that as a form of payment. It’s just too risky and time consuming to do this these days.
- I’ve also read several reports that Bluebird is pretty unreliable now. Lots of people have issues loading it. Some people have even had their accounts frozen by American Express for review.
For all of these reasons, I do not recommend Bluebird! I just wanted to explain how it worked so that people can understand an example of manufactured spending.
Flyertalk has a thread with lots of good and updated information for beginners. If you’re really interested in learning about current MS techniques, check it out.
What manufactured spending techniques currently work?
This is tough to answer because it is always changing and frankly I just do not have time to keep up with it. If I come across any methods that I feel are worthwhile, I will post about them. Also, the best way to MS for you depends on where you live.
The only method I would maybe recommend is buying money orders with prepaid debit cards (AKA visa and mastercard giftcards) The $4-6 fee per $500 gift card adds up, but if you’re trying to spend a couple thousand to meet a minimum spend for a big sign up bonus, it could be worth it.
- For example, you need to spend 2k$ quick to get a 50,000 mile/point bonus
- You would need 4 $500 gift cards (since 500$ is the max per card).
- At 6$ per card, that’s 24$.
- $24 for 50,000 points is a very good deal.
This is highly location/merchant dependent but you can sometimes buy a money order with a gift card if it has a PIN, because it’s basically functioning as a debit card. Never ask if you can use a Visa or MC gift card, because you will likely be told no. Just set up your PIN and try it as a debit card. As stated above, I always recommend doing a test run with a smaller amount of money. If it works, go back and do a larger amount. You can then liquidate the money order for cash. Some places will even allow money orders to be purchased with credit cards. Just be warned that the bank may charge a cash advance fee.
The 2 main reasons we don’t do any type of manufactured spend anymore
1) Since we’ve built up a large stockpile of points over the years, we don’t apply for as many cards as we did when we first started, so we’re not trying to meet multiple minimum spends
2) there aren’t really any methods that are convenient enough to do on a regular basis. With that said, if you’re needing help meeting the minimum spend to get the sign-up bonus for some new credit cards, it may be worth it to look into some sort of manufactured spend.
This post is getting long so I’m going to end here and make a separate post for ways to meet minimum credit card spend, including paying bills that you normally would not be able to pay with a credit card. This kind of goes along with manufactured spend, but since you’re not trying to liquidate credit card spend for cash when doing this, I will save it for the next post.