Developing My Strategy for Manufactured Spend

“Manufactured spend” is a term that describes spending money without really, well… spending money. At least not as much, since there are often fees attached. All those Vanilla Reloads and prepaid cards you hear some people talk can potentially be part of a strategy for manufactured spend. There are two closely related concepts, so allow me a moment to distinguish between all three:

Manufactured spend: Charging cash-like items to your card so that you can later convert them to cash and pay off your bill. Often used to accumulate miles and points cheaply.

Accelerated spend: Charging cash-like items or gift cards to your card so that you can clear a high spending requirement for a sign-up or other type of bonus. You still use these for normal purchases, but you buy them now (before the deadline) and spend them later.

Category conversion: I’m not sure this is the popular term, but it’s an accurate one. Frequent Miler’s original “One card to rulle them all” is an example. People would use an Ink Bold to buy Vanilla Reloads at an office supply store and earn a 5X category bonus. They could then spend the money at stores where a category bonus wouldn’t normally apply.

Accelerated Spend

I’m not a fan of accelerated spend. I don’t have a lot of free cash lying around, so I can’t really front several months of spending all at once. I usually don’t have such high spend requirements anyway that would require it. One of the few tricks that would work for most people is using Amazon Payments to transfer (and get back) $1,000 just after your next billing period begins. That way you have a free loan for about 6-8 weeks, allowing a month before the billing period is over and a few weeks before the payment is due. It’s safe if you don’t spend the free loan but risky if you do.

Category Conversion

I have mixed feelings on the category conversion. I have enough credit cards that almost all my spending fits one with a very good category bonus. Triple points on airfare and double points on groceries with my American Express Premier Rewards Gold card. Double points plus a 7% annual dividend on all travel and dining with Megan’s Chase Sapphire Preferred card. I don’t normally buy things at drugstores, and the ones in Seattle won’t sell me a Vanilla Reload with a credit card, so I ignore the drugstore bonuses on the Hilton HHonors credit cards.

One thought is I could buy gift cards for select merchants at grocery stores using my Premier Rewards Gold card to get 2X Membership Rewards points or at office supply stores using my Ink Bold to get 5X Ultimate Rewards points. Both are high value programs.

The problem is that I can’t really use them. Seattle has so few stores and restaurants that are part of national chains. The closest Olive Garden is 30 minutes away in Tukwila, and there’s better Italian food within walking distance. If I wanted to rely on prepaid Visa or MasterCards instead, most office supply stores no longer carry denominations higher than $200. But I can still get double points at grocery stores, which go as high as $500.

Manufactured Spend

The only strategy that really works for me is manufactured spend using the American Express Bluebird card for Walmart. You can load this with any debit card and then spend it, cash it out at an ATM, or write checks to your friends, landlord, or credit card issuer (to pay off the debt). Most prepaid cards function as debit cards, so it’s a simple loop:

Credit Card >> Prepaid/Debit Card >> Bluebird >> Cash or Check >> Credit Card

I’m starting out slow, but it’s possible to cycle several thousand dollars a month through this process and pay only a few dollars in fees. The biggest challenge for me is that I don’t earn any category bonuses because I can’t buy Vanilla Reloads and because it’s expensive to buy prepaid Visa and MasterCards, as I explained earlier.

Every time I fund my Bluebird it counts as plain vanilla spending, pun intended. Several banks offer prepaid cards, and while not all allow you to fund them with a credit card, those that do won’t count for any category bonuses. (Read more from Travel Summary about how the fees can add up.)

Listen up! This bluebird has something to say.

Listen up! This bluebird has something to say. Image credit: ibm4381.

The only effective way to do this is to fund the Bluebird at a physical Walmart (much smaller transactions are permitted online). And, surprise, the closest one is an hour roundtrip from my apartment. I would never do this without a category bonus, so why bother? Part of it is to accelerate spend. If I can take care of high minimum spend requirements without advancing any cash, then that works well for me.

But the more important reason is to qualify for annual bonuses when I spend a large amount on a card. The Hyatt Visa will give me credit for 2 stays toward elite status if I spend $20,000 in a single year, or a total of 5 stays if I spend $40,000. That is a lot for most people, and if I did spend it all, I would not choose this card just to get some Gold Passport points.

Five stays lets me spend more time working toward SPG Platinum status, without which I might have to pay for $500 in mattress runs. I aslo get 40,000 Gold Passport points, which is almost enough for two nights at any Hyatt. Valued at 1.8 cents each, they’re worth another $720. I can definitely ring up $40,000 in manufactured spend over the course of the year and incur less than $1,220 in fees.

Megan also has her British Airways Visa — $20,000 gets 50,000 bonus Avios points — and both of us have American Express Premier Rewards Gold cards — $30,000 gets 15,000 bonus Membership Rewards points. In the process we’ll earn another 25,000 Avios (1.25 points per dollar) and potentially a lot of Membership Rewards points. I’m vague on the latter number because although there are some bonus categories for groceries, travel, and drugstores, overdoing it can raise suspicions. You do NOT want to be subject to an American Express Financial Review, which is on par with being audited by the IRS.

I’m not suggesting I will go all out on these methods. The Hyatt strategy makes sense for me because I want my Diamond status and the local properties are too expensive for mattress runs. The Avios bonuses make sense because we live in Seattle and can get a lot of value from non-stop awards on Alaska Airlines. We probably won’t use the companion benefit, so Megan won’t shoot for $30,000 on her British Airways card. And you should always be cautious using any of these strategies with American Express, so a plan for my Premier Rewards Gold card may not materialize either.

But my ideas should get the gears turning in your head. Here are a some (not all) of the cards that might make sense for manufactured spending. I tried to limit the list to more reasonable thresholds and more valuable bonuses. Learn more how Amol will be using manufactured spend to earn elite status with Delta this year. Applications for some of the cards below can be found on my list of the Best Travel Credit Cards.

Chase British Airways Visa Signature

  • Spend $10,000 in first year >> Get 25,000 bonus points
  • Spend $20,000 in first year >> Get 25,000 bonus points
  • Spend $30,000 in first year >> Get free companion ticket for paid or award travel (plus taxes/fees)

Citi Hilton HHonors Reserve

  • Spend $10,000 any year >> Get 1 free weekend night
  • Spend $40,000 any year >> Get Diamond elite status

American Express Delta Reserve

  • Spend $30,000 any year >> Get 15,000 bonus miles + 15,000 MQMs
  • Spend $60,000 any year >> Get 15,000 bonus miles + 15,000 MQMs

American Express Platinum Delta SkyMiles

  • Spend $25,000 any year >> Get 10,000 bonus miles + 10,000 MQMs
  • Spend $50,000 any year >> Get 10,000 bonus miles + 10,000 MQMs

American Express Premier Rewards Gold

  • Spend $20,000 >> Get 15,000 bonus points

Chase MileagePlus Explorer

  • Spend $25,000 >> Get 10,000 bonus miles

Barclaycard Arrival World MasterCard

  • Actually, there’s no bonus for high spend. But because every point is worth 2.2 cents toward airfare, they are extremely valuable. Earn them cheaply, and I think that’s good enough in itself. 😉
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  • Ben

    Just a suggestion. I’m not a big fan of mattress runs or mileage runs for that matter. But maybe you could try to coordinate your loads at Walmart with a mattress run. Since you can only do $1k/day on the BB (I think I’m right but could be mistaken), do $1k one day then overnight for a mattress run then do $1k the next day. Might help you out. I’ve heard Seattle is a great place, but it seems like a miles/points wasteland from how you describe it 😀

    • Scottrick

      Hopefully I won’t have to do them at all. I think I can get through this year without, but it’s always the last few near the end of the year that I worry about. Having 5 stay credits would alleviate that concern.

      It’s still much cheaper to drive to Walmart than to book a trip to one in a different state. The airport is equally far and requires time to go through security, etc.

  • kyunbit

    AFAIK, the load at Walmart has to be with debit cards and not credit cards. So, how does it help on the spending on Hyatt cards?

    • Scottrick

      Because prepaid cards function as debit cards, and I can buy and load those using a credit card. I could have made that clearer.

      • Alex

        Can you give an example of what prepaid cards you are buying with a credit card that function as debit cards? Are those different than something like an Amex or Visa gift card?

        • Scottrick

          Several banks sell prepaid cards, and some of those can be loaded with credit cards.

  • C75K

    Your post assumes that it’s easy to manufacture spend. But finding VR is becoming more and more difficult let alone finding places that take credit cards for them.

    • Scottrick

      Actually, my post assumes you can’t find any VR because none of the places near me will sell them with a credit card.

      • C75K

        I take back what I said. I skimmed your post which I shouldn’t have as you are one of the few bloggers not excessively pimping credit cards and churning worthless posts.

        • Scottrick

          No harm done :) I skim, too. I purposely left out some detail about where I get my prepaid cards.

  • travel_abstract

    Manufactured Spend just sounds so shady.

    I like the amazon + bluebird strategy the best when combined with the bonus category spend.

    Some of the other strategy involves a lot more work and fees.

    • Scottrick

      Megan calls it “points laundering.” Would you prefer that? 😀

      • travel_abstract

        Yup. That sounds more appropriate. haha.

        It’s a fun sport.

      • Marcus

        “Points Laundering,” that’s great! Ha ha. Your post and Travel Summary’s article on prepaid cards have really made this whole business a lot clearer.

  • frequent churner

    Perhaps you need to investigate alternative reload products. I’m happily manufacturing $10k/mo at under 0.4 cents per dollar, and could probably rack up even $15k. There’s no blog posts out there explaining how to do this, with arrows and photos, let’s keep it that way.

    • nom de guerre

      Then why are you even mentioning it? Just shut up – you don’t need to prove how smart you are, do you? Floors me how many people feel the need to mention their “best” ideas on blogs. Scott clearly is a rank beginner at generating spend – and let’s keep it that way…

  • Di

    so you can buy bank prepaid card with credit card. Is it a max amount of the prepaid card that you can buy?

    • Scottrick

      Each bank has different rules. I recommend you work with one in your area. I left it vague (1) Because people complain when bloggers spell things out and ruin deals and (2) Because I think there’s enough information here for you to follow up and fill in that critical piece.

  • Teri

    Just confirmed with Amex that there is no additional 15,000 bonus points for $20,000 spend on Amex Premier Rewards Gold card

    • Scottrick

      The bonus is for spending $30,000 not $20,000. I’m having difficulty finding the exact reference to the number of bonus points on the American Express website, but I did find language describing the spend threshold:

      Quote — Premier Rewards Gold Card Spend Threshold
      To qualify, your total purchases charged to your Premier Rewards Gold Card must meet or exceed $30,000 from January 1 to December 31. Cash and cash equivalent transactions (including balance transfers, convenience checks, and cash advances), interest charges, fees, and purchase credit adjustments are not eligible for qualification. — End Quote

      Also, The Points Guy mentioned it in his post. This is a long-standing benefit. I suggest you call a different agent.

  • points_man

    please give us some hint which bank issues prepaid cards that can be loaded with credit card.

  • Russell

    A lower cost way of doing the prepaid GC thing and not setting off alarm bells with AMEX is to go to and follow the link at the very bottom of the page for gift cards. You can buy a $3k gift card for $9 shipping (no purchase fee if you use code PHONEGIFT3). Then use this card as you’re doing but with far lower fees and no need to worry AMEX about multiple $505.95 purchases. You can also personalize the AMEX gift card – with your own name! So it looks like a regular bank debit card and not a gift card as some stores want to see a name on the card that matches ID.

    One last tip is to go to the AMEX site via topcashback for 2.5% rebate (which will take at least 2 months but it helps lower the cost).

  • Vineet Bhagwat

    Maybe Bluebird has changed its rules since this post, or maybe I’m not following correctly…but the Bluebird website shows that you can only load up to $100 from a debit card per day and you pay a $2 fee per load. Is this accurate? I guess the fee part is not too high, but more annoying to do it in $100 daily increments.

    • Scottrick

      You can load more at a Walmart store.

  • Levi

    do you know if the $5,000 monthly limit is a calendar month? or 1 month from when i initiate deposits into the bluebird?

    • Scott Mackenzie

      It’s per calendar month.

  • Joe

    Are you still in Seattle? I’m having trouble finding places that will let me buy a prepaid/debit/gift card using a credit card. Do you know of places in Seattle that still let you do that? Thanks!

    • Scott Mackenzie

      I’ve always done it at QFC, but I haven’t tried recently.

      • Joe

        Cool, thanks! Any QFCs in particular around town? Or have you had luck at all of them?

        • Scott Mackenzie

          I’ve never had a problem buying gift cards. Some QFCs are more picky about accepting gift cards to purchase money orders, typically those in less nice neighborhoods (e.g., compare the QFC at Pike/Broadway to the one at Republican/Broadway).

          • Joe

            Makes sense, I’ve only tried supermarkets and drugstores in my neighborhood and I definitely live in a “less nice neighborhood”…I’ll try elsewhere. Thank you!