If you are looking for the best credit card for rewards and benefits, you will be aware of the multitude of perks and credit offers from the major providers looking to secure your custom. But although there can be some incredibly valuable benefits on offer - you will often have to hit minimum spending requirements in order to access them. Manufactured spending can help you do this without negatively affecting your bank balance!
Below we will look at the answer to "What is Manufactured Spending?" and how you can start using it to access the best rewards on your credit card.
Capital One Venture X Rewards Credit Card
Best for Travel
75,000 Bonus Miles
75,000 Bonus Miles
What is Manufactured Spending?
You can use manufactured spending to access features and vouchers through your credit card which can be converted to cash. This cash can then be used to pay off your credit card bills! Manufactured/Manufacturing Spending (MS) can be achieved through a variety of different techniques.
Why Use Manufactured Spending on Your Credit Cards?
It may seem counterintuitive to increase your spending with credit card companies in order to save money, but it can be done. Here's how manufactured spending may be able to help you:
- If you need to meet a minimum spending requirement to access valuable signing-up bonuses.
- Want to quickly build up airline reward points to access cheaper flights.
- Are looking to access elite status on partner memberships.
- You want to take advantage of large spending category bonuses or big reward offers on your everyday spending.
How Does Manufactured Spending Work?
There are two key ways to begin manufacturing spending:
- Direct Spending - Discovering methods of using your credit card to pay off large bills which usually can't be charged to credit cards such as mortgages, taxes, and rent.
- Indirect Spending - Spending money on your credit card to access gift cards which can be exchanged for cash to pay off your credit card bills.
It can be difficult to discover ways to do this, as banks and credit card providers become more aware of loopholes and avenues which are being exploited to save users thousands of dollars each year.
However, there are still ways to approach manufactured spending in 2023 which we will outline below. (But before you start wildly spending as much as you can, there are some cautionary factors to keep in mind which we will address further down in the article.)
Direct Spending Methods
Direct Spending using MS techniques means using your credit card to pay larger amounts which usually can't be paid for by credit card. This can include loans and rent.
Use Your Credit Card to Fund Bank Accounts
Some credit card providers will let you use your credit card to fund a newly opened bank account with no direct fees. This is usually a one-time thing and the transfer amount can be limited to a couple of hundred dollars.
You can use this method to ramp up spending towards your card's minimum requirement and then use the money you have deposited in the new account to cover your credit card bills!
Make sure you read all the rules and regulations for your credit card and new bank account before taking any action. The rules and restrictions on fees and cash advances will vary according to the provider.
Use Credit Card Spending for Loan Money
Now, this clearly comes with certain risks, and you need to make sure that you are fully aware of how to reduce your risk exposure. But it can be an effective way to increase your credit card spending if you are looking to rack up points and access minimum spend bonuses.
Use Your Credit Card to Pay Bills Using Third-Party Services
Normally you can't pay your rent, taxes, and other bills with a credit card. But there are some services that allow you to work around this to increase your monthly credit spending at no extra (or little) cost.
Remember, all of these services will come with service fees attached. So be sure to factor these into your calculations and work out if the fees outweigh the benefits.
- Plastiq will let you pay bills with credit cards or gift cards.
- Rentler allows you to pay your rent via credit card.
Use Credit Cards to Pay Your Federal Taxes.
You can use some credit cards or a Prepaid visa and Mastercard gift card to pay your annual or quarterly taxes. This is a practical and straightforward manufacturing spending technique to boost your spending towards bonus levels for airline miles and other perks.
Use Venmo or PayPal Credit Card Payment to Pay Family and Friends
If you owe family and friends some money, use Venmo or PayPal to send it to them and reap the rewards by using your credit card as the payment source. (Always check fees before doing this and make sure you still end up in profit when you access your card rewards.)
In-Direct Spending Methods
Gift card purchases redeemable in grocery stores and other retailers can help you to build up your credit card spending while building up funds that can be liquidated or used to pay your everyday grocery bills.
However, as we will discuss below, liquidating gift cards can be a risky business. Rules can change quickly and stores such as Walmart can apply limits to how much you can spend using this method.
Use Gift Cards to Buy Money Orders
This technique has become much more difficult lately, as retailers crack down on this type of manufactured spending with cards such as Meta Bank. But if you are in a viable location and can find a retailer that allows this, you can use a credit card to buy a Visa or MasterCard gift card which can then be used as a debit card to purchase a money order or pay bills direct.
Buy Merchant Gift Cards and Sell Them On
This is another difficult but effective way to increase your credit card spending without wrecking your budget. You can use your credit card to buy gift cards from partners at a discount and then sell them to cover your costs or even make a little profit on top!
You need to be aware that some retailers won't allow purchases by gift cards for popular items and some credit card providers won't allow you to use the same offer on multiple cards. But if you are confident that you can resell gift cards and have found a portable method, this can be an effective way to approach MS.
Why You Should be Cautious With Manufacturing Spending
Credit card providers and partners can quickly adjust or end offers.
Investing thousands of dollars in gift cards that suddenly have a per-person limit or changes in how you can redeem them can leave you severely in the red. So, it's best to utilize several different techniques which means you aren't putting all your eggs in one basket.
Your Account May Be Shut Down
It is important to know that some manufactured spending methods are not condoned by banks, and your account may be penalized if you are caught engaging in them! In particular, the process of purchasing and liquidating gift cards with your credit card is a technique that could see your account being closed!
Credit card providers can also sometimes close accounts if they spot what they consider "risky" actions such as depositing substantial amounts to buy money orders.
Other Accounts You Hold May Be Affected
If your credit card is shut down due to suspicious card purchases, this can affect other accounts you hold with your providers such as savings accounts, retirement accounts, and other credit cards.
Some Methods Only Work for Certain Regions
Rules and regulations can vary from state to state, so you shouldn't assume that each and every method is applicable to you. Always do your research and try to connect with other manufactured spending locals who can share techniques.
For the reasons above it is important that you proceed with caution and don't put your financial stability at risk when trying to earn rewards.
Takeaway - Master the Art of Manufactured Spending: Maximizing Rewards
Manufacturing spending comes with both risks and rewards. The key to effectively utilizing this technique is to make sure you have a clear idea about the answer to "What is Manufactured Spending" and "How Can It Help Me?"
You need to set clear goals, know what your spending objectives are, and take the time to research the most viable options for you. Manufactured spending can be incredibly beneficial if you put in the work at the planning stages.
4 Ways to Maximize Your Points and Rewards on Your Credit Card
If you're like most people, you use your credit card for everything, from groceries to gas. It's a convenient way to pay and it can also help you rack up rewards points and cashback. But if you're not careful, you might not be getting the most out of your credit card rewards.