Manufactured spending is the technique of maximizing credit card spend to earn rewards while minimizing the adverse affect on your bank account balance.
There are many reasons that you may want to increase credit card spend. You may need to meet spend requirements on new credit cards in order to earn big welcome offers. Or, perhaps you want to earn high level elite status or other big spend bonuses, as Greg does with Delta. Or, perhaps you simply want to earn extra rewards using cards with big category bonuses, or big rewards for everyday spend.
The key to increasing credit card spend is to find techniques that either let you use a credit card to pay for expenses that don’t normally allow credit card charges (e.g. mortgage, rent, taxes, contractor payments, …) or to find ways to spend money with your credit card and get the money back as cash. The latter is often referred to as “manufactured spending” or “MS” for short.
Opportunities to manufacture spend at very low cost and/or effort pop up now and then, but those who find them are likely to only share them in confidence with those they trust for fear of those techniques dying before their time. Even the broad techniques discussed here are very regionally-dependent, something that we’ll be repeating ad nauseum in the rest of this guide.
As a result, making local connections can be very beneficial to learning how to MS where you live. Attending conferences like Frequent Traveler University, the Chicago Seminars, or our FM to Go sessions can help to meet people and learn about applicable MS opportunities before they “die.” Our Frequent Miler Insiders Facebook group offers yet another means to connect and stay up to date with what works and what does not work in various regions and offers a way to stay attuned to the latest when changes develop.
When you do find viable options for manufacturing spend, it can be very rewarding. A newfound ability to greatly increase spend and earn more rewards can be exciting and it can be tempting to scale up rapidly to meet your rewards goals. But it is important to proceed with caution.
On this page the Frequent Miler team keeps track of what works and what does not, as well as trying to summarize the risks and benefits of various methods. We’ve broken these down into three main categories: direct methods to increase credit card spend, using gift cards and reselling merchandise.
Frequently Asked Questions (FAQ)
Is manufactured spending illegal?
Manufactured spending techniques are legal, but the same techniques can be used by criminals to launder money or to convert stolen credit card numbers into cash. This has lead to some businesses trying to stop allowing those techniques to work. One way of looking at it is that criminals indirectly steal our points by killing easy manufactured spending options. Sidebar: While MS is legal, structuring is illegal. Read more here.
Do credit card companies frown on manufactured spending?
It depends. Some of the techniques listed below are not condoned by banks. Specifically, the process of using credit cards to purchase and then liquidate gift cards is something some banks don’t like to see. Some will even shut down your accounts if a human sees that this is happening.
The same is true of large money order deposits: some banks will close your accounts for what they deem to be risky activity (i.e. depositing lots of money orders). Shut downs like these can often extend to all of your accounts with that institution (which can include checking/savings, credit cards, retirement accounts, etc) and sometimes even to others in your immediate orbit like authorized users on your accounts.
We at Frequent Miler provide information about these techniques for completeness, but we do not explicitly condone or endorse them.
Do all manufactured spending techniques work all the time?
In many cases, the manufactured spending landscape can change very quickly. Those participating in risky techniques need to understand this and be prepared to utilize multiple methods. You just never know when one door will close, as was the case when many Walmart stores and some grocery chains began severely limiting the use of prepaid gift cards for money order purchases. Imagine buying thousands of dollars in gift cards only to find that you have no way to liquidate them.
Another reason that manufactured spending options die is that the businesses involved realize that they’re losing money. For example, Citibank used to allow funding new bank accounts up to $100,000 by credit card, for free. In those cases, Citi was absorbing the credit card transaction fees. Suppose they had to pay 1.5% in fees: When a person used a credit card to deposit $100,000, Citi was on the hook for $1,500 in fees. It’s no wonder they stopped allowing this!
Of course, while some techniques inevitably die out, new opportunities also pop up from time to time. Understanding what works or has worked in the past can help identify new opportunities. Many techniques are also highly regional. Making connections with others in your local area can help you identify what works where you live.
Direct methods to increase credit card spend
This section lists opportunities to use your credit card to pay for things that can’t usually be paid by credit card. This is in contrast to indirect methods which require using your credit card to buy gift cards or merchandise that can then be turned into cash, used to pay bills or sold. Direct spend techniques tend to be easier than using gift card cards, but also tend to be more limited in scope and/or more expensive.
Fund bank accounts with a credit card
- Read this Doctor of Credit post for details showing which banks allow this and how to avoid cash advance fees.
- A great option is to earn a bank account bonus at the same time. See this Doctor of credit post for current bank account bonuses and see this post for examples in action.
Loan money
Loaning money via credit card can be risky, but it can also be a very easy way to increase credit card spend if you know how to reduce your risk exposure. At the time of this writing, there are two major options for loaning money via credit card: Kickfurther and Kiva.
Kickfurther
Kiva
Online Sports Books
Over the last few years, online sportsbooks have gradually spread across the US, creating direct spend opportunities for those in states where it’s legal (or even adjacent to states where it’s legal). Some sportsbooks allow funding via Visa/MC gift cards and the constant stream of promotions meant to engage users can create some potentially interesting hedging opportunities. If this seems easy and straightforward, it isn’t. It requires research, organization and more than a little self-control.
- Cost: Varies from significant profit to your life savings
- Which gift cards work and which gambling outlets accept them varies...and isn't constant.
- Most sites will require that you play through any amount deposited before withdrawing money
- There is a real risk of losing money
- There is also a risk of shut down from the sportsbook itself and, with it, the risk of funds being locked up or potentially forfeited if you can not prove that they are your funds.
- Laws vary by state, so understand what they are in the state you're playing in
Health Assessment: Healthy, but there’s a lot of risk here. It’s important to do plenty of research before diving off.
Pay bills with a credit card
A number of services let you use a credit card to pay bills that can’t usually be paid by credit card. Of course, they charge fees for this service. It’s important to make sure that the rewards earned from your credit card outweigh these fees, otherwise these services aren’t worth bothering with.
Melio
Melio is a service intended to simplify paying business bills. No matter how vendors want to get paid (ACH or check), Melio users can choose how they want to pay (i.e. ACH for free, or credit card 2.9% fee). It can make sense to pay the 2.9% fee if you want to increase spend in order to earn a large welcome bonus or to earn a big-spend bonus (for example, some credit cards offer free hotel nights or elite status with big spend). Unfortunately, you cannot pay personal bills with Melio.
- Standard credit card fee: 2.9%
- Standard debit card fee: 2.9%.
- Bank-to-bank transfer: free
- No subscription fees
- Melio accepts Visa, MasterCard, and Discover. It does accept American Express, but for a more limited set of expenses.
- Melio cannot be used to pay friends and family. It is intended only for paying business bills.
- Prepaid cards are not accepted.
- Credit card payments count as purchases, not as cash advances.
- Melio does not submit tax forms on behalf of customers or payees
Health Assessment: Healthy and easy.
PayPal Bill Pay
PayPayl Bill Pay is effectively PayPal’s version of Plastiq or Melio, but more intentionally oriented towards consumers and, usually, with no fee. It’s a bill pay service via the PayPal platform that allows you pay utilities, insurance, phone bills and much more directly from your account with all of normal PayPal payment methods. Vendors found in the Paypal Bill Pay system will be paid via ACH bank payment. In some states, PayPal Bill Pay can be used to pay property taxes in some states as well, without having to pay the normal credit card fee.
- Standard credit card fee: none (on most payments)
- Standard debit card fee: none (on most payments)
- PayPal Bill Pay accepts Visa, MasterCard, American Express and Discover.
- PayPal Bill Pay cannot be used to pay friends and family. It is intended only for paying bills.
- PayPal Bill Pay cannot be used by checking out through a website via the PayPal option. It's through the app or website only.
- Credit card payments count as purchases, not as cash advances.
- There are some reports of Paypal switching the payment method. Make sure to double-check.
- PayPal Bill Pay will use your PayPal balance (if any) first, so it's best to have it at zero before processing a payment.
- It's helpful to start out with a small test charge when first setting up a payee.
- PayPal Bill Pay does not submit tax forms on behalf of customers or payees.
Health Assessment: Healthy, but limited.
Plastiq
Plastiq is an online bill payment service that lets you pay many bills by credit card. The catch? A 2.9% fee is charged to the payer (not the payee) for each payment. It can make sense to pay the fee if you want to increase spend in order to earn a large welcome bonus or to earn a big-spend bonus (for example, some credit cards offer free hotel nights or elite status with big spend). Plastiq is not limited to billers in their database and can theoretically be used to pay nearly any business, although in practice they can be very picky about the verifying the legitimacy of business that aren’t in their database.
- Standard credit card fee: 2.9%
- Standard debit card fee: 2.9%.
- Delivery fee per ACH/EFT/electronic payment: $.99
- Delivery fee per check payment: $1.49
- Plastiq accepts Amex, Visa, MasterCard, and Discover.
- Plastiq cannot be used to pay friends and family. It is intended only for paying bills.
- Prepaid cards are accepted, but are officially limited to either $5,000 or $10,000 total per month (depending on the individual account).
- Credit card payments count as purchases, not as cash advances. Plastiq will prevent any payments that could possibly incur cash advance treatment. If Plastiq thinks that there’s a chance of a payment being treated as a cash advance, Plastiq won’t let you finalize that payment.
- Plastiq sometimes requires proof that you are paying a legitimate expense. They may ask you to upload an invoice, for example.
- Plastiq does not submit tax forms on behalf of customers or payees
- Some people have asked if they can have checks that are addressed to others sent to their own house so that they can submit the check with a payment stub or so they can hand the check to the payee directly. Plastiq does not allow this.
Health Assessment: It’s not what it once was, as it no longer accepts American Express and now charges the same fee for debit and credit cards. Still, it can be a very useful tool in some circumstances.
Pay federal taxes with a credit card
You can use a credit card or gift cards to pay federal taxes. If you don’t mind giving the US government a loan, you can use a credit card or Visa/MasterCard gift card to pay your year-end and/or quarterly estimated taxes. Over-payments, if any, will be refunded after you file your year-end taxes.
- Standard credit card fee: 1.85-1.98%
- Standard debit card fee: flat fee of $2.20-$2.50.
- Accepts Visa, MasterCard, American Express and Discover.
- The IRS maintains a list of companies that accept credit and debit cards towards tax payments (Found here).
- You can make up to 2 payments per tax period per tax payment processor.
- If filing jointly, you can make up to 2 payments per tax period per tax payment processor per name on the tax return (so doubles total number of possible payments).
- Some tax payment websites support mobile wallet payments such as Samsung Pay or Google Pay, as well as PayPal.
- You don’t need to send in a voucher if you pay by card.
- Card processing fees are tax deductible for business taxes.
- You must contact the card processor to cancel a card payment.
- IRS will refund any overpayment unless you owe a debt on your account. [Editor’s caution: In recent years the IRS has sometimes been very slow to do so]
- Your card statement will list your payment as “United States Treasury Tax Payment” and your fee as “Tax Payment Convenience Fee” or something similar.
- When you pay while filing your taxes through online software, different card fees apply.
Health Assessment: Healthy and easy.
Pay friends
You can use a credit card to pay money owed to friends, for a fee. PayPal and Venmo allow individuals to pay friends via credit card with approximately 3% in fees. The Cash App does as well, but seems to code as a cash advance inconsistently for all issuers, so isn’t a recommended option.
- Venmo Fee: 3%
- PayPal Fee: 3.4% + $.30
- Currently, American Express and Discover are the only issuers that code Venmo as a purchase. All other banks treat it as a cash advance.
- Venmo transactions via Amex do not earn rewards.
- Venmo users can have up to 4 active or deleted cards in their account at any given time over a 6 month rolling period. The 4 card rolling limit means that once you add a card to Venmo, it will count against your card limit for 6 months, even if you delete it.
- PayPal person-to-person payments code as a purchase for most issuers most of the time, but there are reports of them occasionally triggering cash advance fees.
- PayPal is known to freeze and shut down accounts for doing high volume or multiple person-to-person payments in a short amount of time.
Health Assessment: Easy for very low volume. Given the fees, risk of cash advance coding and payment limitations, there’s more attractive options.
See also: Some peer-to-peer payments coding as cash advances.
Save for college or pay student loans
It’s possible to use a credit card to buy Gift of College gift cards. These gift cards can then be used to fund student loans or college savings. Each gift card can be bought with a credit card and each has a $5.95 fee. When loading each card to the maximum amount ($500), the fee is a very reasonable 1.19%. There is no fee to apply the value of the gift card to a student loan or 529 college savings plan. While saving for college may not immediately seem like a means of manufactured spending, note that rewards here can be significant given that some stores that carry Gift of College Gift Cards may trigger credit card bonus categories valued well beyond the fee. More details can be found here: Miles for College.
- Cost: $5.95 per $500 (1.19%)
- Gift of College gift cards are available regionally at H-E-B and at Cumberland Farms as well as select other chains.
Health Assessment: Healthy, but it can be difficult to find source for Gift of College gift cards in some areas.
Using gift cards to increase credit card spend
Visa and Mastercard gift cards can be extremely useful tools to maximize rewards on credit card spend. These cards are sold both in fixed denominations and in variable-load forms where you can put anywhere between $20-$500 on the card. They are accepted almost everywhere that you can use credit or debit. Outside of periodic sales (like we frequently see at Office Depot and Staples), there is almost always an activation fee on these cards, usually from $3.95-$7.95. Simon Mall sells $1000 gift cards at mall locations for a $3.95 fee and also have a bulk mail-order program that will sell you $10,000 at a time once you’re approved. However, Simon Mall purchases do not earn rewards from American Express.
Much of the points and miles world regards these gift cards as only being useful for “manufactured spend,” or MS, where the gift cards are somehow liquidated into cash or money orders that can then be deposited. However, there are many additional ways to use gift cards and they can be a great tool for anyone trying to maximize rewards on spending. Banks have different levels of tolerance for spending on gift cards. It’s best to start off small and ramp up your spending over time. Amex, in particular, is thought to more sensitive about GC purchases. Be very careful with how much and how often you buy, especially at first, or you risk claw back, pop-up prison and, potentially, shutdown.
Liquidation options have become more difficult since 2020 and are extremely location-dependent. Even if you have options in your area that are healthy, it’s important to have a backup option (or four) and never buy more than you can afford to float in case your preferred liquidation option dries up.
Buy money orders with gift cards
This involves using a credit card to buy a Visa or MasterCard gift card and then using that gift card as a debit card to purchase a money order from a grocery store, department store, post office or other. You can then deposit that money order to a bank or use it directly to pay bills.
- Cost: $.50-$2.20 per $1000 in money orders
- There are several different issuers/brands of Visa/MC gift cards that can be purchased in stores. Some of the most common are Pathward (formerly Metabank), US Bank (USB), Vanilla and Secure Spend.
- Pathward is probably the most common, and also the most tricky to liquidate. Many stores will not process the cards at money order terminals, or not above a certain amount (usually ~$99 or ~$470). These are the cards that Simon Mall sells.
- Techniques that work or don’t work are specific to different regions, stores, or even to individual cashiers. Brands can be location dependent as well. Just because something works in Oklahoma or in rural New York doesn't mean it will work in downtown Seattle.
- Some people have had their bank accounts shut down after depositing large amounts of money orders. Keep in mind that this type of shut down may include the bank closing any credit cards you have with that institution, so consider depositing money orders in a bank or credit union that does not issue credit cards that matter to you.
- Some cashiers will tell you that they can't accept/use gift cards for money orders. It's better to just try as opposed to asking.
- Some cashiers will tell you it's illegal because of "money-laundering laws." It isn't.
- Walmart has instructed employees not to allow manufactured spending transactions as of 12/19/20. However, this is often not enforced. See: Walmart Manufactured Spending Policy Memo: “That activity should be stopped”
- Walmart requires a customer’s ID information to be entered into a Know Your Customer database for money order purchases in excess of $1K. Daily limit is now $8K per rolling 24 hours based on entries in that database. Note that some people have been banned from buying money orders with less than the maximum activity.
- Most Walmart stores now limit money order buyers to 4 debit card swipes (e.g. $2,000 when using $500 debit gift cards)
- Vanilla branded gift cards do not work at Walmart stores for transactions of $50 or greater.
- Many US Post Offices no longer accept gift cards to pay for money orders
Health Assessment: This is extremely location dependent. In some areas, buying money orders with debit gift cards is easy. In other areas it can be very difficult, especially with Walmart and many grocery chains now limiting cards issued by Metabank to swipes of $99 or less, or not taking them at all. It’s often a matter of trial and error in your local area to find out what works and what doesn’t.
Pay bills with a gift card
It’s possible to use credit cards to buy Visa or MasterCard gift cards and then use the gift card as a debit card in-store or online to pay bills (including some credit card bills).
- Cost: Varies.
- Techniques that work or don’t work are specific to different regions, stores, or even to individual cashiers.
- Visa gift cards tend to have fewer problems than MasterCard gift cards.
- Credit card companies are known to shut down accounts when they receive frequent payments from in-store bill pay services, or via multiple debit cards over a period of time. Manufactured spending via this method can be risky.
Health Assessment: This is extremely location/institution dependent.
Reloading prepaid cards with gift cards
Some stores will allow you to use a Visa or MasterCard gift card to reload prepaid cards. These can then be liquidated by paying bills (some offer free bill pay), ATM withdrawals, buying money orders, etc.
- Cost: Fees vary and can add up quickly in some cases: If it costs up to $5.95 for each $500 Visa gift card and then another $5.95 to reload your prepaid card, total fees = 2.38%...and you still haven't gotten the funds off of your prepaid card.
- This option has shrunk dramatically in the last few years and many prepaid card issuers have become very quick to shutdown accounts loaded repeatedly by gift cards.
- Walmart has instructed employees not to allow manufactured spending transactions as of 12/19/20. See: Walmart Manufactured Spending Policy Memo: “That activity should be stopped”
- Techniques that work or don’t work are specific to different regions, stores, or even to individual cashiers.
- Visa gift cards tend to have fewer problems than MasterCard gift cards.
Health Assessment: Healthy for some, but reload techniques have become highly dependent upon location and brand.
Bluebird/Serve
Bluebird and Serve are prepaid reloadable Amex cards (Serve has Visa as well). In order to manufacture spend with Bluebird or Serve, the trick is to find a way to indirectly add funds via credit card (like via a Visa/MC gift card). Once funds are loaded, there are easy options for getting your money back: withdraw cash to your linked bank account; use Bluebird or Serve’s bill pay feature to pay your credit card bill; or withdraw cash from ATMs.
At one time these were very useful tools. Unfortunately, Amex has aggressively gone after those suspected of manufacturing spend with Bluebird or Serve by freezing the ability to load new funds and/or access their account. This effectively makes Bluebird/Serve very difficult to use to MS in any volume (although some have managed to skate through repeated waves of shutdowns and continue to report success by loading small amounts like $200-$400 at a time).
Reselling merchandise to increase credit card spend
Buy & sell merchant gift cards
Buying and selling merchant gift cards (aka “gift card churning) is buying and selling 3rd party gift cards for the purpose of saving money, earning money, earning extra points, and/or manufacturing credit card spend. This can be done directly via online marketplaces like Ebay or to buyer’s clubs that buy the card (or more accurately card number) directly from you and then resell the card to another party.
Doctor of Credit maintains a useful list of methods to buy gift cards with discounts and bonus rewards that is kept semi-updated.
- Risk of non-payment is real, both for direct sales and buyer's clubs.
- Start small, with known buyers that have references (if using buyer's clubs).
- Many stores now block the ability to buy 3rd party gift cards with Visa/MC gift cards.
- Amazon.com allows buying 3rd party gift cards with Amazon gift card credit, but Amazon has been known to shut down the accounts of some customers doing this. If you value your Amazon account, proceed with caution.
- Gift card selling through eBay is alive, but less attractive now that they no longer allow buying 3rd party gift cards with eBay gift cards.
- Not to brag, but our own Stephen Pepper's website, GC Galore, is probably the most-used resource for tracking gift card sales (and is also used by many buyer's clubs).
- The biggest public GC resellers are Raise.com, The Card Bay and Aligned Incentives. While none of these usually offer the best rates out there, they are well-known and can be good places to get your toes wet.
- Organization is very important, make sure that you can keep track of necessary cards, numbers, pay-out, etc.
Health Assessment: Healthy, but risky, similar to merchandise resale. Sometimes, buying groups do go out of business. In those instances, sellers are usually left holding the bag.
Buying physical merchandise and reselling
It’s possible to buy merchandise at a discount with a credit card in order to earn rewards, and then resell for a slight loss, to break even or make a profit. This can be an effective way of generating sizeable amounts of spend for welcome offers or big spend bonuses at minimal cost.
Manufacturing Spend through reselling has always been a grind, but it’s also a potentially very rewarding option. In some cases people have started reselling for the purpose of manufacturing spend, but soon found that it’s a good way to earn money in general. That said, it takes effort and organization to pull it off. There will always be some risk of non-payment selling either directly or to buyer’s clubs. It only takes a few non-payments to erase a lot of profit.
- Risk of non-payment is real, both for direct sales and buyer's clubs.
- Start small, with known buyers that have references if using buyer's clubs.
- If shipping merchandise to your home, make sure taxes and shipping costs are factored in to profitability.
- If shipping directly to a buyer's club (drop-shipping), note that many large retailers have the addresses for common buyer groups blocked and will auto-cancel orders that are made to those addresses.
- Amazon.com is one of the easiest retailers from which to drop-ship. Shutdowns do happen, though. It pays to start small, ramp up slowly, and pay as much as you can with credit cards instead of Amazon gift cards.
- Many retailers like Target, Best Buy, Ebay and Dell.com will block accounts that they suspect are reselling from ordering through their sites. Dell operates on a hair-trigger.
- Be careful about the rate you sell to buyer's clubs at, many of them are currently doing many below-cost deals, meaning they are paying you less than you are paying for the merchanside. Make sure that the rewards you're earning justify the cost you're paying in time and money to participate in below-cost deals.
- Like with gift card reselling, organization is key. If selling to buyer's clubs, make sure that the tracking numbers are entered in a timely manner and doublecheck to make sure that the price you recieved is the price you were promised.
Health Assessment: Healthy, but requires some effort and currently margins are low at buyer’s clubs. Make sure that the rewads warrant the risk, cost and effort.
Manufactured spending graveyard
Pay Rent with RadPad
Pay rent via credit card. RadPad is a rent payment service that had previously shuttered their service, but is now available again.
Health Assessment: Dead. No rent payments accepted after 1/15/2021
Pay Rent with Urbanr
Pay rent via credit card for a 1.5% fee. Note that Urbanr only accepts Visa, Mastercard, or Discover (no Amex), but they allow you to split tender over 3 credit cards. A 1.5% fee is an amazingly good deal.
Health Assessment: Dead. Sometime on or before May 10th 2020, their website ceased to exist.
Pay Rent with RoomiPay
Health Assessment: Dead. As of Nov 8 2018 (or so) Roomipay no longer accepts credit card payments for rent.
PayPal My Cash Cards
Buy PayPal My Cash cards with a credit card (some drug stores allow credit card payments); load the funds to your PayPal account (up to $4,000 per month); and then retrieve the funds in a number of ways: transfer to your bank account; send money to friends; spend the funds with a PayPal debit card (buy money orders, for example); etc. For information about how to use these without getting shut down, see: PayPal Business Debit Card: A Great Backup Tool for Manufactured Spending.
Health Assessment: Dead
REDbird — The Target Prepaid REDcard
It used to be possible to load in-store with credit card and then withdraw money or pay bills but cash only loads haved killed REDbird for manufacturing spend.
Health Assessment: Dead
Visa Buxx Cards
Visa Buxx are prepaid reloadable Visa debit cards designed for teenagers. The great thing about these cards for manufacturing spend is that they can be loaded by a parent online, with a credit card for a small fee. Then, they can be unloaded either by using as a debit card to pay bills via debit card, buy cash equivalents, in stores that allow cash back for debit payments (many grocery stores, for example), or via ATM withdrawals.
Health Assessment: Dead
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