Note: On January 8, 2015 American Express sent out a notice to a large number of Bluebird & Serve cardholders informing them that loading capabilities on their accounts had been terminated. For more information, see: Amex kills Bluebird and Serve for manufactured spend
I don’t know how long it will last, but as of the time of this writing it is possible to manufacture credit card spend for free (see “Better than free manufactured spend“). This means that you can collect points and miles for free. You can meet minimum spend requirements for free. You can earn high spend bonuses for free (see “Best Big Spend Bonuses“). Sometimes you can even make a profit while collecting points this way.
In the past I’ve often compared various manufactured spend techniques by calculating the cost per point of each technique. Now, though, the cost per point is zero or less. It’s time to look for a new comparative metric.
Bluebird as a limited resource
Currently, I’d argue that American Express’ Bluebird product is the single best and easiest way to turn Visa gift cards and Vanilla Reload cards into cash. Vanilla Reload cards can be loaded to your Bluebird account online via the site vanillareload.com. Visa gift cards can be loaded to your Bluebird account at Walmart stores via “swipe reloads” (see “Gift card PINs“). Both techniques for unloading the cards are free.
Importantly, Bluebird limits reloads to $5000/month per person (swipe reloads and Vanilla reloads combined). So, I think that a useful new metric is to compare techniques with Bluebird’s $5000/month limit in mind. Which combination of credit card, gift card, portal, and gift card merchant results in the most value for $5000 per month in spend?
The Bluebird Metric
Here’s how the Bluebird Metric works:
For each technique, calculate the following for $5K of manufactured spend:
- Calculate out of pocket cost. For example:
- If you buy 10 $500 Visa gift cards, each with a $5.95 fee then out of pocket cost = 10 x $5.95 = $59.50
- Estimate the cost of your time, gas to drive to/from Walmart, and car wear and tear.
- Calculate credit card value
- # Points earned via credit card (or cash back earned)
- Value of points earned via credit card
- Estimated cash value of other benefits earned (e.g. “Travel Together ticket”, elite status, etc.)
- Calculate value of other rewards
- # Points earned via other means (e.g. fuel points from grocery store, points from online portal, etc.)
- Value of points earned via other means
- Cash earned via non-credit card means (cash back portals, for example)
- Add up all of the above benefits and subtract all of the costs.
In the end, you should have an estimate of the total value of $5000 worth of manufactured spend. This value can be compared across multiple manufactured spend techniques to help decide which is best.
To help calculate all of this, I created a Google Docs spreadsheet and entered in a number of different scenarios. Here is what I found:
Grocery 2X vs. 5X
The example below shows two similar scenarios. In both cases, the idea is to manufacture spend by buying $500 Visa gift cards at a grocery store and then liquidate them through Bluebird at Walmart. The biggest difference between the two scenarios is that one uses a credit card that earns 2X at grocery stores and the other earns 5X.
The samples above show an estimated value of manufacturing $5000 in spend. In my experience, Kroger awards fuel points for gift card purchases. For me, fuel points are worth about 1 cent each, but the value for you would depend completely on how much you fill your gas tank (and/or friend’s gas tanks) each time (see “What is a fuel point worth?“). Next to “Estimate other costs” I entered “$50” to cover the cost/time/pain of visiting Walmart several times in a month. Everyone has different circumstances that would warrant very different values here.
The two columns above vary by credit card: The Amex PRG (Premier Rewards Gold) card (which earns 2X at gas and grocery stores) vs. the Citibank ThankYou Preferred card (the one that earns 5X at groceries, drug stores, and gas stations for the first year). For the PRG card, I entered a very conservative value of 1.29 cents per point (based on the estimated Fair Trading Price). For the Citi card, I entered a value of 1.33 cents per point (see “ThankYou!“). The PRG card earns a big spend bonus of 15,000 points after $30K spend, so I entered that in as well. Note that the calculations assume that once the big spend bonus is achieved, the card will no longer be used in the same calendar year.
Overall, you can see that the net estimated benefit of manufacturing $5K of spend in this way would be $101 for the PRG card vs. a whopping $273 for the Citi card.
Let’s look at other examples…
Vanilla Reload cards 1X vs. 1.1X vs. 5X
In this scenario, I compared three cards:
The American Express SPG (Starwood Preferred Guest) card earns only one point per dollar. My Chase Freedom card earns 1.1 points per dollar thanks to the annual 10% bonus I get for having a Chase checking account (see “The new king of the Ultimate Rewards Mall“). And, my Citi ThankYou Preferred card earns 5X at drug stores for the first year (Details here). With the estimated values I plugged in, you can see that only the 5X scenario results in much gain.
Office Supply Stores
Here are my estimates for the value of buying $200 Visa gift cards at office supply stores with a card that earns 5X:
The only difference between the two columns above is that I used the conservative Fair Trading Price of 1.31 cents per point for the left-hand column, and I used a much higher 2 cent per point estimate for the right-hand column. With the 1.31 cents per point value, this approach results in $88 of value per month. The 2 cents per point option results in a whopping $261 of value per month.
Cash Back Portals
In my recent post “Better than free manufactured spend” I showed that it was possible to earn money when manufacturing spend by going through a cash back portal to GiftCardMall to buy $1000 Visa gift cards. I also pointed out that you could earn even more money by getting cash back buying Amex gift cards, and then get more cash back by using those Amex gift cards to buy Visa gift cards. The table below shows the value of the first approach (buying $1K Visa cards at GiftCardMall) and just the incremental value of adding on the step of buying American Express gift cards:
Basically what this shows is that there is decent value to be had by manufacturing spend via GiftCardMall, but the incremental benefit of buying Amex gift cards is pretty small. I don’t think it’s worth the extra hassle.
Note that the Amex gift card column is just an estimate of the value you would get per $5000. In reality, you probably wouldn’t buy cards with exactly $2500 in value (a number I used for convenience to fit the spreadsheet). In fact, that would be an inconvenient amount if the purpose was to use them to buy $1000 Visa gift cards. In reality, one might buy Amex gift cards each with $3K in value and use them to buy Visa gift cards with values of just under $1K each (in order to account for fees).
Note also that the Amex gift card approach can be mixed with other manufactured spend approaches. For example, you can use the Amex gift cards to buy Visa gift cards at grocery stores. So, you can estimate that the added value of doing this (if you were going to use a 1X card anyway) would be about $39 per month. Again, its probably not worth the effort for most people.
Your Miles May Will Vary
The estimated value of each manufactured spend approach shown above is highly dependent upon my situation: how much I value different types of points, which credit cards I own, how much I dislike visiting Walmart, etc. The numbers will be more meaningful if you plug in your own estimates and even add new scenarios.
Here is the Google Docs spreadsheet:
To make changes, you will need your own copy. Do the following from the opened spreadsheet:
- Select File… Make a Copy.
- Give the new file a distinctive name so that you can tell it apart from mine.
Note that the blue cells are ones that should be edited to fit your circumstances. Red cells are calculated automatically from the others so its best to leave those alone.
Conclusion
Its interesting to see that manufacturing spend is probably not worth the hassle except under certain circumstances:
- You are working towards a big spend bonus that you find especially valuable.
- You need to meet minimum spend requirements for new credit card sign-ups.
- You can earn a high multiple through category bonuses (e.g. 5X is very good)
- You have specific award redemptions in mind that are worth more than 1 to 2 cents per point
What do you think of the Bluebird Metric? Is it a good way to evaluate various manufactured spend techniques? Are there better or simpler options?
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Now bluebird metrics are much clearer for me, thank you!
Any one know if you can purchase visa or Amex gift cards with cash in the UK then upload the money into bluebird? Thank you!
I believe that the answer is no, unfortunately
David D: yes, at Walmart you can do a Bluebird “swipe reload” and use a debit card to pay. With the OneVanilla cards, use any 4 digit combination as your PIN (I always use the last 4 numbers on the card).
I purchased two onevanilla cards at 500 ea. is it possible to load these to bluebird?
They do say debit on them.
I don’t “think” so…I think you can use those to buy a vanilla reload card (at least I can at CVS)
Steph: Yes, Bluebird can be used internationally with no foreign transaction fee and it even works at many ATMs. When using it as a credit card, just make sure to find a place that accepts Amex
Hey FM, trying to read all the FAQ on BB….can I use it out of the country?
@Steph – it seems they just did the same to my account after I had a withdrawal yersterday…not sure if I left any money in the card but will give them a call later tonight to find out.
FM or any one with experience – what would be a good prepaid card to use mainly for bean uploads and getting out cash? Thanks for any input!
gottoloveink: Bluebird
Thanks FM! I’m shocked that they shut it down after $5500-$6000 over 4 months! Whatever! I did the BB online and going to start trying my rewards cards. Thank you for posting this info! Greatly appreciated!!
Steph: I assume you mean that you were using the MyVanilla card? Anyway, yes, many people have gotten shut down. I’ve never heard of anyone getting shut down with Bluebird so definitely give that a try.
DonT: Great!
FM, I was able to load the card at a different walmart.
I was using the vanilla reload card to cash in visa gift cards. Had it for 4 months…only cashed in a total of $6000 over that time IF that!!! Today my card was closed by vanilla for “improper use”…said I loaded money and withdrew it out (not same day so what’s the problem???) my fiancé loaded even less…like $2k and his card was closed too….thinking of getting a bluebird card. Am I asking for trouble because I will purchase the vanilla reload card to load BB?
Don T: Those US Bank cards are flaky. Most likely it is an issue with that particular card, not Walmart/bluebird
Greg, bought a 500 variable Visa US Bank Card at Kroger today, couldn’t load it a Walmart. Hope this isn’t a sign of things to come.
Chris D: Thanks! Good to know!
Datapoint: Walmart neighborhood markets are super convenient but do not have Money Centers. But the one near me has a Walmart ATM. It is right up at the front and looks like an ugly version of the Money Center machine at a Super Walmart. It has the same moneycard reload options as the Money Center machine. Worked perfectly for the BB reload with a Visa gc and pin.
FM: Thanks!
T3pleShot: calendar month
Any idea if the Bluebird 5k monthly load limit is per calendar month or every 30 days?
Thanks!
Yaokai J: NO, you cannot do the 2 browser trick anymore with Citi. They will not approve 2 cards in one day anymore! I have no idea how long the Citi TY Preferred offer will last. It could be weeks, it could be years.
Dave: I can’t really say whether it is safer to put spend on business cards, but there is one nice benefit: your credit utilization is not affected by spend on business cards. So, you’re less likely to get dinged on your credit score.
Ed: I’ve heard stories of very high spenders on the TY Preferred getting shut down, but I don’t know 1) if its true; or 2) how much did they spend. My guess is that to stay safe, your annual spend on the card should be reasonable in relationship to the income that you reported on the card’s application. In other words, if you reported $30K annual income and you spend $90K annually on the card, I would expect that to raise flags.
luchex: No, OfficeMax doesn’t give rewards for gift card purchases
Curtis: As far as I know, the AA cards are the only ones where Citi enforces waiting 18 months to 2 years before applying again. My guess is that you’d be safe to get the Premier again.
Hi FrequentMiler,
I intend to apply for Citi Thank you Preferred because of its 5x in gas stations and grocery stores as well as the Thank you Premier because of the supposedly 15% discount for flights.
Do you know if I can still use the 2-browser trick to apply for 2 citi cards on the same day? Or is that no longer working?
Other than that, do you think the 5x TY preferred offer is going away any time soon (in the next 3-4 months.
Just went into my local CVS and tried to buy 2 $500 vanilla reloads and my delta amex reserve would not work but my delta gold did. Anyone know why?
@Ford, lol. Me thinks Chris = troll. No way they gave him 50k retention bonus. 125k in manufactured spend would not be too difficult.
@Curtis
What’s hard to believe, that he/she got 50,000 points out of Chase’s stingy retention unit or got away with 125k man sp.? 🙂
@chris, that is very hard to believe. Can you send Frequent Miler proof once you receive the retention bonus?
I recently called to cancel my Chase ink Bold card, the yearly fee was due. I was wanting to get a slight bonus maybe 2-5k of UR points but was offered a staggering 50k!!!! This was the same as my initial bonus! All I do is manufactured spend, I’ve maxed out 5x and 2x. Total Manufactured spend past year was 125K. Has anyone else had this experience with wanting to cancel because of your yearly due coming up or is this new because this was one AWESOME DEAL I couldn’t pass up for a $95 yearly fee!
In my experience business cards have more spending ability before fraud alerts pop up.
Regarding sustainability, what are your thoughts on using a business card rather than a personal card for heavy spending? I’m always hesitant to spend too much on my AMEX BCP and SPG card. I’ve been declined at the register and received calls now from AMEX for every one of my cards (also free Hilton 6x) for big purchases. I always confirm my identity and all is well, but I don’t need more attention from them. I’m wondering if heavy spending from a business card might have a higher threshold for alarm from the bank.
One thing that always strikes me with this type of analysis is the importance of the points multipliers.
In general anything over 1.5x tends to work but 5x really works.
Thanks for posting this analysis.
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In terms of sustainability 2 comments:
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1. Remember whatever spend you are doing needs to be a reasonable fraction of your income. If you earn $80k a year and are doing $120k spend (2xBBx12months) then you will be flagged pretty easily and maybe even by the IRS as you are spending way beyond your stated income. Although you’re doing nothing criminal any audit is to be avoided.
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3. A great side benefit of the high denomination AMEX GC is you essentially mask the many VR or Visa GC purchases in your spend patterns.
@Anon @Jack L – I see it too (ie max amount $500) when starting at BigCrumbs! When you go direct for say the personalized ones you can still pick up to a $3000 one but that does not help with cash back!
Thanks FM for the excellent analysis. I get a more out of MR points as well as Kroger fuel points than you listed. Across our two bluebird cards, we can get points worth ~ $500 per month using the Amex PRG and Citi TYP. This may look insignificant to somebody that can earn a million miles a month 🙂 but it is worth the time and effort for most of us less competent mile/point earners.
@anon, Amex killed what deal?
Good post, it’s important to calculate the time and cost for earning points. When you add in cost for gas and time, you are paying over 1 cent per point.
I got an offer from Chase for my United Explorer bumping my points earning through 5/30 to 1.5 miles per $ for every dollar over $1k each month. I’m definitely getting crazy value with VR right now. I’d love to see what kind of value United miles get under this scenario as I’m planning on trying to run $10-15k through my card by the end of the promotion
You have changed my life Randolpho!! I am now a miles/points generating crazy person!! This post is excellent and one I will definitely save- you are the best!
Ed you are correct the question is though would Citi shut you down and my guess is yes they would.
FM, just one other thing to keep in mind. The Speedy Rewards Mall. They partner with lots of different retailers etc.
For instance, I know you’ve Sears in the past. Sears gives 50 Speedy Rewards per dollar spent!
I know I sound like a broken record on the Speedy Rewards but I love Speedy Rewards points! 🙂
Since when can WalG beans be purchased with CC?
FM – Thanks for the post. The Citi Thank You card seems like a slam dunk for a year anyway. Doing the math it seems to me that if I spend $10k/month (my wife and I each have BB account), then I would end up with 604,740 Thank you points at year end, good for over $8k towards flights. After fees which are $948, we net over $7100 towards flights. Is this correct? Do you think Citi will allow this much spend? Is there a cap on the 5x earnings? Thanks again for your help.
Amex killed the deal. max denomination GC now is $500.
The only thing I would add is that you should put a threshold for Ink at $50000 for the year since you don’t get any additional 5/2 points after that.
The only grocery shop near me is Stop & Shop and they don’t give fuel points for buying gift cards.
I also use an excel file something similar to what you posted.
@JX – You didn’t estimate the cost of actually buying the GC which comes up to 109.5x12x2=$2628.
I just got the TY Premier card and was able to generate $20k in spending my first month, and 100k points is worth about a grand to me. Not a bad tax-free income for spending a few hours driving each weekend.
Does anyone here know if you can use CVS gift cards when purchasing a prescription?
I don’t have Kroger nearby but do have Food 4 Less. Anyone knows if Food 4 Less offer Visa Giftcard and fuel points?
Thanks,
The best value for $5K, according to your spreadsheet, is $273 per month. To me, that is a very good profit. It seems to be small compared to other options. However, if you can play the game for both you and the wife and do it every month, the profit is about 273x12x2=$6552.
$6552 is really a lot of money for average middle class Americans. For me, I don’t mind work an extra month every year to get this extra $6552. Worth it!
The problem is if this is sustainable or how to make our practice as sustainable as possible. As Jonathan pointed out, if we max it out every month we might be banned. I would like to see more discussion on sustainability.
Again, thanks for the post.
Also, as others have said above, the fuel point value from $5k spend at Kroger (5k fuel points) is worth a lot more than $50. I suppose if you and your wife have cars that only hold 12.5 gallons, and you both fill up twice a month (using 4k of your 5k fuel points), then that would be only $50 off fuel. I think most people would get a much bigger benefit here though, well over $100/mo. (We have a tahoe, vette, 4 banger, and boat… so we save a ton when we’re using all of those vehicles a lot).
And remember that they run $2gal off sometimes (like half of last year), which makes this MUCH more lucrative.
Great post, FM. Now if only I hadn’t closed both of our TY Premier cards last year and only have the TY Preferred with no travel TY point bonus. Now the wife or I have to get a TY Premier again before we use all the TY points I’m racking up.
I asked on FT, but haven’t heard. Any chance you or someone here knows if you can get the TY Premier again after 18mo? Honestly I don’t care what kind of bonus (even if there isn’t one – but i know with Citi, you get the bonus if you get approved) since I’ll earn 33% more from my TY points.
Not sure what you mean by “dislike visiting Walmart”? To me Walmart is just like any other big chain retailer. Unless this is a “People of Walmart” thing.
FliesALot: Walmart is out of my way
Yesterday I went to Office Max and got a OM rewards card that gives me %5 back. I was in a hurry and didn’t ask if that % %5 also work for gc inn that case it would be $10 for a $200 gc that has a 5.95 purchase fee. But I didnt ask if applies to gc . Anybody knows?
Greg,
Thanks for putting this analysis together. Its helpful confirmation for me that although there are great ways to manufacture spend for cheap, free or better then free, the greatest way to make points is still churning and making minimum spend. The bird is just a minimum spend machine for me. How people choose to ‘feed their bird’ is really a question of how much they value their opportunity costs. As for me, its far more convenient to hit the CVS down the street for VR and load them online, then it is to make multiple trips to walmart (which is 15-20 min away by car), though will probably use these techniques when 5x is available (I dont have the Citi card, yet) and easy (or gas points)!
Another thing you did not discuss much here (though you did discuss elsewhere) is the risks of maximizing spend in these ways. Sure you could make a profit loading up $5k a month on multiple cards, but dont think it wont raise suspicions. For me the higher risk of being flagged for audit for doing this regularly, is not worth it for the $100-$200 worth in points. Dont get me wrong, I’ll still use these means, but to max it without regard for regular spend and spreading out that spend is unrealistic (though again, definitly helpful for analysis). I know you know these things (you’ve written about them), though Id encourage you to continually remind your readers of it, to keep their zeal from being the premature death of their travel hacking adventures.
I duplicated the Kroger purchase and got fuel points too.
I’m new to this so excuse me if I’m missing something obvious, but are you certain about earning fuel points at Kroger? I see this in the fine print:
*Excludes The Kroger Co. Family of Stores gift cards, Green Dot® prepaid reloadable products, MoneyPaks® and American ExpressR® Variable Load, Visa® Variable Load, 1-2-3 REWARDS® Reloadable Visa® Prepaid Debit Card and MasterCard® Variable Load gift cards.
(http://giftcards.kroger.com/)
Josh: Yes, I’m certain that I have earned fuelpoints at Kroger when buying $500 U.S. Bank Visa cards
If you value SPG pts at less than 2% why not just use a cash back card that earns 2%? The good news is that there are multiple options to earn much higher than .02 per point for spend.
MileageUpdate: I included some cash back options (including the Arrival World Mastercard) in the spreadsheet, but didn’t list the details here. The post was getting long enough!
Which card used is the best for the VRs approach? I don’t use topcash. I have all the Chase Cards, no AMEX other than SPG and AMEX Hilton Surpass. No need to add gas and time as CVS is on my way to work.
Sil: I’d recommend that you copy the Google spreadsheet and find a column where I did the VR analysis. Then change it to include your own valuations.
If you find the stores you need on your way to work and back home and you enjoy the process, the time and gas issue is not an issue.
You did not include no fee chase gift cards in your mix.
I think the giftcardmall 1000 card is the easiest to pull off, buy a few at your computer, take a trip to walmart with 2 bluebirds, and unload 2000, maybe 3000 if you buy a Money order.
Drew: Feel free to add the Chase gift cards to your copy of the Google spreadsheet. I didn’t list it because I think the giftcardmall option is a better deal.
Yep, great for minimum spend, but not really worth driving around for me after min spend has been met for bonus.
In the 2x vs 5x Grocery example (kroger) the store reward/fuel point reward value equal 5060 points for 10 $500 Visa/MC gift cards ,which is worth $175 in free gas IF you max out the 35 gallons per fill up….which will increase the total value per $5k to $284(2x) and $398(5x).
I view this as a part time job that on an hourly basis is pretty lucrative. I combine these activities with regular errands so the extra time is minimal. It will end at some point so I want to take advantage of it while I can. Great work FM.
Great, great post! For me, the numbers don’t end up working so favorably (which is why I don’t bother), and I suspect some people might be surprised and how little “ROI” they’re actually getting out of their manufactured spend, once they take everything into account.
YMMV indeed!
I mean right now…
I do believe right not the famed Perpetual Points Machine is fully operational
Nice analysis. I had a catharsis last week where I realized the relative effort of 2x VR at gas stations wasn’t worth the hassle relative to 1x at giftcardmall.
Are any prepaid giftcards sold at Lowe’s?
I got this note on TopCashBack this morning. It looks like the cashback is now limited at Cardpool. I clicked through to Cardpool and this message popped up.
“Just so you know…
Once a unique user has reached the threshold of $1,000 in purchases and sales, in total across ANY reward or cashback sites, they are not eligible for any more cashback from Cardpool and your transactions may stop tracking or go on to be declined.
If you have spent more than $1000 across all reward sites, we cannot accept any claims for any untracked sales which you may incur. “
Mel: The TopCashBack note regarding Cardpool is a Cardpool thing not a TopCashBack thing. Cardpool limits cash back across all portals in this way.
DonT: No, I don’t think Lowe’s sells Visa, MC, or Amex gift cards
It is what it was, a min spend machine.
I think Bluebird is at its best for earning points/miles on typically non-credit spend (ie. Rent, car note, etc.). Worth the little extra time and hassle especially for these type of payments that carry some financial clout.
The fact that I am up at this hour to be the first post is depressing.