Travel credit card sign-up bonuses are an excellent way to easily and quickly build your points/miles balances, while also diversifying your portfolio. However, virtually all of the credit card companies require some sort of minimum spending over several months before you can unlock the valuable bonus. If you open more than one credit card on the same day, this minimum spending requirement can certainly add up quickly. Manufactured spending is one technique to meet minimum spending requirements and/or build your mileage bonuses after that minimum spend threshold is met–without actually “spending” any money.

What is “Manufactured Spending?”

Perhaps one of the easiest to understand examples of manufactured spending came about several years ago via the US Mint. The Mint wanted to get the $1 Coin out into mainstream usage, and one of the ways that the Mint was trying to get these coins in the hands of the American public was by selling them directly to the public. The mint offered $100 bags of $1 coins on their website and the cost was $100, including free shipping. Customers were able to purchase $100 in coins for $100, charge it to their favorite credit card, then once the coins arrived on their doorstep they could go right to the bank, deposit the $100 to their account, and immediately pay off their credit card. $100 in spending on the credit card, but no money out of pocket for the customer.

Not surprisingly this deal was short-lived! However, new techniques come out relatively often–sometimes they survive for a while, sometimes not–but by understanding how and when to use these techniques can help you maximize value in your points/miles collecting!

Not all manufactured spending techniques are “free” per se. Sometimes you have to pay nominal fees, and most of the current techniques do cost some of your time as well. So, you always must determine if the value of the miles you are trying to get outweigh your time spent plus any fees you pay . Often times, especially when we look at the large, valuable bonuses that you can get via strategically opening credit cards, the small cost of fees/time is well worth the large bonus!

Some easy ways to Manufacture Spending

Bluebird

One of the most popular ways to manufacture spend is via the use of the American Express product, Bluebird. This is not a credit card, it is more closely related to pre-paid debit cards. You apply online here, it has no fees associated with opening or maintaining the card, and each individual can only have one card. Essentially Amex markets Bluebird as an alternative to a checking account: you can pay with the card like a debit card, you can write free checks from your account, you can get money from an ATM, you can direct deposit to your account, etc. You pay no fees for any of this–even when you use it overseas (no foreign transaction fees). Bottom line is that you can use the Bluebird funds to pay bills that you would not normally be able to pay with a credit card–like a mortgage, rent, even your credit card bill!

Once you have your Bluebird account established and receive your card, you can start manufacturing spend. In this case you want to load your Bluebird account with funds purchased via a credit card that you are trying to spend on to get a bonus or get more miles. There are many different ways to do this, but one of the easiest is by purchasing Visa gift cards at OfficeMax. You can buy these Visa gift cards in amounts up to $500, but you pay an approximately $6 fee for each card–so its best to max it out at $500. You can actually do this online with free shipping. **Bonus tip, use a card like Chase Ink that gets 5x miles at office supply stores to even get more value from your manufactured spend**

Once you have your Visa gift cards (do not use Amex gift cards or Vanilla Reload cards, they do not work the same), you can go to Walmart to load your Bluebird. Many Walmarts have Money Center Kiosks (see below) where you can load the value from your Visa gift cards onto your Bluebird.

The reason you can do this is that these types of Visa gift card are actually considered pre-paid debit cards themselves–and the rules allow you to load your Bluebird via a debit card (but not a credit card!). If your Walmart does not have a Money Center Kiosk, you will have to go to a register to complete this transaction.

Most of the time the kiosk or the cashier will ask for your pin for your debit card (i.e. your Visa Gift Card). Some of these Visa gift cards require you to set a pin up online prior to using, others use the last 4 digits of the card itself, and some will allow you to input any four numbers at first use–setting that as your pin for the future. Look for the directions for the Visa Gift card you purchase. **Remember, it is always a good idea to try this out with a small amount of $$ and/or gift cards before you purchase huge amount of gift cards and find that they do not work the way you expected them to!**

Once you input the pin, you will be able to choose the amount to load–if you have $500 on the card, load the entire $500 onto your Bluebird account. Those funds are now immediately available to write checks, get cash from the ATM, pay bills, etc. In fact, you can immediately pay off the credit card you just used to purchase those Visa gift cards via the Bluebird online bill pay!

Some important limits do exist:

• Maximum $5,000 per month in PIN-enabled gift card reloads (maximum $1,999.99 per day at Walmart)

• Maximum $2,000 per month ($750 per day) in ATM withdrawals

• Maximum $2,500 per month ($2,500 per transaction) in send money transactions (i.e.: transferring funds to your bank account or to someone else)

Doing the quick and easy math–you paid approximately $6 to manufacture $500 in spending on your favorite credit card, plus the time it took you to go to Walmart to complete the transaction.

Serve

Serve is another American Express product, that works very similar to Bluebird. However, you can only have one or the other–not both! Serve does not offer the convenience of free paper checks, but you can reload your account at Walmart or Family Dollar. Online, Bluebird and Serve work almost identically, allowing you to pay bills, transfer funds, etc. The principals behind purchasing your Visa gift cards, and then loading your account via a pin are essentially the same.

The limits on Serve are:

• Maximum $5,000 per month in PIN-enabled gift card reloads (maximum $2,500 per day at Walmart, $500 per day at Family Dollar)

• Maximum $2,000 per month ($750 per day) in ATM withdrawals

• Maximum $2,500 per month in send money transactions (ie: transferring funds to your bank account or to someone else)

Paypal

Paypal is another option that you can use to manufacture spend by purchasing My Cash cards in up to $500 increments for a fee of just $3.95. Once you purchase one of these cards with a credit card–almost all 7-11s have them–you can immediately transfer those funds to your paypal account. Once in your paypal account you can transfer to your bank account; send money to friends; spend the funds with a debit card (load Bluebird or Serve, for example); etc.

However, if you simply load the funds and transfer them directly to your checking account there are many reports that Paypal will limit your account–or even shut it down. This technique is best used sparingly and not as an every month strategy to build mileage balances.

Bottom line is that this is my LEAST favorite way to manufacture spend–because it can quickly lead to your Paypal account being shut down and your assets frozen, with little chance of appeal.

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Putting it all together

Bluebird is my method of choice to manufacture spend when necessary. It is relatively easy, there is very little chance of having your account shut down or locked since you are following the rules, and it doubles as a pretty decent free checking account! You do have to spend some money to manufacture spend via this method, but the value of the points and miles I get in return are almost always worth it to me.

Keep in mind, that if you use your credit cards for all feasible purchases (dining out, entertainment, groceries, gas, utilities, etc) you can likely easily charge thousands of dollars each month on expenses you were paying via cash, debit, or checking direct withdrawals not earning any points! The best time to use manufactured spent, in my opinion, is when you open several credit cards at once–or have a card with a hefty minimum spend requirement. Manufactured spending can fill in the gap between your normal monthly spending and the requirements of the new card (or cards). The last thing you want to do is sign up for a great deal on a credit card, then not get the bonus because you didn’t end up meeting the minimum spending requirements.

Manufactured spend techniques come and go–always be on the lookout for the next great deal as part of your strategy to maximize the value of your points and miles.