Meeting Minimum Spends Quicker with Manufactured Spending

I'm going to assume you've read the getting started guide on churning. In that post, we discussed which cards you should open first. If you go through the steps outlined in that post, and open five chase cards (for simplicity's sake we'll assume you went with Chase Sapphire Preferred, Chase Sapphire Reserve, Chase Ink+, Chase IHG, and Chase Marriot Rewards) then you would have accumulated enough points for a 5-7 day vacation anywhere within the Continental United States. You would probably have to fly economy class but the entire trip would more or less be free (minus miscellaneous spending on restaurants and activities).

Most people would agree this is a really good deal. But some people are more ambitious than others. There are many churners, myself included, who dream of a vacation where the flights are first class and the hotels are the cream of the crop. I'm talking a $25,000 trip for two in the finest resort in the Maldives. For the majority of people this is out of reach. And it will take time if you plan to do it through churning alone. But, for the ambitious churner, this is legitimately attainable. And it can be done by regularly opening multiple credit cards with large sign-up bonuses all at once. This might mean you'll have to meet a combined minimum spend of $20,000-30,000 in a three month period. In addition, anytime an exciting new credit card offer comes along, (Chase Sapphire Reserve comes to mind) you'll want to be in a position to immediately take advantage of it. The vast majority of people can't do this through day-to-day spending alone. In comes Manufactured Spending.

The most famous example of Manufactured Spending I can think of is when Brad Wilson earned over 4,000,000 frequent flyer miles buying $1 coins from the U.S. Mint. The U.S. Mint had a special promotion in 2005 where they were selling newly minted $1 coins for face value. Shipping was free and the website accepted credit cards. Brad managed to buy around $3,000,000 worth of $1 coins before they shut the deal down. It worked like this: He'd max out his credit cards by buying the $1 coins for face value. So for simplicity's sake lets say his credit card limit was $10,000 (it was probably a lot more but I can't find any numbers). Brad would then buy 10,000 $1 coins for exactly $10,000. Once they were delivered, he would deposit them in his bank account and then pay off his credit card bill with the deposit. Each purchase would earn credit card rewards (in this case it was frequent flyer miles) and the whole process cost him nothing (other than some time). Essentially all he was doing was moving money in a circle and collecting points in the process. Unfortunately the U.S. Mint caught on and shut this down and today's methods for Manufactured Spending are not as straight forward.

So before we dive into Manufactured Spending theres just a handful of things you need to consider. First of all you'll want to have a very good idea of where you want to travel and roughly how much it'll cost. And maybe even more importantly, you'll want to figure out which hotels and airlines operate in that location. It doesn't make much sense to churn a card that offers points for Alaska Airlines if you're planning on going to Africa (a continent they don't service). With this information, you'll have a handle on which cards it makes sense for you to open. You might not think it's possible, but there are churners out there that end up having hundreds of thousands of points they don't end up using simply because they didn't plan this part out very well. I won't talk about which cards it makes sense to open because I won't know what your goals are (first class or economy flights) or where you want to go. So that part does require some research on your end.

Now lets get to the exciting part: Manufactured Spending. The basic idea of Manufactured Spending is that you "fake" your spending. It is definitely frowned upon, and most businesses have put in place measures to make manufactured spending difficult if not impossible. But there are a few simple methods still out there.

AMEX Serve One VIP Card: By far the easiest method for manufactured spending is with the AMEX Serve One VIP card. You can load this card with money at a select few retailers by telling the cashier you'd like to load money on your card. What makes this card special is that you can load it with Visa Gift Cards. The workflow is as follows:

Purchase a Visa Gift Card with your credit card -> Load the AMEX Serve with your Visa Gift Card -> pay off your credit card bill. 

The reason this works is because certain Visa Gift Cards are coded as debit cards at the register. Depending on the retailer (looking at you Walmart) you'll want to avoid using the Vanilla Visa Gift Cards because the cash register is coded to cancel the transaction for these cards. If you don't see the word Vanilla, then you should be good. You can find Visa Gift Cards at many different retailers but you'll want to order from a store that meshes the best with the credit card you're going to use. For instance, the Chase INK earns 5x points at office stores such as Staples so you'll want to buy your Visa Gift Cards either in-store or on Staples.com to maximize your rewards. Once you have your gift cards, you'll want to be absolutely positive that they are activated (depending on where you buy from they'll already be activated) and that you know the pin number. For many VGC's, this will be the last 4 digits of the card number but this is not always the case (Read the packaging on the gift card for details!). You can load your AMEX Serve ONE VIP at Family Dollar, Krogers, Walmart, and a few other retailers. Just tell the cashier you want to load money using a debit card. Some cashiers don't care but others might tell you they can't take gift cards (they aren't telling the truth but don't argue with them). It is most definitely a good idea to do a trial run of this whole process with a small amount, say a $25 gift card in case something goes wrong. And again, absolutely do not argue with the cashier if they tell you they can't load your card - this is not the type of activity you want to bring unnecessary attention too. Once the money is loaded to your AMEX Serve, you can go online to their website and use their bill-pay option to pay off your credit card. A few additional notes about Serve cards:

• There is a $2500 daily limit for offline loads and a $500 limit for a single transaction. This means you'll need to perform at least five transactions to hit the offline daily load (though I do not recommend you ever hit this limit). 
• There is a $200 daily limit for online loading from a debit card. But do not under any circumstances use a Visa Gift Card to load your Serve card online. The Serve website will recognize you are trying to load from a gift card and shut down your account.
• There is a $7,000 combined monthly limit to loads. 
• AMEX is very proactive about shutting down Serve accounts if they think you are manufactured spending. And since you are, it is a good idea to not hit the daily and monthly limits.

Money Orders: The second, and in my opinion less desirable method is to use Money Orders. The workflow is the same as above:

Purchase a VGC with your credit card -> Purchase a Money Order with the VGC -> Use the Money Order to pay off the credit card bill.

Money Orders are likely to be scrutinized more heavily than loading your Serve card. This means you will likely find the person at the register asking you more questions than you would if you were simply loading a Serve card (not always the case but be prepared anyways). Remember: you aren't doing anything illegal, but you are doing something that can look sketchy and is generally frowned upon. So if you find yourself being interrogated by a cashier, there is no harm in being honest (other than that they might not process the order for you). Money Orders can be bought at many different places: Walmarts, Grocery Stores, and Post Offices are the most common. I personally go to the Post Office but thats a convenience thing for me more than anything. Like with loading a Serve card, you'll want to do a small scale test run - say a $25 gift card. And you'll want to be sure to tell the person at the register that you are loading from a debit card (this is technically not inaccurate). The biggest thing you'll want to consider with the Money Order method is that there will be a small fee and it will vary depending on where you are getting the Money Order from. So if you have a $500 Visa Gift Card and the Money Order fee is $0.70, you'll want to ask for a $499.30 Money Order.


There are certainly more methods for Manufactured Spending out there but most churners don't like to talk about them. Currently, these are the two least expensive methods I know of but I am always on the lookout for more. At the end of the day, the best thing you can do is keep your eyes peeled for any potential opportunities. Anytime you can buy something that can be easily converted into cash, there is a manufactured spending opportunity. Thats partially why I threw in the story of Brad Wilson at the beginning of this post - I hope that it inspires you to always be on the lookout. And since these opportunities tend to not last long once they become widely known, it is beneficial for you to get in on a new method as early as possible.

Thanks for reading,
Rybos