This is the third post in our series on manufactured spending for beginners. Previously, we covered key concepts behind manufactured spending and answered some basic questions related to the hobby.
Here, we will (1) cover real step-by-step examples of manufactured spending and (2) provide a timeline that you can reference.
Basic principles
The basic principles of earning credit card points from manufactured spending come down to two simple steps:
Find a reward play (e.g., spend $5K on card X to earn 100K points)
Manufacture spend on the card to earn your reward (e.g., manufacture $5K of spend)
Let's take a closer look at both of these steps.
Step 1: Finding a reward play
A classic reward play for beginners
A reward play may sound daunting by name, but it's just when a credit card offers a reward for spending some amount of money on a card. Finding a reward play doesn't have to be hard; in fact, we maintain a list of our current favorite reward plays.
These generally fall into two categories: spending-based and category-based.
Spending-based
Spending-based plays typically take the form of sign-up bonuses. You will sign up for a new credit card and earn some enticing amount of points for spending some amount of money. The screenshot above shows an example of this on the Amex Platinum card. At any point in time, almost all credit card companies will be offering some type of sign-up bonus for their cards. This type of spending does not have to conform to any specific category.
Category-based
Sadly the best thing that happened to me in 2023
Other common reward plays involve some type of spending within a specific category in return for some multiplier bonus on your spend. For example, in 2023, Amex offered a reward of +5X on every dollar spent at grocery stores, up to $25,000 in spend. If you got this reward on the Amex Gold card, which already earns 4X at grocery stores, you would have earned 9X (4X + 5X) on grocery spending. If you played this perfectly, this would have earned you 225K MR points ($2,250 if directly cashed out).
Yep, you can definitely do that. Manufactured spending is for folks who don't want to spend their real money toward earning these rewards. If you're content with opening a card or two a year and applying your real spending toward the card to earn rewards, go for it.
Yes, most cards have an annual fee, ranging anywhere from $50–$650. Most of these cards have benefits that outweigh the cost of the card, assuming you can fully utilize those benefits.
Valid concern. Your credit score could be negatively affected if you are not careful, but if you correctly follow the methods in our guides, your score can improve over time.
If you're starting out, dip your toes in with a sign-up bonus for a credit card with a low annual fee and low spend requirement. Then think about reward plays in terms of hourly earnings.
Step 2: Manufactured spending
Now for the fun part! Once you've picked a reward play, you will have some amount of money that you need to spend on your credit card. You may have a specific category that you need to spend on. We list all of our favorite manufactured spending methods here.
From here, this is a one-or-more-step process of converting money from your credit card into a bank account. Each method has different pros and cons and will typically have some small percentage fee. We use the bonus earning calculator to make sure our rewards far outweigh any fees. There are a variety of methods for manufacturing spend, but some common methods include:
One-step methods
Common one-step methods include:
Funding a bank account with a credit card
Purchasing a CD with a credit card
Purchasing electronics and shipping them to reselling groups
Making a short-term loan with a credit card
Gift card liquidation methods
Purchase a Visa or Mastercard gift card (online, at the grocery store, etc.), then liquidate it by:
Using it to buy a money order, which you can deposit into your bank account
Funding an investment account with your gift card, which you can cash out to a bank account
Load the gift card onto a reloadable debit card, which you can liquidate in various ways (e.g., bill payment services)
See the full list of our manufactured spending methods on this page
Fees can vary, but are typically in the 0%-3% range. Often there is a tradeoff between convenience, scalability, and fees.
Many liquidation endpoints do not accept credit cards directly. Gift cards can sometimes act as the bridge between card spend and cash-like liquidation.
You can absolutely focus on plays from home. Some people prefer remote plays and accept a higher fee for the convenience.
Example: Earn $600 in value in one hour
Reward play: 60K sign-up bonus (SUB) on Chase Sapphire Preferred ($600 value)
Manufactured spending method: Funding a bank account
Cost and fees: $0
Steps
Open a Chase Sapphire Preferred card with a 60K sign-up bonus. I like looking for card referrals on Rankt, where you may be able to find further elevated offers.
Once you have your card, find a bank account that accepts credit cards for funding. The best place to find such bank accounts is on Doctor of Credit. Especially take advantage of the comments at the bottom, which will have people's most recent data points. You may need to fund multiple bank accounts to hit your sign-up bonus.
Once your money is in your bank account, use it to pay off your credit card bill.
My favorite is Gesa Credit Union, which let me fund $10K from a credit card, but this is limited to certain states.
Approach analysis
Pros
Hourly earning rate is incredible ($600 per hour)
No fees involved
Can be done completely online
Cons
Not scalable: bank accounts can only be funded with a credit card when the account is first opened. If you wanted to do this again, you would need to find a new bank account. And unfortunately, there are only a limited number of banks that allow funding via credit card. So you can only use this MS method a few times until you're tapped out.
Some banks only allow limited amounts to be funded via credit card, in which case you would need to open multiple bank accounts. This adds to the overhead of keeping track of multiple separate accounts.