Earning credit card points requires you to spend on the card. For most of us, the challenge is that we’re not buying things worth tens of thousands of dollars a month that would earn us meaningful credit card points. This is where manufactured spending comes into play. Essentially, it involves using a credit card to purchase items that can be converted back into cash, which is then used to pay off the credit card balance from your initial purchases. By doing this, your credit card spending will earn you reward points that can then be redeemed for travel, merchandise, and more.

Hence, we are “manufacturing” spend on the card, and any money spent will come back to us in full.

What are the benefits of manufactured spending?

You earn rewards without actually spending money! This can be particularly useful if you're trying to earn a sign-up bonus or meet a minimum spending requirement on a new credit card.

For example, if you have a credit card that offers a sign-up bonus of 50,000 points after spending $3,000 in the first three months, you can use MS techniques to hit that spending requirement without actually forcing yourself to spend the full $3,000 to buy something you might not actually need.

With MS techniques, you will earn more rewards than you would with regular spending. For example, let's say you have a credit card that gives you 4X points (meaning four points per dollar spent) on all purchases at grocery stores. With your normal spending behavior, you might only spend a few hundred dollars a month at grocery stores. On the other hand, if you apply MS techniques, you will be able to spend thousands a month at grocery stores, giving you orders of magnitude more points.

In fact, as part of my $100,000 MS challenge, I plan to spend $25,000 at U.S. grocery stores in the next three months! I currently have a 9X points offer on my Amex Gold, which I intend to maximize. This should net me 225,000 points, which I value at over $3,000.

Is manufactured spending illegal?

Free credit card points usually sound too good to be true, so the first question I usually get is whether all this is illegal. Let us be clear: manufactured spending is not illegal. Credit card companies may frown upon this behavior, but nothing about it is illegal. In the worst case, credit card companies may claw back points or shut down your card. However, this is extremely unlikely, and there are several steps you can take to avoid these risks. Additionally, for all the manufactured spending methods covered on this site, we provide a risk assessment so that you can make an informed decision about whether you wish to take part.

Examples of manufactured spending!

Manufactured spending generally involves making some sort of purchase that can be converted back to cash.

Common manufactured spending methods include:

Buying a gift card (acquisition), then using it to buy a money order (liquidation)

Making a short-term, zero-interest loan

Funding a bank account using your credit card

Buying electronics online and shipping them to resellers

These are just some of the better-known MS techniques, but this blog will cover all the known (and not-so-well-known) techniques in detail! We will give each technique a rating across several categories: ease of use, scalability, and value.

How much could I earn with these methods?

This depends on so many different factors: which credit card offers you’re targeted for, whether you have a partner who allows you to open cards in their name, what kind of liquidation methods are available in your location, how aggressive you want to be, etc.

However, in the interest of not giving a cop-out answer, let me share two data points.

If you were to just follow the beginner’s guide...

You could easily earn $10,000 per year in value by opening a few cards.

If you were to follow along with my $100,000 challenge:

You would earn $50,000 in value

Note that I say “in value” because the best way to redeem points is not always by cashing them out directly. In most cases, you get more value by redeeming them for hotels and flights. For example, I recently stayed at the Park Hyatt Kyoto, which cost me 40K points per night. If I had cashed out those nightly points, I would have gotten $400. On the other hand, if I had tried to book the hotel with cash, it would have cost me $1,500 per night.

This sounds too good to be true... what's the catch?

In the interest of full transparency, this is where I see the risks in this hobby, and how we mitigate them.

Catch #1: Organization

The main catch is that you have to be organized. Like, extremely organized.

Even though we may be “manufacturing” spend, this is still real money we are talking about, after all! If you don’t stay organized and pay your credit card bills on time, your credit score will be negatively affected. On the other hand, if you follow all the directions we provide and pay off your statements, your credit score will actually improve, since lenders will see you as being responsible with money.

To simplify the organization aspect, we’re working on launching a tool to notify you whenever you need to take any action on your accounts.

Catch #2: Fees

As with anything, (almost) nothing is entirely free. With manufactured spending, you will encounter methods that have some small cost requirement (usually 1–3%). For example, buying Visa gift cards usually carries a 1% fee.

But don’t worry! The trick here is to make sure that your points earnings outweigh the costs. In most cases, the earnings will far outweigh any cost. For each method we share on this website, we provide the upfront fee expectations and credit card suggestions for making the earnings worthwhile.