Money For Nothing

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In “To Everything: Churn, Churn, Churn,” I made the comment that spending $17,001 in 5 months was “a piece of cake.”

No doubt this sounded quite callous to some. After all the head of a household making $50,000/yr in Arizona (a  low-tax state,) would take home $3500 a month in pay. This would necessitate that she spend almost 100% of her paycheck every month on credit cards in order to meet her lofty spending goal.

Which raises an important distinction. I certainly wasn’t suggesting that it was a good idea to actually buy $17,000 of goods and services in that period of time. That would be completely inconsistent with my core message of saving more and spending less. The suggestion was merely that one could easily buy $17,001 worth of nothing  with credit cards.

Which is where manufactured spending comes in. On it’s simplest terms, manufactured spending refers to spending lots of money on copious amounts of nothing in order to make it appear that you’re spending greatly more money on your credit cards than you actually are.

When it comes to manufactured spending, there is a large spectrum of activity the falls under its umbrella.

Some people will spend $50,000 a month per credit card and make multiple credit card payments throughout the month in order to maintain available credit so that they may extract the most value possible from their credit cards.

These people seem to frequently get their credit cards shut down.

Others are comfortable with almost no manufactured spending at all. Thus these people are unable to fully leverage the power of credit card rewards/Sign-up bonuses.

I advocate for a middle way. I see manufactured spending as a way to get credit card rewards for every penny spent that I would’ve spent anyway.

Think about your biggest expenses. your mortgage/rent, your car payment, your taxes, your insurance, your child’s education.  These expenses are often impossible to purchase with your credit card without paying large and undesirable transaction fees.

If you could buy all of these big-ticket items with your credit card, then your monthly credit card spend would at least double, without you actually spending a penny more than necessary.

By buying cash equivalents with credit cards one can transfer the non-eligible credit card spending on to one’s credit card.

To me, this seems eminently fair, but each person must define for himself what it is that he is comfortable with.

So how does one go about manufacturing spend?

Step one: go to a supermarket, gas station, drugstore, or Internet gift card store, and buy a cash equivalent with your credit card. Use the card which gives you the most value for the purchase in that particular category of store.

Cash equivalents include cash value gift cards, and reloadable cards (Cards whose value can be loaded onto another card via phone or Internet.)

Step two: load the cash equivalent onto another card, or put it into your wallet for every day spend.

The best card to load the cash equivalent card’s value onto is probably the free bluebird card from American Express which serves as a pseudo-checking account for the under banked. This is a card which can be filled with reloadable cards called vanilla reloads, or by loading with gift cards with pins at Walmart registers.


Bluebird:  can be stuffed with manufactured spend

Step three: You can then actually write checks (to your mortgage company, student loan company, etc) or use online bill pay to liquidate the bluebird card. (What I used to do. )

Or you can just write a check right back to the credit card company who’s card you used to buy the cash equivalent in the first place, and immediately pay down the bill for your manufactured spend. (What I do now.)

There are some general guidelines that are useful to consider prior to beginning to manufacture spend.

1. Never spend more on cash equivalents than you can afford to be without for at least a month. -Sometimes there are hiccups and your money will become temporarily frozen. You will always get it back, because you’re doing nothing illegal, but sometimes it takes time.

2. There’s a lot of information out there on the web as to what works and what doesn’t work within the realm of manufactured spending. If you’re interested in buying a new cash equivalent product, or reloadable card, do a little research on the product before you do.

3. Always save all documentation, receipts, transaction confirmations, that have to do with your manufactured spend transactions.

4. Look for ways to offset the cost of the cash equivalent purchases. These can include fuel points, cashback credit cards, cashback portals. The possibilities are endless.

5. Value your time. If you don’t enjoy the exercise, you should probably just scale back your ambition a little bit and keep your credit card spending to more comfortable levels.

6. This is a bit redundant but worth repeating. Only do what you feel comfortable with. People will look at you strangely for buying $3000 worth of cash gift cards. You have to know in your heart that you’re doing nothing wrong and hurting nobody in order for it not to get to you.

I mean you don’t want to feel like this guy.

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11 Responses to “Money For Nothing”

  1. babalooleeee October 10, 2013 at 3:38 pm #

    great post!

  2. Noub May 8, 2014 at 8:31 am #

    Are there any fees in this process? For example, are there any fees incurred using the Bluebird card?

  3. N May 8, 2014 at 8:32 am #

    Are there any fees in this process? For example, are there any fees incurred using the Bluebird card?

    • Miles Dividend M.D. May 8, 2014 at 9:10 am #


      There is a 1% fee if you buy gift cards of $500 value.

      This can often be offset by using a cashback card to buy the gift cards.


  4. Noub May 8, 2014 at 12:50 pm #

    Hmm, but aren’t we trying to buy them with the miles cards not cash back cards. Also, don’t these vanilla cards have a 3.95 fee?

  5. Noub May 8, 2014 at 1:40 pm #

    Isn’t the idea to use a miles card, not a cash back card?


  6. Dannio November 30, 2014 at 6:21 pm #

    “Or you can just write a check right back to the credit card company who’s card you used to buy the cash equivalent in the first place, and immediately pay down the bill for your manufactured spend. (What I do now.)”

    To confirm: this is using the credit card to funnel money through some number of intermediate cards (in the case of Redcard/Redbird, just one) to pay back the original credit card, right? I am new to manufactured spending.

    If so, isn’t this closer to the “artificial” kind of manufactured spending than to the middle way that you mention in your post? Because those aren’t dollars you would have spent anyway, like a rent payment.

    This is not a moral judgment, just clarifying before I go engage in behavior that raises some credit card eyebrows.

    • Miles Dividend M.D. November 30, 2014 at 7:18 pm #


      “Artificial” is in the eyes of the beholder.

      From a practical standpoint, the credit card company just receives a check from a third-party bill pay Company. This is indistinguishable from using electronic bill pay on your brick-and-mortar bank’s website.

      From an ethical standpoint, you’re on your own. My own comfort level is in keeping my manufactured spending amount below my monthly take-home income. But this is a line that each manufactured spender must draw for himself.



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