Credit Cards Manufactured Spending

Manufactured Spending With the Discover It Miles Card After Year 1: Worth It?

After my Barclay Arrival Plus card got shut down, I had to look for a replacement 2% cash back card. Eventually I landed on the Fidelity Rewards Card and the Discover It Miles Card. The Fidelity Rewards Card offers 2% cash back, while the Discover It Miles Card paid out 3% cash back the first year. I earned over $3,100 worth of cash back from the Discover It Miles Card during that year and ended up keeping the card. It has no annual fee and comes with an annual $30 in-flight wifi credit, so I’m basically getting paid to keep the card. But is it worth putting any manufactured spending on the card? That depends on your manufactured spending expenses, but in my experience it can be totally worth it.

Discover It Miles Credit Card 3% Cash Back Bonus First Year
Maximizing the 3% Cash Back Bonus

I’m churning gift cards the lazy way these days: I mostly rely on credit card category bonuses and am not doing much to off-set fees. With 2% cash back cards, it’s still possible to manufacture spend at a profit. Past the first year, the Discover It Miles Card only earns the equivalent of 1.5% cash back. That amounts to $15 cash back per $1,000 worth of gift cards. If you’re churning gift cards in large numbers, it can get pretty lucrative…

Discover It Miles Card + Gift Cards.com

With Yazing paying out 1.25% cash back on giftcards.com orders, a $2,500 Visa gift card order would cost $13.15 to purchase and liquidate. That purchase would also generate $37.50 cash back with the Discover It Miles Card. That leaves a profit of $24.35. You’re essentially “paying” $13.15 for $37.50 worth of travel credits. If you were to utilize your rewards to cover travel expenses, you could essentially save 65% on all travel. That’s not as great as the 75% discount you can generate with the Barclay Arrival Plus card, but it’s still substantial.

$2500 Giftcards.com order

$37.50 cash back from Discover It Miles Card Cash Back on $2500

– $10.95 gift card fees (after 1.25% cash back from Yazing)

– $2.20 money order fees

= $24.35 profit (or $9.74 profit per $1,000)

Discover It Miles Card + Simon Mall

Buying gift cards with the Discover It Miles Card from Simon Mall isn’t quite as lucrative. Since there’s no portal cash back, you’re pretty much on the hook for all the fees. It works out to $21.95 fees on $37.50 cash back earned from the Discover It Miles Card. You come away with a $15.55 profit, which amounts to a 41% discount on travel. Assuming that’s how you put your cash back to use.

$2500 Simon Mall gift card purchase

$37.50 cash back from Discover It Miles Card Cash Back on $2500 Simon Mall purchase

– $19.75 gift card fees

– $2.20 money order fees

= $15.55 profit (or $6.22 profit per $1,000)

Final Thoughts

If you’re considering using your Discover It Miles Card for manufactured spending after the first year, it can still be lucrative. You can treat the card like a travel savings account to pay for travel when redeeming miles isn’t possible (or doesn’t make sense). Another option is to use the cash back earned from this card to cover manufactured spending fees incurred from mile-earning credit cards. Discover lets you transfer rewards directly to your bank account, which is a nice perk.

While 1.5x rewards doesn’t seem like much, it can still translate to substantial savings on paid travel. If you haven’t hit the 1-year mark on your Discover It Miles Card, I highly recommend you take advantage of the 3x bonus while you can. It applies to all spending and is a one-time deal only, so milk it while you can.

Have you used the Discover It Miles card for manufactured spending after the payout rate dropped to 1.5x miles?

NOTE: If you’re thinking of picking up a Discover It Miles Card, consider letting me refer you. We’ll both get a $50 statement credit after you are approved and make your first purchase.

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18 Comments

  1. corinne g thompson

    I know I just woke up but, how do you figure your “59% discount on travel” in your second example? Thanks for your great column.

  2. Ariana, will you be going back to the Arrival Plus card?

    • Yup! Just looking for a few more stats on how soon you can reapply.

      • corinne g thompson

        I tried reapplying for the Barclaycard Arrival and when I called was told ,just like Chase, a 24 month period between apps was needed. Huh? That was a first. Did you hear the same?

      • What? I thought barcl@ys shut you down. They canned me last year. C1ti canned my spouse last year and even as just an AU I appear to be banned there (even though I got that card off my credit report). I figured Barclays would be the same.

  3. LOVE….Excellent article. Thanks Ariana.

  4. I notice that you never mention the Capital One products. Is there a reason for this? Very much appreciate your blog!

    • I might have to do a post on that. I don’t like the three credit pulls from Capital One. It’s just not justified considering the sign-up bonus and so many other alternatives out there.

  5. What about other straight 2% cards instead?

    • Works out to $50 cash back per $2,500 gift card purchase. Subtract the appropriate fees to determine profits. It’s a good way to go if you want a $0 fee card that pays out more than 1.5x miles.

  6. Is the Discover It Miles Card churnable ? Also, can you max out $30K monthly on TooCashBack AND another $30K monthly on Yazing ?

  7. Thanks for the article. How soon does Yazing track your order? I see they have a Dashboard now.

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