Credit Cards Manufactured Spending

Manufacturing Spend for Cash Profit: Worth It?

Before I started a new job last year, I was pretty much blogging and churning gift cards for a living. Back then, I had access to several Barclay Arrival Plus Cards and 5% cash back gift cards that helped me earn a 3.5% profit on all of my spending. With the huge number of gift cards I was churning, this 3.5% cash back added up to a significant amount. That deal died and then I focused on churning gift cards with 2% cash back cards for a while. Until that got really boring and I started to evaluate my life choices. However, I still occasionally MS with cash back cards and if you approach it the right way, it can be somewhat lucrative.

Purse full of Visa gift cards
My purse during holiday/gift card churning season

For manufactured spending to be lucrative (or just cheap, if you’re earning miles), you need to keep your costs down. You can do this by using apps like iBotta to get cash back on your Walmart receipt uploads, take advantage of discounted and $0 fee gift card promotions, and by taking advantage of credit card category bonuses. To demonstrate how profitable manufactured spending for cash can be, I’ll use a few examples based on Visa gift cards priced at $3.95 since that’s the most common type.

Gift Card Churning with 2% Cash Back Cards

Manufacturing spend with 2% cash back can be somewhat lucrative, but I was primarily doing it because it was easy. When I had the Barclay Arrival Plus Card, it was convenient because rewards posted as soon as the transaction did and I was able to generate a lot of manufactured spending. Until Walmart Bill Pay came into the picture and I was shut down.

The 10% rebate I got from the card (now 5%) added up, and I had plenty of people who let me charge their travel to my credit card so that I could redeem my miles for those purchases. I used to go to my local mall almost daily, pick up $9,500 worth of Visa gift cards and after liquidation I came away with a profit of around $108.

$191.50 cash back
– $75.05 gift card fees
– $6.65 money order fees
= $109.80 profit

Nowadays, I occasionally use my Fidelity Rewards Visa. It’s tied to my Fidelity brokerage account and rewards are deposited monthly. I treat it like a secondary savings account, so whatever cash back I earn stays in there for a rainy day. At 2% cash back, my profit on standard gift card churning is now about $108. That’s not bad for a couple of hours worth of work…

$191.50 cash back
– $75.05 gift card fees
– $8.36 money order fees
= $108.09 profit

Full Disclosure: I do have an affiliate relationship with Barclay, so using the Arrival Plus link in this post to apply for the card gets me a commission.

Gift Card Churning with the Discover It Miles Card

The Discover It Miles Card offers 1.5% cash back, which is doubled the first year. You get the second half of your rewards deposited into your account at the end of your first year. Considering this card has no annual fee (or sign-up bonus), that’s a pretty generous offer. I had a goal in mind to generate over $10,000 worth of cash back on a single card. But my credit limit wasn’t high enough and I kind of got lazy at one point, so I ended up with *just* $3,188.88 worth of cash back.

Somewhat disappointing, but it did cover a lot of my travel expenses that I wasn’t able to redeem miles for. I took a lot of Uber and Lyft rides, so it was nice to be able to credit rewards towards those purchases. Plus, when I exhausted my travel redemptions, I was able to transfer the excess funds into my bank account. If you’re looking to pick up a Discover It Miles Card, your profit on a standard $9,500 gift card churn would be around $201.59:

$287.25 cash back
– $75.05 gift card fees
– $8.36 money order fees
= $201.59 profit

If you are thinking of applying for a Discover It Miles card, please consider using my referral link. Just shoot me an email and I’ll send you one.

Gift Card Churning with Cards That Earn 5% at Office Supply Stores

If you don’t have a Chase Ink Plus card, don’t beat yourself up. The American Express SimplyCash Plus Business Credit Card also earns 5% cash back at office supply stores. That amount is limited to the first $50,000 spent (in this and other categories), but that’s still plenty. Office supply stores carry Visa gift cards in smaller denominations with higher fees, but you can still earn a good amount of cash back.

For example, on $9,600 worth of Visa gift card purchases your profit would be a little under $200:

$494.32 cash back
– $286.40 gift card fees
– $8.80 money order fees
= $199.12 profit

Gift Card Churning for Category Bonuses

There are various other cash back cards that offer category bonuses you can take advantage of in order to churn gift cards for a profit. Do a bit of research and figure out what works best for you.

Not everyone can churn gift cards in large volumes or at a profit. Factors that could affect this include having MS-friendly stores around, time, and the funds to cover any potential losses. Always be prepared for a shut-down and have a back-up in place in case your primary liquidation method goes away.

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  1. Nice summary, thank you!

  2. Great summary! Just FYI, I don’t think all of your blog post uploaded. The last sentence reads, “Not everyone can churn gift cards in large volumes or at a profit. Factors that could affect this include” and then stops.

  3. To be continued……………..?

  4. Anyone using the citi double cash card for msing cash back?

  5. Been using the Arrival Plus for years and my math is different from yours. I buy $9500 from Simon. Shipping and card costs are $78.65. WM is $8.36. Point credit from Barclay is -8.50. My net cost for those $9500 in cards is $77.51 for me. This $9500 gives me a redemption of 19,000 points, or covers $190 hotel bill. That means those points saved me $190 – $77.51 = $112.49. This does not look like a profit to me, but a reduction in my overall cost of redemption.

    • It’s a reduction in cost if you’re redeeming for travel. But what I did was book travel for other folks (who would reimburse me) and then I’d use the funds for an additional statement credit.

  6. Got the 40% cash back at CVS up to $25 and bought a vanilla vgc but when I took it to WM. The card wouldn’t go thru. Any idea how to make this work?

  7. Thanks very helpful, but would like to hear more about the “what to do with the mo” aspect of the equation.

    • Open a checking account at a credit union that you aren’t worried if they close your account. Deposit all your MOs there. Usually credit unions, in my experience, are perfectly fine with this. I live in WA state and BECU is a good choice. This varies by where you live. But do choose a bank or CU that you wouldn’t be to worried if someone there got overly concerned and closed your accounts. Meaning not one you need for other business or potential mortgages, or credit cards. Not Chase etc. Then of course pay your bills from this account. It’s also nice to keep your churning monies away from your personal money available to spend.

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