Manufactured Spending

Reader Question: How Do I Get Started With Credit Cards and Manufactured Spending?

Reader Grant emailed me with a manufactured spending question that’s pretty common among newbies, so I thought I’d share my answer in a post. Also, I’m out of content ideas so I figured a reader question would make a good post.

“I’ve been researching and have been looking to start MS’ing. I’m wondering what the first step should be. I currently have 2 credit cards: AMEX Platinum and Chase Sapphire Preferred. I definitely want to apply for a Hilton card (For hotel) and then an American Airlines card (For Travel) – do you have any recommendations here?”

My advice to anyone looking for a rewards credit card is to get one that helps them meet their travel goals. Banks are getting strict about credit card approvals, so you should be equally picky about which credit cards you apply for. Getting a Chase card to start is a great choice, since you can then churn other cards without worrying about 5/24.

The next step is to have a travel goal in mind and then pick up credit cards that help you meet that goal. Work in cards from different issuers (Citi, Bank of America, Barclay). For AAdvantage miles, I recommend the Barclay Aviator Red over the Citi Platinum AAdvantage. The sign-up bonus is the same but Barclay doesn’t have a spending requirement. 

Cards that earn flexible rewards (i.e. Chase Ultimate Rewards, Amex Membership Rewards, Citi ThankYou points) are always a good bet if you don’t have a specific redemption in mind. You can transfer those points to lots of different airlines and hotels, giving you flexibility when it’s time to book travel. I’d also look into cards with large sign-up bonuses (i.e. 50,000 points and up). It’s always a good idea to take advantage of limited-time promotions when they come around. An example? The Chase Iberia Avios Card, which currently has a 75,000 mile sign-up bonus (up from 50k). 

Normally, I would also recommend the Starwood Preferred Guest credit cards to newbies. However, considering the ridiculous $200 statement credit Amex is offering in lieu of a sign-up bonus, I would pass on it. Unless you plan on doing a lot of manufactured spending before D-Day. Having lots of SPG points (and converting them to Marriott) before the new award chart goes into effect is a smart move. Which brings me to Grant’s second question…

“I’m wondering what your recommendation is for someone looking to do their very first MS transaction – I was thinking of just going to CVS/Walmart and buying a $100 – $500 VISA Gift Card to start out…?”

If you’re buying gift cards for the first time, start small – especially if you have a fairly new credit card. A $1,000+ purchase will probably set off a fraud alert. Start with $500 (to make paying the fee worthwhile) and work in some normal spending for a while. Then slowly work your way up to larger numbers. My general rule of thumb for gift card churning is never to spend more than my stated annual income. In case of an inquiry, it’s going to be hard to explain why your spending habits exceed your earnings. In that situation, I’d normally just admit to doing this for the miles rather than keeping up an unbelievable charade. Still, it’s best not to even get to that point. Keeping your long-term spending capped helps you stay under the radar. 

Those are pretty much the basics when it comes to getting started with rewards credit cards and gift card churning. Once you have an actual goal in mind, you can make decisions accordingly.

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  1. Aloha Ariana. I have a question about your comment to convert the SPG point to Marriott before DDAY. I had thought that the merger would do that automatically at 1:3 and I should keep the SPG in place for now because of their convertibility to other loyalty programs. Can you expand on why I should do it earlier? I appreciate any thought you may have on the timing of this. Mahalo, Lulu

  2. Ariana, Another great and well written post. I would add emphasis, that getting those Chase cards 1st should trump all other cards at this time. Get Ink, Freedom, and Chase Reserve, then all the others. I would have added the Arrival Plus as one of the cards to get, or the newer Arrival Premeir, or whatever, it is called.

    Also, I would not suggest doing MS for the minimum required spend on a card. Use your rent, insurance, car payments, etc. directly to payee or through Plastiq. Once minimum is met, then a good time to MS.

    • Thanks Byron! Yes, getting a Chase card first is a must. In general, I think it’s best to work your way up, ms-wise. A lot of folks have had sign-up bonuses clawed back from MS. So it’s best to be careful in the beginning and try to meet most spending reqs via normal spending.

  3. Hi Ariana, I have some gift cards I won’t use & want to sell. I’m not ms’ing just need to unload at a decent rate. Since you are answering reader’s questions this go round, which reseller do you recommend? Thanks!

    • That depends on where you got them and whether you have receipts. If you can provide proof of purchase and got the cards from a retailer, then I’d resell to The Plastic Merchant. Otherwise, I’ve gotten good reselling rates through Cardpool.

  4. Matt Barkley

    Great post! As someone who’s just getting started with VGC (SimonMall)>MOs, do you have any recommendations for banks in which to mobile deposit (or ATM) the MOs? I don’t want to use my main bank account, so hoping you could provide some insight to this. I know Alliant has a high daily deposit max, but maybe more than one bank/CU is necessary? Thanks for your help.

    • I use WF for banking because none of my credit cards are tied to them. So if they do shut me down, it doesn’t really affect me. Their mobile deposit has never worked for me, so it’s a bit of a hassle to deposit them via ATM. Back when I used Bofa for deposits, I was rarely able to use mobile fro MO’s.

  5. Thanks for the post!

  6. can u explain when and what DDAY is? and how it applies to spg and marriott..

    • She’s referring to, I believe, August 2018 when SPG points will become Rewards Points with Marriott (pretty much become equivalent by multiplying their value by 3). This will also be when new point rates for hotel categories begin.

  7. Just got started in MS and I must say… My MSing skills are weak. At least money order skills. I’m having difficulties liquidating VGCs. I’ve liquidated about $3k but I’ve purchased closer to $9k (1,800 MCGC).

    I go to the same 3 or 4 WMs and they’re all hit or miss based on the employee. Some tell me they don’t allow GCs. Some don’t check. One told me I could use GCs as long as it has a pin BUT I needed to give her all sorts of personal info like my DL, address, profession, and SSN ( I drew the line here and decided not to go thru with it).

    I’m actually more than willing to give the WM employees a kickback if they’ll do the MOs just to save the headache. Is anybody honest with them and letting them know what you’re doing? I’ve been pulling out my 5 bank debit cards to show them and then hiding the GCs. Again, hit or miss partly because they’re all $200 GCs.

    I tried to do the MCGC trick of pressing cancel on the last swipe but it doesn’t seem to work. Do I need to register these first online? I tried many times at multiple locations and either I’m not getting the timing right or MCGCs just aren’t working in my area. I’m ready to give up and just use them to pay my mortgage via Plastiq.

    • Jay – just sharing info from another poster on here I read (I haven’t done this yet, but am going to buy my first giftcard today) – he says to always use the word DEBIT. Tell them you want to pay with your debit card. Dunno if this is something you’ve already done but thought I would at least share because as someone who is about to try this I thought it was pretty clutch.

      • Jessica

        The tips on here plus a little experimenting of my own have made it easy to do money orders. I still can’t get mcgc to work even with the last swipe tip at my local WM but visa GCs are a breeze.

  8. Oh ok great! Glad to hear. I couldn’t buy at the mall today because the service center was closed. I browsed the GCs at CVS and even the non-Vanilla visa debit cards seemed more work than they were worth for a beginner like me (costs money per transaction etc).

    • Which credit card are you using? I was using ink cash and buying $200 vgc to complete my min spend at Office Depot. It’s a lot of work for a small amount of money but OD has some great sales that made it worth it. $15 off $300+. I was combining with ebates 6% cash back. Unfortunately my ebates account got shut down so I was only making about $14-15 per $200 card after the discount and 5% cash back (plus completing the min spend to get $300 which is now $500

  9. Geez… sounds like a lot of work. I won’t be able to get into all that, I barely have time to go to Walmart. I just tried to buy a money order with a GC at the post office and it didn’t go through, so I’m disappointed about that but it was worth a try.

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