Introduction to Manufactured Spending

Great Lakes Brewery in Cleveland, Ohio

Manufactured spending can be defined as spending money without actually spending money. In other words, the credit card company thinks that you have spent the money, but you have not actually spent any cash, as the money was simply transferred to  another form of currency. Manufactured spending is most often used to obtain credit card reward points, either through regular rewards when spending, or bonuses after hitting a certain amount of spending within a time frame.

For example, one form of manufactured spending has been to send money to another party through Amazon payments. When this occurs, the amount will be charged to your credit card, and the money will be made available to the party of your choosing. This is applicable to manufactured spending, as you can simply send the money to a friend, have the friend write you a check for the amount of the spend, and then this money can be applied to the credit card that was used to send the money using Amazon payments. All in all, this results in $1,000 in spending on your credit card without much work at all.

Manufactured spending can be used to hit sign-up bonuses for credit cards that would be out of the range of your regular expenses. For example, the Chase Sapphire Preferred often has a bonus of 40,000 points after spending $3,000 in the first three months. Even if you don’t have enough expenses to reach this spending amount in the time period, manufactured spending can help you reach this goal and you can obtain this lucrative bonus, which is worth upwards of $500 in travel rewards. See this post for some common manufactured spending techniques.

Overall, with some creativity and planning of purchasing, along with manufactured spending, you can be on your way to rewards in the form of free all inclusive travel and cash back.

 

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