Tag Archives: manufactured spend

Things I Like Right Now: US Bank

In the past, I’ve written extensively about how I think the US Bank Club Carlson credit cards are underrated in the miles/points blogosphere. These cards are one reason why I’m a fan of US Bank.

More recently, though, I’m a big fan of the Visa Buxx cards offered through US Bank. I’ve been slacking on the manufactured spending front, but Visa Buxx makes for a couple of grand of easy spend each month at minimal ongoing cost. It helps that there are US Bank ATMs where I live, including near my work as well as near my home.

To make the process of liquidation even easier, I opened a US Bank checking account, so I can withdraw money and deposit it at the same trip (yes, I hog the ATM for 5 minutes or so). And at the time that I opened my checking account, US Bank was offering a $150 opening bonus, so that just made it all the more worthwhile.

Granted, there are things that I dislike about US Bank: namely, their fraud controls are way too stringent. I’ve given up on using my Club Carlson credit cards for any sort of manufactured spend as I hated having to call every single time I made a somewhat large purchase. But Visa Buxx and redeeming two nights for the price of one (which can be stacked back-to-back with two credit cards/Club Carlson accounts) make me a big fan of US Bank right now.

A Quick Primer on Manufactured Spend Using Amazon Payments

This is an article for beginners, so I apologize in advance for those of you who are more well versed in these matters.

I’ve mentioned manufactured spending a number of times over the past couple of weeks, and some of my friends have told me that they have no idea what I’m talking about, nor how to even start.

Manufactured spend is essentially “spending” money on a credit card without actually spending much (if any) cash out of pocket. This is extraordinarily useful for people like me who don’t actually spend that much money but like applying for credit cards with minimum spending requirements.

One of the easiest ways to manufacture spend is through Amazon Payments, and it’s free!

Step #1: Sign up for an Amazon Payments account. You can use the same login info as your normal Amazon account, but you will need to give additional information like linking a bank account and giving your SSN.

Step #2: Withdraw any money that you might have in your account.

Make sure you've withdrawn any balance so you can fund your transfer via credit card

Make sure you’ve withdrawn any balance so you can fund your transfer via credit card

Step #3: Find someone you trust, and send them money. The limits are $500 per day and $1000 per month in total.

Click "send money" to start the process

Click “Send Money” to start the process

Make sure that you choose “Goods/Services” so you don’t get charged any additional fees!

Goods or Services is key!

“Goods/Services” is key!

Then choose whichever credit card you want to manufacture spending on. You can also use Amazon Payments to get money off of gift cards this way.

And of course, choose to fund via credit card instead of bank account

And of course, choose to fund via credit card instead of bank account

It’s super easy, and a free $1000 of spend each month. Even with a basic cashback card like the Chase Freedom or Discover It, you’ll manufacture 1,000 points, which is worth $10, but this becomes super lucrative when you’re instead hitting minimum spend requirements for things like a 40,000 point sign-up bonus for the Chase Sapphire Preferred. Not bad for something that takes less than 5 minutes per month once you’ve set it up!

Why You Shouldn’t Change Your Spending Habits When You Get New Credit Cards

I’ve successfully converted a number of friends to points and miles earning credit cards, but I sometimes worry about what I’ve done. In general, the credit cards I recommend to my friends have minimum spending requirements (like $3,000 in the first three months for the Chase Sapphire Preferred, which is the card I normally recommend to newbies) in order to get the full sign-up bonus, and while I do believe wholeheartedly that these sign-up bonuses are worth the minimum spend, it’s possible to make inefficient decisions that negate the benefits of applying for credit cards.

The most dangerous thing that I see people do is change their spending habits to hit minimum spend requirements. This isn’t inherently bad, but it depends on what you’re changing. If you’re just shifting around spend onto a credit card that you would already otherwise do, that’s great! This is a good change, as you’re maximizing the value of your spending. If you’re just frontloading your spending (e.g. buying Christmas presents in July instead of in December to hit a minimum spending requirement), this also isn’t bad, provided that you have the ability to float the money (there’s an inherent cost to spending your money now rather than later, and Christmas presents are not very likely to appreciate in that time period).

But the thing you should almost never do is buy things you wouldn’t normally buy, and I worry that the notion of having a minimum spend requirement makes people more willing to spend money that they normally wouldn’t spend. For example, if you’re at Whole Foods watching a guy doing a Vitamix demonstration and you think to yourself, “gosh, I don’t really need a Vitamix, but it’s pretty awesome and it makes such smooth smoothies and can even make soup, and I do have a $3,000 minimum spend that I need to meet”, then you’re in the danger zone. Stop and reconsider! If you spend $500 on a blender that you don’t really need and the sign-up bonus is only worth $500 to you, then you’ve negated the entire sign-up bonus. (I don’t mean to disparage Vitamix blenders at all, as they are really, really awesome and totally worth it for some people)

How do you get around this and avoid this spending trap? Essentially, you need to ignore the fact that you have a minimum spend requirement and spend as you normally would. You’re not maximizing your benefit if you end up spending money on things that you don’t need.

But what if you’re like me and your normal spending habits aren’t nearly high enough to hit minimum spend requirements? This is where manufactured spend comes into play. Pretty much everyone can easily manufacture an extra $1,000 per month for free via Amazon Payments, and if this still isn’t enough, then you can try something like Bluebird and Vanilla Reloads to get up to an extra $5,000 per month at a cost of $3.95 per $500 of manufactured spend (well, technically paying $3.95 per $503.95 of manufactured spend). It’s true that you’re changing your spending habits and spending money that you normally wouldn’t have spent, but at least this way, the spend is much more constrained, and you’re still almost certainly going to come out ahead paying $3.95 per $503.95 of spend on almost any decent rewards card.