Manufactured Spending and Maximizing Points

Now you know what you can do with points and you have decided on the cards that work best for you, we can discuss the strategy to maximize your points. Aside from using your card FOR EVERYTHING (seriously there is no reason to pay by any other means), there are opportunities to earn more points without actually spending more.

Manufactured Spending

I will not spend too much time on this topic, because the most beneficial avenues for making this strategy work have been cut off by the card companies.  It is good to know though because the rare opportunity may come back and you will want to jump on it quickly.

The concept behind manufactured spending (MS) was to make it look like you spent a lot of money, without actually spending any money at all, or just a small fraction. For some of the rewards cards, you have to spend several thousand in a short amount of time to qualify for the fat bonus. Someone just starting out in this game, they may not have the revenue stream to support that; you can do things like pay for a group dinner and collect the cash, etc but that will only get you so far.

MS in principle is quite simple but required using 3 things: your Rewards Card, a Visa/MC Debit Gift Card  (must have the Debit symbol), and an AMEX Bluebird Account.

1) You would buy a Visa/MC Debit Gift Card using your Rewards Card.
2) You take the Visa/MC Debit Gift Card and load the money onto an AMEX Bluebird Account. You had to go to Walmart to make this transaction.
3) You pay off the Rewards Card using the money loaded onto the AMEX Bluebird Account via on-line.

On the surface this seems pretty simple and is almost a Zero-Sum transaction, but there two major pit falls:

• The Visa/MC Debit Gift Card usually has an upfront fee ~$2.95-6.95. It would cost you money to buy money. This was only beneficial in certain situations; 
• Using the Chase INK card, you would earn 5x the points (max card value was $200, so 1000 points, this is when cents per points (cpp) became very important factor)
• There was a time when Office Depot would give you $10 off if you bought a $200 gift card. $200 + $6.95 fee - $10 = ~$197 out pocket but $200 into your AMEX Bluebird. That's a $3 profit per card. (People would buy up thousands of $$$$ in those gift cards when this promotion was around; by "people" I meant me.).
• If you were just short of the spending requirement to get the huge bonus and did not want to actually spend all that money, you could eat the fee and make it an almost Zero-Sum transaction and qualify for the bonus.
• Time. If you are using the Chase INK you would have to go to the office supply store, and then if there was a promotion you'd have to make the purchases on individual transactions (if you could convince the manager to allow it), and then you would have to go to Walmart and stand in line to make the deposits onto your AMEX Bluebird... it was a significant amount of time invested. For me personally, this was the big killer.

Ultimately what killed MS was that the credit companies caught on and the office supply stores would only allow you to purchase the Visa/MC Debit Gift Cards using cash or debit. This nullified any benefits. Occaisionally some stores will pop up and allow you to make the transaction on a credit card, but it is pretty locked out now.

Maximizing Your Points

You do not want to spend more money just to get points. That is completely counter productive to the whole idea of traveling on points!! With a little patience and planning however, you can maximize the points you earn spending the same amount you normally would have.

Online Reference Malls (Rapid Rewards Shopping/Chase Ultimate Rewards Shopping) 

If you have ever used the website E-bates.com, some of the rewards programs - specifically the Rapid Rewards (Southwest) and the Chase Ultimate Rewards - have a similar set up. I call them Online Reference Malls. The basic idea behind the mall is that you go to these reference sites first, then click on the site that you actually want to shop at. What happens here is that you will get a bonus for going through the reference site; usually in the form of a point multiplier i.e. 3x, 4x, etc. 

If you are a big online shopper, this works excellently to your benefit! There's a couple of things to keep in mind though:

• You MUST FIRST go to the reference site! In some instances they can tell if you have already added items to your shopping cart, left the site, went to the reference site and then came back. Just to be safe, clear your browsing history and cookies if you forget to go to the reference site first. 
• The Chase UR Shopping site requires that you use the specific card with the Ultimate Rewards points. The Rapid Rewards Shopping site does NOT! (And this opens up a world of options discussed below).

In my last post I discussed how you can the Chase INK card to buy store specific gift cards (Amazon, Starbucks, etc) from office supply stores; this way you get 5x points on something you are already buying.  Combining the Chase INK with the Rapid Rewards Shopping site, allows you to get points on two different systems and earning 5+x points in certain situations.

Here is an example of how this works:

• Purchase a $50 Macys gift card from the office supply store using your Chase Ink card. Earn 250 UR points.
• Login to Rapid Rewards Shopping site and click on Macy's.com, which is currently 4x points per dollar spent. Buy that $50 Michael Kors (ha!) purse you have been eyeing and earn 200 RR points.

The Rapid Rewards Mall will also have the occaisional special promotion so instead of the normal 4x points at Macy's.com it could be 10x points. Some office stores also sell Southwest Gift Cards, so there is an opportunity to do some crazy double dipping. On a recent trip to Staples I even found a gift card for Netflix, which could be used for existing accounts. 

This process takes up some time, but I think it is worth it since you are using it to purchase items you would normally; a little bit of time and patience and you can be earning 10x points!