Making Manufactured Spending Worthwhile (2017)

Opportunity cost. If I can buy something on a credit card, the lowest reward I will get is 2%. I have 5% gas, 3% grocery, and a few other special bonus cards. But worst case scenario is I use a generic 2% cash back card on a purchase.

Thus, if I use my Chase Freedom card (5% back at Walmart Q4) to buy Visa Gift Cards, I am forgoing the opportunity to get 2% cash back on whatever I buy on those Visa Gift Cards. For example:

Suppose I go to a local deli and spend $100. If I use my 2% cash back card then Iā€™ll earn $2 in rewards. If I use my Visa Gift Card, I earn $0 in rewards.

I earn 5% on the purchase of the Visa Gift card, but thatā€™s offset by the 1% purchase fee ($5 fee on $500 card). So I really earn 4% on the purchase of the Visa Gift Card.

But, since I forgo earning 2% rewards on anything I buy with the Visa Gift Card, my additional marginal benefit is only 2%.

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Youā€™ve hit on the biggest issues; it is an incredible waste of time on the small scale and youā€™re not supposed to buy things youā€™d buy anyway with these. Youā€™re supposed to increase your total spending by cashing them out.

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Agreed. Thatā€™s why I donā€™t load any paypal cards. Iā€™ve seen too many people get their money taken by paypal only to sit in limbo for long periods of time.

Besides prepaying cable/phone/internet or other bills to give your account a credit that will be depleted in the coming monthes, you can charge estimated taxes for as little as a 1.87% fee. Lower your withholding and pay more estimated tax. See credit card payment sites on ww.irs.gov

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A lot of CCs that used to allow payment with VGCs have now disallowed it like Citi and CapOne. I am not surprised why people who find new ones keep it to themselves because once they are ā€œadvertisedā€ in public, it dies within a short period of time. Those that are not leaked are still enjoyed by many who found them on their own or found out from small group discussions.

Where do I find this FW?

FT.

Morechars

On aisle three, next to the H&B.

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Iā€™ve been told that Citi credit cards are among those more likely to categorize some charges like this as a cash advance, so, as with all cards, call to lower your cash advance limit to as low as possible just in case., If your charge is above that amount, it wonā€™t go through if itā€™s considered a cash advance.

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Interesting. My local fred meyer lets me buy money orders with debit cards (not credit). This might be a good idea to satisfy minimum spending requirements.

I am the shopper of a big family. In general I try to avoid Wally World but it might be worth a combined a shopping trip.

I totally get the anxiety about losing the card.

For small ball like this I personally use Kiva to unload debit cards. There are plenty of sites that discuss lending there but basically I target short term loans with 3.5-5 stars, country diversification, and use the InsideFlyer and Flyertalk groups ā€œstill fundingā€ lists as suggestions.

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One good way to empty out four gift cards is to pay estimated taxes with a Visa/MC gift card, which is considered debit.

Newbies to mfr spending ought to be reminded to go slow until they fully understand the mechanics of this ā€˜hobbyā€™. Many have been burned when they thought they were ā€˜successfulā€™ in buying 3 or 4 VGCs loaded with $500 each only to find out they donā€™t know where and how to drain them. :sweat:

Best to try initially with a $25 VGC, load that to your reloadable or buy MO and see how it goes before you go for the big bucks. If this is too difficult for you or you have doubts this is legal, better find some other hobby.

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I was referring to calling in C1t1 and pay balance with VGCs, this was a known method in the past that worked for at least a year that I know of before it quit working. Same thing with CapOne. I was able to do this for about a year to be able to drain my GCs without going to the store.

There is no way to pay any CC balance using a different CC that I know of, whether by calling, going to the bank or doing billpay in-store.

If the VGC is a high enough value to make it worthwhile and you can add a pin number so you can use it as ā€˜debitā€™, you can buy a postal money order, as long as the money order plus nominal fee does not exceed the amount on the gift card, and use that to make a payment on the cardā€¦ I have found that not all prepaid gift cards allow this transaction to go through.

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Then maybe MS ainā€™t for you. I donā€™t say that to discourage you. I am being real. If youā€™re worried about losing a $500 card, maybe the risk:reward isnā€™t quite your style.

Iā€™m not bragging by any means, and Iā€™m small potatoes, but Iā€™ve had $20k in cards sitting in my car before. Never once worried. Maybe that was naive of me, but I donā€™t think itā€™s really that big of a deal. Honestly, I worry more about my liquidation method(s) being shut down, and me being stuck with a $20k CC bill than anything.

Man, I tried Kiva. It was more of a pain in the neck from a time perspective than anything. So much easier/less time-consuming/cash tie up methods elsewhere.

Meh. I worry about all those things AND losing a card. Itā€™s money. More importantly, itā€™s MY money. :wink:

Also, this is not really a manufactured spend technique per se, but I did find it really useful info for getting ā€œextraā€ points for paying taxes using CC - thanks to The Wealthy Accountant (who, Iā€™m assuming, was a FWF member, so if heā€™s here, apologies for poaching your page): The Ultimate Credit Card Rewards Hack - The Wealthy Accountant

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When draining VGCs at Wally or grocery stores, I have at least 500 cash with me and two DCs with at least $2000 balance on each. These serves as my back up in case Iā€™m buying two $1K MOs with 4 swipes and the last VGC doesnā€™t go through. Instead of canceling transaction I use my real bank DC so my MOs will print. There were times the bank DC wouldnā€™t be accepted for whatever reasons, and cash was the only option left. At the time I had to withdraw $500 from the ATM beside the MC while the cashier suspended my transaction. Thankfully, I was able to finish that transaction and got my MOs. Iā€™ve learned from those experiences and make sure I have back ups.

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