Author Topic: Travel Hacking for low spending  (Read 2689 times)

Foxy Mustachian

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Travel Hacking for low spending
« on: June 18, 2018, 09:27:54 AM »
Hi all,

I'm interested in getting into travel hacking. My only problem is that a majority of the cards out there have a requirement of a minimum spending of $3k (or $5k) in the first three months. I honestly don't think I'd spend that much in three months - and I don't think there's a way I can do it (my rent, which is my biggest expense, I can't pay via credit card). As it is, I think my yearly expenses will be under $12k, probably more like $10k (which is awesome, but not helpful for the whole travel hacking thing...)

Any other cards that are good for this? Or any tips regarding low spending and travel hacking cards?

Lady SA

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Re: Travel Hacking for low spending
« Reply #1 on: June 18, 2018, 09:47:24 AM »
You can buy a bunch of gift cards to your grocery store with the card all in one go, then use the gift cards throughout the year. Depending on your yearly grocery spend, that alone should get you pretty darn close to the $3k mark.

Otherwise there are a few posters on the forum who do something called manufacture spending. I don't know the ins and outs but it is essentially a grey area where you send money orders (paid via cc) to yourself to meet the min spend. I don't personally do this so I can't speak to it.
« Last Edit: June 18, 2018, 09:48:56 AM by Lady SA »

Rubic

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Re: Travel Hacking for low spending
« Reply #2 on: June 18, 2018, 10:19:49 AM »
Manufactured Spending used to be pretty easy.  At one time I'd push through $1000/week
via Target REDcard with essentially frictionless transactions, since I drove past the store
a couple times a week.  Now it's getting harder and I mainly don't bother with Amex Serve
or the gift cards -> money order approach.

If OP has someone they trust, they can send money via Venmo and have the trusted party
reimburse them (not through Venmo).

I'm currently working through $4K spend on my 8th(!) AA Citi card, but I have some travel
expenses that will cover that next month.


secondcor521

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Re: Travel Hacking for low spending
« Reply #3 on: June 18, 2018, 10:29:35 AM »
Manufactured spending is a gray area in the sense that it is perfectly legal but the credit card companies and banks and stores involved don't like it because if you do it you're taking advantage of loopholes in the system.

It is basically moving money in a circle to generate what appears to be spending to the credit card companies so you meet the $3K minimum spend in 4 months (or whatever the requirement is) but don't increase your actual spending rate.

There are many versions, here's the basic outline of how I do it:

1.  Go to my local grocery store and buy a $500 gift card with my credit card, paying a $5.95 fee.  $509.95 charged to credit card and treated as "grocery spending" towards $3K minimum spend.
2.  Go to my local grocery store and buy a $499.75 money order with the $500 gift card from step 1.  Pay a 25 cent money order fee.
3.  Go to my bank and deposit the $499.75 money order into my checking account.
4.  Use the $499.75 money order plus $6.20 of my own money to pay off my credit card.

As you can see, this has four steps and costs about 1% of the manufactured spend amount to accomplish.  So on a $3K minimum spend the cost would be between $30 and $35, but you're likely to get $300 to $500 in credit card rewards by doing so.

There are ways to reduce the costs, but those ways are more complex IMHO.  There are simpler ways that cost more, too.

You should check with your bank to see if they're OK with you depositing lots of money orders.  You should also read up on the risks of structuring and civil forfeiture.  There are lots of places on the web with more information, just google "manufactured spending" and start reading.

Catbert

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Re: Travel Hacking for low spending
« Reply #4 on: June 18, 2018, 10:31:56 AM »
I  not recommend manufactured spending to someone new to credit card churning and especially someone with a low budget.  Too many things can go wrong if you don't know what you're doing and with a low budget harder to dig your way out. 

A google search for "credit cards with low spend bonus" yielded:

https://onemileatatime.boardingarea.com/2017/12/06/rewards-cards-low-minimum-spend/

https://www.doctorofcredit.com/credit-card-bonuses-low-minimum-spend-requirements-500-1000/

https://www.moneyunder30.com/low-minimum-spend-credit-cards

Some of these articles are a bit old (and offers  change all the time) but may be a good starting place.

kpd905

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Re: Travel Hacking for low spending
« Reply #5 on: June 18, 2018, 12:07:00 PM »
If your rental office accepts checks, you can try using Plastiq and a credit card.  You will pay a 2.5% fee, but any sign up bonus should outweigh that fee by a lot.

You can also sometimes do the initial funding for a checking account with a credit card.  This way, you can get both a credit card bonus and a checking account bonus at the same time.  Check Doctorofcredit.com for bank bonus deals.
« Last Edit: June 18, 2018, 12:09:25 PM by kpd905 »

beattie228

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Re: Travel Hacking for low spending
« Reply #6 on: June 18, 2018, 01:17:31 PM »
If OP has someone they trust, they can send money via Venmo and have the trusted party
reimburse them (not through Venmo).


Curious - what's the rationale behind not reimbursing through Venmo? Off topic, but I use Venmo to reimburse things and wanted to make sure I wasn't missing something.

Thanks.

ixtap

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Re: Travel Hacking for low spending
« Reply #7 on: June 18, 2018, 01:23:25 PM »
If OP has someone they trust, they can send money via Venmo and have the trusted party
reimburse them (not through Venmo).


Curious - what's the rationale behind not reimbursing through Venmo? Off topic, but I use Venmo to reimburse things and wanted to make sure I wasn't missing something.

Thanks.

In this case, wouldn't Venmo just process it as a refund, thus voiding the original spend?

Rubic

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Re: Travel Hacking for low spending
« Reply #8 on: June 18, 2018, 02:30:23 PM »
If OP has someone they trust, they can send money via Venmo and have the trusted party
reimburse them (not through Venmo).
Curious - what's the rationale behind not reimbursing through Venmo? Off topic, but I use Venmo to reimburse things and wanted to make sure I wasn't missing something.

If you send money from account-1 to account-2 and then round-trip it back
from account-2 to account-1, you'll eventually get shut down.

More advice: If you decide to use Venmo for manufactured spend, start with small
amounts, i.e. don't spend $3K all at once.


CheapScholar

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Re: Travel Hacking for low spending
« Reply #9 on: June 19, 2018, 05:28:06 PM »
I think it would help to know what your goal is.  Says you live in MN.  Are you trying to travel hack a simple 3 night trip to Colorado, or a two week grand tour through Europe?  Personally, when I'm trying to use points and/or find insane deals on travel, I start with the flights.  The Southwest card has an annual fee, but it can be well worth it if you're booking low point flights (typically very early morning flights, especially on Tuesdays or Wednesdays).  For example, by signing up for the Southwest CC, you get 40,000-50,000 points after making the required transactions.  If you book smart, this can easily get two people round trip nearly anywhere in the US from MN.

Foxy Mustachian

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Re: Travel Hacking for low spending
« Reply #10 on: June 28, 2018, 03:17:27 PM »
Hi all!!

Thank you so much for responding (sorry I haven't been super active). I'm intrigued by manufactured spending, but it kind of scares me tbh (I think this is due to a lack of understanding mostly).

A little more information:

I live in a housing cooperative. I pay approximately $340 per month for food/housing

So 1, my rent is a direct deposit from our bank, because if we used cards it would be a huge fine to either the house or myself (and I did the math, it's totally not worth it).
2. My spending is very low, that's why I can't seem to figure out how to do this. (I'm not concerned about having a lack of funds, just a lack of spending - not that I want my spending to go up).

In response to my goals: I don't really have any immediate plans to travel, but I thought it might be nice to start earning points. I also don't see my current spending changing in the near future, so finding some sort of way to travel hack with low spending would be ideal.

I will look into manufactured spending a little more. Thanks.

Foxy Mustachian

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Re: Travel Hacking for low spending
« Reply #11 on: June 28, 2018, 03:19:00 PM »
You can buy a bunch of gift cards to your grocery store with the card all in one go, then use the gift cards throughout the year. Depending on your yearly grocery spend, that alone should get you pretty darn close to the $3k mark.

Otherwise there are a few posters on the forum who do something called manufacture spending. I don't know the ins and outs but it is essentially a grey area where you send money orders (paid via cc) to yourself to meet the min spend. I don't personally do this so I can't speak to it.

I don't think this is very feasible for me, considering my house collectively buys food, through our house bank account.

DaMa

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Re: Travel Hacking for low spending
« Reply #12 on: February 18, 2020, 07:49:00 AM »
If I know I'm going to make a big purchase, I'll get a new card.  Otherwise, I just use whatever credit card gives me the best payback, whether cash or miles.  I don't do manufactured spend, and I don't like the idea of having a lot of money in gift cards.

Big purchases:  move to CA was about $5k, cruise for DH and I $4k, bathroom remodel $2k -- these types of things have come up about once a year for me.  I have used the benefits to pay for airfare.

DadJokes

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Re: Travel Hacking for low spending
« Reply #13 on: February 18, 2020, 07:56:14 AM »
If OP has someone they trust, they can send money via Venmo and have the trusted party
reimburse them (not through Venmo).
Curious - what's the rationale behind not reimbursing through Venmo? Off topic, but I use Venmo to reimburse things and wanted to make sure I wasn't missing something.

If you send money from account-1 to account-2 and then round-trip it back
from account-2 to account-1, you'll eventually get shut down.

More advice: If you decide to use Venmo for manufactured spend, start with small
amounts, i.e. don't spend $3K all at once.

Do you have data points on this? I've been transferring money back and forth between my and my wife's Venmo accounts for a month now to get bank bonuses.

1. She transfers $500 to me.
2. I deposit it into account that codes a Venmo cashout as direct deposit.
3. I Venmo the money back to her a couple days later.
4. Repeat.

Is there a point at which we will be shut down?

Livingthedream55

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Re: Travel Hacking for low spending
« Reply #14 on: February 18, 2020, 08:46:08 AM »
I got a Spirit Airlines credit card (no fee for first year, so be sure to cancel before annual fee kicks in) which had a $500 spend requirement which I easily meet by paying my utility bills and buying grocery store gift cards.

This created 15,000 miles which if used carefully (need to find trips which only cost 2,500 miles each way) could yield three round trips with Zone 1 in the U.S. With fees each flight is around $24. You have to make sure to make small spends on the card (I loaded $1 on Amazon gift card) every couple of months to keep the frequent flier miles viable.

I did two trips this way last year. Couldn't do a third because family member seriously ill.