The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: WestchesterFrugal on March 16, 2014, 06:44:07 PM
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i use this in conjunction with an AMEX HHonors card. I buy my Vanilla Reloads at CVS and get 6 points per dollar. I use it to pay my mortgage or other bills where i need to send a check. Works out to getting hotel rooms for ~40 bucks per night or less for a 200+ dollar a night room. Its a pretty good deal if you travel as much as we do. i wouldnt use it otherwise
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Yep, I use it to pay my rent, mortgage, taxes, etc. No issues so far.
I buy Vanilla Reloads at CVS, usually to reach spending bonuses on new credit cards.
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The cards cost $3.95 each, up to a value of $500. I always buy $500 cards in order to maximize their value.
The net cost ($3.95/$500.00) = $0.0079 per point. As I try to get at least $0.02 per point in redemptions AND it's on spending I couldn't earn points on otherwise, it works out for me.
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I never even thought of using Bluebird to leverage cashback from my credit cards, I did a little research today and found this link:
http://saverocity.com/travel/best-credit-cards-use-bluebird-vanilla-reload-strategy/ (http://saverocity.com/travel/best-credit-cards-use-bluebird-vanilla-reload-strategy/)
This guy did a ton a research on how to maximize this. I plan on setting up BlueBird accounts for my wife and myself, we already have a Fidelity AmEx so this will net us about $1500's just for doing cash transfers.
This kicker is I will then put the cash in my HELOC to reduce my interest payment until the credit card payment is due so my savings will be even greater.
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You guys want a Q&A here from my findings? Happy to help answer anything to help keep you living the good life.
First off:
HHonors card is a big mistake, too little ROI
Fid Amex, barely qualifies but OK
What you need... 5x There is a legacy Amex Blue link somewhere that has 1x for the first $6500 in spend per year, then 5x for anything else, that is gold.
With a true 5x card you make a net profit of $210 per month ($250 for $5K spend, minus $40 in fees) per card.
1 card per SSN...
Better than Bluebird is its sister card called the Serve, it offers the same PLUS you can load it with without any fees:
http://saverocity.com/travel/bluebird-vs-serve-calculations/
Additionally, I don't go into it in this post, but you can load another 2K via online (1K Credit 1K Debit)
It ties into the concept of Manufactured Spending, I am currently running a competition to help people understand this a bit better, you can check that out below, we gave a bankroll of $5K to the players, and the top guys are earning a net profit of between $1000-$1700 in cash and points. Per week...
Link to the guy who earned $1700 ($1K in real money, $700 in a mix of travel points and cash) in just one week. Net. For a few hours work.
http://saverocity.com/travel/meet-player-big-milemadness/
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I never even thought of using Bluebird to leverage cashback from my credit cards, I did a little research today and found this link:
http://saverocity.com/travel/best-credit-cards-use-bluebird-vanilla-reload-strategy/ (http://saverocity.com/travel/best-credit-cards-use-bluebird-vanilla-reload-strategy/)
This guy did a ton a research on how to maximize this. I plan on setting up BlueBird accounts for my wife and myself, we already have a Fidelity AmEx so this will net us about $1500's just for doing cash transfers.
This kicker is I will then put the cash in my HELOC to reduce my interest payment until the credit card payment is due so my savings will be even greater.
PS, since your link alerted me to this thread (thanks!) you might want to take a look at something called Evolve Money. It is a similar manufacturing program, but this one allows certain payees to HELOCs, if yours is listed it means that you don't need to use Vanilla Reloads, which means you can increase your options in this field.
I never play around with Bluebird or Serve, here is the process I use:
Buy Vanilla Reload with 5x card
Load Vanilla Reload to Bluebird
Pay 5x Card with Bluebird
Done.
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So I read about the Vanilla Reload/Bluebird hack in another thread, and checked my local CVS. They do have them, but they also have PayPal money cards. It looks like the same thing (for the same price) except it loads your PayPal account vs. a Bluebird account.
Is there a pro/con to using PayPal vs. Bluebird? I only ask because I already have a PayPal account, and if it's the same hack, I wouldn't have to set up a Bluebird account.
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So I read about the Vanilla Reload/Bluebird hack in another thread, and checked my local CVS. They do have them, but they also have PayPal money cards. It looks like the same thing (for the same price) except it loads your PayPal account vs. a Bluebird account.
Is there a pro/con to using PayPal vs. Bluebird? I only ask because I already have a PayPal account, and if it's the same hack, I wouldn't have to set up a Bluebird account.
The first rule of Manufactured Spend in any way is that you cannot 'play' with money you cannot afford to lock up. Generally speaking that is the highest risk you will face. Paypal locks up money if not done correctly, you need to float through enough real transactions to make it work. If you open a new Paypal, or revive an unused one and start pushing through these cards they will lock you down, holding your money for a short while until they release it. They often terminate accounts at this time.
People I know are using Paypal, but they are 'warming' accounts first by having a lot of genuine transactions.
Also, it shouldn't be an either or, it should be a 'great and' everyone should get a Serve, and then also if you want to tinker with paypal or any of the many other options add them on.
Serve is the best card out there, they have the strongest record for not shutting accounts/locking funds and can load the most per month ($7000)
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You guys want a Q&A here from my findings? Happy to help answer anything to help keep you living the good life.
First off:
HHonors card is a big mistake, too little ROI
Fid Amex, barely qualifies but OK
What you need... 5x There is a legacy Amex Blue link somewhere that has 1x for the first $6500 in spend per year, then 5x for anything else, that is gold.
With a true 5x card you make a net profit of $210 per month ($250 for $5K spend, minus $40 in fees) per card.
1 card per SSN...
Better than Bluebird is its sister card called the Serve, it offers the same PLUS you can load it with without any fees:
http://saverocity.com/travel/bluebird-vs-serve-calculations/
Additionally, I don't go into it in this post, but you can load another 2K via online (1K Credit 1K Debit)
It ties into the concept of Manufactured Spending, I am currently running a competition to help people understand this a bit better, you can check that out below, we gave a bankroll of $5K to the players, and the top guys are earning a net profit of between $1000-$1700 in cash and points. Per week...
Link to the guy who earned $1700 ($1K in real money, $700 in a mix of travel points and cash) in just one week. Net. For a few hours work.
http://saverocity.com/travel/meet-player-big-milemadness/
I didn't realize you were on the forum, first off thanks for the research you have done on the cards and how to run the Manufactured spending strategies.
Another card you can examine which I have and will probalby leverage and is easily accessible to everyone is from PenFed here is the link https://www.penfed.org/Platinum-Cash-Rewards/ (https://www.penfed.org/Platinum-Cash-Rewards/), it offers 5% cash back as a statement credit at gas stations, if you have another qualifying product there is no annual fee otherwise $25 which is nominal. A checking account with direct deposit is a qualifying account.
A question regarding BlueBird and/or Serve as you have them both, can you wrtie checks to yourself? Can you transfer money to your own bank account that was loaded via Vanilla Reload?
The AmEx website is unclear on both points, just curious to see how this work as far as options. Cleary these services were not designed for how people like us plan on leveraging them, so in time I am sure they will attempt to close loopholes or at least make it more complicated, but in the end the will still probalby be available to be taken adavantage of.
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I never even thought of using Bluebird to leverage cashback from my credit cards, I did a little research today and found this link:
http://saverocity.com/travel/best-credit-cards-use-bluebird-vanilla-reload-strategy/ (http://saverocity.com/travel/best-credit-cards-use-bluebird-vanilla-reload-strategy/)
This guy did a ton a research on how to maximize this. I plan on setting up BlueBird accounts for my wife and myself, we already have a Fidelity AmEx so this will net us about $1500's just for doing cash transfers.
This kicker is I will then put the cash in my HELOC to reduce my interest payment until the credit card payment is due so my savings will be even greater.
PS, since your link alerted me to this thread (thanks!) you might want to take a look at something called Evolve Money. It is a similar manufacturing program, but this one allows certain payees to HELOCs, if yours is listed it means that you don't need to use Vanilla Reloads, which means you can increase your options in this field.
I never play around with Bluebird or Serve, here is the process I use:
Buy Vanilla Reload with 5x card
Load Vanilla Reload to Bluebird
Pay 5x Card with Bluebird
Done.
Your welcome from bringing the thread to your attention, clearly your insight is helpful the conversation.
Why would you not use the money loaded on Bluebird to pay a HELOC? I didn't mean the actual monthly payment, I meant pay down extra principal. To me that is a huge savings, to WestchesterFrugal who started this thread it would be even bigger.
I have a balance on my HELOC at 2.49%, if I can load $10k onto Bluebird accounts (my wife and I) staggard over a 5 day window and then pay down my balance on my HELOC by $10k I save 2.49% for about 35 days until my credit card is due in which time I can borrow the money back from the HELOC to pay the credit card back.
I have many credit cards with limits well over what I would ever use, I can easily charge the $10k every month and not have any cash flow or credit score issues. I currently use my HELOC as a sweep or accelerator account anyway, I deposit all of my income there and borrow back the money when bills come due to reduce the interest owed.
So did you have any reason in particular not to use Bluebird/Serve in connection with a HELOC?
I have been looking for the longest time for a way to pay my mortgage with a credit card as it is my largest monthly bill and the cash back would be so worth it. This trumps it as the Manufactured Spending is far greater than my mortgage payment and I get both the cash back and then and interest free loan until the credit card is due which I can use to reduce the interest due on my HELOC, so the total amount earned/saved is compounded.
In reality, I would be buying the following months VR cards before paying the credit card back and would never actually be borrowing addtional money from HELOC as new deposits would come in before the previous months bill is due.
How would Evolve be better than Bluebird for this?
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You guys want a Q&A here from my findings? Happy to help answer anything to help keep you living the good life.
First off:
HHonors card is a big mistake, too little ROI
Fid Amex, barely qualifies but OK
What you need... 5x There is a legacy Amex Blue link somewhere that has 1x for the first $6500 in spend per year, then 5x for anything else, that is gold.
With a true 5x card you make a net profit of $210 per month ($250 for $5K spend, minus $40 in fees) per card.
1 card per SSN...
Better than Bluebird is its sister card called the Serve, it offers the same PLUS you can load it with without any fees:
http://saverocity.com/travel/bluebird-vs-serve-calculations/
Additionally, I don't go into it in this post, but you can load another 2K via online (1K Credit 1K Debit)
It ties into the concept of Manufactured Spending, I am currently running a competition to help people understand this a bit better, you can check that out below, we gave a bankroll of $5K to the players, and the top guys are earning a net profit of between $1000-$1700 in cash and points. Per week...
Link to the guy who earned $1700 ($1K in real money, $700 in a mix of travel points and cash) in just one week. Net. For a few hours work.
http://saverocity.com/travel/meet-player-big-milemadness/
I'm a total N00B at this, so apologies if these questions are basic, but i'm just tying to wrap my head around the strategy.
So the strategy here would be to sign up for an AMEX serve account, then purchase Vanilla Reload cards at CVS (with the credit card). Then transfer the money from the Vanilla Reloads card to your AMEX serve account.
Then- from the serve account- you can do things like pay rent, pay off the credit card, etc.
Is that the gist of it?
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You guys want a Q&A here from my findings? Happy to help answer anything to help keep you living the good life.
First off:
HHonors card is a big mistake, too little ROI
Fid Amex, barely qualifies but OK
What you need... 5x There is a legacy Amex Blue link somewhere that has 1x for the first $6500 in spend per year, then 5x for anything else, that is gold.
With a true 5x card you make a net profit of $210 per month ($250 for $5K spend, minus $40 in fees) per card.
1 card per SSN...
Better than Bluebird is its sister card called the Serve, it offers the same PLUS you can load it with without any fees:
http://saverocity.com/travel/bluebird-vs-serve-calculations/
Additionally, I don't go into it in this post, but you can load another 2K via online (1K Credit 1K Debit)
It ties into the concept of Manufactured Spending, I am currently running a competition to help people understand this a bit better, you can check that out below, we gave a bankroll of $5K to the players, and the top guys are earning a net profit of between $1000-$1700 in cash and points. Per week...
Link to the guy who earned $1700 ($1K in real money, $700 in a mix of travel points and cash) in just one week. Net. For a few hours work.
http://saverocity.com/travel/meet-player-big-milemadness/
I'm a total N00B at this, so apologies if these questions are basic, but i'm just tying to wrap my head around the strategy.
So the strategy here would be to sign up for an AMEX serve account, then purchase Vanilla Reload cards at CVS (with the credit card). Then transfer the money from the Vanilla Reloads card to your AMEX serve account.
Then- from the serve account- you can do things like pay rent, pay off the credit card, etc.
Is that the gist of it?
That is the gist of it. FWIW, I'm new to this idea as well. Apparently there are ways to optimize the strategy as well (which CC you use, where you buy the Vanilla Reload, etc). Google "Manufactured Spending" or check out Saverocity's blog (linked above) to get into the (what seems to me to be a) head-spinning game...
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Another card you can examine which I have and will probalby leverage and is easily accessible to everyone is from PenFed here is the link https://www.penfed.org/Platinum-Cash-Rewards/ (https://www.penfed.org/Platinum-Cash-Rewards/), it offers 5% cash back as a statement credit at gas stations, if you have another qualifying product there is no annual fee otherwise $25 which is nominal. A checking account with direct deposit is a qualifying account.
If that's the same Penfed CC I have, the cash back as a statement credit only counts for gas purchases paid at the pump. (It's what we use for a gas card). I doubt that bonus would trigger if you tried to buy a Vanilla Reload in the convenience store.
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Another card you can examine which I have and will probalby leverage and is easily accessible to everyone is from PenFed here is the link https://www.penfed.org/Platinum-Cash-Rewards/ (https://www.penfed.org/Platinum-Cash-Rewards/), it offers 5% cash back as a statement credit at gas stations, if you have another qualifying product there is no annual fee otherwise $25 which is nominal. A checking account with direct deposit is a qualifying account.
If that's the same Penfed CC I have, the cash back as a statement credit only counts for gas purchases paid at the pump. (It's what we use for a gas card). I doubt that bonus would trigger if you tried to buy a Vanilla Reload in the convenience store.
Damn... I never read it that closely... I always just use the card for gas at the pump exclusively. I just assumed it meant all gas station purchases.
There goes that idea... Still love the card for gas even at the stations where cash is cheaper, that card works out in my favor.
I have the AmEx Blue 6% card too... But no supermarkets near me carry Vanilla Reloads or MoneyPak's...
Gonna need a new high percentage card... Wish there was something for pharmacies...
-
You guys want a Q&A here from my findings? Happy to help answer anything to help keep you living the good life.
First off:
HHonors card is a big mistake, too little ROI
Fid Amex, barely qualifies but OK
What you need... 5x There is a legacy Amex Blue link somewhere that has 1x for the first $6500 in spend per year, then 5x for anything else, that is gold.
With a true 5x card you make a net profit of $210 per month ($250 for $5K spend, minus $40 in fees) per card.
1 card per SSN...
Better than Bluebird is its sister card called the Serve, it offers the same PLUS you can load it with without any fees:
http://saverocity.com/travel/bluebird-vs-serve-calculations/
Additionally, I don't go into it in this post, but you can load another 2K via online (1K Credit 1K Debit)
It ties into the concept of Manufactured Spending, I am currently running a competition to help people understand this a bit better, you can check that out below, we gave a bankroll of $5K to the players, and the top guys are earning a net profit of between $1000-$1700 in cash and points. Per week...
Link to the guy who earned $1700 ($1K in real money, $700 in a mix of travel points and cash) in just one week. Net. For a few hours work.
http://saverocity.com/travel/meet-player-big-milemadness/
I didn't realize you were on the forum, first off thanks for the research you have done on the cards and how to run the Manufactured spending strategies.
Another card you can examine which I have and will probalby leverage and is easily accessible to everyone is from PenFed here is the link https://www.penfed.org/Platinum-Cash-Rewards/ (https://www.penfed.org/Platinum-Cash-Rewards/), it offers 5% cash back as a statement credit at gas stations, if you have another qualifying product there is no annual fee otherwise $25 which is nominal. A checking account with direct deposit is a qualifying account.
I think the terms state a Direct Deposit of $500 per month to avoid fees on said account
A question regarding BlueBird and/or Serve as you have them both, can you wrtie checks to yourself? Can you transfer money to your own bank account that was loaded via Vanilla Reload?
Yes to both
The AmEx website is unclear on both points, just curious to see how this work as far as options. Cleary these services were not designed for how people like us plan on leveraging them, so in time I am sure they will attempt to close loopholes or at least make it more complicated, but in the end the will still probalby be available to be taken adavantage of.
If you read the terms for the Penfed card it states 'at the pump' and you can't buy giftcards at the pump, so probably not a great option for you. The best card is the old style Amex Blue Cash, links for it are hard to find - half the game is finding an application link that is not supposed to be active anymore - that card is not the Blue Everyday nor the Blue Preferred but the Blue Cash... 1x at Drugstores for the first $6500 then it offers 5x after that.... a gold mine.
Other 5x cards that are active would be the TD Ameritrade card and the Wells Fargo card, I think both are only for the first 6 months.... so not perpetual.
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Another card you can examine which I have and will probalby leverage and is easily accessible to everyone is from PenFed here is the link https://www.penfed.org/Platinum-Cash-Rewards/ (https://www.penfed.org/Platinum-Cash-Rewards/), it offers 5% cash back as a statement credit at gas stations, if you have another qualifying product there is no annual fee otherwise $25 which is nominal. A checking account with direct deposit is a qualifying account.
If that's the same Penfed CC I have, the cash back as a statement credit only counts for gas purchases paid at the pump. (It's what we use for a gas card). I doubt that bonus would trigger if you tried to buy a Vanilla Reload in the convenience store.
Damn... I never read it that closely... I always just use the card for gas at the pump exclusively. I just assumed it meant all gas station purchases.
There goes that idea... Still love the card for gas even at the stations where cash is cheaper, that card works out in my favor.
I have the AmEx Blue 6% card too... But no supermarkets near me carry Vanilla Reloads or MoneyPak's...
Gonna need a new high percentage card... Wish there was something for pharmacies...
Just FYI, the Serve can be loaded without VR, upto 1K per day straight swiping. It can be done with the Amex Blue cash for 5x with no fees at a CVS
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I never even thought of using Bluebird to leverage cashback from my credit cards, I did a little research today and found this link:
http://saverocity.com/travel/best-credit-cards-use-bluebird-vanilla-reload-strategy/ (http://saverocity.com/travel/best-credit-cards-use-bluebird-vanilla-reload-strategy/)
This guy did a ton a research on how to maximize this. I plan on setting up BlueBird accounts for my wife and myself, we already have a Fidelity AmEx so this will net us about $1500's just for doing cash transfers.
This kicker is I will then put the cash in my HELOC to reduce my interest payment until the credit card payment is due so my savings will be even greater.
PS, since your link alerted me to this thread (thanks!) you might want to take a look at something called Evolve Money. It is a similar manufacturing program, but this one allows certain payees to HELOCs, if yours is listed it means that you don't need to use Vanilla Reloads, which means you can increase your options in this field.
I never play around with Bluebird or Serve, here is the process I use:
Buy Vanilla Reload with 5x card
Load Vanilla Reload to Bluebird
Pay 5x Card with Bluebird
Done.
Your welcome from bringing the thread to your attention, clearly your insight is helpful the conversation.
Why would you not use the money loaded on Bluebird to pay a HELOC? I didn't mean the actual monthly payment, I meant pay down extra principal. To me that is a huge savings, to WestchesterFrugal who started this thread it would be even bigger.
I have a balance on my HELOC at 2.49%, if I can load $10k onto Bluebird accounts (my wife and I) staggard over a 5 day window and then pay down my balance on my HELOC by $10k I save 2.49% for about 35 days until my credit card is due in which time I can borrow the money back from the HELOC to pay the credit card back.
I have many credit cards with limits well over what I would ever use, I can easily charge the $10k every month and not have any cash flow or credit score issues. I currently use my HELOC as a sweep or accelerator account anyway, I deposit all of my income there and borrow back the money when bills come due to reduce the interest owed.
So did you have any reason in particular not to use Bluebird/Serve in connection with a HELOC?
I have been looking for the longest time for a way to pay my mortgage with a credit card as it is my largest monthly bill and the cash back would be so worth it. This trumps it as the Manufactured Spending is far greater than my mortgage payment and I get both the cash back and then and interest free loan until the credit card is due which I can use to reduce the interest due on my HELOC, so the total amount earned/saved is compounded.
In reality, I would be buying the following months VR cards before paying the credit card back and would never actually be borrowing addtional money from HELOC as new deposits would come in before the previous months bill is due.
How would Evolve be better than Bluebird for this?
Yeah, your idea is fine.
But...
The evolve is better because it then allows the Bluebird (or serve) to also operate.
So say you are pushing 10K on that Heloc, you do it through evolve, then you do another 10K through Bluebird.... all of a sudden you are running 20K, and since we said each $5K earns about $210 in profit, you are now making a profit of $840 per month, along with the savings.
Personally I am not sure that I would do the monthly, but I did write a post about something similar on an annual basis.
Here is one where I use the Bluebird to create a 12 month interest free loan, and then put that into a high interest saving account in order to generate a profit as follows:
New cardholders:
Travel Cash $550
Real Cash $151.10
http://saverocity.com/finance/credit-card-arbitrage-paypal-prepaid-mastercard-barclaycard-arrival/
Only potential issue with your plan:
You may end the month carrying a large balance on your credit card prior to wiping it down, if you do that you will trigger high utilization alerts (depending on your line of credit) that can dent your credit score, which should be considered if you are applying for credit.
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You guys want a Q&A here from my findings? Happy to help answer anything to help keep you living the good life.
First off:
HHonors card is a big mistake, too little ROI
Fid Amex, barely qualifies but OK
What you need... 5x There is a legacy Amex Blue link somewhere that has 1x for the first $6500 in spend per year, then 5x for anything else, that is gold.
With a true 5x card you make a net profit of $210 per month ($250 for $5K spend, minus $40 in fees) per card.
1 card per SSN...
Better than Bluebird is its sister card called the Serve, it offers the same PLUS you can load it with without any fees:
http://saverocity.com/travel/bluebird-vs-serve-calculations/
Additionally, I don't go into it in this post, but you can load another 2K via online (1K Credit 1K Debit)
It ties into the concept of Manufactured Spending, I am currently running a competition to help people understand this a bit better, you can check that out below, we gave a bankroll of $5K to the players, and the top guys are earning a net profit of between $1000-$1700 in cash and points. Per week...
Link to the guy who earned $1700 ($1K in real money, $700 in a mix of travel points and cash) in just one week. Net. For a few hours work.
http://saverocity.com/travel/meet-player-big-milemadness/
I'm a total N00B at this, so apologies if these questions are basic, but i'm just tying to wrap my head around the strategy.
So the strategy here would be to sign up for an AMEX serve account, then purchase Vanilla Reload cards at CVS (with the credit card). Then transfer the money from the Vanilla Reloads card to your AMEX serve account.
Then- from the serve account- you can do things like pay rent, pay off the credit card, etc.
Is that the gist of it?
That is the gist of it. FWIW, I'm new to this idea as well. Apparently there are ways to optimize the strategy as well (which CC you use, where you buy the Vanilla Reload, etc). Google "Manufactured Spending" or check out Saverocity's blog (linked above) to get into the (what seems to me to be a) head-spinning game...
Yep - but KISS just buy them on your card, pay off the card, rinse, repeat.
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Gonna need a new high percentage card... Wish there was something for pharmacies...
I was exploring this as well, and noticed that the Citi Dividend Platinum Select currently has 5% cash back at Drugstores. The categories rotate, so that's only good till the end of the month.
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Another card you can examine which I have and will probalby leverage and is easily accessible to everyone is from PenFed here is the link https://www.penfed.org/Platinum-Cash-Rewards/ (https://www.penfed.org/Platinum-Cash-Rewards/), it offers 5% cash back as a statement credit at gas stations, if you have another qualifying product there is no annual fee otherwise $25 which is nominal. A checking account with direct deposit is a qualifying account.
If that's the same Penfed CC I have, the cash back as a statement credit only counts for gas purchases paid at the pump. (It's what we use for a gas card). I doubt that bonus would trigger if you tried to buy a Vanilla Reload in the convenience store.
Damn... I never read it that closely... I always just use the card for gas at the pump exclusively. I just assumed it meant all gas station purchases.
There goes that idea... Still love the card for gas even at the stations where cash is cheaper, that card works out in my favor.
I have the AmEx Blue 6% card too... But no supermarkets near me carry Vanilla Reloads or MoneyPak's...
Gonna need a new high percentage card... Wish there was something for pharmacies...
Just FYI, the Serve can be loaded without VR, upto 1K per day straight swiping. It can be done with the Amex Blue cash for 5x with no fees at a CVS
I called AmEx tonight my Blue Cash Preffered gives me 6% at Supermarkets, 3% at stand alone gas stations and 1% everywhere else. The 6% is limited $1500 cash back annually. There is no cash back at CVS. There is an annual fee if $75, but i usually get that waived, I've been with AmEx awhile and charge a lot. I didn't ask if the card can be switched to the old rewards program however.
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Yeah, your idea is fine.
But...
The evolve is better because it then allows the Bluebird (or serve) to also operate.
Just being able to use both doesn't make one better... What is better about evolve? Their website didn't impress me in fact it kinda sucked. In have no idea who the company is, AmEx is worldwide financial leader, you have to give some real argument for it being better not that I can use both.
So say you are pushing 10K on that Heloc, you do it through evolve, then you do another 10K through Bluebird.... all of a sudden you are running 20K, and since we said each $5K earns about $210 in profit, you are now making a profit of $840 per month, along with the savings.
Personally I am not sure that I would do the monthly, but I did write a post about something similar on an annual basis.
Or I just do $10k on AmEx Serve and call it a day and be happy.
Here is one where I use the Bluebird to create a 12 month interest free loan, and then put that into a high interest saving account in order to generate a profit as follows:
New cardholders:
Travel Cash $550
Real Cash $151.10
http://saverocity.com/finance/credit-card-arbitrage-paypal-prepaid-mastercard-barclaycard-arrival/
I don't care about travel $ only real money, if its not cash I'm not interested. I know there is lots if good deals in travel, but I can't be bothered, cash is king.
Only potential issue with your plan:
You may end the month carrying a large balance on your credit card prior to wiping it down, if you do that you will trigger high utilization alerts (depending on your line of credit) that can dent your credit score, which should be considered if you are applying for credit.
I have more than enough limit to avoid utilization issues and the cash is always available in the HELOC to pay the card off if need be.
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Yeah, your idea is fine.
But...
The evolve is better because it then allows the Bluebird (or serve) to also operate.
Just being able to use both doesn't make one better... What is better about evolve? Their website didn't impress me in fact it kinda sucked. In have no idea who the company is, AmEx is worldwide financial leader, you have to give some real argument for it being better not that I can use both.
So say you are pushing 10K on that Heloc, you do it through evolve, then you do another 10K through Bluebird.... all of a sudden you are running 20K, and since we said each $5K earns about $210 in profit, you are now making a profit of $840 per month, along with the savings.
Personally I am not sure that I would do the monthly, but I did write a post about something similar on an annual basis.
Or I just do $10k on AmEx Serve and call it a day and be happy.
Here is one where I use the Bluebird to create a 12 month interest free loan, and then put that into a high interest saving account in order to generate a profit as follows:
New cardholders:
Travel Cash $550
Real Cash $151.10
http://saverocity.com/finance/credit-card-arbitrage-paypal-prepaid-mastercard-barclaycard-arrival/
I don't care about travel $ only real money, if its not cash I'm not interested. I know there is lots if good deals in travel, but I can't be bothered, cash is king.
Only potential issue with your plan:
You may end the month carrying a large balance on your credit card prior to wiping it down, if you do that you will trigger high utilization alerts (depending on your line of credit) that can dent your credit score, which should be considered if you are applying for credit.
I have more than enough limit to avoid utilization issues and the cash is always available in the HELOC to pay the card off if need be.
I posted to tell you how you can make more money by using the evolve card because you have a HELOC. The Bird or Serve is a self contained operation that anyone can use 10K, if you have a HELOC you should use Evolve (if it works with your HELOC, it doesn't with all) and then you can earn REAL money of an extra $400 per month which for someone with debt should be interesting.
If you don't care about 'travel money' then what if you take the same principle and use a different card?'
Do it your way and earn X do it my way and earn 2X.
I'm giving you knowledge on how to make more money so you can get out of the debt you are in, maybe this is standard response for these forums, but I think you should tone down the attitude, because when I get replies like that I lose any interest in continuing to help.
-
Yeah, your idea is fine.
But...
The evolve is better because it then allows the Bluebird (or serve) to also operate.
Just being able to use both doesn't make one better... What is better about evolve? Their website didn't impress me in fact it kinda sucked. In have no idea who the company is, AmEx is worldwide financial leader, you have to give some real argument for it being better not that I can use both.
So say you are pushing 10K on that Heloc, you do it through evolve, then you do another 10K through Bluebird.... all of a sudden you are running 20K, and since we said each $5K earns about $210 in profit, you are now making a profit of $840 per month, along with the savings.
Personally I am not sure that I would do the monthly, but I did write a post about something similar on an annual basis.
Or I just do $10k on AmEx Serve and call it a day and be happy.
Here is one where I use the Bluebird to create a 12 month interest free loan, and then put that into a high interest saving account in order to generate a profit as follows:
New cardholders:
Travel Cash $550
Real Cash $151.10
http://saverocity.com/finance/credit-card-arbitrage-paypal-prepaid-mastercard-barclaycard-arrival/
I don't care about travel $ only real money, if its not cash I'm not interested. I know there is lots if good deals in travel, but I can't be bothered, cash is king.
Only potential issue with your plan:
You may end the month carrying a large balance on your credit card prior to wiping it down, if you do that you will trigger high utilization alerts (depending on your line of credit) that can dent your credit score, which should be considered if you are applying for credit.
I have more than enough limit to avoid utilization issues and the cash is always available in the HELOC to pay the card off if need be.
I posted to tell you how you can make more money by using the evolve card because you have a HELOC. The Bird or Serve is a self contained operation that anyone can use 10K, if you have a HELOC you should use Evolve (if it works with your HELOC, it doesn't with all) and then you can earn REAL money of an extra $400 per month which for someone with debt should be interesting.
If you don't care about 'travel money' then what if you take the same principle and use a different card?'
Do it your way and earn X do it my way and earn 2X.
I'm giving you knowledge on how to make more money so you can get out of the debt you are in, maybe this is standard response for these forums, but I think you should tone down the attitude, because when I get replies like that I lose any interest in continuing to help.
First off let me apologize if I came across with an attitude I was replying late at night from my iPhone after just getting off the phone with my insurance company filing a claim for a car accident I was in earlier in the day. All that being said it really is no excuse for an attitude if I came across as having one as that was not my intention. You have been providing a lot of useful information and I would hate for you to stop because of my late night response.
Now back to our regularly scheduled post...
So basically Evolve isn't really "better" than Serve/Bluebird it is just an alternative and to the point you were making something you can operate independently to double up the amount you make in cash back rewards.
Now I agree I am not sure I really don’t want to push $20k a month through something like this, at least not right away so if I were to do it I would pick AmEx as my go to company as they are a known player compared to Evolve, not that I would rule out doubling up in a few months if this worked out to be as lucrative as it seems like it can be, I would start with $10k using most likely AmEx Serve for both my wife and I.
Regarding the HELOC as debt, I actually have the assets to clear it 100% if I chose, but it’s a low rate 2.49% so I don't same thing with my mortgage. Actually in my last refinance, I split my mortgage into a mortgage and the HELOC to get out of a Jumbo for a lower rate and put the remaining balance on the HELOC. I have about $200k of free borrowing capacity on my HELOC.
What I do is pretty much dump all of my income into the HELOC to temporally lower the balance to reduce the monthly interest payment and borrowing the funds back to pay my bills, the 2.49% beats any money market accounts etc… So in essence by saving 2.49% on depositing my income that is my savings rate. Now the rate is lower because the 2.49% gets reduced for the tax benefit as the first $100k is considered home acquisition debt and I have never had over another $100k of home equity debt so it is all tax deductible. However I am also not paying taxes on interest earned so that counters the tax savings so it nets out to an effective rate of just shy of the 2.49%, so I call it that to make it simple.
I overpay my mortgage basically to the amount of my initial mortgage payment prior to all of my refi's, I have done 2, so the formula is original mortgage payment - current mortgage payment - minus HELOC interest = monthly overpayment. So my end game is larger overpayments to my mortgage which is also quite low at 3.375%.
Now I agree using both Evolve and Serve would have a bigger impact on the front end and then the backend however like you said pushing $20k a month through 3 cards just seems excessive although when running the numbers all the way through with the savings being compounded into the mortgage the earnings/savings are probably upwards of $1000 per month.
As far as the travel cards, I don't like them because they seem good on the front end, but when it comes time to use them not so much. SPG 5x earning is great except that it locks you into Starwood properties and the rooms that go for 20,000 points per night are far cheaper to pay for in cash and earn cash back on credit cards, not just singling out SPG just using that as an example. You have to spend a god awful amount of money to earn enough points to get the travel perks we would use, it is far more cost effective to maximize cash back and pay for travel than try to spend my way into travel rewards. My father in law did this analysis a few years back (he's retired and travels extensively) and we all switched all of our cards to cash back. That is a topic for a whole other thread... I think I might start that actually...
My current best play is using my AmEx Blue Cash Preferred and/or my Costco AmEx which both get 3% back at gas stations, I am going to call AmEx again see about the AmEx Blue with the old reward program. When speaking with them last night there is a new card coming out soon called AmEx Everyday, they have not listed all of the details yet, so not sure if it will be useful in Manufactured Spending.
-
Yeah, your idea is fine.
But...
The evolve is better because it then allows the Bluebird (or serve) to also operate.
Just being able to use both doesn't make one better... What is better about evolve? Their website didn't impress me in fact it kinda sucked. In have no idea who the company is, AmEx is worldwide financial leader, you have to give some real argument for it being better not that I can use both.
So say you are pushing 10K on that Heloc, you do it through evolve, then you do another 10K through Bluebird.... all of a sudden you are running 20K, and since we said each $5K earns about $210 in profit, you are now making a profit of $840 per month, along with the savings.
Personally I am not sure that I would do the monthly, but I did write a post about something similar on an annual basis.
Or I just do $10k on AmEx Serve and call it a day and be happy.
Here is one where I use the Bluebird to create a 12 month interest free loan, and then put that into a high interest saving account in order to generate a profit as follows:
New cardholders:
Travel Cash $550
Real Cash $151.10
http://saverocity.com/finance/credit-card-arbitrage-paypal-prepaid-mastercard-barclaycard-arrival/
I don't care about travel $ only real money, if its not cash I'm not interested. I know there is lots if good deals in travel, but I can't be bothered, cash is king.
Only potential issue with your plan:
You may end the month carrying a large balance on your credit card prior to wiping it down, if you do that you will trigger high utilization alerts (depending on your line of credit) that can dent your credit score, which should be considered if you are applying for credit.
I have more than enough limit to avoid utilization issues and the cash is always available in the HELOC to pay the card off if need be.
I posted to tell you how you can make more money by using the evolve card because you have a HELOC. The Bird or Serve is a self contained operation that anyone can use 10K, if you have a HELOC you should use Evolve (if it works with your HELOC, it doesn't with all) and then you can earn REAL money of an extra $400 per month which for someone with debt should be interesting.
If you don't care about 'travel money' then what if you take the same principle and use a different card?'
Do it your way and earn X do it my way and earn 2X.
I'm giving you knowledge on how to make more money so you can get out of the debt you are in, maybe this is standard response for these forums, but I think you should tone down the attitude, because when I get replies like that I lose any interest in continuing to help.
First off let me apologize if I came across with an attitude I was replying late at night from my iPhone after just getting off the phone with my insurance company filing a claim for a car accident I was in earlier in the day. All that being said it really is no excuse for an attitude if I came across as having one as that was not my intention. You have been providing a lot of useful information and I would hate for you to stop because of my late night response.
Now back to our regularly scheduled post...
So basically Evolve isn't really "better" than Serve/Bluebird it is just an alternative and to the point you were making something you can operate independently to double up the amount you make in cash back rewards.
Now I agree I am not sure I really don’t want to push $20k a month through something like this, at least not right away so if I were to do it I would pick AmEx as my go to company as they are a known player compared to Evolve, not that I would rule out doubling up in a few months if this worked out to be as lucrative as it seems like it can be, I would start with $10k using most likely AmEx Serve for both my wife and I.
Regarding the HELOC as debt, I actually have the assets to clear it 100% if I chose, but it’s a low rate 2.49% so I don't same thing with my mortgage. Actually in my last refinance, I split my mortgage into a mortgage and the HELOC to get out of a Jumbo for a lower rate and put the remaining balance on the HELOC. I have about $200k of free borrowing capacity on my HELOC.
What I do is pretty much dump all of my income into the HELOC to temporally lower the balance to reduce the monthly interest payment and borrowing the funds back to pay my bills, the 2.49% beats any money market accounts etc… So in essence by saving 2.49% on depositing my income that is my savings rate. Now the rate is lower because the 2.49% gets reduced for the tax benefit as the first $100k is considered home acquisition debt and I have never had over another $100k of home equity debt so it is all tax deductible. However I am also not paying taxes on interest earned so that counters the tax savings so it nets out to an effective rate of just shy of the 2.49%, so I call it that to make it simple.
I overpay my mortgage basically to the amount of my initial mortgage payment prior to all of my refi's, I have done 2, so the formula is original mortgage payment - current mortgage payment - minus HELOC interest = monthly overpayment. So my end game is larger overpayments to my mortgage which is also quite low at 3.375%.
Now I agree using both Evolve and Serve would have a bigger impact on the front end and then the backend however like you said pushing $20k a month through 3 cards just seems excessive although when running the numbers all the way through with the savings being compounded into the mortgage the earnings/savings are probably upwards of $1000 per month.
As far as the travel cards, I don't like them because they seem good on the front end, but when it comes time to use them not so much. SPG 5x earning is great except that it locks you into Starwood properties and the rooms that go for 20,000 points per night are far cheaper to pay for in cash and earn cash back on credit cards, not just singling out SPG just using that as an example. You have to spend a god awful amount of money to earn enough points to get the travel perks we would use, it is far more cost effective to maximize cash back and pay for travel than try to spend my way into travel rewards. My father in law did this analysis a few years back (he's retired and travels extensively) and we all switched all of our cards to cash back. That is a topic for a whole other thread... I think I might start that actually...
My current best play is using my AmEx Blue Cash Preferred and/or my Costco AmEx which both get 3% back at gas stations, I am going to call AmEx again see about the AmEx Blue with the old reward program. When speaking with them last night there is a new card coming out soon called AmEx Everyday, they have not listed all of the details yet, so not sure if it will be useful in Manufactured Spending.
Hey, thanks for the reply, sorry to hear about that day!
I got irked by it because I actually became aware of this forum initially by someone posting me up in the 'hall of shame' and I found certain attitudes around here lacking, there is a little vibe of 'holier than thou' but I don't see it from what you wrote here, and it was presumptuous on my behalf. My apologies.
As for your strategy, you are thinking the right way, start small, ramp up. Now, Evolve is not as pretty as Amex, agreed, and it isn't as stable, but it seems to be a valid option for many. Your challenge of it actually has prompted me to explore its financial standing and robustness and I will dig into this.
What you will quickly find is that once you are comfortable with $10K you will want $20K, then $100K and so on. The top 'players' (though not the ones in my tournament) that I know are doing $1M+ per month on a variety of programs.
You sound in good shape regarding your debt management, but lets remember that even with 'good debt' being able to pay it down is better than paying interest in the most optimized manner, if you could bring an extra $5K+ per year to reduce your debt levels from additional methods (such as evolve and others) then they offer a lot of value.
As for your travel analysis... not necessarily true, just like with money there are two sides of every coin, how you earn and how you spend. Let's actually use SPG:
20,000 points can transfer to huge list of airlines at a 1:125 rate, making 25K American Airlines miles. You can then fly from New York to Tokyo in Coach (or in Biz if you double that) for that, which I think is valued at more like $500 (that is very conservative).
Taking that further, fly back from Tokyo (another 20K SPG) to NYC, and use their free stopover rule to stay in NY for 8 months, then fly one way to St Thomas for free.
So by optimizing both the earning and the spending you get WAY better value.
For travel, cash back is only really useful for domestic flights and for some hotels, for international flights it doesn't make sense. I personally fly the wife an I in Business Class internationally all the time for free like this, leveraging the various stopover rules to make 3 trips for the price of 2.
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Hey, thanks for the reply, sorry to hear about that day!
I got irked by it because I actually became aware of this forum initially by someone posting me up in the 'hall of shame' and I found certain attitudes around here lacking, there is a little vibe of 'holier than thou' but I don't see it from what you wrote here, and it was presumptuous on my behalf. My apologies.
I feel ya, sometimes the forum is a bit rougher than it should be.
As for your strategy, you are thinking the right way, start small, ramp up. Now, Evolve is not as pretty as Amex, agreed, and it isn't as stable, but it seems to be a valid option for many. Your challenge of it actually has prompted me to explore its financial standing and robustness and I will dig into this.
What you will quickly find is that once you are comfortable with $10K you will want $20K, then $100K and so on. The top 'players' (though not the ones in my tournament) that I know are doing $1M+ per month on a variety of programs.
I'm fairly conservative, and my wife even more more than I, so in all likelyhood I doubt we would ever ramp up much more even it were proven to be very lucrative. We would also stick with working with companies that are more stable. She would never use some random company, if I tell here this is through AmEx she won't think it is anywhere as shady as it really is.
You sound in good shape regarding your debt management, but lets remember that even with 'good debt' being able to pay it down is better than paying interest in the most optimized manner, if you could bring an extra $5K+ per year to reduce your debt levels from additional methods (such as evolve and others) then they offer a lot of value.
I have crunched some numbers, correct me if you think I am doing this wrong, this is back of the napkin math. Lets say right now I use AmEx Serve with my AmEx Blue Cash Prefered and get 3% cash back. So I use VR at Sunoco for $10k and get $302.37 cash back, then I swipe another $2k at CVS on my Fidelity AmEx for $40, subtract the $79 for VR fees and have a net total of $263.37 in cash back. I now have $12k on my 2 Serve cards which I will transfer to my bank account and then make a principal payment to my HELOC. Hypothetically, lets say the whole process takes 5 days, and I started on the first day of my AmEx Blue billing cycle the 11th. As of the 16th I have now reduced my HELOC by $12k at 2.49% which is is roughly $.82 per day. My statement closes on the 11th of the following month and the payment is then due the 6th of the month afterwards. Normally, I wait until the day the payment is due to keep the money in the HELOC as long as possible, but now I think I would pay it off as soon as the statment closed on the 11th, roughly 26 days for a total reduction of interest of $21.32. My AmEx Blue payment would be for $9,697.63. I will keep it simple and assume the Fid AmEx is the same cycle and pays the $2k same day even though it doesn't, I get those funds transfered to my Fidelity account and they wind up in the HELOC eventually as well in a few days. I would then have an extra $21.32 toward mortgage principal, a permanent reduction of $302.37 to my HELOC and cleared all the CC debt, and ready to start over again.
As for your travel analysis... not necessarily true, just like with money there are two sides of every coin, how you earn and how you spend. Let's actually use SPG:
20,000 points can transfer to huge list of airlines at a 1:125 rate, making 25K American Airlines miles. You can then fly from New York to Tokyo in Coach (or in Biz if you double that) for that, which I think is valued at more like $500 (that is very conservative).
I have spend $4,000 to earn 20k SPG points which is then becomes 25k AA miles. Or I can earn 2% and get $80. The problem is you assumption that I can get a flight from NY to Tokyo for 25k AA miles and as an AA platimum member it is far and few between that I have ever been able to claim a flight that I needed for under 100k miles, so I am either buying up or paying for my flight instead. Same goes for United (it was Continental last time I flew them). If you have lots of flexiblity and book around deals then you make that work, if you need to book within parameters that are more rigid and my life/travel is usually not geared around travel perks then the perks just don't add up. I understand how people can make them work, but you have to be very flexible and jump through hoops, I am not a hoop jumper. I will take a consistent simple reward over something that might be beneficial but I might never be able to leverage.
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Hey, thanks for the reply, sorry to hear about that day!
I got irked by it because I actually became aware of this forum initially by someone posting me up in the 'hall of shame' and I found certain attitudes around here lacking, there is a little vibe of 'holier than thou' but I don't see it from what you wrote here, and it was presumptuous on my behalf. My apologies.
I feel ya, sometimes the forum is a bit rougher than it should be.
As for your strategy, you are thinking the right way, start small, ramp up. Now, Evolve is not as pretty as Amex, agreed, and it isn't as stable, but it seems to be a valid option for many. Your challenge of it actually has prompted me to explore its financial standing and robustness and I will dig into this.
What you will quickly find is that once you are comfortable with $10K you will want $20K, then $100K and so on. The top 'players' (though not the ones in my tournament) that I know are doing $1M+ per month on a variety of programs.
I'm fairly conservative, and my wife even more more than I, so in all likelyhood I doubt we would ever ramp up much more even it were proven to be very lucrative. We would also stick with working with companies that are more stable. She would never use some random company, if I tell here this is through AmEx she won't think it is anywhere as shady as it really is.
You sound in good shape regarding your debt management, but lets remember that even with 'good debt' being able to pay it down is better than paying interest in the most optimized manner, if you could bring an extra $5K+ per year to reduce your debt levels from additional methods (such as evolve and others) then they offer a lot of value.
I have crunched some numbers, correct me if you think I am doing this wrong, this is back of the napkin math. Lets say right now I use AmEx Serve with my AmEx Blue Cash Prefered and get 3% cash back. So I use VR at Sunoco for $10k and get $302.37 cash back, then I swipe another $2k at CVS on my Fidelity AmEx for $40, subtract the $79 for VR fees and have a net total of $263.37 in cash back. I now have $12k on my 2 Serve cards which I will transfer to my bank account and then make a principal payment to my HELOC. Hypothetically, lets say the whole process takes 5 days, and I started on the first day of my AmEx Blue billing cycle the 11th. As of the 16th I have now reduced my HELOC by $12k at 2.49% which is is roughly $.82 per day. My statement closes on the 11th of the following month and the payment is then due the 6th of the month afterwards. Normally, I wait until the day the payment is due to keep the money in the HELOC as long as possible, but now I think I would pay it off as soon as the statment closed on the 11th, roughly 26 days for a total reduction of interest of $21.32. My AmEx Blue payment would be for $9,697.63. I will keep it simple and assume the Fid AmEx is the same cycle and pays the $2k same day even though it doesn't, I get those funds transfered to my Fidelity account and they wind up in the HELOC eventually as well in a few days. I would then have an extra $21.32 toward mortgage principal, a permanent reduction of $302.37 to my HELOC and cleared all the CC debt, and ready to start over again.
As for your travel analysis... not necessarily true, just like with money there are two sides of every coin, how you earn and how you spend. Let's actually use SPG:
20,000 points can transfer to huge list of airlines at a 1:125 rate, making 25K American Airlines miles. You can then fly from New York to Tokyo in Coach (or in Biz if you double that) for that, which I think is valued at more like $500 (that is very conservative).
I have spend $4,000 to earn 20k SPG points which is then becomes 25k AA miles. Or I can earn 2% and get $80. The problem is you assumption that I can get a flight from NY to Tokyo for 25k AA miles and as an AA platimum member it is far and few between that I have ever been able to claim a flight that I needed for under 100k miles, so I am either buying up or paying for my flight instead. Same goes for United (it was Continental last time I flew them). If you have lots of flexiblity and book around deals then you make that work, if you need to book within parameters that are more rigid and my life/travel is usually not geared around travel perks then the perks just don't add up. I understand how people can make them work, but you have to be very flexible and jump through hoops, I am not a hoop jumper. I will take a consistent simple reward over something that might be beneficial but I might never be able to leverage.
You are more or less right. A couple of optimization ideas might be: swipe reloading with a higher multiple (5x at groceries) would make 10K worth $500. As for swiping, I have to confirm but I think that if you swipe you reduce the amount you can load with vanilla, the $7K actually comes like this:
5K swipe or vanilla
1K online load (200 per day) from a Credit Card
1K online Load (200 per day) from a Debit Card
Regarding the SPG, sadly that is actually spending 20K to earn 20K - they earn at 1X but they transfer at 1.25X this raises a split in the mindset of the manufactured spenders - one is more mustacian than the other...
One camp (lets call them the Devils Children) like to buy cheap flights, IE they would earn those SPG in order to fly at a discounted price. They operate in a net cash negative (mainly)
Another camp (lets call them the Cherubs) like to earn a net profit, so they tend to go for cash back.
There is a guy that I featured (the guy who earned 1700 in a week) that actually brought both together. He made a system where he bought $5000 in gift cards earning 3% online cash back for $150, and paid with the SPG for 5000 points, and to liquidate paid another 70 cents per $1000. He was netting a profit of 5000 points and $146.50 per transaction. Now the people who say there was an opportunity cost on the spg vs 2% cash are correct, but also you can kinda see the point of saying screw it, take the points, travel business class and pocket the profit (well I can anyway!)
As for your booking problems... SPG transfer to dozens of carriers, so you could search in advance and find the best, then transfer. I am positive you could find a way to get there if you had that flexibility (from the options to spend) even if your schedule is tight.
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You are more or less right. A couple of optimization ideas might be: swipe reloading with a higher multiple (5x at groceries) would make 10K worth $500. As for swiping, I have to confirm but I think that if you swipe you reduce the amount you can load with vanilla, the $7K actually comes like this:
5K swipe or vanilla
1K online load (200 per day) from a Credit Card
1K online Load (200 per day) from a Debit Card
I called AmEx again last night and spoke to them about the old Blue card rewards program, they do not actively offer the card but I had no problem getting it, I've a member for a while and my monthly spend with them is fairly high, YMMV. My new Blue Cash card with 5% cash back at CVS will be arriving on or before 3/29. The card will have a limit of $15k which is perfect for $12k monthly charges as the utitlization is only 80% which will never impact my credit report and the the $12k will have no impact on my overall credit utilization. It also leaves me with $750 of normal spend at CVS for prescriptions at 5% which is well over what I normally spend. I will most likely role over most of my limit from the my other Blue Cash Prefered card to this card and drop that card, the extra 1% at grocery stores with a $1500 cash back limit isn't really worth the $75 annual fee, especially since I will crush the $6,500 thresehold in the first month with Manufactured Spending. So the limit will never be an issue.
As another point, I read the terms of service on AmEx Serve and plan on calling to day for clarity but it seems like paying your mortgage is a legit use for the card, so this would be 100% on the level, not even in the scam category at all, which is completely suprising. There is however a $5,000 bill pay limit to all payees per month, so the final $1,000 would have to be a cash withdrawal from the ATM or ACH to my bank and payment to the HELOC at the bank, which is no big deal.
So now to the numbers, excluding the first month where I need to clear the $6,500 hurdly, I would
Swipe $10k ($1k per day, 2 cards, 5 days)
Online $2k ($200 per day , 2 cards, 5 days)
Debit card, I have no rewards program on my debit cards, so just skipping that...
Total of $12k @ 5%, no fees is $600 clear, monthly or $7,200 annually.
The bill pay will take 4 days according to AmEx Serve website , so lets call it 5 to be safe and I will normalize months to 30 days, so I will get 25 days of $.82 interest savings or $20.50 per month. I will actually move the money incrementally as I load it, so I will build up to $.82 and get a little more.
I will leave the $7,200 as a permanent reduction to the HELOC as it is pretty much free money and use this entire process as a mortgage accelerator.
I am going to call AmEx Serve tonight with a few questions and setup my accounts, this is actually going to be so simple, my wife is going to complain that she has to go to CVS 5 days in a month to swipe a card, I am hoping you can swipe without an ID check and I can just hold onto both of our cards and she doesn't actually have to do anything, that will make my life so much easier...
Regarding the SPG, sadly that is actually spending 20K to earn 20K - they earn at 1X but they transfer at 1.25X this raises a split in the mindset of the manufactured spenders - one is more mustacian than the other...
At 1x earnings there is no comparison, $20,000 in spend to get a free flight that I can book for a fraction of that, give me 2% back on the $20k, $400 which I can use on anything.
One camp (lets call them the Devils Children) like to buy cheap flights, IE they would earn those SPG in order to fly at a discounted price. They operate in a net cash negative (mainly)
Another camp (lets call them the Cherubs) like to earn a net profit, so they tend to go for cash back.
There is a guy that I featured (the guy who earned 1700 in a week) that actually brought both together. He made a system where he bought $5000 in gift cards earning 3% online cash back for $150, and paid with the SPG for 5000 points, and to liquidate paid another 70 cents per $1000. He was netting a profit of 5000 points and $146.50 per transaction. Now the people who say there was an opportunity cost on the spg vs 2% cash are correct, but also you can kinda see the point of saying screw it, take the points, travel business class and pocket the profit (well I can anyway!)]
As for your booking problems... SPG transfer to dozens of carriers, so you could search in advance and find the best, then transfer. I am positive you could find a way to get there if you had that flexibility (from the options to spend) even if your schedule is tight.
I understand the dynamics and how people can make it work, to me that is just too much work with not enough incentive, I will be happy with my contant optimized cash rewards, and I will look for optimal travel deals and just pay for them. My wife is a excellent shopper anyway. For the return on time invested I would rather spend it looking at something other CC travel rewards etc... there is much better returns to be had.
I have spent a fair amount of time doing research and responding on this dialog on the manufactured spending, but this looks like it will yield a very nice cash return for very little actual effort, the travel stuff I have already looked into in the past and my conclusion is the same, it is better to go with cash and not worry about it. I know there are people who do some crazy travel hacking with CC and gift cards etc... More power to them, I just find the time involved is not worth the savings compared to just taking the cash in respect to my asset base and time commitments etc...
Thanks again for all your help, I may never have known about AmEx Serve or even thought about getting the old Blue cash card again to make this a home run without your blog or posts here.
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Awesome! That serve/5% is going to make a massive difference, glad I could share the news on it.
For travel, my method is simple, I do what you are planning to do for the 5% Cash back, then when I need to fly I sign up for a Credit Card and snag their bonus, I don't use travel cards for either regular or 'irregular spend'.
Enjoy!
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You are more or less right. A couple of optimization ideas might be: swipe reloading with a higher multiple (5x at groceries) would make 10K worth $500. As for swiping, I have to confirm but I think that if you swipe you reduce the amount you can load with vanilla, the $7K actually comes like this:
5K swipe or vanilla
1K online load (200 per day) from a Credit Card
1K online Load (200 per day) from a Debit Card
I called AmEx again last night and spoke to them about the old Blue card rewards program, they do not actively offer the card but I had no problem getting it, I've a member for a while and my monthly spend with them is fairly high, YMMV. My new Blue Cash card with 5% cash back at CVS will be arriving on or before 3/29. The card will have a limit of $15k which is perfect for $12k monthly charges as the utitlization is only 80% which will never impact my credit report and the the $12k will have no impact on my overall credit utilization. It also leaves me with $750 of normal spend at CVS for prescriptions at 5% which is well over what I normally spend. I will most likely role over most of my limit from the my other Blue Cash Prefered card to this card and drop that card, the extra 1% at grocery stores with a $1500 cash back limit isn't really worth the $75 annual fee, especially since I will crush the $6,500 thresehold in the first month with Manufactured Spending. So the limit will never be an issue.
As another point, I read the terms of service on AmEx Serve and plan on calling to day for clarity but it seems like paying your mortgage is a legit use for the card, so this would be 100% on the level, not even in the scam category at all, which is completely suprising. There is however a $5,000 bill pay limit to all payees per month, so the final $1,000 would have to be a cash withdrawal from the ATM or ACH to my bank and payment to the HELOC at the bank, which is no big deal.
So now to the numbers, excluding the first month where I need to clear the $6,500 hurdly, I would
Swipe $10k ($1k per day, 2 cards, 5 days)
Online $2k ($200 per day , 2 cards, 5 days)
Debit card, I have no rewards program on my debit cards, so just skipping that...
Total of $12k @ 5%, no fees is $600 clear, monthly or $7,200 annually.
The bill pay will take 4 days according to AmEx Serve website , so lets call it 5 to be safe and I will normalize months to 30 days, so I will get 25 days of $.82 interest savings or $20.50 per month. I will actually move the money incrementally as I load it, so I will build up to $.82 and get a little more.
I will leave the $7,200 as a permanent reduction to the HELOC as it is pretty much free money and use this entire process as a mortgage accelerator.
I am going to call AmEx Serve tonight with a few questions and setup my accounts, this is actually going to be so simple, my wife is going to complain that she has to go to CVS 5 days in a month to swipe a card, I am hoping you can swipe without an ID check and I can just hold onto both of our cards and she doesn't actually have to do anything, that will make my life so much easier...
Regarding the SPG, sadly that is actually spending 20K to earn 20K - they earn at 1X but they transfer at 1.25X this raises a split in the mindset of the manufactured spenders - one is more mustacian than the other...
At 1x earnings there is no comparison, $20,000 in spend to get a free flight that I can book for a fraction of that, give me 2% back on the $20k, $400 which I can use on anything.
One camp (lets call them the Devils Children) like to buy cheap flights, IE they would earn those SPG in order to fly at a discounted price. They operate in a net cash negative (mainly)
Another camp (lets call them the Cherubs) like to earn a net profit, so they tend to go for cash back.
There is a guy that I featured (the guy who earned 1700 in a week) that actually brought both together. He made a system where he bought $5000 in gift cards earning 3% online cash back for $150, and paid with the SPG for 5000 points, and to liquidate paid another 70 cents per $1000. He was netting a profit of 5000 points and $146.50 per transaction. Now the people who say there was an opportunity cost on the spg vs 2% cash are correct, but also you can kinda see the point of saying screw it, take the points, travel business class and pocket the profit (well I can anyway!)]
As for your booking problems... SPG transfer to dozens of carriers, so you could search in advance and find the best, then transfer. I am positive you could find a way to get there if you had that flexibility (from the options to spend) even if your schedule is tight.
I understand the dynamics and how people can make it work, to me that is just too much work with not enough incentive, I will be happy with my contant optimized cash rewards, and I will look for optimal travel deals and just pay for them. My wife is a excellent shopper anyway. For the return on time invested I would rather spend it looking at something other CC travel rewards etc... there is much better returns to be had.
I have spent a fair amount of time doing research and responding on this dialog on the manufactured spending, but this looks like it will yield a very nice cash return for very little actual effort, the travel stuff I have already looked into in the past and my conclusion is the same, it is better to go with cash and not worry about it. I know there are people who do some crazy travel hacking with CC and gift cards etc... More power to them, I just find the time involved is not worth the savings compared to just taking the cash in respect to my asset base and time commitments etc...
Thanks again for all your help, I may never have known about AmEx Serve or even thought about getting the old Blue cash card again to make this a home run without your blog or posts here.
So- you can take your AMEX serve card to CVS and swipe reload it with an AMEX credit card, and AMEX won't count that as a cash advance? That just seems crazy... I can see buying the VR cards since that's probably categorized as a drug store purchase, but the swipe reloads are counted as drug store purchases as well?
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Furthermore, you can go online and put $1000 on your AMEX serve, using an AMEX credit card, and they'll categorize that as a purchase as opposed to a cash advance?! My brain might explode...
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So- you can take your AMEX serve card to CVS and swipe reload it with an AMEX credit card, and AMEX won't count that as a cash advance? That just seems crazy... I can see buying the VR cards since that's probably categorized as a drug store purchase, but the swipe reloads are counted as drug store purchases as well?
The CVS and 7-11 swipes are charges at the stores that are processed through the VR network the same way as if you brought cash to the register.
So the credit card company I this case AmEx just sees a charge from CVS no idea what for.
That is how I understand it anyway... YMMV depending on your credit card carrier.
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Furthermore, you can go online and put $1000 on your AMEX serve, using an AMEX credit card, and they'll categorize that as a purchase as opposed to a cash advance?! My brain might explode...
Processed through ISIS Wallet I believe also obscures the charges.
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So- you can take your AMEX serve card to CVS and swipe reload it with an AMEX credit card, and AMEX won't count that as a cash advance? That just seems crazy... I can see buying the VR cards since that's probably categorized as a drug store purchase, but the swipe reloads are counted as drug store purchases as well?
The CVS and 7-11 swipes are charges at the stores that are processed through the VR network the same way as if you brought cash to the register.
So the credit card company I this case AmEx just sees a charge from CVS no idea what for.
That is how I understand it anyway... YMMV depending on your credit card carrier.
Got it- I guess it just seems like something that AMEX could kill pretty easily. I could see Chase, for instance not knowing that your $1,000 CVS purchase is funding your Serve account- but in this case, since both the serve account and your credit card are administered by AMEX- I would think they could put 2 and 2 together pretty easily (a $1000 charge on your AMEX blue (at CVS no less) and then a $1000 deposit into your serve account)
But hey- if it works. Awesomeness.
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So- you can take your AMEX serve card to CVS and swipe reload it with an AMEX credit card, and AMEX won't count that as a cash advance? That just seems crazy... I can see buying the VR cards since that's probably categorized as a drug store purchase, but the swipe reloads are counted as drug store purchases as well?
The CVS and 7-11 swipes are charges at the stores that are processed through the VR network the same way as if you brought cash to the register.
So the credit card company I this case AmEx just sees a charge from CVS no idea what for.
That is how I understand it anyway... YMMV depending on your credit card carrier.
Got it- I guess it just seems like something that AMEX could kill pretty easily. I could see Chase, for instance not knowing that your $1,000 CVS purchase is funding your Serve account- but in this case, since both the serve account and your credit card are administered by AMEX- I would think they could put 2 and 2 together pretty easily (a $1000 charge on your AMEX blue (at CVS no less) and then a $1000 deposit into your serve account)
But hey- if it works. Awesomeness.
Actually it would be highly unlikely if not impossible for them to put the transactions together. I am a software engineer by trade, financial software in fact. For starters AmEx is the parent but I am sure Serve (Prepaid reloadable card) and Blue (credit card) are actually seperated companies wholly owned subsidiaries, at the bare minimum they are seperate divisions.
They absolutely don't share infrastructure for compliance reasons, and the only key piece if data connecting the 2 accounts is social security number which is absolutely not crucial in either transaction or in day reconciliations.
So someone would have to have access to both businesses to even make the request which is a high level exec and then you would need to find programmers who have access to both who could generate a report that cross references the data.
The cost involved in trying to find out if people are complying with the TOS of several of their products would probably not be justified compared to the cost to there bottom line.
They are well aware of the capability and for the small percentage of people who use the product like we have discussed the cost is absorbed by the profit made overall by the users they have targeted.
Trust me AmEx is smarter then us
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Interesting.. that wouldn't occur to me because I've had Bank of America Credit cards and a checking account, as well as a Chase checking account and Chase credit cards, and on each site i've been able to view and access my credit card info along with my checking account info. As well as do simple transfers between credit card and checking account. They certainly seem to interact to me.
Is Serve and AMEX different, or is what I'm describing something different? Not trying to argue, but really just curious.
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Interesting.. that wouldn't occur to me because I've had Bank of America Credit cards and a checking account, as well as a Chase checking account and Chase credit cards, and on each site i've been able to view and access my credit card info along with my checking account info. As well as do simple transfers between credit card and checking account. They certainly seem to interact to me.
Is Serve and AMEX different, or is what I'm describing something different? Not trying to argue, but really just curious.
Amex offers two products, one is called Serve, one is called Bluebird. They are intended solutions for the 'unbanked'
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Interesting.. that wouldn't occur to me because I've had Bank of America Credit cards and a checking account, as well as a Chase checking account and Chase credit cards, and on each site i've been able to view and access my credit card info along with my checking account info. As well as do simple transfers between credit card and checking account. They certainly seem to interact to me.
Is Serve and AMEX different, or is what I'm describing something different? Not trying to argue, but really just curious.
Well that is a little different; let me explain in a little more detail, you are thinking like a customer not like a bank, which is fine as you are a customer not a bank. In the consumer banking division of Chase of BofA there is the traditional depository business of checking savings accounts and then there is the Credit card division which is revolving lines of credits. I actually have accounts both checking/savings and credit cards with both banks, I will use Chase as the example as there website is easier to show how it works.
Back in the beginning of the internet age you would have had separate banking and credit card usernames websites which were not connected because in fact banking and credit cards are separate divisions or possibly entities within the same bank depending on structure. However to make things more convenient for customers as technology has progressed the websites have merged into one to provide seamless integration across product lines.
On Chases website once you are logged on you will notice the web address is https://chaseonline.chase.com/MyAccounts.aspx the bold part being the subdomain that is the master authentication site for online access to the Chase banking world, they use something referred to as Single Sign On (SSO) to pass credentials between different internal applications.
If you select a bank account the web address will begin with something that looks like this https://banking.chase.com notice the bolded word banking, this subdomain is the banking world for checking and savings account etc...
If you select a credit card the web address will begin with something that looks like this https://cards.chase.com/ notice the bolded word cards, this subdomain is the credit card world for Chase.
I don't have a chase mortgage but my guess is https://mortgage.chase.com/ would be the subdomain etc...
Now here is where it gets really cool https://payments.chase.com is where all transfers and payments are made, now since all of these companies are internal they know any internal transfer is legit and can make it instant as they can verify the funds, so that is a courtesy to their customers, even though the reconciliation is probably not as instant.
I do not work for Chase (or BofA for that matter), I am just able to discern this information from understanding in general both how banks work and how software for banks is built, this is my best guess, I of course can be off in some of the details.
Now on to how AmEx and Serve are different, well AmEx is a holding company, one of its subsidiaries is actually the American Express Centurion Bank; this is where it runs its consumer banking and credit card business from.
AmEx Serve is not a banking product; it is a prepaid debit card which is acting like a full service bank. The funds are held in custody at either AmEx Centurion or Wells Fargo, they are insured indirectly via pass through FDIC insurance and your limits are jointly tied to the limits you have with the underlying institution. You can also scroll all the way to the bottom of the Serve website and the copyright is actually for the following company name "2014 Serve Virtual Enterprises, Inc.". Both Serve and Bluebird are sister products and I am sure share infrastructure and this is why you can have only or the other.
AmEx probably cannot even legally share data between its credit card business and its prepaid card business, even if you are a customer of both, in fact I called this morning again and Serve confirmed they are a separate entity from the credit card business. Separate website, separate logon.
Banking is an extremely complex and profitable business, as much as there are plenty of avenues for smart consumers to reap benefits from the system, trust me the banks do more than their share of analysis to determine that each product is profitable, they don't look at it like we do they look at the profitability of a product across all consumers if it will make money then it is a good product and that accounts for the slippage due to whatever small percentage of people can game the product. So if Serve is a profitable product and Blue Cash is a profitable product they will not care that x number of people are getting the best of them by combining them that would make their models too complex, they made their margins.
When their models show they are not making the numbers they expect they change the program, Chase Freedom for example used to have much better rewards, I was grandfathered in, it has gradually sucked more and more that I barely use the card only for its rotating categories now. Over time if a program costs them too much like the Blue Cash/Serve deal might, we will get squeezed out of it, so the more it is published the more likely that will happen... At this point I am not too worried. The likely change will be to the Blue Cash card, but in reality they have already changed that they no longer market the card, the percentage of people who will do this is probably small in comparison to the card base in the entire Blue program which is what they probably model.
Sorry if this way more information than you were expecting :)
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Interesting.. that wouldn't occur to me because I've had Bank of America Credit cards and a checking account, as well as a Chase checking account and Chase credit cards, and on each site i've been able to view and access my credit card info along with my checking account info. As well as do simple transfers between credit card and checking account. They certainly seem to interact to me.
Is Serve and AMEX different, or is what I'm describing something different? Not trying to argue, but really just curious.
Well that is a little different; let me explain in a little more detail, you are thinking like a customer not like a bank, which is fine as you are a customer not a bank. In the consumer banking division of Chase of BofA there is the traditional depository business of checking savings accounts and then there is the Credit card division which is revolving lines of credits. I actually have accounts both checking/savings and credit cards with both banks, I will use Chase as the example as there website is easier to show how it works.
Back in the beginning of the internet age you would have had separate banking and credit card usernames websites which were not connected because in fact banking and credit cards are separate divisions or possibly entities within the same bank depending on structure. However to make things more convenient for customers as technology has progressed the websites have merged into one to provide seamless integration across product lines.
On Chases website once you are logged on you will notice the web address is https://chaseonline.chase.com/MyAccounts.aspx the bold part being the subdomain that is the master authentication site for online access to the Chase banking world, they use something referred to as Single Sign On (SSO) to pass credentials between different internal applications.
If you select a bank account the web address will begin with something that looks like this https://banking.chase.com notice the bolded word banking, this subdomain is the banking world for checking and savings account etc...
If you select a credit card the web address will begin with something that looks like this https://cards.chase.com/ notice the bolded word cards, this subdomain is the credit card world for Chase.
I don't have a chase mortgage but my guess is https://mortgage.chase.com/ would be the subdomain etc...
Now here is where it gets really cool https://payments.chase.com is where all transfers and payments are made, now since all of these companies are internal they know any internal transfer is legit and can make it instant as they can verify the funds, so that is a courtesy to their customers, even though the reconciliation is probably not as instant.
I do not work for Chase (or BofA for that matter), I am just able to discern this information from understanding in general both how banks work and how software for banks is built, this is my best guess, I of course can be off in some of the details.
Now on to how AmEx and Serve are different, well AmEx is a holding company, one of its subsidiaries is actually the American Express Centurion Bank; this is where it runs its consumer banking and credit card business from.
AmEx Serve is not a banking product; it is a prepaid debit card which is acting like a full service bank. The funds are held in custody at either AmEx Centurion or Wells Fargo, they are insured indirectly via pass through FDIC insurance and your limits are jointly tied to the limits you have with the underlying institution. You can also scroll all the way to the bottom of the Serve website and the copyright is actually for the following company name "2014 Serve Virtual Enterprises, Inc.". Both Serve and Bluebird are sister products and I am sure share infrastructure and this is why you can have only or the other.
AmEx probably cannot even legally share data between its credit card business and its prepaid card business, even if you are a customer of both, in fact I called this morning again and Serve confirmed they are a separate entity from the credit card business. Separate website, separate logon.
Banking is an extremely complex and profitable business, as much as there are plenty of avenues for smart consumers to reap benefits from the system, trust me the banks do more than their share of analysis to determine that each product is profitable, they don't look at it like we do they look at the profitability of a product across all consumers if it will make money then it is a good product and that accounts for the slippage due to whatever small percentage of people can game the product. So if Serve is a profitable product and Blue Cash is a profitable product they will not care that x number of people are getting the best of them by combining them that would make their models too complex, they made their margins.
When their models show they are not making the numbers they expect they change the program, Chase Freedom for example used to have much better rewards, I was grandfathered in, it has gradually sucked more and more that I barely use the card only for its rotating categories now. Over time if a program costs them too much like the Blue Cash/Serve deal might, we will get squeezed out of it, so the more it is published the more likely that will happen... At this point I am not too worried. The likely change will be to the Blue Cash card, but in reality they have already changed that they no longer market the card, the percentage of people who will do this is probably small in comparison to the card base in the entire Blue program which is what they probably model.
Sorry if this way more information than you were expecting :)
You learn something new everyday. Thanks!
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MIND. BLOWN.
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Following this thread until I can wrap my head around whether this would work for me or not.
Thanks Saverocity!
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MIND. BLOWN.
If you are really interested and really want your mind to be blown here is a link for a "somewhat" easy to follow generic credit card profit model...
Trust me the actual models will be far more complicated and they are run with a lot more variability.
http://blegrange.wordpress.com/2010/10/11/a-generic-credit-card-profit-model/ (http://blegrange.wordpress.com/2010/10/11/a-generic-credit-card-profit-model/)
Basically, it breaks down credit cards users into 2 groups "revolvers" those who carry a balance who make the lion’s share of profit for the credit card companies and "transactors", those who pay their balances in full every month.
Of the "transactors", the subset who really play the credit card game to maximize cash/reward returns is very small, here are some basic stats according to Creditcards.com:
In 2012 the average household has 1.96 credit cards (clearly not optimized for maximum rewards).
In 2012 39% of Americans carried credit card debt month to month "revolvers".
In 2012 the average balance per card that carries a balance month to month is $8,220.
In 2012 the average balances per card that is paid in full $1,037.
Total credit card debt in the US at the end of 2012 was approximately $850 billion.
So you can figure out for yourself that the amount of people and their transaction sizes that take advantage of bonuses and rewards or cash back optimally is very small compared to the whole credit card industry in general that it is probably really no big deal in the scheme of things, unless a card program in general is not profitable than you really don't have to worry about it. You personally will never raise a red flag as being a problem user from a rewards perspective, unless you are blatantly committing fraud.
Charging Serve/Bluebird and immediately paying it off probably isn't considered fraud.... But is probably not highly regarded, transferring to your bank account would be construed as a cash advance and would most likely be considered fraud under their TOS, I wouldn't want to have to prove it isn't. I plan on paying my HELOC which is a considered a mortgage and Serve's TOS clearly allows that, so I am well within their guidelines. I then will pay the credit card back with the HELOC, well actually from my checking account which will be funded from my HELOC when I borrow funds to cover the bill.
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Following this thread until I can wrap my head around whether this would work for me or not.
Thanks Saverocity!
+1
I've read the whole thread, but I don't even understand half of what was said. I think I need some context for some of this.
Essentially the optimal strategy takes an old AmEx 5% Blue card and swipes that to then load up a card with cash and then pay bills with that card?
So all of your bills are basically 5% less, to a limit of 7.2k/year or something?
Can you tell I have no idea what I'm typing? :P
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MIND. BLOWN.
If you are really interested and really want your mind to be blown here is a link for a "somewhat" easy to follow generic credit card profit model...
Trust me the actual models will be far more complicated and they are run with a lot more variability.
http://blegrange.wordpress.com/2010/10/11/a-generic-credit-card-profit-model/ (http://blegrange.wordpress.com/2010/10/11/a-generic-credit-card-profit-model/)
Basically, it breaks down credit cards users into 2 groups "revolvers" those who carry a balance who make the lion’s share of profit for the credit card companies and "transactors", those who pay their balances in full every month.
Of the "transactors", the subset who really play the credit card game to maximize cash/reward returns is very small, here are some basic stats according to Creditcards.com:
In 2012 the average household has 1.96 credit cards (clearly not optimized for maximum rewards).
In 2012 39% of Americans carried credit card debt month to month "revolvers".
In 2012 the average balance per card that carries a balance month to month is $8,220.
In 2012 the average balances per card that is paid in full $1,037.
Total credit card debt in the US at the end of 2012 was approximately $850 billion.
So you can figure out for yourself that the amount of people and their transaction sizes that take advantage of bonuses and rewards or cash back optimally is very small compared to the whole credit card industry in general that it is probably really no big deal in the scheme of things, unless a card program in general is not profitable than you really don't have to worry about it. You personally will never raise a red flag as being a problem user from a rewards perspective, unless you are blatantly committing fraud.
Charging Serve/Bluebird and immediately paying it off probably isn't considered fraud.... But is probably not highly regarded, transferring to your bank account would be construed as a cash advance and would most likely be considered fraud under their TOS, I wouldn't want to have to prove it isn't. I plan on paying my HELOC which is a considered a mortgage and Serve's TOS clearly allows that, so I am well within their guidelines. I then will pay the credit card back with the HELOC, well actually from my checking account which will be funded from my HELOC when I borrow funds to cover the bill.
Thanks Mister Fancypants. I've got the Amex Costco card which gives me cash back to be spent at Costco. A nice bonus every February. But I don't regularly use it and most of our transactions are debit purchases. I could just as easily pay everything with a cash back card and then pay the balance. Definitely something to consider.
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Has anyone been using the bluebird or serve to pay bills for long enough to be able to recommend it or give it the stamp of approval?
Yes, it happened for me the first month I made $420 profit from the account.
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Following this thread until I can wrap my head around whether this would work for me or not.
Thanks Saverocity!
+1
I've read the whole thread, but I don't even understand half of what was said. I think I need some context for some of this.
Essentially the optimal strategy takes an old AmEx 5% Blue card and swipes that to then load up a card with cash and then pay bills with that card?
So all of your bills are basically 5% less, to a limit of 7.2k/year or something?
Can you tell I have no idea what I'm typing? :P
No no... this goes against all thing Mustachian until you see through the smoke and mirrors.
What players of this game attempt to do is to spend as much as humanly possible each month on a Credit Card. By which I mean 5-6 figure amounts.
In tandem, I try to spend as little as possible on wasteful stuff, the balance between the two numbers is what is considered 'manufactured spend'.
The profit from this activity can equate to a 6 figure salary at the extreme.
For your average Joe and Joanne as a couple, just doing the Serve with say $6K per person per month = $12K*5% = $600 net profit per month, or $7.2K net per year.
Not 5% discount from groceries, but an extra $7.2K in your pocket, which is why I have been trying to bash heads on this forum to make people realize what this could do your FIRE plans.
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For your average Joe and Joanne as a couple, just doing the Serve with say $6K per person per month = $12K*5% = $600 net profit per month, or $7.2K net per year.
Does that mean you need to be spending 6k/person/month, aka 144k/yr? My spending is like .. 1/10th that.
Not 5% discount from groceries, but an extra $7.2K in your pocket, which is why I have been trying to bash heads on this forum to make people realize what this could do your FIRE plans.
You may need to write up a Simple Beginners Guide then, like I.P. had to do for cell phones for us slow folks.. ;)
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For your average Joe and Joanne as a couple, just doing the Serve with say $6K per person per month = $12K*5% = $600 net profit per month, or $7.2K net per year.
Does that mean you need to be spending 6k/person/month, aka 144k/yr? My spending is like .. 1/10th that.
Not 5% discount from groceries, but an extra $7.2K in your pocket, which is why I have been trying to bash heads on this forum to make people realize what this could do your FIRE plans.
You may need to write up a Simple Beginners Guide then, like I.P. had to do for cell phones for us slow folks.. ;)
It doesn't matter what you spend now, the increase in spend is completely false. In other words, if you currently spend 14.4K per year (your arbitrary 10%) then using this system you will reduce your actual spend by 50%....
I'd be happy to write up a post, can I get some more questions here (nothing is too stupid) so I can start to frame something that the Mustachian might be able to wrap their head around more easily?
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Are there any intro guides to wtf this is even all about?
Like, I start reading a blog post linked above and am immediately lost.
I don't know what a vanilla refill is, unless you mean one of those giant metal cups when you order a milkshake and can pour the extra from that into your cup.
I don't know what manufactured spend is.
I'm guessing some kind of spending to earn CC rewards, like the Loyal3 stuff, but with some amex debit card too and then you pay bills and stuff.. idk?
Here's what would help:
1) A basic "here is what is being done" big picture overall strategy, then
2) a step by step how to of "1) sign up for this card at LINK 2) buy these refills at X store every Y days 3) purple monkey dishwasher 4) transfer this money to the card 5) ??? 6) profit"
The second part, step by step, I can probably parse from posts and blogs once I understand the big picture, but it would still be a great reference for those not reading all these posts.
Sorry I'm apparently real dense. Tough trying to puzzle through it when half the posts make no sense. :P
can I get some more questions here (nothing is too stupid)
Oh good. :P
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Okay, I found this that helps explain somewhat:
http://boardingarea.com/dealswelike/2014/02/04/my-vanilla-reload-amex-bluebird-strategy/
Only I guess now you use "Serve" instead of Bluebird.
Some remaining confusions:
1) I'm not sure how you're turning it into cash, rather than juggling a dozen airline cards for miles like the guy above.
2) He is using the loaded up money (5k/mo) to pay his bills. This implies a spending of 60k annual. But you said the spending didn't matter. How does that work?
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Are there any intro guides to wtf this is even all about?
Like, I start reading a blog post linked above and am immediately lost.
I don't know what a vanilla refill is, unless you mean one of those giant metal cups when you order a milkshake and can pour the extra from that into your cup.
I don't know what manufactured spend is.
I'm guessing some kind of spending to earn CC rewards, like the Loyal3 stuff, but with some amex debit card too and then you pay bills and stuff.. idk?
Here's what would help:
1) A basic "here is what is being done" big picture overall strategy, then
2) a step by step how to of "1) sign up for this card at LINK 2) buy these refills at X store every Y days 3) purple monkey dishwasher 4) transfer this money to the card 5) ??? 6) profit"
The second part, step by step, I can probably parse from posts and blogs once I understand the big picture, but it would still be a great reference for those not reading all these posts.
Sorry I'm apparently real dense. Tough trying to puzzle through it when half the posts make no sense. :P
can I get some more questions here (nothing is too stupid)
Oh good. :P
OK cool - maybe I can try to answer your questions, and if in the end we hit an 'ah ha!' moment we can then make that into a post on the 'how to' side.
Overview
People are trying to find ways to increase the spend on their credit cards in order to get cash or points back, without incurring cost.
EG - You have a 5% Cashback card that works at Grocery stores. You buy $1000 of prime rib, and you get $50 back assuming you then eat that, the card is functioning as intended, to get you to be wasteful, and ideally in a place where you have to pay off that amount over time, paying interest and late fees.
The Manufactured Spender would accept that $50 of cash back from $1000 of spend is great, but they are not willing to buy and waste on the prime rib. They instead want to find ways to buy things that are free, but still give the cash back.
Weird? OK....
Here is an example. You buy a Vanilla Reload, which can be charged in value between $20-$500. The card has a flat fee of $3.95 regardless of the value (it is designed to screw over the unbanked) but the charged amount is actually just money moved from your 5% credit card to the Vanilla Reload.
Therefore for $503.95 you are buying $500 of money.
You get 5% on the full amount spent, which means $503.95*5% in cash back earned ($25.1975)
If you deduct the price of the card from the cash back earned you get a net profit from the transaction of $21.25 ($25.20-$3.95) therefore each Vanilla card that you buy, you make $21.25 from, it is like walking into a CVS store and plucking $20 bills from the shelf for free.
The limitation is on the liquidation side, you need a way to take the Vanilla loaded with $500 and return it to your bankroll - that is where Serve or Bluebird come in. These vehicles can be loaded with Vanilla Reloads, and once you have deposited the reload you pay off your credit card, cycle is complete.
Let me know if that helps or if something else needs clearing up from that.
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Okay, I found this that helps explain somewhat:
http://boardingarea.com/dealswelike/2014/02/04/my-vanilla-reload-amex-bluebird-strategy/
Only I guess now you use "Serve" instead of Bluebird.
Some remaining confusions:
1) I'm not sure how you're turning it into cash, rather than juggling a dozen airline cards for miles like the guy above.
2) He is using the loaded up money (5k/mo) to pay his bills. This implies a spending of 60k annual. But you said the spending didn't matter. How does that work?
1. Your profit is the currency you use, if you buy the reloads with a points earning card you earn points, if you buy with a 5% cash back card you earn 5% cash back.
2. Ignore him. You can pay whatever you like, including the card that you used to buy the Vanilla with. He gets paid by Chase so is concerned about saying that, since they don't like people to know.
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What are the limits to this?
Why are two people having to do it?
Where did the 7200 annual come from (I'm sure from the limits but that's why I'm asking). Your example above had someone earning $21 per CVS visit, and Mr. Pants said 5 trips to CVS x 2 people. That is 210/mo, or about 2500 annual. Not following where the numbers are coming from yet.
Limits on Serve?
Limits on Bluebird?
Limits on AmEx Blue Card?
Besides CVS I see WalMart mentioned - do they sell the Vanilla reloads or other cards that work with it? Any other stores?
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I have been reading up on manufactured spending all weekend. I'm interested in using mileage cards to fund some fun trips for me and DH. One of my hubby's resistance to cutting our budget down is his desire to travel. So I thought maybe I could show him a way we could travel at very little cost.
Right now, we use only an costco Amex card for gas/groceries/etc and pay the balance off each month. Do you have suggestions on mileage cards we should apply for? I have requested a serve Amex and I found VR cards at a 7-11 gas station close by. There is a cvs in my area(15 min drive) but I haven't checked them out. I plan on starting very small as I try this out, then doing more as my knowledge and confidence grows. Thanks again for walking us through it Saverocity, I've become an avid reader of your blog!
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I'm interested in using mileage cards to fund some fun trips for me and DH. One of my hubby's resistance to cutting our budget down is his desire to travel. So I thought maybe I could show him a way we could travel at very little cost.
Right now, we use only an costco Amex card for gas/groceries/etc and pay the balance off each month. Do you have suggestions on mileage cards we should apply for?
Did you check the link I posted at the top of this second page? Those seem pretty decent.
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What are the limits to this?
Why are two people having to do it?
Where did the 7200 annual come from (I'm sure from the limits but that's why I'm asking). Your example above had someone earning $21 per CVS visit, and Mr. Pants said 5 trips to CVS x 2 people. That is 210/mo, or about 2500 annual. Not following where the numbers are coming from yet.
Limits on Serve?
Limits on Bluebird?
Limits on AmEx Blue Card?
Besides CVS I see WalMart mentioned - do they sell the Vanilla reloads or other cards that work with it? Any other stores?
There are no limits. I said you can earn into the 6 figure range.
Per offloading vehicle - Serve and BB have $5K loading from Vanilla or Swipes (the Serve, without any fee)
I talk about couples because isn't everyone in a relationship that can do this? Some of the other things I do require a second person, this doesn't.
If you go purely 1 person on Vanilla on Serve that is 5K per month, $250 profit (no Vanilla is needed), for $3K per year. Double that for a couple. Add on that there is extra loading allowed via online direct loads and you get to that $7.2 level.
So yep, if you are single, you can make a profit of $3K without breaking a sweat.
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There are no limits. I said you can earn into the 6 figure range.
Per offloading vehicle - Serve and BB have $5K loading from Vanilla or Swipes (the Serve, without any fee)
I talk about couples because isn't everyone in a relationship that can do this? Some of the other things I do require a second person, this doesn't.
If you go purely 1 person on Vanilla on Serve that is 5K per month, $250 profit (no Vanilla is needed), for $3K per year. Double that for a couple. Add on that there is extra loading allowed via online direct loads and you get to that $7.2 level.
So yep, if you are single, you can make a profit of $3K without breaking a sweat.
(Emphasis added.)
Sorry to be dense again, but I don't see how your first and last sentences jibe. If there are no limits, why do you say 5k/mo and some online?
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I'm interested in using mileage cards to fund some fun trips for me and DH. One of my hubby's resistance to cutting our budget down is his desire to travel. So I thought maybe I could show him a way we could travel at very little cost.
Right now, we use only an costco Amex card for gas/groceries/etc and pay the balance off each month. Do you have suggestions on mileage cards we should apply for?
Did you check the link I posted at the top of this second page? Those seem pretty decent.
You can't think like that. Cards that are linked to posts like that are included primarily for their affiliate revenue payments. If you want to know what cards to get you have to think more.
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There are no limits. I said you can earn into the 6 figure range.
Per offloading vehicle - Serve and BB have $5K loading from Vanilla or Swipes (the Serve, without any fee)
I talk about couples because isn't everyone in a relationship that can do this? Some of the other things I do require a second person, this doesn't.
If you go purely 1 person on Vanilla on Serve that is 5K per month, $250 profit (no Vanilla is needed), for $3K per year. Double that for a couple. Add on that there is extra loading allowed via online direct loads and you get to that $7.2 level.
So yep, if you are single, you can make a profit of $3K without breaking a sweat.
(Emphasis added.)
Sorry to be dense again, but I don't see how your first and last sentences jibe. If there are no limits, why do you say 5k/mo and some online?
Because the Bluebird is just the tip of the iceberg. The concept of Manufactured Spending goes incredibly far beyond this. If you can understand the underlying concept then the opportunities are everywhere, hence this starting out with me talking about the Evolve option - for people who have maxed the BB monthly, and can now max that.
There are many vehicles, the Bluebird is just one.
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If you go purely 1 person on Vanilla on Serve that is 5K per month, $250 profit (no Vanilla is needed), for $3K per year. Double that for a couple. Add on that there is extra loading allowed via online direct loads and you get to that $7.2 level.
So yep, if you are single, you can make a profit of $3K without breaking a sweat.
Sorry, I'm lost again. Are you saying you can swipe direct from a rewards card to your serve card up to 5K /mo? So I need to get a serve account for DH- and adult children possibly?
Also, how can you get the Amex blue? Can I call and ask for it? I found this guy below who said he would suggest cards based on your goals. Is he just trying to get affiliate links or is he legit?
http://milevalue.com/free-credit-card-consultation/
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I have been reading up on manufactured spending all weekend. I'm interested in using mileage cards to fund some fun trips for me and DH. One of my hubby's resistance to cutting our budget down is his desire to travel. So I thought maybe I could show him a way we could travel at very little cost.
Right now, we use only an costco Amex card for gas/groceries/etc and pay the balance off each month. Do you have suggestions on mileage cards we should apply for? I have requested a serve Amex and I found VR cards at a 7-11 gas station close by. There is a cvs in my area(15 min drive) but I haven't checked them out. I plan on starting very small as I try this out, then doing more as my knowledge and confidence grows. Thanks again for walking us through it Saverocity, I've become an avid reader of your blog!
As I mentioned, you have to be careful who you ask when it comes to the answer to what card you should get- card referrals pay a large amount of money and some people (though not necessarily the guy who was linked to) will promote a certain card simple because it pays them well.
In order to answer your question, I need to know about your travel habits. Tell me what airport is nearby, and where you want to go, and I can start.
I have a reasonably elaborate system in place, but very generally speaking for any Domestic trips I use British Airways Avios on American Airlines metal (planes) as that is the best value for the most part. Internationally I use AA or UA. It depends on your goals, but once you hit international level you need to start 'optimizing' even more, for example here is how you get a free one way with American, I use an example for me, being based in NYC where I fly NY to San Francisco, back to New York, then months later fly onto Paris for a total of 32.5K miles... learn tricks like that and lots of fun travel options appear: http://saverocity.com/travel/getting-the-magic-dashes-on-aadvantage-reservations/
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Because the Bluebird is just the tip of the iceberg. The concept of Manufactured Spending goes incredibly far beyond this. If you can understand the underlying concept then the opportunities are everywhere, hence this starting out with me talking about the Evolve option - for people who have maxed the BB monthly, and can now max that.
There are many vehicles, the Bluebird is just one.
Okay, so there are limits, you can just do multiple things.
Like the "buy visa debit gift card, purchase money order with it, deposit money order into account" idea?
So Serve's limit is 5000/mo loaded in person, 1000/mo loaded online @ 5% cash back = 3.6k annual profit.
Does Bluebird have the same limit? Can you have both a bluebird and serve account?
I went back and read your thing on Evolve - it's not just for HELOCs? You can load it up like you do Serve and pay your CC bill with it? What are the limits on that?
Are there cash back limits on the AmEx Blue? What other cards offer 5% cash back?
Besides no theoretical limits, are there any practical limits?
What was the XXXXX thing on the blog post about DCBroker? One of the things already mentioned?
How much do you think you will earn on this, this year?
I mean, sounds like I could do this and if it held up for a year at the crazy limits you're suggesting, FIRE in a year. You'd need a lot of CCs though and a lot of trips to CVS or whatever, especially if they capped your cash back...
Hmm..
You've got me real excited about the possibilities. It's similar to the Loyal3 idea, but with major advantages (no risk of stocks going down during the short holding period, no emails from Loyal3 threatening to cut you off, 5% cash back instead of 2% because you're buying at a pharmacy or grocery store or whatever, rather than just a 2% cash back).. though the downside is all the physical trips to stores. Still well worth it.
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If you go purely 1 person on Vanilla on Serve that is 5K per month, $250 profit (no Vanilla is needed), for $3K per year. Double that for a couple. Add on that there is extra loading allowed via online direct loads and you get to that $7.2 level.
So yep, if you are single, you can make a profit of $3K without breaking a sweat.
Sorry, I'm lost again. Are you saying you can swipe direct from a rewards card to your serve card up to 5K /mo? So I need to get a serve account for DH- and adult children possibly?
Also, how can you get the Amex blue? Can I call and ask for it? I found this guy below who said he would suggest cards based on your goals. Is he just trying to get affiliate links or is he legit?
http://milevalue.com/free-credit-card-consultation/
Yes, you can swipe directly with the Serve, it is the major difference between the two.
As for the Amex blue, there are many types, you need to specifically ask for the Blue cash, and state that it earns 1% for the first $6500 then 5% thereafter on Drugstores (and Gas and Groceries)
That guy you linked to, nothing personal against him, but he has the worst reputation in the market for pushing credit cards that only pay him a commission rather than looking after you. I'd be happy to offer you the same consultation here in public (you can skip financial data) to show the difference.
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I have been reading up on manufactured spending all weekend. I'm interested in using mileage cards to fund some fun trips for me and DH. One of my hubby's resistance to cutting our budget down is his desire to travel. So I thought maybe I could show him a way we could travel at very little cost.
Right now, we use only an costco Amex card for gas/groceries/etc and pay the balance off each month. Do you have suggestions on mileage cards we should apply for? I have requested a serve Amex and I found VR cards at a 7-11 gas station close by. There is a cvs in my area(15 min drive) but I haven't checked them out. I plan on starting very small as I try this out, then doing more as my knowledge and confidence grows. Thanks again for walking us through it Saverocity, I've become an avid reader of your blog!
As I mentioned, you have to be careful who you ask when it comes to the answer to what card you should get- card referrals pay a large amount of money and some people (though not necessarily the guy who was linked to) will promote a certain card simple because it pays them well.
In order to answer your question, I need to know about your travel habits. Tell me what airport is nearby, and where you want to go, and I can start.
I have a reasonably elaborate system in place, but very generally speaking for any Domestic trips I use British Airways Avios on American Airlines metal (planes) as that is the best value for the most part. Internationally I use AA or UA. It depends on your goals, but once you hit international level you need to start 'optimizing' even more, for example here is how you get a free one way with American, I use an example for me, being based in NYC where I fly NY to San Francisco, back to New York, then months later fly onto Paris for a total of 32.5K miles... learn tricks like that and lots of fun travel options appear: http://saverocity.com/travel/getting-the-magic-dashes-on-aadvantage-reservations/
I'm interested in the travel stuff, as after FIRE in about two years the wife and I are planning on traveling full time, and it'd probably be good to start building up miles now (it'll mostly be international stuff), however the cash stuff intrigues me more because it seems more straightforward.
I definitely hear you on the biased people trying to get the referral fees, but where else do you go for this sort of information besides random bloggers? :P
If you have any cards that you'd actually recommend and have referral fees (incidentally - that's not the reason why you're referring them), I'd be more than glad to sign up with your referral links.
I appreciate the time you've taken to answer my questions. :)
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Because the Bluebird is just the tip of the iceberg. The concept of Manufactured Spending goes incredibly far beyond this. If you can understand the underlying concept then the opportunities are everywhere, hence this starting out with me talking about the Evolve option - for people who have maxed the BB monthly, and can now max that.
There are many vehicles, the Bluebird is just one.
Okay, so there are limits, you can just do multiple things.
Like the "buy visa debit gift card, purchase money order with it, deposit money order into account" idea?
So Serve's limit is 5000/mo loaded in person, 1000/mo loaded online @ 5% cash back = 3.6k annual profit.
Does Bluebird have the same limit? Can you have both a bluebird and serve account?
I went back and read your thing on Evolve - it's not just for HELOCs? You can load it up like you do Serve and pay your CC bill with it? What are the limits on that?
Are there cash back limits on the AmEx Blue? What other cards offer 5% cash back?
Besides no theoretical limits, are there any practical limits?
What was the XXXXX thing on the blog post about DCBroker? One of the things already mentioned?
How much do you think you will earn on this, this year?
I mean, sounds like I could do this and if it held up for a year at the crazy limits you're suggesting, FIRE in a year. You'd need a lot of CCs though and a lot of trips to CVS or whatever, especially if they capped your cash back...
Hmm..
You've got me real excited about the possibilities. It's similar to the Loyal3 idea, but with major advantages (no risk of stocks going down during the short holding period, no emails from Loyal3 threatening to cut you off, 5% cash back instead of 2% because you're buying at a pharmacy or grocery store or whatever, rather than just a 2% cash back).. though the downside is all the physical trips to stores. Still well worth it.
Yes, each vehicle has a limit, Bluebird is almost the same as Serve, but the swipe load at CVS makes it fee free (serve has a slight edge for the online load too) they are basically the same, but Serve is better. You can only have one or the other, not both, per person. There isn't a cap on cash back, but if you go really big you do risk what amex calls a Financial Review, which includes them pulling your tax returns to see if your spending is sustainable with your income.
The XXXX thing is kept to email because it is neat. In that situation DC found the money earner (buying Giftcards via cash back) and earned a ton, but the issue was getting those Amex Giftcards liquidated. That's a core part of the game. Vanilla liquidates to Bluebird (which in turn exits the game as a bill pay to the card) however Amex Giftcards cannot buy money orders at Walmart, they are coded against it, so finding an intermediary step, the XXXX that swaps that Giftcard for another Giftcard that does get accepted for Moneyorders is a game changer, and opens up $75,000 per month of spend. That spend is at 2-3% Cash back plus whatever card you use, with a max of 2.22% for the Arrival (travel spend only) or 2% real money.
That's too big a thing to lay out in the newbie guide :)
This is far beyond Loyal3, but yep, you have the right idea.
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I have been reading up on manufactured spending all weekend. I'm interested in using mileage cards to fund some fun trips for me and DH. One of my hubby's resistance to cutting our budget down is his desire to travel. So I thought maybe I could show him a way we could travel at very little cost.
Right now, we use only an costco Amex card for gas/groceries/etc and pay the balance off each month. Do you have suggestions on mileage cards we should apply for? I have requested a serve Amex and I found VR cards at a 7-11 gas station close by. There is a cvs in my area(15 min drive) but I haven't checked them out. I plan on starting very small as I try this out, then doing more as my knowledge and confidence grows. Thanks again for walking us through it Saverocity, I've become an avid reader of your blog!
As I mentioned, you have to be careful who you ask when it comes to the answer to what card you should get- card referrals pay a large amount of money and some people (though not necessarily the guy who was linked to) will promote a certain card simple because it pays them well.
In order to answer your question, I need to know about your travel habits. Tell me what airport is nearby, and where you want to go, and I can start.
I have a reasonably elaborate system in place, but very generally speaking for any Domestic trips I use British Airways Avios on American Airlines metal (planes) as that is the best value for the most part. Internationally I use AA or UA. It depends on your goals, but once you hit international level you need to start 'optimizing' even more, for example here is how you get a free one way with American, I use an example for me, being based in NYC where I fly NY to San Francisco, back to New York, then months later fly onto Paris for a total of 32.5K miles... learn tricks like that and lots of fun travel options appear: http://saverocity.com/travel/getting-the-magic-dashes-on-aadvantage-reservations/
I'm interested in the travel stuff, as after FIRE in about two years the wife and I are planning on traveling full time, and it'd probably be good to start building up miles now (it'll mostly be international stuff), however the cash stuff intrigues me more because it seems more straightforward.
I definitely hear you on the biased people trying to get the referral fees, but where else do you go for this sort of information besides random bloggers? :P
If you have any cards that you'd actually recommend and have referral fees (incidentally - that's not the reason why you're referring them), I'd be more than glad to sign up with your referral links.
I appreciate the time you've taken to answer my questions. :)
Anytime.
I do also have cards with referral fees, they are found on my blog. I just don't link to every card that pays me since not all are the best offer. For example, you can get one card that gives you 30,000 miles and me a fee, or you can find another offer that gives you 40,000 and me nothing. I'd rather you had the 40k.
But there are others that I have the best offer for, so you can do no better by not using my link, and those I am happy for people to use.
However, as much as I do appreciate people coming to me for the links, I am happier to share knowledge about how to beat the system, so please feel free to ask me stuff here or on my site and I would gladly share my experiences with you.
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The XXXX thing is kept to email because it is neat. In that situation DC found the money earner (buying Giftcards via cash back) and earned a ton, but the issue was getting those Amex Giftcards liquidated. That's a core part of the game. Vanilla liquidates to Bluebird (which in turn exits the game as a bill pay to the card) however Amex Giftcards cannot buy money orders at Walmart, they are coded against it, so finding an intermediary step, the XXXX that swaps that Giftcard for another Giftcard that does get accepted for Moneyorders is a game changer, and opens up $75,000 per month of spend. That spend is at 2-3% Cash back plus whatever card you use, with a max of 2.22% for the Arrival (travel spend only) or 2% real money.
Gotcha.
Okay, so 3.6k annual Serve profit from that limit (which precludes you from having Bluebird). Up to 18k annual from item XXXX (if you do the 75k/mo you mentioned at 2% cash back - that'd be a lot though, seems like). Evolve is another one. Any other ones to look in to?
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I have been reading up on manufactured spending all weekend. I'm interested in using mileage cards to fund some fun trips for me and DH. One of my hubby's resistance to cutting our budget down is his desire to travel. So I thought maybe I could show him a way we could travel at very little cost.
Right now, we use only an costco Amex card for gas/groceries/etc and pay the balance off each month. Do you have suggestions on mileage cards we should apply for? I have requested a serve Amex and I found VR cards at a 7-11 gas station close by. There is a cvs in my area(15 min drive) but I haven't checked them out. I plan on starting very small as I try this out, then doing more as my knowledge and confidence grows. Thanks again for walking us through it Saverocity, I've become an avid reader of your blog!
As I mentioned, you have to be careful who you ask when it comes to the answer to what card you should get- card referrals pay a large amount of money and some people (though not necessarily the guy who was linked to) will promote a certain card simple because it pays them well.
In order to answer your question, I need to know about your travel habits. Tell me what airport is nearby, and where you want to go, and I can start.
I have a reasonably elaborate system in place, but very generally speaking for any Domestic trips I use British Airways Avios on American Airlines metal (planes) as that is the best value for the most part. Internationally I use AA or UA. It depends on your goals, but once you hit international level you need to start 'optimizing' even more, for example here is how you get a free one way with American, I use an example for me, being based in NYC where I fly NY to San Francisco, back to New York, then months later fly onto Paris for a total of 32.5K miles... learn tricks like that and lots of fun travel options appear: http://saverocity.com/travel/getting-the-magic-dashes-on-aadvantage-reservations/
We fly out of the SLC airport. Desired destinations are 1) Europe 2) Hawaii 3) Florida w/the kids 4)costa rica
Thanks again, and I'm happy to use your links for any cc.
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The XXXX thing is kept to email because it is neat. In that situation DC found the money earner (buying Giftcards via cash back) and earned a ton, but the issue was getting those Amex Giftcards liquidated. That's a core part of the game. Vanilla liquidates to Bluebird (which in turn exits the game as a bill pay to the card) however Amex Giftcards cannot buy money orders at Walmart, they are coded against it, so finding an intermediary step, the XXXX that swaps that Giftcard for another Giftcard that does get accepted for Moneyorders is a game changer, and opens up $75,000 per month of spend. That spend is at 2-3% Cash back plus whatever card you use, with a max of 2.22% for the Arrival (travel spend only) or 2% real money.
Gotcha.
Okay, so 3.6k annual Serve profit from that limit (which precludes you from having Bluebird). Up to 18k annual from item XXXX (if you do the 75k/mo you mentioned at 2% cash back - that'd be a lot though, seems like). Evolve is another one. Any other ones to look in to?
dozens... but everyone needs to start small. There is a chance funds will be locked up for playing the game, so nothing more than is readily available. Amazon has a great option for couples, it is small, but 1K per month per person no fee
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I have been reading up on manufactured spending all weekend. I'm interested in using mileage cards to fund some fun trips for me and DH. One of my hubby's resistance to cutting our budget down is his desire to travel. So I thought maybe I could show him a way we could travel at very little cost.
Right now, we use only an costco Amex card for gas/groceries/etc and pay the balance off each month. Do you have suggestions on mileage cards we should apply for? I have requested a serve Amex and I found VR cards at a 7-11 gas station close by. There is a cvs in my area(15 min drive) but I haven't checked them out. I plan on starting very small as I try this out, then doing more as my knowledge and confidence grows. Thanks again for walking us through it Saverocity, I've become an avid reader of your blog!
As I mentioned, you have to be careful who you ask when it comes to the answer to what card you should get- card referrals pay a large amount of money and some people (though not necessarily the guy who was linked to) will promote a certain card simple because it pays them well.
In order to answer your question, I need to know about your travel habits. Tell me what airport is nearby, and where you want to go, and I can start.
I have a reasonably elaborate system in place, but very generally speaking for any Domestic trips I use British Airways Avios on American Airlines metal (planes) as that is the best value for the most part. Internationally I use AA or UA. It depends on your goals, but once you hit international level you need to start 'optimizing' even more, for example here is how you get a free one way with American, I use an example for me, being based in NYC where I fly NY to San Francisco, back to New York, then months later fly onto Paris for a total of 32.5K miles... learn tricks like that and lots of fun travel options appear: http://saverocity.com/travel/getting-the-magic-dashes-on-aadvantage-reservations/
We fly out of the SLC airport. Desired destinations are 1) Europe 2) Hawaii 3) Florida w/the kids 4)costa rica
Thanks again, and I'm happy to use your links for any cc.
You have a lot of Delta there - stay well away from the Delta cards, they suck big time, you can't find seats at the rates you want. Best options are going to be BA Avios for domestic on AA, or Southwest for your local flights, and AA for international, possibly some United too if you are OK with international coach. I don't have paid links for any of those cards, but they are your best options.
If you give me a specific itinerary (city) I can give you some better ideas.
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dozens... but everyone needs to start small. There is a chance funds will be locked up for playing the game, so nothing more than is readily available. Amazon has a great option for couples, it is small, but 1K per month per person no fee
I don't care about funds being locked up, as I can cover them for awhile, as long as they come back within.. I don't know, 3-6 months?
The Amazon 1k/person at 2% cash back = $20 a month = 240 a year.
That's always the type of stuff I've heard of, and it never seemed worth the hassle for $20 a month.
If I can make several thousand bucks though, awesome. A few hundred, meh. So Serve and CVS vanilla cards seem like the best primary option for me for now, I'll be going to CVS tomorrow (and calling Amex to try and change my Blue card to the old one).
Thanks again!
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You have a lot of Delta there - stay well away from the Delta cards, they suck big time, you can't find seats at the rates you want. Best options are going to be BA Avios for domestic on AA, or Southwest for your local flights, and AA for international, possibly some United too if you are OK with international coach. I don't have paid links for any of those cards, but they are your best options.
If you give me a specific itinerary (city) I can give you some better ideas.
#1 goal as a couple is to get to Italy for our 25th anniversary in 3 years. Maybe fly into Rome? We don't mind coach at all. I'm not really into luxury- unless someone else is paying for it. ;)
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1) How can I get a very cheap flight from Vegas to somewhere in South America (preferably Belize, but I'm flexible) in early August?
2) Same question, but also Chicago instead of Vegas (to S. America)?
3) How can I get cheaply from Vegas to Chicago (separate issue from above) any time of year?
A better question: what is the best way for me to run these types of searches myself so I don't have to bug you? :)
My standard practice is go to Orbitz, watch that for a few weeks, book a flight.
A "this airline is best for that, use this CC and spend $x" type deal is, from what I understand, what travel hackers do instead, but it seems like that stuff is constantly changing and the barrier to entry re: loads of information is very high.
It's on my to-do list for FIRE (learn travel hacking). Heh.
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My AMEX serve card arrived in the mail today. I'll be trying my first swipe reload at CVS tomorrow, with my Barclays' card just to see how it goes.
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My AMEX serve card arrived in the mail today. I'll be trying my first swipe reload at CVS tomorrow, with my Barclays' card just to see how it goes.
Cool, keep us posted. I just requested one for me and one for DH. :)
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1) How can I get a very cheap flight from Vegas to somewhere in South America (preferably Belize, but I'm flexible) in early August?
2) Same question, but also Chicago instead of Vegas (to S. America)?
3) How can I get cheaply from Vegas to Chicago (separate issue from above) any time of year?
A better question: what is the best way for me to run these types of searches myself so I don't have to bug you? :)
My standard practice is go to Orbitz, watch that for a few weeks, book a flight.
A "this airline is best for that, use this CC and spend $x" type deal is, from what I understand, what travel hackers do instead, but it seems like that stuff is constantly changing and the barrier to entry re: loads of information is very high.
It's on my to-do list for FIRE (learn travel hacking). Heh.
There is a lot of information required to be good at travel hacking, but you can start like anything else, one step at a time.
For example, if the extent of you knowledge is to use Orbitz instead of a regular travel agent congrats! You are savvier than many.
What about optimizing that by: Paying for it with a card that offers great cash back, like the 2% fidelity Amex?
How about then cross checking Orbitz on a site like EVreward.com and seeing what extra cash is available, another 6.5% is showing today from ebates.
You just 'optimized' your strategy by 8.5% You can add on coupon searches too and discount further.
That is about the extent of optimizing an OTA like Orbitz or Travelocity, there are ways to drop it lower using other techniques, such as hidden city fares, but that is a different conversation all together.
Next, to take it to the next level you need to look at miles instead of cash. The key to that is knowing the home airport and routes, I am in NYC we have a lot of options, but some airports have very few routes for certain airlines, so if you are collecting United miles but there is no United hub airport near you things will be harder to achieve.
For Vegas to South America look at who flies that route, remember that Partner airlines are within alliances, such as OneWorld or StarAlliance and offer many solutions.
When I fly to South America I typically use LAN (partnered with AA or BA in one world) or Copa or others within Star Alliance. There is a lot to take onboard, but the information is out there. For the LAN example, AA has regional awards, BA has distance based awards, the latter can provide value opportunity if you are able to find routes within certain bands. Here are some intro posts to distance based to explain more: http://saverocity.com/travel/exploring-distance-based-award-programs-part-1-introduction-airlines/
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You have a lot of Delta there - stay well away from the Delta cards, they suck big time, you can't find seats at the rates you want. Best options are going to be BA Avios for domestic on AA, or Southwest for your local flights, and AA for international, possibly some United too if you are OK with international coach. I don't have paid links for any of those cards, but they are your best options.
If you give me a specific itinerary (city) I can give you some better ideas.
#1 goal as a couple is to get to Italy for our 25th anniversary in 3 years. Maybe fly into Rome? We don't mind coach at all. I'm not really into luxury- unless someone else is paying for it. ;)
I'll see what I can do!
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Thanks Mister Fancypants. I've got the Amex Costco card which gives me cash back to be spent at Costco. A nice bonus every February. But I don't regularly use it and most of our transactions are debit purchases. I could just as easily pay everything with a cash back card and then pay the balance. Definitely something to consider.
Note: You do NOT have to spend the cash back at Costco. You can just take it up to a register and have them give you actual cash.
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You may need to write up a Simple Beginners Guide then, like I.P. had to do for cell phones for us slow folks.. ;)
You are not really spending money. To use the old broker term - you are churning money, and profiting off the transactions. The new term for this for consumers using the technique against corporations is "Manufactured Spending"
There are lots of methods. The easiest to understand was the old US Mint (no longer works)
1) Buy $10,000 in $1 coins at the US Mint with a 2% back credit card. The Mint mails you the coins for free as a promotion to get more in circulation.
Credit balance: -$10,000
Cash in hand: $10,000
Bank balance: $0
Rewards balance: $200
2) Deposit cash at your bank.
Credit balance: -$10,000
Cash in hand: $0
Bank balance: $10,000
Rewards balance: $200
3) Billpay from your bank to your credit card.
Credit balance: $0
Cash in hand: $0
Bank balance: $0
Rewards balance: $200
You have churned $10,000 through the system, earning $200 and your actual spend is $0.
Okay, now replace the US Mint with Vanilla and replace Bank with Bluebird.
Step 1: Use rewards card with 5% back at Drugstores to buy $500 Vanilla ("recharge your prepaid card") at CVS.
Status:
Credit balance = -$503.95
Vanilla Balance = $500
Bluebird Balance = $0
Rewards balance = $25
Step 2: Use Vanilla to "refill" Bluebird.
Credit balance = -$503.95
Vanilla Balance = $0
Bluebird Balance = $500
Rewards balance = $25
Step 3: Use Bluebird's Billpay to pay off the credit card
Credit balance = -$3.95
Vanilla Balance = $0
Bluebird Balance = $0
Rewards balance = $25
Eventually, use some of the reward to pay off the $3.95 fee - but probably you will churn through a lot of cycles before bothering with this step.
You have churned $500 and earned $21.05
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What are the limits to this?
Why are two people having to do it?
Where did the 7200 annual come from (I'm sure from the limits but that's why I'm asking). Your example above had someone earning $21 per CVS visit, and Mr. Pants said 5 trips to CVS x 2 people. That is 210/mo, or about 2500 annual. Not following where the numbers are coming from yet.
Limits on Serve?
Limits on Bluebird?
Limits on AmEx Blue Card?
Besides CVS I see WalMart mentioned - do they sell the Vanilla reloads or other cards that work with it? Any other stores?
This has been quite the active thread last night and this morning... Let me chime in with my summary of how this works and an explanation of my numbers. (This will also be a great practice run for me to go over it with my wife :) )
First let me define manufactured spending. Everyone knows what manufacturing is to create something; to manufacture a Boeing 777 is to build it. Everyone knows what spending is, when we transfer money for good or services.
Well Manufactured Spending is creating the illusion of spending. When we charge $1000 we generally get $1000 worth of product or service, if you go to an ATM it is a cash advance and you get hit with huge fees, credit cards don't want you taking cash off your cards without buying something, they think that is very risky.
Mustachians use cards with some form of rewards be it travel or cash back when charging things, so if you have a 2% rewards card and you charge $1000, you really only spend $980. If it is 5% rewards card you only spend $950. So you are getting your products and services for a discount. Now let's say if what you were to buy is a gift card with a face value of $1000 and you got cash back from your card still have your initial buying power retained in the new gift card, that would be considered manufactured spending.
Ideally you want to be able to keep the money you spend as liquid as possible so buying a gift card that is for a specific store or restaurant is not as useful as a generic Visa or AmEx gift card. But even a gift card is not cash, so even though you have an extra $20 or $50 reward that you manufactured it is not as liquid as cash it's a reward and you have a gift card, I would rather have my cash.
So now comes AmEx Serve/Bluebird and the class of products that make this a lot more robust...
Serve is a product offered by American Express to address the unbanked and underbanked market. It is a reloadable prepaid debit card which can be used anywhere AmEx is accepted. It has a mobile app for iOS and Android as well as a website, you can pay bills to any merchant that accepts AmEx via ACH and anyone else AmEx will send a check to in 3-5 days (even your cousin Phil). Here is the link to find out all about this bank replacement product https://www.serve.com/ (https://www.serve.com/)
AmEx also offers Bluebird which is a sister product https://www.bluebird.com/ (https://www.bluebird.com/) but you can only have one or the other.
Serve is an individual account tied to your social security number, so you get one and you SO gets one.
There are many ways to add money to your Serve account, direct deposit, taking a picture of a check with a mobile app, a bank transfer via a linked account, another Serve account. The key way that is important for this thread is you can load money onto a Serve account via either a Vanilla Reload card or directly via a credit card charge at either CVS or 7-11.
You can read about Vanilla Reload here https://www.vanillareload.com/ (https://www.vanillareload.com/), they are prepaid pin based debit cards that can be purchased you can see the various places you can buy them on their website, CVS and 7-11 are on the list. The cards can be loaded with $20 to $500 a per card charge of $3.95.
I will focus on the CVS swipe as it is the most lucrative (no charge like the Vanilla Reload Cards), you can go into a CVS store and swipe your credit card and charge up $500 per transaction to load your Serve card. (You can do 2 $500 transactions per day) It will appear immediately as available. Depending on your credit card carrier the charge will show up as charge or a cash advance, AmEx and Chase seem to charge as of now, not cash advances. The charges are done by CVS and processed through the Vanilla Reload network (an InComm company).
So if you have a credit card that gets you a nice reward at CVS like the old AmEx Blue Cash card which earns 5% cash back at drug stores you can maximize your cash back.
As to limits the AmEx Blue Cash card has no upper limits on cash back but you need to spend $6500 at 1% before the 5% kicks in.
As to limits on the Serve card here is the link to the limits of the amounts the can be loaded and spent per month on a given card https://www.serve.com/help/#/fees-and-limits-1 (https://www.serve.com/help/#/fees-and-limits-1)
It is $10k per month and $100k per year loaded and spent.
You can load $1000 per day per card via swipe at CVS and an additional $200 per day via credit card online for a total of $1200. The maximum per month at CVS is $5000, the maximum online is $1000. So the maximum per month in total per credit card is $6000.
My math consisted of 2 cards, one for my wife and one for myself, going to CVS 5 days each and both charging the $1000 daily limit so that is a total of $10,000 per month charges on an AmEx Blue card at CVS get 5% cash back. That is $500. I wrongly assumed the online daily load of $200 per card per person would also earn me 5%, but since that will not be at CVS, I will only earn 2% on my Fidelity AmEx card on the remaining $2000 I can load on the 2 cards. So my total monthly cash back will $540 (after the first month meeting the $6500 threshold). Annually $6220, not the $7200 I initially indicated.
Now I can just use the Serve bill pay to pay off my AmEx Blue and my AmEx Fidelity credit cards and collect my cash back. That would be true Manufactured Spending, however neither of those cards is due immediately, so I plan on taking advantage of the float for the next 30 to 45 days on my 0% $12,000 loan.
I have a HELOC with a balance of over $12k at a rate of 2.49%, since that rate is higher than any money market account currently I deposit all of my current income into the HELOC to temporally reduce the balance and have an effective savings rate of 2.49%, when my bills come due I simply borrow the money back from my HELOC and the balance becomes "true" again and my bills get paid.
I will treat this borrowed $12k the same way; I will reduce my HELOC balance temporally to save on the interest and when the credit card bills are due borrow back the money from the HELOC and pay the credit cards minus the cash back rewards which will then become permanent debt reduction.
I will actually probably use Serve to pay some of the bills that normally are paid by check rather than borrow from the HELOC it will make it look more sincere, like my mortgage utilities etc...
So I will make $6220 in cash back annually and then what you do with the float is your own calculation, in my case it is a minimum of $240 in interest savings, plus whatever compounding effect this all has on the HELOC balance.
Now I know saverocity is an advocate of this being the tip of the iceberg and there are many other programs you can use like Evolve Money, Paypal, Amazon Payment Services etc... and you can float a lot of money and earn a lot more, and he is correct you can run a ton of money through this, I will however caution anyone in doing any of this for a few things. First just using Serve along for one person is charging $6k per month, for you and an SO it is $12k, ask yourself how much did you actually charge in normal spend before doing this? I charge up to $8k a month regularly and my comfort level beyond $12k in Manufactured Spending is not very high. To do this you are tying up a lot of money and these programs ARE NOT BANKS they are NOT REGULATED BY THE FED and you can get into a lot of trouble if your money gets locked up, so if you charge $20k or $30k or $100k do you have the liquidity to pay those bills if you get into a situation where your money is tied up. AmEx is the only company offering a service like this whose backing I trust, I am also a loyal large enough customer that I can raise a concern on the credit card side if need be even though they are separate businesses. I'm also a stock holder, which adds weight if they want to lock up my funds. The funds at AmEx at held in custody at AmEx Centurion Bank or Wells Fargo, I am not concerned with the viability of either bank. Lastly the TOS on these programs can and most likely will change at some point having too much exposure is probably not as advisable. As far as people's concerns on the Serve accounts getting locked, from what I have read it is usually in a violation of the TOS, don't fund your Serve card with your SO's credit card or vice versa, only fund with your own funds etc... follow the TOS and you should be ok as far as other providers I have no idea.
AmEx is generally making money on Serve in at least two ways by getting more card swipes by putting more AmEx cards in people's hands, and they are also investing the float of funds in reserve that people deposit.
As far as the AmEx Blue Cash Card they make 1.4% on the first $6500 charged, then loss 2.6% thereafter, but no one knows the deal they have with Vanilla/InComm they might get enough to cover the CVS cash back charges and still come out ahead. AmEx gets 2.4% as an interchange fee per card swipe at the register.
Remember there is really no such thing as a free lunch; the banks are making money on these products, even if we think we are figured them out.
-Mister FancyPants
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Great thoughts, especially the cautions. Thanks MFP!
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Are there any intro guides to wtf this is even all about?
Like, I start reading a blog post linked above and am immediately lost.
I don't know what a vanilla refill is, unless you mean one of those giant metal cups when you order a milkshake and can pour the extra from that into your cup.
I don't know what manufactured spend is.
I'm guessing some kind of spending to earn CC rewards, like the Loyal3 stuff, but with some amex debit card too and then you pay bills and stuff.. idk?
Here's what would help:
1) A basic "here is what is being done" big picture overall strategy, then
2) a step by step how to of "1) sign up for this card at LINK 2) buy these refills at X store every Y days 3) purple monkey dishwasher 4) transfer this money to the card 5) ??? 6) profit"
The second part, step by step, I can probably parse from posts and blogs once I understand the big picture, but it would still be a great reference for those not reading all these posts.
Sorry I'm apparently real dense. Tough trying to puzzle through it when half the posts make no sense. :P
can I get some more questions here (nothing is too stupid)
Oh good. :P
Manufactured spend is... cheating for want of a better word. Unethical, perhaps; depends how much you hate/dislike the banks and in reality, retailers - you are siphoning money away and to yourself.
The conspiracy theorists say that, the more widespread this becomes (and the more people who take the piss), the sooner it'll all be shut down.
But basically what you are doing is getting a *credit card* which gives x% in cashback to buy money at some cost less than x; then pushing that money into your checking account, and paying off the credit card. IE, free cashback.
The classic, now failed I think?, was to get an Ink card (5% at the office supply shops), buy a $500 vanilla reload card for ~ $504 which gives you 5% cashback = $25. Load your Bluebird or Serve account with the $500; write a Bluebird check to yourself; pay check into normal checking account; pay off credit card.
*Edit* $504 = $500 you get + $3.95 admin fee.
Sadly there don't seem to be any ways to do this in Canada; Bluebird specifically states you must be US resident.
The other easy one is Amazon Payments; get two people *with different surnames* and pay from one person to the other at no cost at all; the second person gives you that money back. Nothing has happened, except a $1k payment on your card which generates points/cashback.
I feel ambiguous about it. It is certainly not something the card companies would endorse, and heavy users get their accounts locked/closed - if they are obvious about it.
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Ok, so I think I found a link to the old Amex Blue cash card: https://www304.americanexpress.com/credit-card/blue-cash/25330 (https://www304.americanexpress.com/credit-card/blue-cash/25330) And credit to this for finding it: http://ficoforums.myfico.com/t5/Credit-Cards/the-old-Blue-Cash-card-Amex-still-available/td-p/2685719/page/1 (http://ficoforums.myfico.com/t5/Credit-Cards/the-old-Blue-Cash-card-Amex-still-available/td-p/2685719/page/1)
I'm interested in starting and just want to lay out my steps, and see if I'm heading in the right direction. I recently signed up for the Amex Gold Membership Rewards card, so I'll have to use that one until I hit the signup offer, then I'll switch over to the Blue cash. Assuming I get approved.
1. Signup for Serve. (seems easy enough)
2. Apply for Blue Cash Card. (even though I won't use it right away)
3. Load $1000 onto my Serve account with my credit card.
4. Use billpay from Serve to pay rent.
5. Pay off credit card in full every month from xxxx account.
6. Repeat.
Does that seem right? Another question I have is about big sign up offers. I'm currently thinking of just using the Blue Cash card for this process, and using a card that has a big sign up offer to work towards for all other purchases. And I guess I'll plan to always be working on a sign up offer. Any thoughts?
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Manufactured spend is... cheating for want of a better word. Unethical, perhaps; depends how much you hate/dislike the banks and in reality, retailers - you are siphoning money away and to yourself.
I strongly disagree with your statements that this is cheating or unethical, if you follow the Terms of Service of all of the products involved and happen to make profit good for you. It is no more cheating or unethical then a bank taking our deposits and paying .01% savings and lending the money out as mortgages at 3%, it is called a business model.
The conspiracy theorists say that, the more widespread this becomes (and the more people who take the piss), the sooner it'll all be shut down.
It’s actually not conspiracy theorists, it is bank analysts who study these number, I have posted lots of statistics on credit card usage already, but basically, 60% of credit card users do not carry a balance, they pay their balance in full, this has been the case historically, if you want the academic studies or the Federal Reserve documents I can provide them. The average debt carried is skewed higher by the smaller group of revolvers who carry excessive debt (which explains the high interest rate on credit cards, most people can care less as they keep small balances and pay them off within a few months). Those with large balances generally do balance transfers before owing interest and avoid being profitable to credit card companies in general on an interest owed perspective anyway.
The average number of credit cards per person/household has actually dropped from close to 4 to about 2 over the last few years, so people are not generally optimizing the their rewards programs if they have so few cards. Credit card companies also report that people let the rewards go unused as well at a high percentage; feel free to review any AmEx annual report or other major bank issuing rewards points.
So the small group of people that take full advantage of these programs or even combine them to get more leverage is very small compared to the total credit card profit model, so a particular card program might be shut down or modified, but rewards are not going anywhere anytime soon, in fact they will probably get better over time.
I feel ambiguous about it. It is certainly not something the card companies would endorse, and heavy users get their accounts locked/closed - if they are obvious about it.
If they don't want you to load these cards with a credit card they will not allow it as an option.... Since they do I guess they are ok with it, they do however put limits on it, and so they have constrained how much they endorse it... As far as them locking/closing accounts, do you have any links to back that up or is it you opinion?
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I don't know what a vanilla refill is, unless you mean one of those giant metal cups when you order a milkshake and can pour the extra from that into your cup.
Bahahahahahaha! That was funny.
Am catching up on this thread now. :)
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Manufactured spend is... cheating for want of a better word. Unethical, perhaps; depends how much you hate/dislike the banks and in reality, retailers - you are siphoning money away and to yourself.
I strongly disagree with your statements that this is cheating or unethical, if you follow the Terms of Service of all of the products involved and happen to make profit good for you. It is no more cheating or unethical then a bank taking our deposits and paying .01% savings and lending the money out as mortgages at 3%, it is called a business model.
The conspiracy theorists say that, the more widespread this becomes (and the more people who take the piss), the sooner it'll all be shut down.
It’s actually not conspiracy theorists, it is bank analysts who study these number, I have posted lots of statistics on credit card usage already, but basically, 60% of credit card users do not carry a balance, they pay their balance in full, this has been the case historically, if you want the academic studies or the Federal Reserve documents I can provide them. The average debt carried is skewed higher by the smaller group of revolvers who carry excessive debt (which explains the high interest rate on credit cards, most people can care less as they keep small balances and pay them off within a few months). Those with large balances generally do balance transfers before owing interest and avoid being profitable to credit card companies in general on an interest owed perspective anyway.
The average number of credit cards per person/household has actually dropped from close to 4 to about 2 over the last few years, so people are not generally optimizing the their rewards programs if they have so few cards. Credit card companies also report that people let the rewards go unused as well at a high percentage; feel free to review any AmEx annual report or other major bank issuing rewards points.
So the small group of people that take full advantage of these programs or even combine them to get more leverage is very small compared to the total credit card profit model, so a particular card program might be shut down or modified, but rewards are not going anywhere anytime soon, in fact they will probably get better over time.
I feel ambiguous about it. It is certainly not something the card companies would endorse, and heavy users get their accounts locked/closed - if they are obvious about it.
If they don't want you to load these cards with a credit card they will not allow it as an option.... Since they do I guess they are ok with it, they do however put limits on it, and so they have constrained how much they endorse it... As far as them locking/closing accounts, do you have any links to back that up or is it you opinion?
I had a good read through the... I forget, slickdeals or fatwallet forum post (or maybe another board). There were people having their accounts closed for doing too much, getting kicked out of walmart for buying money orders too often, and so on.
Listen, I get you're all for it. I'm not trying to bash you as a person, and I understand that it's fine if you don't break the rules. But think about it - why would any company leave loopholes like these open? They are giving you money for nothing. I understand the stats; but Amazon Payments was changed recently so it is less abusable, right? If you're smart and don't do it too much and don't make it obvious I'm sure you'll be fine.
Like, don't do $1k with no other spend and send it straight back to your card. You have to obfuscate, right? You have to hide your trail? And what does that say about the process?!
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I had a good read through the... I forget, slickdeals or fatwallet forum post (or maybe another board). There were people having their accounts closed for doing too much, getting kicked out of walmart for buying money orders too often, and so on.
Listen, I get you're all for it. I'm not trying to bash you as a person, and I understand that it's fine if you don't break the rules. But think about it - why would any company leave loopholes like these open? They are giving you money for nothing. I understand the stats; but Amazon Payments was changed recently so it is less abusable, right? If you're smart and don't do it too much and don't make it obvious I'm sure you'll be fine.
Like, don't do $1k with no other spend and send it straight back to your card. You have to obfuscate, right? You have to hide your trail? And what does that say about the process?!
I didn't take it as an attack on me personally, nor was I attacking you if you took it that way, my apologies if that was the case.
I agree with you if you simple charge your card to get cash back and simple pay of your card that is a violation of the TOS of some of the products we have been discussing and I have recommended against that. If you were to read my post https://forum.mrmoneymustache.com/ask-a-mustachian/does-anyone-use-amex-bluebird/msg252250/#msg252250 (https://forum.mrmoneymustache.com/ask-a-mustachian/does-anyone-use-amex-bluebird/msg252250/#msg252250) you will see that is not what I am describing. My methodology abides by all of the rules of all of the programs involved, and allows me to a nice profit and by no means do I plan on paying off the cards instantly. I also will leverage the cash borrowed to make an addtional profit.
I am using a very simple business strategy, fund my expenses with cheapest funds available. I can reduce my cost of capital with short term lending at low rates.
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I had a good read through the... I forget, slickdeals or fatwallet forum post (or maybe another board). There were people having their accounts closed for doing too much, getting kicked out of walmart for buying money orders too often, and so on.
Listen, I get you're all for it. I'm not trying to bash you as a person, and I understand that it's fine if you don't break the rules. But think about it - why would any company leave loopholes like these open? They are giving you money for nothing. I understand the stats; but Amazon Payments was changed recently so it is less abusable, right? If you're smart and don't do it too much and don't make it obvious I'm sure you'll be fine.
Like, don't do $1k with no other spend and send it straight back to your card. You have to obfuscate, right? You have to hide your trail? And what does that say about the process?!
I didn't take it as an attack on me personally, nor was I attacking you if you took it that way, my apologies if that was the case.
I agree with you if you simple charge your card to get cash back and simple pay of your card that is a violation of the TOS of some of the products we have been discussing and I have recommended against that. If you were to read my post https://forum.mrmoneymustache.com/ask-a-mustachian/does-anyone-use-amex-bluebird/msg252250/#msg252250 (https://forum.mrmoneymustache.com/ask-a-mustachian/does-anyone-use-amex-bluebird/msg252250/#msg252250) you will see that is not what I am describing. My methodology abides by all of the rules of all of the programs involved, and allows me to a nice profit and by no means do I plan on paying off the cards instantly. I also will leverage the cash borrowed to make an addtional profit.
I am using a very simple business strategy, fund my expenses with cheapest funds available. I can reduce my cost of capital with short term lending at low rates.
Sure thing - you're converting your credit into a not only interest free, actually a negative interest loan, effectively. How I *feel* about it is kinda how I feel about hoarding, or extreme couponing - if you see orange juice for $0.50 with a $1 mail in rebate, do you buy half a dozen cartons, or go in with a forklift truck to buy the whole pallet? I have a constant back and forth with myself over 'fair' - life isn't *fair* but I want it to be; I want there to be Paladins who help old ladies, etc, etc. So I, on one hand, do not consider manufactured spend to be 'fair'; but on the other hand, if you're making money off the banks, I kinda want to pat you on the back and say "good on'ya".
As to a bank giving you 0.01, yeah, that is awful, but there are (slightly) better options out there; but honestly, even when they give you 5%, it's only because the base rate is 8%...
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I agree with you if you simple charge your card to get cash back and simple pay of your card that is a violation of the TOS of some of the products we have been discussing and I have recommended against that. If you were to read my post
Sorry, I did read your post, and I'm probably being dense here but I'm having trouble distinguishing what you consider a violation of the TOS, vs the strategy you are employing. Especially when you said:
Now I can just use the Serve bill pay to pay off my AmEx Blue and my AmEx Fidelity credit cards and collect my cash back.
How is this not charging your card to get cash back, then paying off your card? I'm sure it has something to do with using your HELOC here, but i'm not quite wrapping my head around it.
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I agree with you if you simple charge your card to get cash back and simple pay of your card that is a violation of the TOS of some of the products we have been discussing and I have recommended against that. If you were to read my post https://forum.mrmoneymustache.com/ask-a-mustachian/does-anyone-use-amex-bluebird/msg252250/#msg252250 (https://forum.mrmoneymustache.com/ask-a-mustachian/does-anyone-use-amex-bluebird/msg252250/#msg252250) you will see that is not what I am describing.
Sorry, I did read your post, and I'm probably being dense here but I'm having trouble distinguishing what you consider a violation of the TOS, vs the strategy you are employing. Especially when you said:
Now I can just use the Serve bill pay to pay off my AmEx Blue and my AmEx Fidelity credit cards and collect my cash back.
How is this not charging your card to get cash back, then paying off your card?
From my interpretation it would be a violation of Serve's TOS, which is why I am not going to do that. I did say I can, however if you read my post, what you see I will be doing is paying bills mostly my HELOC and later using my checking account to pay my to pay the credit cards which I will borrow money from my HELOC to fund the checking account. Serve will never pay the credit cards and therefore I wil not violate any TOS.
In essence I am going to fund my Serve account with a credit card to pay down my HELOC to pay bills and deposit my income into the HELOC simulaneously and then borrow money from the HELOC as needed to pay my bills as they come due.
All money will be comingled, I am just adding a new inexpensive source of short term lending to my capital sources with the added bonus of a cash back component.
However I still wouldn't call it stealing if you were to pay back the credit card directly, I just would not do it as it would be a violation of Serves TOS.
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Ah, i see- thanks for the clarification.
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Just wanted to say thanks to all for the contributions to the thread and great potential idea.
I just signed up for both the Amex Blue (using the old like an OP posted, with the 1% until $6,500 and then 5%) and bluebird. I'll probably sign DH up for Serve and then see which we prefer or use both. Gonna give this a try.
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Manufactured spend is... cheating for want of a better word. Unethical, perhaps; depends how much you hate/dislike the banks and in reality, retailers - you are siphoning money away and to yourself.
I strongly disagree with your statements that this is cheating or unethical, if you follow the Terms of Service of all of the products involved and happen to make profit good for you. It is no more cheating or unethical then a bank taking our deposits and paying .01% savings and lending the money out as mortgages at 3%, it is called a business model.
The conspiracy theorists say that, the more widespread this becomes (and the more people who take the piss), the sooner it'll all be shut down.
It’s actually not conspiracy theorists, it is bank analysts who study these number, I have posted lots of statistics on credit card usage already, but basically, 60% of credit card users do not carry a balance, they pay their balance in full, this has been the case historically, if you want the academic studies or the Federal Reserve documents I can provide them. The average debt carried is skewed higher by the smaller group of revolvers who carry excessive debt (which explains the high interest rate on credit cards, most people can care less as they keep small balances and pay them off within a few months). Those with large balances generally do balance transfers before owing interest and avoid being profitable to credit card companies in general on an interest owed perspective anyway.
The average number of credit cards per person/household has actually dropped from close to 4 to about 2 over the last few years, so people are not generally optimizing the their rewards programs if they have so few cards. Credit card companies also report that people let the rewards go unused as well at a high percentage; feel free to review any AmEx annual report or other major bank issuing rewards points.
So the small group of people that take full advantage of these programs or even combine them to get more leverage is very small compared to the total credit card profit model, so a particular card program might be shut down or modified, but rewards are not going anywhere anytime soon, in fact they will probably get better over time.
I feel ambiguous about it. It is certainly not something the card companies would endorse, and heavy users get their accounts locked/closed - if they are obvious about it.
If they don't want you to load these cards with a credit card they will not allow it as an option.... Since they do I guess they are ok with it, they do however put limits on it, and so they have constrained how much they endorse it... As far as them locking/closing accounts, do you have any links to back that up or is it you opinion?
I had a good read through the... I forget, slickdeals or fatwallet forum post (or maybe another board). There were people having their accounts closed for doing too much, getting kicked out of walmart for buying money orders too often, and so on.
Listen, I get you're all for it. I'm not trying to bash you as a person, and I understand that it's fine if you don't break the rules. But think about it - why would any company leave loopholes like these open? They are giving you money for nothing. I understand the stats; but Amazon Payments was changed recently so it is less abusable, right? If you're smart and don't do it too much and don't make it obvious I'm sure you'll be fine.
Like, don't do $1k with no other spend and send it straight back to your card. You have to obfuscate, right? You have to hide your trail? And what does that say about the process?!
Not to be rude, but you are postulating here, and what you are saying is both incorrect and narrow minded. I always preface things that sound rude with not to be rude and now you can't be upset - I read that somewhere.
As for the obfuscation. no. It is not needed. There is no rent payment for me, straight back to card, amazon payments between people with same last names, whatever.
My own postulation is that the players like Amazon, Bluebird, Vanilla etc are in this for the big bucks, and using the data gathered by gamers along with all the rest to increase the empirical value in order to gain new business. The BB/Vanilla has been structured to allow incredibly abusive fees to the unbanked on one end of the spectrum, and marginally abusive back at them on the other from the gamers.
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Not to be rude, but you are postulating here, and what you are saying is both incorrect and narrow minded. I always preface things that sound rude with not to be rude and now you can't be upset - I read that somewhere.
As for the obfuscation. no. It is not needed. There is no rent payment for me, straight back to card, amazon payments between people with same last names, whatever.
My own postulation is that the players like Amazon, Bluebird, Vanilla etc are in this for the big bucks, and using the data gathered by gamers along with all the rest to increase the empirical value in order to gain new business. The BB/Vanilla has been structured to allow incredibly abusive fees to the unbanked on one end of the spectrum, and marginally abusive back at them on the other from the gamers.
I think narrow minded is a bit harsh, but hey, you make a lot of money from this (Upton Sinclair quote *again* - hard to get someone to accept a point of view when their income depends on it...).
Your postulation - so basically you're taking advantage of companies keeping the poor and stupid poor and stupid? Unethical!
Look, I'm not telling you to stop, I do think it's pretty cool in some ways, but getting thousands of dollars for literally nothing... it's mad. Sign up bonuses, carrot not stick, I get that. But free money for nothing. Why do you think it's ok?
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But free money for nothing. Why do you think it's ok?
Ummm, isn't this the same question people ask about those who FIRE (how can they find it moral to sit back and watch others work while they roll in it, doing nothing for decades)? What's ok or not should depend on how helpful/harmful it is to society, not whether or not it seems they did enough work to others to justify their return.
We have a weird system setup where the amount of money one earns is really not always directly correlated with the work they do to get it. Is it wrong for anyone to ever make more money than someone else when they do less work? How then would you define work and how does one weigh mental vs physical work? Does one get to do less overall work if they plan ahead and avoid pitfalls, or does only total work matter (eg, no benefit to planning or working "smart")?
As long as one works within the system legally, and considers the effects of their choice of work on society and individuals (as, IMO, those working for "The Man" are not exempt from either), then making money for less effort than someone else is absolutely ok.
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Not to be rude, but you are postulating here, and what you are saying is both incorrect and narrow minded. I always preface things that sound rude with not to be rude and now you can't be upset - I read that somewhere.
As for the obfuscation. no. It is not needed. There is no rent payment for me, straight back to card, amazon payments between people with same last names, whatever.
My own postulation is that the players like Amazon, Bluebird, Vanilla etc are in this for the big bucks, and using the data gathered by gamers along with all the rest to increase the empirical value in order to gain new business. The BB/Vanilla has been structured to allow incredibly abusive fees to the unbanked on one end of the spectrum, and marginally abusive back at them on the other from the gamers.
I think narrow minded is a bit harsh, but hey, you make a lot of money from this (Upton Sinclair quote *again* - hard to get someone to accept a point of view when their income depends on it...).
Your postulation - so basically you're taking advantage of companies keeping the poor and stupid poor and stupid? Unethical!
Look, I'm not telling you to stop, I do think it's pretty cool in some ways, but getting thousands of dollars for literally nothing... it's mad. Sign up bonuses, carrot not stick, I get that. But free money for nothing. Why do you think it's ok?
Why is it free money for nothing? It isn't a passive activity.
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Not to be rude, but you are postulating here, and what you are saying is both incorrect and narrow minded. I always preface things that sound rude with not to be rude and now you can't be upset - I read that somewhere.
As for the obfuscation. no. It is not needed. There is no rent payment for me, straight back to card, amazon payments between people with same last names, whatever.
My own postulation is that the players like Amazon, Bluebird, Vanilla etc are in this for the big bucks, and using the data gathered by gamers along with all the rest to increase the empirical value in order to gain new business. The BB/Vanilla has been structured to allow incredibly abusive fees to the unbanked on one end of the spectrum, and marginally abusive back at them on the other from the gamers.
I think narrow minded is a bit harsh, but hey, you make a lot of money from this (Upton Sinclair quote *again* - hard to get someone to accept a point of view when their income depends on it...).
Your postulation - so basically you're taking advantage of companies keeping the poor and stupid poor and stupid? Unethical!
Look, I'm not telling you to stop, I do think it's pretty cool in some ways, but getting thousands of dollars for literally nothing... it's mad. Sign up bonuses, carrot not stick, I get that. But free money for nothing. Why do you think it's ok?
Why is it free money for nothing? It isn't a passive activity.
Exactly, I'm still trying to decide if I have the time and organizational skills for this. Hardly seems passive to me!
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Your postulation - so basically you're taking advantage of companies keeping the poor and stupid poor and stupid? Unethical!
I'm probably reading this wrong, but it sounds like you're saying it's unethical because xyz company is keeping the poor and stupid poor and stupid. So to you, would taking advantage of a different company that has a more affluent client base be more ethical?
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Just here to reiterate what Saverocity and others have mentioned, which is to start small and work your way up.
Also be aware of the financial review:
http://boardingarea.com/viewfromthewing/2013/05/02/preparing-for-the-dreaded-american-express-financial-review/
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Not to be rude, but you are postulating here, and what you are saying is both incorrect and narrow minded. I always preface things that sound rude with not to be rude and now you can't be upset - I read that somewhere.
As for the obfuscation. no. It is not needed. There is no rent payment for me, straight back to card, amazon payments between people with same last names, whatever.
My own postulation is that the players like Amazon, Bluebird, Vanilla etc are in this for the big bucks, and using the data gathered by gamers along with all the rest to increase the empirical value in order to gain new business. The BB/Vanilla has been structured to allow incredibly abusive fees to the unbanked on one end of the spectrum, and marginally abusive back at them on the other from the gamers.
I think narrow minded is a bit harsh, but hey, you make a lot of money from this (Upton Sinclair quote *again* - hard to get someone to accept a point of view when their income depends on it...).
Your postulation - so basically you're taking advantage of companies keeping the poor and stupid poor and stupid? Unethical!
Look, I'm not telling you to stop, I do think it's pretty cool in some ways, but getting thousands of dollars for literally nothing... it's mad. Sign up bonuses, carrot not stick, I get that. But free money for nothing. Why do you think it's ok?
Why is it free money for nothing? It isn't a passive activity.
Ok, so, in the olden days.
Person X spends several hours a day growing food and selling it, digging up rocks and selling them, shining shoes, whatever. The value of the thing being sold is greater to the person buying it than the cost of paying for it - so you spend $1 having your shoes shined because the person doing it does a better job, is quicker, etc than you.
What Manufactured Spend is has no benefit to anyone except you. It is parasitic. In the olden days, the grower/manufacturer/service provider gets something (money), and the purchaser gets something (service, good). In this setup, you get something (money), and the provider loses something (money). Symbiosis is where both parties get something. Parasitism is where one side gains, one side loses.
You may well expend effort in getting this money, but if the value of the money is greater than the value of your time, it is 'worth doing' - financially.
Here's an example: On Hallowe'en, my wife - who looks very youthful - takes sweets and treats meant for children. Every year, she goes back to a number of houses and takes a small number of candies for herself. Is that ethical? Is that fine?
Note I am not saying you should all stop, you're all evil. Start small and work your way up? So as not to raise any alarms? Hmmm.
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Just here to reiterate what Saverocity and others have mentioned, which is to start small and work your way up.
Also be aware of the financial review:
http://boardingarea.com/viewfromthewing/2013/05/02/preparing-for-the-dreaded-american-express-financial-review/
I actually under report my earning when applying for credit and generally use slightly more then my gross W-2 earnings.
We have substantial insurance income that is not reported on our tax returns and I feel it would so much more of a hassle to deal with a review, so it is easier to under report. For things like a mortgage I report the insurance earnings as it is more practical... But for an AmEx card it's not worth it.
I keep my total credit utilization including my HELOC under 40% and never let any single credit card go over 80% and pay every balance off in full every month... I don't imagine I will have a problem unless I am simply randomly selected from a computer... But my guess is the criteria is not so random (nothing in computers is ever that random).
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What Manufactured Spend is has no benefit to anyone except you. It is parasitic.
You just described most of the financial services industry.
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What Manufactured Spend is has no benefit to anyone except you. It is parasitic. In the olden days, the grower/manufacturer/service provider gets something (money), and the purchaser gets something (service, good). In this setup, you get something (money), and the provider loses something (money). Symbiosis is where both parties get something. Parasitism is where one side gains, one side loses.
You may well expend effort in getting this money, but if the value of the money is greater than the value of your time, it is 'worth doing' - financially.
I didn't know you were employed by any of the companies providing the products that facilitated "Manufactured Spending" and could verify that they don't provide a benefit to anyone but the person getting cash back?
Let's analyze that, for starters, if you buy Vanilla Reload cards, Vanilla Reload (InComm) makes $3.95 per card, if you swipe your credit card at CVS or 7-11 they record a store sale for the dollar amount you charged and InComm gets a fee for processing that charge. There are interchange fees associated with credit card swipes so the acquiring bank and the issuing bank gets a slice of that fee. The rewards card is supported by marketing fees, so the swipe might be at a loss but the use of the card is part of the marketing cost which is used to sell other cards and increases market share of the card to make that card profitable, and only an insider would know that.
So you make some pretty blanket statements based purely on your beliefs that this takes advantage of a lot of companies, when in fact these very companies might be encouraging the behavior by making it accessible to the savvy intelligent users but simply can't market it.
Many other companies want your data like Amazon or PayPal and they will pay dearly for it.
In the end, if AmEx didn't want you to load Serve with a credit card then they wouldn't make it an option, they do so your ethics are nonsense. They as a credit card company also don't make the charges cash advances.... I doubt that's a coincidence... If CVS didn't want you to charge at their store they wouldn’t have made the deal with AmEx. If Vanilla Reload didn’t want to be the service provider they too would not be taking credit cards.
You seem to think you know what these companies want you to do and think people are taking advantage of stupid poor people, but your attitude is simply based on uninformed guesses and is nothing more than an opinion. So if people found a way to operate within the TOS of various products to make money more power to them, if you don’t want to do that is your prerogative but don’t tell people this is unethical and no else benefits when you absolutely no proof whatsoever to back up your statements.
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What Manufactured Spend is has no benefit to anyone except you. It is parasitic.
You just described most of the financial services industry.
That’s an unfair accusation there are at least 7 people who work in finance who aren't parasites :P
All kidding aside, for the most part the goal of a company is to be profitable, and if it is a financial services company it is really hard to have your goals and there’s align so for the most part everything they do is in an effort to be profitable at the expense of someone.
Even everyone's beloved Vanguard, their low fees are generally geared at attracting assets under management (AUM), the more they have the more those fees bring in.
Fee only advisors have nothing to gain by giving you bad advice, they charge only for their time, but like lawyers and doctors who don’t take insurance they charge a lot for the time, you pay for their knowledge...
Finance is not a user friendly field.... Even for those of us who think we know a lot, we get eaten alive more often than not.
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What Manufactured Spend is has no benefit to anyone except you. It is parasitic. In the olden days, the grower/manufacturer/service provider gets something (money), and the purchaser gets something (service, good). In this setup, you get something (money), and the provider loses something (money). Symbiosis is where both parties get something. Parasitism is where one side gains, one side loses.
You may well expend effort in getting this money, but if the value of the money is greater than the value of your time, it is 'worth doing' - financially.
I didn't know you were employed by any of the companies providing the products that facilitated "Manufactured Spending" and could verify that they don't provide a benefit to anyone but the person getting cash back?
Let's analyze that, for starters, if you buy Vanilla Reload cards, Vanilla Reload (InComm) makes $3.95 per card, if you swipe your credit card at CVS or 7-11 they record a store sale for the dollar amount you charged and InComm gets a fee for processing that charge. There are interchange fees associated with credit card swipes so the acquiring bank and the issuing bank gets a slice of that fee. The rewards card is supported by marketing fees, so the swipe might be at a loss but the use of the card is part of the marketing cost which is used to sell other cards and increases market share of the card to make that card profitable, and only an insider would know that.
So you make some pretty blanket statements based purely on your beliefs that this takes advantage of a lot of companies, when in fact these very companies might be encouraging the behavior by making it accessible to the savvy intelligent users but simply can't market it.
Many other companies want your data like Amazon or PayPal and they will pay dearly for it.
In the end, if AmEx didn't want you to load Serve with a credit card then they wouldn't make it an option, they do so your ethics are nonsense. They as a credit card company also don't make the charges cash advances.... I doubt that's a coincidence... If CVS didn't want you to charge at their store they wouldn’t have made the deal with AmEx. If Vanilla Reload didn’t want to be the service provider they too would not be taking credit cards.
You seem to think you know what these companies want you to do and think people are taking advantage of stupid poor people, but your attitude is simply based on uninformed guesses and is nothing more than an opinion. So if people found a way to operate within the TOS of various products to make money more power to them, if you don’t want to do that is your prerogative but don’t tell people this is unethical and no else benefits when you absolutely no proof whatsoever to back up your statements.
+1
There's no way Amex doesn't know this happens. And if they're fine letting it continue, clearly it still benefits them. And I'm sure for every x% that does this correctly, there is a x% of people who bite of more than they can chew, and get nailed with the interest. It seems similar to large sign up offers.
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Mustachians, forget the blogs, because here is where the writers are getting their information. I present to you the motherlode: http://www.flyertalk.com/forum/manufactured-spending-719/ (http://www.flyertalk.com/forum/manufactured-spending-719/)
This stuff isn't new, and many have made six figures annually from these shenanigans. Gotta have organizational skills, and what I like to call a "backstop." That means money that you can afford to lose access to for several months, in case someone like PayPal or Bancorp locks up your funds for a little while.
REQUEST TO MMM - Because of the high visibility of your blog, if this material ever becomes main-story, headline material, these shenanigans will receive press that they don't need, and it could negatively affect many people's profits. Please keep this info in the forums, and off the front page of MMM.
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There's no way Amex doesn't know this happens. And if they're fine letting it continue, clearly it still benefits them. And I'm sure for every x% that does this correctly, there is a x% of people who bite of more than they can chew, and get nailed with the interest. It seems similar to large sign up offers.
Right. What indicates that most to me is not the Vanilla reload stuff, but the fact that you can load your Serve card directly with your credit card online. On their site! Using one of their cash back cards!
They allow you to load it directly with a credit card. As part of their system.
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Mustachians, forget the blogs, because here is where the writers are getting their information. I present to you the motherlode: http://www.flyertalk.com/forum/manufactured-spending-719/ (http://www.flyertalk.com/forum/manufactured-spending-719/)
This stuff isn't new, and many have made six figures annually from these shenanigans. Gotta have organizational skills, and what I like to call a "backstop." That means money that you can afford to lose access to for several months, in case someone like PayPal or Bancorp locks up your funds for a little while.
REQUEST TO MMM - Because of the high visibility of your blog, if this material ever becomes main-story, headline material, these shenanigans will receive press that they don't need, and it could negatively affect many people's profits. Please keep this info in the forums, and off the front page of MMM.
I would be absolutely shocked if companies like Amex don't have departments (or at least a bunch of interns) devoted to perusing forums like Flyertalk daily. I've seen plenty of customer service reps from companies responding to comments on Flyertalk and other forums. But if all of a sudden the amount of people doing MF increased by 20% or something, then I imagine that might cause some changes to the system.
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REQUEST TO MMM - Because of the high visibility of your blog, if this material ever becomes main-story, headline material, these shenanigans will receive press that they don't need, and it could negatively affect many people's profits. Please keep this info in the forums, and off the front page of MMM.
I really have issues with this request. Again, I 'get it' - tragedy of the commons. Except it isn't a tragedy. You're asking MMM/the mods specifically to keep this a secret?
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Not to be rude, but you are postulating here, and what you are saying is both incorrect and narrow minded. I always preface things that sound rude with not to be rude and now you can't be upset - I read that somewhere.
As for the obfuscation. no. It is not needed. There is no rent payment for me, straight back to card, amazon payments between people with same last names, whatever.
My own postulation is that the players like Amazon, Bluebird, Vanilla etc are in this for the big bucks, and using the data gathered by gamers along with all the rest to increase the empirical value in order to gain new business. The BB/Vanilla has been structured to allow incredibly abusive fees to the unbanked on one end of the spectrum, and marginally abusive back at them on the other from the gamers.
I think narrow minded is a bit harsh, but hey, you make a lot of money from this (Upton Sinclair quote *again* - hard to get someone to accept a point of view when their income depends on it...).
Your postulation - so basically you're taking advantage of companies keeping the poor and stupid poor and stupid? Unethical!
Look, I'm not telling you to stop, I do think it's pretty cool in some ways, but getting thousands of dollars for literally nothing... it's mad. Sign up bonuses, carrot not stick, I get that. But free money for nothing. Why do you think it's ok?
Why is it free money for nothing? It isn't a passive activity.
Ok, so, in the olden days.
Person X spends several hours a day growing food and selling it, digging up rocks and selling them, shining shoes, whatever. The value of the thing being sold is greater to the person buying it than the cost of paying for it - so you spend $1 having your shoes shined because the person doing it does a better job, is quicker, etc than you.
What Manufactured Spend is has no benefit to anyone except you. It is parasitic. In the olden days, the grower/manufacturer/service provider gets something (money), and the purchaser gets something (service, good). In this setup, you get something (money), and the provider loses something (money). Symbiosis is where both parties get something. Parasitism is where one side gains, one side loses.
You may well expend effort in getting this money, but if the value of the money is greater than the value of your time, it is 'worth doing' - financially.
Here's an example: On Hallowe'en, my wife - who looks very youthful - takes sweets and treats meant for children. Every year, she goes back to a number of houses and takes a small number of candies for herself. Is that ethical? Is that fine?
Note I am not saying you should all stop, you're all evil. Start small and work your way up? So as not to raise any alarms? Hmmm.
Its ok @daverobev. My wife thinks exactly the same way. When I tell her about these manufacture spend opportunities, or really about any type of loophole I find that nets us a few bucks she tells me that she feels like we are "ripping the company off" and that we really shouldn't do it. I love her for it. Her parents are the same way. That's just the way she was raised- you don't earn a dollar unless you get your hands dirty to earn it.
And I'm sure thinking like her's brings a smile to every financial services CEO out there. Not only do they get to make obscene profit off of the average shmuck who is too lazy or just to poor to pay off their credit card balances on time, or in full- they also don't need to worry about losing any money from people who consider themselves too ethical to take a dollar for themselves from their obscenely high pile of money.
All they got to do is worry about the few creative folks out there who won't play their game, while also making a few bucks. It's pennies for them. I'm sure they've got some algorithm where if these activities cost them something like one-half of 1 percent off their profit margin, they'll put a stop to it or something. I think they'll be fine.
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Even if you don't feel that Manufactured Spending is ethical, you can still use this strategy to make some money. I am going to use the Blue and Amex to pay my mortgage and all my bills, including my other credit cards. They are legit expenses that need to be paid. The only difference is that now I'm getting an extra 30 days and cash back to pay them. I'll probably only be using $3-4k of the limit each month, but that's still $150 each month (as long as AmEx doesn't change anything). Thanks to everyone for the education lesson. I had heard of almost all of this before, but never put it all together well enough to put it into practice. And thanks to Westchester for starting this thread. I think it's pretty interesting that she has started another very popular thread and hasn't even made any further comments on this one.
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REQUEST TO MMM - Because of the high visibility of your blog, if this material ever becomes main-story, headline material, these shenanigans will receive press that they don't need, and it could negatively affect many people's profits. Please keep this info in the forums, and off the front page of MMM.
I really have issues with this request. Again, I 'get it' - tragedy of the commons. Except it isn't a tragedy. You're asking MMM/the mods specifically to keep this a secret?
As of this time, there is no plan to keep any information secret. See earlier discussion about this topic in the Loyal3 thread.
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I think it's pretty interesting that she has started another very popular thread and hasn't even made any further comments on this one.
WCF ended up deleting nearly all of her comments (200) or so, and editing out the ones she could't delete (see the first post in this thread, for example). Her account was deleted shortly after. Hopefully at some point she will start a new account with a fresh start.
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Even if you don't feel that Manufactured Spending is ethical, you can still use this strategy to make some money. I am going to use the Blue and Amex to pay my mortgage and all my bills, including my other credit cards. They are legit expenses that need to be paid. The only difference is that now I'm getting an extra 30 days and cash back to pay them. I'll probably only be using $3-4k of the limit each month, but that's still $150 each month (as long as AmEx doesn't change anything). Thanks to everyone for the education lesson. I had heard of almost all of this before, but never put it all together well enough to put it into practice. And thanks to Westchester for starting this thread. I think it's pretty interesting that she has started another very popular thread and hasn't even made any further comments on this one.
Absolutely, and I would do that in a heartbeat. Unfortunately our options here in Canada are the Canadian Tire Mastercards which allow a weird psuedo bill pay (I'd be able to get 0.25% off our property tax.. about $4.50). Oh, and a Pivot card, but it's pretty terrible, I think. Bluebird is - don't get me wrong - fantastic and really cool - but only US residents are eligible.
@thepokercab - thanks - I have no issues with taking full advantage of whatever offers I can - eg I'm scheming buying gift cards at the supermarket to get 2% rather than the 1% I would get if I used my CC where I'll spend the money. Not much of a scheme, right? :)
I agree it is probably small beer to the companies. I guess small beer is relative. I feel semi-guilty having a $75 balance at a credit union, when they give a $1 a month credit for electronic statements.. $12 is not a small deal if you're in a third world country, but here, well. Not even worth sweating over, right?
I would certainly use something like Plastiq (at a cost of 2%) to meet minimum spends on new cards - eg, I could pay my income tax bill of several thousand dollars. Unfortunately I don't have any relevant min spends to meet.
Yeah. I like playing Paladins in RPGs. :)
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What Manufactured Spend is has no benefit to anyone except you. It is parasitic. In the olden days, the grower/manufacturer/service provider gets something (money), and the purchaser gets something (service, good). In this setup, you get something (money), and the provider loses something (money). Symbiosis is where both parties get something.
Again, this is the same argument I hear against people reaching FIRE. How is living off of investment income any different?
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Even if you don't feel that Manufactured Spending is ethical, you can still use this strategy to make some money. I am going to use the Blue and Amex to pay my mortgage and all my bills, including my other credit cards. They are legit expenses that need to be paid. The only difference is that now I'm getting an extra 30 days and cash back to pay them. I'll probably only be using $3-4k of the limit each month, but that's still $150 each month (as long as AmEx doesn't change anything). Thanks to everyone for the education lesson. I had heard of almost all of this before, but never put it all together well enough to put it into practice. And thanks to Westchester for starting this thread. I think it's pretty interesting that she has started another very popular thread and hasn't even made any further comments on this one.
This is my practice as well, but for points. I use these techniques to shift my non-points-earning regular spending (i.e. rent, utilities) to points-earning credit card spending. I rarely do any manufactured spending, but I see no ethical implications of it either.
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What Manufactured Spend is has no benefit to anyone except you. It is parasitic. In the olden days, the grower/manufacturer/service provider gets something (money), and the purchaser gets something (service, good). In this setup, you get something (money), and the provider loses something (money). Symbiosis is where both parties get something.
Again, this is the same argument I hear against people reaching FIRE. How is living off of investment income any different?
Because FIRE is on money you've earned and invested. A state pension is given to all equally (depending on government/country). This isn't dumpster diving (taking money that would otherwise go to landfill); it is systematically finding loopholes to siphon money into your ownership.
Buying shares with money you've earned which in turn give you money is investing. Taking pens from your place of employment is theft. And while I don't think MS is theft, and it may well be a cost of fleecing the poor (!), the fact people want to keep it hush-hush speaks volumes.
It is wrong in the same way financial advisers getting ongoing kickbacks is wrong.
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What Manufactured Spend is has no benefit to anyone except you. It is parasitic. In the olden days, the grower/manufacturer/service provider gets something (money), and the purchaser gets something (service, good). In this setup, you get something (money), and the provider loses something (money). Symbiosis is where both parties get something.
Again, this is the same argument I hear against people reaching FIRE. How is living off of investment income any different?
daverobev, do you think Amex knows that manufactured spending occurs?
Because FIRE is on money you've earned and invested. A state pension is given to all equally (depending on government/country). This isn't dumpster diving (taking money that would otherwise go to landfill); it is systematically finding loopholes to siphon money into your ownership.
Buying shares with money you've earned which in turn give you money is investing. Taking pens from your place of employment is theft. And while I don't think MS is theft, and it may well be a cost of fleecing the poor (!), the fact people want to keep it hush-hush speaks volumes.
It is wrong in the same way financial advisers getting ongoing kickbacks is wrong.
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What Manufactured Spend is has no benefit to anyone except you. It is parasitic. In the olden days, the grower/manufacturer/service provider gets something (money), and the purchaser gets something (service, good). In this setup, you get something (money), and the provider loses something (money). Symbiosis is where both parties get something.
Again, this is the same argument I hear against people reaching FIRE. How is living off of investment income any different?
Because FIRE is on money you've earned and invested. A state pension is given to all equally (depending on government/country). This isn't dumpster diving (taking money that would otherwise go to landfill); it is systematically finding loopholes to siphon money into your ownership.
Buying shares with money you've earned which in turn give you money is investing. Taking pens from your place of employment is theft. And while I don't think MS is theft, and it may well be a cost of fleecing the poor (!), the fact people want to keep it hush-hush speaks volumes.
It is wrong in the same way financial advisers getting ongoing kickbacks is wrong.
We all have our ethical and moral code. I personally think that people who FIRE are accelerating the destruction of Social Security because they are pulling out of a system that desperately needs their support, which is fine, until those same people show financial plans that include 'their fair share' of social security later in life. It is also dangerous to plan like that as they are bringing down a system they later plan to lean on.
There are many things that are wrong out there, personally I have no qualms making extra cash from financial institutions, but I can understand that some people will feel the urge to protect these banks and credit card companies from such tactics.
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Because FIRE is on money you've earned and invested. A state pension is given to all equally (depending on government/country). This isn't dumpster diving (taking money that would otherwise go to landfill); it is systematically finding loopholes to siphon money into your ownership.
Buying shares with money you've earned which in turn give you money is investing. Taking pens from your place of employment is theft. And while I don't think MS is theft, and it may well be a cost of fleecing the poor (!), the fact people want to keep it hush-hush speaks volumes.
It is wrong in the same way financial advisers getting ongoing kickbacks is wrong.
During FIRE you live off of way more money than you've earned through working, and often benefit from tax breaks for doing it (covered by those who are continuing to work). The fact that you once placed it in a different kind of an account (investment vs savings) doesn't take much more effort than MS (if effort for money is so meaningful)...And investment certainly isn't dumpster diving either.
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What Manufactured Spend is has no benefit to anyone except you. It is parasitic. In the olden days, the grower/manufacturer/service provider gets something (money), and the purchaser gets something (service, good). In this setup, you get something (money), and the provider loses something (money). Symbiosis is where both parties get something.
Again, this is the same argument I hear against people reaching FIRE. How is living off of investment income any different?
Because FIRE is on money you've earned and invested. A state pension is given to all equally (depending on government/country). This isn't dumpster diving (taking money that would otherwise go to landfill); it is systematically finding loopholes to siphon money into your ownership.
Buying shares with money you've earned which in turn give you money is investing. Taking pens from your place of employment is theft. And while I don't think MS is theft, and it may well be a cost of fleecing the poor (!), the fact people want to keep it hush-hush speaks volumes.
It is wrong in the same way financial advisers getting ongoing kickbacks is wrong.
Daverobev, do you think Amex knows that Manufactured Spending occurs?
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I can't comment on social security as I don't know exactly how it works. I will get something from the Canada Pension Plan only for the years I have paid in, which is fine. Ditto UK State Pension. I will get out in proportion to what I have paid in.
As to protecting the banks? Ah... no. I am well aware they are.. unethical, perhaps, themselves, but really IMHO the problem is advertising and 'convenience'.. but that is another topic.
Yes, I assume Amex knows about MS, and yes I assume they close down the blatant loopholes and count the rest as a cost of business. That doesn't make stealing from a thief not stealing (for example).
I'm done here, I think.. I don't wish to argue though I do find the whole thing fascinating!
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This is all really interesting, and I've been thinking about it nonstop since I found the thread last night. On the moral issue: people keep talking as if AmEx is the one taking the hit here, but I think it's way more plausible that CVS is taking the hit. CVS is paying the transaction fee to AmEx. That is about 5% from what I understand. And perhaps CVS gets to pocket the $4 fee. So they're paying out the $21 that ends up in your pocket. This also explains why some CVSs have stopped taking credit cards for these purchases.
I guess, for my part, it seems a little crappier to take the money if it is out of CVS's pocket. Unless I could be convinced that this is not just an oversight on their part, I'm not inclined to take advantage of an error that they made in setting up their policies. Compare: a mis-loaded atm machine is spitting 100s instead of 20s. Do you just withdraw the maximum and count it your lucky day? In a case like this, someone made a big mistake, and it seems to me that the right thing to do is to say "hey, you guys made a mistake" rather than take advantage of their error.
If it were AmEx, I'd be more inclined to say "you guys deserve it" and also I'd think that they probably knew what they were doing and I was missing something. But CVS seems like they just have erred in setting things up this way, and I have no beef with them, or really any reason to think that they deserve this sort of treatment.
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This is all really interesting, and I've been thinking about it nonstop since I found the thread last night. On the moral issue: people keep talking as if AmEx is the one taking the hit here, but I think it's way more plausible that CVS is taking the hit. CVS is paying the transaction fee to AmEx. That is about 5% from what I understand. And perhaps CVS gets to pocket the $4 fee. So they're paying out the $21 that ends up in your pocket. This also explains why some CVSs have stopped taking credit cards for these purchases.
I guess, for my part, it seems a little crappier to take the money if it is out of CVS's pocket. Unless I could be convinced that this is not just an oversight on their part, I'm not inclined to take advantage of an error that they made in setting up their policies. Compare: a mis-loaded atm machine is spitting 100s instead of 20s. Do you just withdraw the maximum and count it your lucky day? In a case like this, someone made a big mistake, and it seems to me that the right thing to do is to say "hey, you guys made a mistake" rather than take advantage of their error.
If it were AmEx, I'd be more inclined to say "you guys deserve it" and also I'd think that they probably knew what they were doing and I was missing something. But CVS seems like they just have erred in setting things up this way, and I have no beef with them, or really any reason to think that they deserve this sort of treatment.
If CVS is losing money selling vanilla reloads, then regardless of whether you are using them for a manufactured spend or not, they're losing money on a product they sell. You are not making money off of CVS, you are making money from Amex rewards, and CVS is possibly losing money on selling vanilla reloads (a loss they'd have regardless of whether you're profiting or losing money through vanilla reload fees).
Companies take losses on products deliberately and often (they're called loss leaders). These are not oversights, they are planned losses with the company gambling that they'll make it up through the traffic through their stores. Or, is purchasing any of the other loss leaders at CVS unethical?
Is one really expected to try to figure out for each product one buys if the company loses money on it? What if you buy other stuff and they are making a huge product off of those items; do your losses/their gains balance out? Or what about all of the people buying products at CVS not at all on sale, is CVS unethical if they make too much of a profit? Or, are the customers the only ones with the ethical responsibility to make sure that the other party is really profiting from their choices?
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If CVS is losing money selling vanilla reloads, then regardless of whether you are using them for a manufactured spend or not, they're losing money on a product they sell.
If I'm right that CVS gets the $4 fee, then they don't lose money on reloads that cost $80 or less. But you're right that they're losing money on all vanilla reloads over that price.
You are not making money off of CVS, you are making money from Amex rewards, and CVS is possibly losing money on selling vanilla reloads (a loss they'd have regardless of whether you're profiting or losing money through vanilla reload fees).
I don't know who to say that you're "making money off" because this isn't a precise expression. But what's true is that people who do this are getting money from CVS for free. And it is false that CVS would lose money on the purchases of individuals engaging in this strategy if those individuals stopped engaging in the strategy. So it's false that the loss CVS incurs as a result of this strategy is a "loss they'd have regardless of whether you're profiting". What's true is that they'd continue to lose money on the transactions of those people who buy vanilla reloads over $80 who were not engaging in this "manufactured spending" strategy. But I think that's a red herring. I am not criticizing people who buy those reloads without engaging in this strategy.
Companies take losses on products deliberately and often (they're called loss leaders). These are not oversights, they are planned losses with the company gambling that they'll make it up through the traffic through their stores. Or, is purchasing any of the other loss leaders at CVS unethical?
No, buying loss leaders is not unethical. I find it implausible that these cards are being offered as a loss leader. I think there's a moral difference between buying a loss leader and (say) scooping up 100s from a mis-loaded atm machine. Don't you agree that there's a difference here? Or would you be happy to take 100s from such a machine? In any case, I'd be interested if anyone has a reason to think that this is really a loss leader for CVS rather than a mistake akin to the atm example.
Is one really expected to try to figure out for each product one buys if the company loses money on it?
No. But if a company has made an obvious error (say, an expensive $1000 item somehow scans at the register for $1 by computer error), the ethical thing is to point it out. There's a relevant difference between this and being "expected to figure out for each product one buys if the company loses money on it". I'm suggesting: there is a morally relevant distinction between them engaging in a poor business strategy, on the one hand, and them *accidentally* messing up. Maybe it's hard to sustain this distinction, but I think I can see it pretty clearly.
Or what about all of the people buying products at CVS not at all on sale, is CVS unethical if they make too much of a profit?
No, that falls on the strategy side of things. Business is in some way a game of strategy, and, if everyone is playing the game, some will make bad moves. But its one thing to beat someone fair and square, and its another to take a 20 from them because they accidentally thought it was yours.
Or, are the customers the only ones with the ethical responsibility to make sure that the other party is really profiting from their choices?
Everyone has a responsibility to not take advantage of other people when they accidentally made an error. That's what I'm saying. If they are thinking (seemingly stupidly) that this is a profitable loss leader, then I'm ok with buying it. But I doubt that's what is happening. They didn't realize that they stepped in it with this. As soon as they do, the strategy will dry up. Meanwhile, its not very good to take advantage. So it seems to me.
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CVS may be done with this as of 1 April. Blogs are saying that CVS will no longer take credit cards for VR's as of April. Will "press to test" on Tuesday.
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Just activated the Bluebird Card, going to wait for our bank account to link up first.
My gf and I have Capital One Venture cards, gets like 1.25x miles per dollar spent. Probably not the best card for this. Either of us could get any prime card we wanted (~750+ credit scores).
I'm a little confused on what card to look for, so far its looking like one of the American Express, I guess the BLue Cash with the annual fee. I live right next door to a 7-11 always has a ton of the vanilla cards in stock, there is no gas pump, not sure if it counts as grocery or gas or neither (and what happens to 6% cash back after the limit of 6k? reduces to 1%?)
We all also travel domestic ~8x/year and international once every other year or so (Chicago is homebase ORD or MDW depending). If anyone has any advice it would be greatly appreciated :)
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Can anyone comment on the following scenario (I'm not sure if it will actually work):
TCB is offering 2% back on AMEX gift cards. My plan is to buy 10 of these in $500 increments, for a total of $5,000. There is a $3.95 fee for each card, and $8.95 for shipping, totaling $5,048.45. I would be using my Capital One Quicksilver card which offers 1.5% cash back on all purchases.
Therefore, my total "profits" would be 2% on the initial $5,000 + 1.5% on the $5,048.45 = $175.73. However, I would still need to liquidate and/or pay bills/expenses with these cards, so I would go to Walmart and purchase 10 VISA gift cards that are able to be loaded onto a Bluebird account (if I'm not mistaken, you can't load AMEX gift cards onto BB). The fees for these cards would be another $3.95/card, or $39.50 total. These fees, plus the fees listed above ($48.45) come to a grand total of $87.95. Quick math suggests that I would profit the $175.73-$87.95 = 87.78/month.
I plan on actually using the BB account to pay rent ($400/month) and my student loan payments of ~$2,400/month. So some of the spending is manufactured but some of it is real. Is this scenario optimized and/or a real possibility? If so, I'd be looking at over $1K/year for not that much extra work.
Thoughts?
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Can anyone comment on the following scenario (I'm not sure if it will actually work):
TCB is offering 2% back on AMEX gift cards. My plan is to buy 10 of these in $500 increments, for a total of $5,000. There is a $3.95 fee for each card, and $8.95 for shipping, totaling $5,048.45. I would be using my Capital One Quicksilver card which offers 1.5% cash back on all purchases.
Therefore, my total "profits" would be 2% on the initial $5,000 + 1.5% on the $5,048.45 = $175.73. However, I would still need to liquidate and/or pay bills/expenses with these cards, so I would go to Walmart and purchase 10 VISA gift cards that are able to be loaded onto a Bluebird account (if I'm not mistaken, you can't load AMEX gift cards onto BB). The fees for these cards would be another $3.95/card, or $39.50 total. These fees, plus the fees listed above ($48.45) come to a grand total of $87.95. Quick math suggests that I would profit the $175.73-$87.95 = 87.78/month.
I plan on actually using the BB account to pay rent ($400/month) and my student loan payments of ~$2,400/month. So some of the spending is manufactured but some of it is real. Is this scenario optimized and/or a real possibility? If so, I'd be looking at over $1K/year for not that much extra work.
Thoughts?
I think Visa gift cards at Walmart are more like 5.95 for $500, so reduce your profits by another $20 if you plan on buying 10. Also, you can only load $1000 per day, so plan on making 5 round trips, which will eat into your profits again. And that's if you have no issues loading, or buying the visa gift cards in the first place. Not worth it in my opinion.
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Can anyone comment on the following scenario (I'm not sure if it will actually work):
TCB is offering 2% back on AMEX gift cards. My plan is to buy 10 of these in $500 increments, for a total of $5,000. There is a $3.95 fee for each card, and $8.95 for shipping, totaling $5,048.45. I would be using my Capital One Quicksilver card which offers 1.5% cash back on all purchases.
Therefore, my total "profits" would be 2% on the initial $5,000 + 1.5% on the $5,048.45 = $175.73. However, I would still need to liquidate and/or pay bills/expenses with these cards, so I would go to Walmart and purchase 10 VISA gift cards that are able to be loaded onto a Bluebird account (if I'm not mistaken, you can't load AMEX gift cards onto BB). The fees for these cards would be another $3.95/card, or $39.50 total. These fees, plus the fees listed above ($48.45) come to a grand total of $87.95. Quick math suggests that I would profit the $175.73-$87.95 = 87.78/month.
I plan on actually using the BB account to pay rent ($400/month) and my student loan payments of ~$2,400/month. So some of the spending is manufactured but some of it is real. Is this scenario optimized and/or a real possibility? If so, I'd be looking at over $1K/year for not that much extra work.
Thoughts?
You're not ready to get into this game.
For one thing, the fees are higher than $3.95 for gift cards, and ultimately you have too many steps in liquidating the funds to get a meaningful profit.
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You're not ready to get into this game.
For one thing, the fees are higher than $3.95 for gift cards, and ultimately you have too many steps in liquidating the funds to get a meaningful profit.
Any constructive criticism or suggestions on how the poster could improve their strategy?
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Can anyone comment on the following scenario (I'm not sure if it will actually work):
TCB is offering 2% back on AMEX gift cards. My plan is to buy 10 of these in $500 increments, for a total of $5,000. There is a $3.95 fee for each card, and $8.95 for shipping, totaling $5,048.45. I would be using my Capital One Quicksilver card which offers 1.5% cash back on all purchases.
Therefore, my total "profits" would be 2% on the initial $5,000 + 1.5% on the $5,048.45 = $175.73. However, I would still need to liquidate and/or pay bills/expenses with these cards, so I would go to Walmart and purchase 10 VISA gift cards that are able to be loaded onto a Bluebird account (if I'm not mistaken, you can't load AMEX gift cards onto BB). The fees for these cards would be another $3.95/card, or $39.50 total. These fees, plus the fees listed above ($48.45) come to a grand total of $87.95. Quick math suggests that I would profit the $175.73-$87.95 = 87.78/month.
I plan on actually using the BB account to pay rent ($400/month) and my student loan payments of ~$2,400/month. So some of the spending is manufactured but some of it is real. Is this scenario optimized and/or a real possibility? If so, I'd be looking at over $1K/year for not that much extra work.
Thoughts?
You should look into Evolve money, which is set up to do bill pay from things like Visa gift cards. If nothing else, that would save you a trip to Wal-Mart.
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You're not ready to get into this game.
For one thing, the fees are higher than $3.95 for gift cards, and ultimately you have too many steps in liquidating the funds to get a meaningful profit.
Any constructive criticism or suggestions on how the poster could improve their strategy?
Sure thing. Start by acquiring a credit card that gives you 5% back on groceries and drug stores, then go here: http://www.flyertalk.com/forum/manufactured-spending-719/
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You're not ready to get into this game.
For one thing, the fees are higher than $3.95 for gift cards, and ultimately you have too many steps in liquidating the funds to get a meaningful profit.
Any constructive criticism or suggestions on how the poster could improve their strategy?
Yes.. but first, keep in mind CVS no longer accepts Credit Cards for Vanilla Reload cards. You'll need to buy another Visa or MC gift card for $5 to $7, load it with $500, purchase it with the credit card you're earning miles on, go to Walmart, and use their Money Center to transfer the Gift Card to a Bluebird account.
A 2% cashback isn't gonna make this strategy worth your time. Sign up for new credit cards that offer, say, 30,000 to 50,000 miles or points for spending around $1000 to $5000 (depending on the card) in the first few months. Then buy gift cards with them and transfer the gift cards to Bluebird as described above. Then you can use Bluebird to pay your bills that can only be paid using a check (i.e. Rent, Mortgage, Car Payment, etc.)