How to spend a bunch of money on my credit card to earn rewards?

November 1, 2014 1:08 PM

I got my first rewards credit card. To get the bonus, I only have to spend $2,000 in three months, which seemed easy because my rent is $1400/month and I pay $800/month in other bills. Wrong. The problem is, I thought I'd be able to pay off rent and student loans with a credit card, but now I realize I can't. With loans, that option doesn't exist - you have to use a checking account. I can pay rent with a credit card, but there's a $70 service charge, which chips away at freeness of my free flights.

What can I pay off with a credit card to earn my points? Beside rent and student loans, I have my car lease (Toyota), car insurance, cell phone (Virgin Mobile), internet (Comcast) and utilities (which are low). I guess I can use it for all my food and gas and any other shopping I do for the next three months, but that alone I'm not sure whether that will get me to $2,000. Any other ideas?

Would it be possible to purchase something a little expensive from say Walmart and return it for cash? Or will retailers only give me credit back? Like I could buy an iPod, never open it and return it a day later. Any other ideas?

I just want to get to $2,000, pay off the entire balance immediately and then never use the credit card again (and maybe even cancel it once I use my flights). If I don't get to $2,000, I won't get the bonus airline points which will make the whole thing end up costing me money. Help me get there!

posted by AppleTurnover to Work & Money (24 answers total)

Best answer: You could buy a bunch of gift cards for your local grocery store, and then just use those to purchase groceries for the next several months. Or buy a bunch of gift cards to give at Christmas. Basically GIFT CARDS GIFT CARDS GIFT CARDS.
posted by jabes at 1:18 PM on November 1, 2014 [8 favorites]

You can usually pay cell phone, internet, and utilities with a card, as well as groceries, gas, etc. You might be able to pay your car insurance with a card. Add 3 months' worth of that stuff up. How much more do you need to spend? Do you have a list of holiday gifts you were planning to buy? Do you need new glasses/contacts? Can you stock up on bulk household and kitchen items you always use?

And then get lots of gift cards for the rest, like jabes said.
posted by bedhead at 1:22 PM on November 1, 2014

Do you have any friends who want a new $THING that they could give you cash for, but that you pay for with your card?
posted by Solomon at 1:25 PM on November 1, 2014 [2 favorites]

Like I could buy an iPod, never open it and return it a day later.

Unfortunately, I don't think this will work. I believe most credit card companies calculate the rewards after each billing cycle.

I agree with the above suggestions on gas/groceries gift cards - however, you might want to sit on any purchasing decisions until Black Friday comes around. Who knows what the stores will be offering- maybe even discounts for bulk-purchasing of gift cards.
posted by invisible ink at 1:36 PM on November 1, 2014

Find out if you can get checks from them. I used to use checks to transfer balances from one credit card to another when one of them offered me, say, zero percent interest for a six month period. If you can get checks from them to do a balance transfer, I think you should also be able to pay the rent or whatever with the checks without some mega fee attached.

I never got more than a few checks from them at a time (like 3 or something), but I do recall sending one to my real estate agent at some point for some reason. I think I might have needed repairs on the house or something. I don't recall exactly. But I do recall using these checks for more than just balance transfers from other credit cards -- in other words, using them like checks from a checking account.
posted by Michele in California at 1:46 PM on November 1, 2014

I was also going to say get checks - my Citibank card has sent me checks, which I can use to pay rent.
posted by miles1972 at 1:51 PM on November 1, 2014 [1 favorite]

Response by poster: Gift cards is a brilliant idea. This is the exact offer and here the explanation of pricing and terms. I am waiting to get the card in the mail, but I don't see anything here limiting what can be applied toward my credit card total.

invisible ink, I think you misunderstood. I was implying I could buy an iPod on my credit card and return it for cash. So it wouldn't come off my credit card when I returned it. The credit card balance would remain and I'd get cash back. I just don't know if they'd give me cash or if I'd have to be credited on the card.

I am taking a trip soon. I could offer to put everything on my card and have people pay me back. I do worry I won't actually get all the money back because of how these things tend to go when you travel with a large group of people.

This card does have a $99 annual fee, so it definitely behooves me to earn these two free round-trip flights.

Thanks for all the responses!
posted by AppleTurnover at 1:52 PM on November 1, 2014

Have you considered upgrading your personal/professional wardrobe? You could get a nice, lower-high end suit for that $2k, or several nice, high-midrange ones (assuming of course that you're a fella, and you need such items). Likewise, for that kind of cash you could replace several pairs of standard, cheap-ish department store dress shoes with higher-end, well-made, repairable models.

I don't know much about lady-clothes (assuming you're not a fella), but I do know that there's a steeper grade, gender-wise, in pricing between fast-fashion stuff and things made to higher specs. Perhaps you could replace all those thin, acrylic-y sweaters with substantial ones that will last for years and actually keep you warm? ;-)

Clothes are best seen as an investment, whether in terms of personal enjoyment or public appearance, so at least you'd have some long-term return on your spend-money-to-make-money scheme.
posted by credible hulk at 1:53 PM on November 1, 2014

If you buy gift cards, make sure you read the fine print on them very carefully. Some of them have unusual restrictions.

In the past, I have found Amazon gift cards to be remarkably flexible.
posted by doctor tough love at 2:09 PM on November 1, 2014

You can't return credit card purchases for cash. Usually they will credit it back to your card or give you store credit, but never cash. It protects everyone from credit card fraud, and protects the credit card companies from what you're trying to do.
posted by erst at 2:09 PM on November 1, 2014 [13 favorites]

Sign up for an Amex Bluebird or Serve account - its a prepaid debit card you can load from credit cards and pay bills with. Even if you can't pay rent/loans through it, you can load up a couple thousand dollars now to get the credit card spending and then pay all your other bills out of it for six months.(research this first - some banks treat this as a cash advance and not a purchase, which won't help).
posted by the agents of KAOS at 2:11 PM on November 1, 2014 [1 favorite]

It's really not hard to spend $2K in 3 months unless you are very frugal. $100 per week on groceries is $1200 over the course of 12 weeks. Gas, electric, and cell phone is maybe another $100 per month on the very low end, which is $300 over the course of 3 months. That leaves about $500. In my world, that's one car repair, or one emergency vet visit, or some other unexpected thing that always seems to come up.

Just use your card for everything, pay your bill in full when you get it, and if you're not already 2/3 of the way there after 2 months, THEN start worrying about how you'll hit the spending requirement.
posted by rabbitrabbit at 2:15 PM on November 1, 2014 [5 favorites]

Not your question, but: you should double check how many flights you'll get with that initial signup bonus. Most credit cards that offer airline miles will only let you use those miles to buy a full flight, not to partially offset the cost of a flight that "costs" more miles than you have. I mention this because it may undercut your plan to get the free flights and then never use the card again. Does that make sense?
posted by tapir-whorf at 2:15 PM on November 1, 2014 [2 favorites]

you can pay comcast via your credit card, and probably your cell phone.

I'd ask friends if you could pay for something they were planning to buy in exchange for cash/checks. With Christmas coming up, it shouldn't be too hard.

You can also pre-pay, so you could spend as much as you want. You could probably pay a whole year's worth of Comcast payments and get close to the amount you need to get your bonus. Of course, then you'd be on the hook for the interest for however long before you pay it off. Just another reason to be super careful about "gifts" from credit card companies.
posted by skewed at 2:18 PM on November 1, 2014

Best answer: The term you want is "manufactured spend" (abbreviated MS). Check out reddit.com/r/churning for people who breathe ways to do this.
posted by Nonsteroidal Anti-Inflammatory Drug at 2:21 PM on November 1, 2014 [13 favorites]

Do cash advances count toward the required spend? You could get cash advances for rent and loan payments. Interest on cash advances is high, so I'd pay it back immediately. I pay for everything with credit cards: bills, groceries, incidentals, etc. then, I pay the credit card balance down to zero as soon as I get paid. It's pretty easy to get a high balance of points that way.

Make sure you understand all the fine print regarding the free flights. There tend to be lots of technicalities.
posted by quince at 2:38 PM on November 1, 2014 [1 favorite]

In addition to Nonsteroidal Anti-Inflammatory Drug's mention of a subreddit for manufactured spending, here's another link:

http://www.flyertalk.com/forum/manufactured-spending-719/

There are people who churn through thousands of dollars each month for MS.
posted by Brian Puccio at 2:43 PM on November 1, 2014 [2 favorites]

Response by poster: Really great ideas so far. Thanks so much everyone. More ideas are definitely welcome! I'm not sure I have the time or desire to do a ton of "manufactured spending," but that's definitely helpful to know that's what I want to do at a low-level. (I wish the U.S. Mint still let us buy $1 coins for an even exchange, haha.)

tapir-whorf, to your question, Southwest does require that you either spend points or money for flights -- you cannot mix. But I have booked one-way with cash and one-way with points before to combine them. Also, points don't expire and Southwest is really the only airline I fly, so I'm not worried -- I'll eventually use 50,000 points. In fact, I recently took a trip for free purely on points I had earned over the past couple years.

doctor tough love, point taken. I do think gift cards have become a better deal since the Consumer Financial Protection Bureau got rid of those bullshit hidden maintenance fees that makes the value of the cards dwindle over time. But yes, some will have fees built in. I'd have to find gift cards that a) I will use and will be as valuable as cash to me. b) Won't have fees and costs that devalue them. I am new this so I'll have to do a bit of research.

Thank you again and more ideas certainly welcome!
posted by AppleTurnover at 3:21 PM on November 1, 2014

Best answer: I had to do this earlier this year. For a one-time situation like this, I'd recommend gift cards that you know you'll use instead of complicated, semi-risky manufactured spending. I bought grocery gift cards, Amazon, Target, and clothes from places where I shop a lot (and if I needed to return any of them, I opted for store credit). I thought about getting a $1000 gift card to Apple since I was planning to buy a new laptop soon, but ended up not needing to.

Plus, three months-- that's Christmas, and after-Christmas sales.
posted by acidic at 3:26 PM on November 1, 2014

AppleTurnover: " I was implying I could buy an iPod on my credit card and return it for cash. So it wouldn't come off my credit card when I returned it. The credit card balance would remain and I'd get cash back. "

People launder money and stolen goods this way. So no, mostly not.
posted by Eyebrows McGee at 3:41 PM on November 1, 2014

Best answer: Be careful with American Express Serve. You want to make sure your load doesn't count as "cash advance".

Also, think ahead. Do you pay your car insurance monthly? Do you know if you will stick with them for 6 months? Pay 6 months in ahead. Most insurance companies allow paying multiple months in advance (and it might be a little cheaper for you too!)


You could buy something in Walmart and return it and ask them for store credit instead of credit refund. I have done that a couple of times. (Assuming of course you actually buy stuff in Walmart !!! .. Otherwise the Walmart gift card becomes a waste). The reason I suggest this is because with gift cards there are usually small fees for loading, or at least buying the first time. With refund store credit, you don't lose anything
posted by the_hard_truth at 3:51 PM on November 1, 2014 [1 favorite]

Re gift cards and fine print: it's more than just hidden fees. I've seen them have restrictions such that they could not be used to pay for subscriptions. Or for anything from a seller outside of the US.
posted by doctor tough love at 3:57 PM on November 1, 2014

Be careful here - you are not the first person to try this...if you think you have found a magic method of converting credit into cash you are probably mistaken.

Things like gift cards are commonly excluded or require a transaction fee to purchase.

Things like checks can often draw on your credit in 'fine print' based manners (i.e. as a cash advance which may in fact get different treatment with respect to grace periods and interest rates)

When a loop hole opens up they don't last long - you could actually buy quarters from the US mint a few years back with credit cards and only lose the shipping...this was shut down pretty quickly and/or people who tried to take advantage of the situation found their accounts frozen...
posted by NoDef at 5:23 PM on November 1, 2014 [1 favorite]

Most of the checks you get from your credit card company come with a fee if you use them, even for balance transfers. It's 4 percent for the ones I get.
posted by soelo at 8:48 AM on November 3, 2014