This is a guest post from one of our members in the whatcard.sg community who requested to remain anonymous
Last year, I came across this concept in the miles hacking community called manufactured spending. Simply put, manufactured spending is the process of purchasing any item of value with a rewards credit card and then converting the item back into cash which can then be used to pay off the bill on the credit card. An example would be buying a $100 dollars iTunes gift card with an air miles credit card that awards 1.2 miles per dollar spent and then selling off the gift card on Carousell for $100. The net outcome of here is that we end up with 120 miles without actually having to fork out a single cent. As the savvy reader might have noticed, it is probably hard to sell off an iTunes gift card at face value and the rewards do not justify the efforts to do so.
Once in a while, a window of opportunity opens where we’re able to manufacture spend large amounts easily. That window of opportunity presented itself in June 2018 when I noticed that Oanda, an FX trading platform listed that credit card fees are waived when funding one’s trading account via Paypal. Funding an Oanda account via Paypal is immediate and withdrawal of the funds from Oanda to the same Paypal account takes one working day. From Paypal, funds can be withdrawn to a local bank account in one working day as well. Having discovered the opportunity, it was a matter of trying out all my miles cards to see out which card awarded miles for Paypal transactions. That card turned out to be my Citibank Premier Miles card.
Over 3 weeks, I was able to manufacture spend a total of $60,000 and was awarded 72,000 miles from making that spend. However, the game ended for me when Oanda’s customer service officer gave me a friendly call one day asking me for a reason why I was funding my account and withdrawing from it without making any trades. Shortly after the call, I received an email stating that my Oanda account has been terminated.
While the above mentioned method is no longer viable after Citibank made changes to its terms and conditions, the knowledge about how I was able manufactured spend such a large amount should help you in spotting opportunities that may appear in the future.
Message from the Team behind https://whatcard.sg
Manufactured spending opportunities are quite rare in our opinion and should not be relied on as the core strategy to accumulate miles. Instead, we recommend our fellow readers to always aim to achieve the maximum rewards from their daily spend which is a much more dependable strategy for accumulating miles. To help our readers with this, we’ve built https://whatcard.sg which allows you to easily search for the best credit cards to use before making a spend.
If you enjoyed this article, you may also be interested in:
- Best Cashback Card for One-Off & Lump Sum Spending (Updated July 2019)
- 7 Questions with WhatCard co-founder Glenn Toh (SingSaver interview)
- Best Credit Card Strategy to Save More on Grab (July 19)
- How I Got 72,000 Krisflyer Miles (worth $1,440) for Free
- Why I would suggest mile chasers to think twice about applying for the BOC Miles Card
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