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Are you interested in flying business class virtually free? How about staying in 5 star hotels for almost nothing? If so, this beginner’s guide to manufactured spending is for you!
Where do you want to fly? Where do you want to stay when you are there? What time of year do you want to fly there? Those are just a few of the questions you need to ask yourself. You can sign up for multiple credit cards and accumulate millions of points for different airlines and hotels, but not all of them allow you to go where you want to go. That is why it is very important to have a goal when it comes to manufactured spending.
As I mentioned above, you do not want to accumulate millions of points and never spend them. Airlines and hotels are known for devaluing points over time. The longer you wait to spend your points, the more likely they are to be worth less. Also, award tickets get snatched up quickly. So, when you have the points, make sure to use them months before your trip. That way you lock in your trip and do not have to worry about those points devaluing.
Organization is key in this game. You will be handling thousands of dollars a month. If you don’t stay organized and lose a vanilla reload card, it will be a very bad day. This is a worst-case-scenario, but if the IRS decides to audit you and they see large amounts of money orders, it is a very good idea to have your receipts handy. That way you can prove that they were authentic purchases. You also do not want to miss annual fee dates, payment dates, miss out on the sign-on bonus, ect. It is just all around very important to stay organized. A great way to stay organized is through Award Wallet.
It’s important to make sure you are maximizing your credit card rewards. By this I mean use the card that gets the highest percentage at the store you are in. For example, when I buy groceries I use my American Express Blue Cash Preferred which gets 6% cash back. Whenever I buy office supplies, I use my Chase Ink Bold since I get 5X Ultimate Rewards points per dollar. A great app to use is Wallaby. Wallaby tells you which of your cards gives the best rewards at a given store. Also, make sure to use portals as often as possible!
If you are like more people, you use many forms of payment including checks, cash, credit cards, and debit cards. This is normally fine, however in the world of manufactured spending, it is important to use your credit cards for EVERYTHING. That way even if you only get 1% back, it’s still better than no percent back.
This is very important. Sign-on bonuses tend to be the most lucrative part about signing up for a credit card. All sign-on bonuses have a requirement, before they will give you the bonus. They could be as simple as making a single transactions, or they could require you to spend $10,000 in 6 months. Make sure to pay attention to the requirement and make sure to hit it.
Your credit score is the deciding factor when it comes to credit cards. You want to make sure to watch it, to make sure it is healthy when you plan on signing up for cards. The best way to do this is by using Credit Karma and Credit Sesame. Those are two great services that are completely free! You can find more information about Credit Karma and Credit Sesame here.
There is not an “overdoing it” threshold, but you need to draw the line somewhere. The best advice I can give, is don’t go over your head, only do what you feel comfortable with. If you only want to max out Bluebird monthly, or you want to do 20k+ of manufactured spending, it’s up to you. Just make sure you know your limits and can handle yourself if something goes wrong.
If you’ve made it this far, congratulations! You have used credit cards in a way that is not only legal, but rewards you with amazing traveling experiences! If this blog has helped you along the way, I would love to hear about your trip! Either contact me or comment.
I would say this is the more important steps in the beginner’s guide. If you are not having fun, you should not be manufactured spending. You will likely be putting in a lot of hours accumulating points and miles, which could easily wear you down if you don’t enjoy it. If you treat this as a hobby, it can be very fun, very profitable, and very exciting!