Time Shifting Spend versus Manufacturing Spend

On Flyertalk.com, sk8uno posted a great explanation on time shifted spend and manufactured spend.

A good distinction to learn early on in this game is that of time-shifting spend vs. manufacturing spend. Time-shifting spend just allows you to move your future spend up to the present. This doesn’t increase your overall spend, it just moves your future spend up to the present. Manufacturing spend increases the amount you “spend” by cycling money through one of a variety of methods. This allows you to “spend” more than you would normally, without actually spending money (except for transaction fees).

Not realizing this, I fell into the category manufacturing spend in the last 2 months. I was hooked into it after reading The Frequent Miler’s “Gift cards: buy low, sell high, get cash back”

The best and easiest way to manufacture spend is to use your credit card with the highest bonus category and spend money there. It is especially helpful to have the Chase Ink cards where you receive 5x the amount of points per purchase.

For instance, you would have to find an Office Depot that stocks a $500 Vanilla prepaid card with a $4.95 activation fee. Purchasing said gift card and using it as a cash equivalent for future purchases is “time shifting spend.” Add in the twist of using the Vanilla prepaid card to buying store specific gift cards and reselling is “manufacturing spend.”

A quick way to manufacture spend with said Vanilla prepaid card is to go to Walmart or Target and buy their gift cards and sell on Cardpool.com or PlasticJungle.com as you would receive 92% of the value of the card.

Spend $504.95 and receive 2525 UR points for Office Depot purchase [(500+4.95)*5]. Receive $460 for selling the gift cards. Cost $44.95. Cost to manufacture spend: .018 cents per point