topic Re: Manufactured Spending in Credit Cards

Manufactured Spending

JSS3 — Fri, 12 Sep 2014 11:58:08 GMT

Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?

Re: Manufactured Spending

juggalo9er — Fri, 12 Sep 2014 12:16:29 GMT

@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?

both!

Re: Manufactured Spending

nmac — Fri, 12 Sep 2014 12:58:17 GMT

@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?

I would argue that there are many instances where buying a gift card with a credit card is not manufactured spending and that there are a variety of was to manufacture spending to meet a minimum spending requirement that don't involve purchasing gift cards. I don't feel that you can use either of those criteria to pin down the definition of manufactured spending.

I personally only consider purchases that are eventually turned back into cash or cash equivalences and used to pay the card bill to be manufactured spending. For example I would say that using serve to make a car, rent or mortgage payment wouldn't be manufactured spending. Where as using serve to pay off the credit card used to load the serve account would be manufactured spending. I don't consider buying a amazon gift card at a grocery store and using it to buy stuff to be manufactured spending. While buying a gift card and selling it for cash would be manufactured spending.

To me manufactured spending has nothing to do with whether or not your trying to meet a minimum spend requirement, it has to do with the nature of the actually spending. I only consider purchases that are circular in nature meaning that the value of the purchase is eventually used to pay off the card as manufactured spending. That being said the term is not concrete in nature like APR or grace period. Rather it is in the same group of terms that are up for debate like "thick file" or "prime card." Other forum members (or for that mater banks) may have more or less restrictive definition of manufactured spending then me.

Re: Manufactured Spending

Anonymous — Fri, 12 Sep 2014 13:20:39 GMT

@nmac wrote:
@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?
I would argue that there are many instances where buying a gift card with a credit card is not manufactured spending and that there are a variety of was to manufacture spending to meet a minimum spending requirement that don't involve purchasing gift cards. I don't feel that you can use either of those criteria to pin down the definition of manufactured spending.

I personally only consider purchases that are eventually turned back into cash or cash equivalences and used to pay the card bill to be manufactured spending. For example I would say that using serve to make a car, rent or mortgage payment wouldn't be manufactured spending. Where as using serve to pay off the credit card used to load the serve account would be manufactured spending. I don't consider buying a amazon gift card at a grocery store and using it to buy stuff to be manufactured spending. While buying a gift card and selling it for cash would be manufactured spending.

To me manufactured spending has nothing to do with whether or not your trying to meet a minimum spend requirement, it has to do with the nature of the actually spending. I only consider purchases that are circular in nature meaning that the value of the purchase is eventually used to pay off the card as manufactured spending. That being said the term is not concrete in nature like APR or grace period. Rather it is in the same group of terms that are up for debate like "thick file" or "prime card." Other forum members (or for that mater banks) may have more or less restrictive definition of manufactured spending then me.

I agrree that the term is loosely defined. For those that do MS, a key criterion is the circularity, so that it is (in theory) repeatable indefinitely.

Of course though, it is the issuer's view that matters, and that is where "intention" is ignored. If you buy a gift card, it could be a real gift, a way of meeting minimum spend, or the start of an MS cycle. It's easier for the issuer, especially if it happens a few times, to assume that it is MS, and any argument about whether it is "real" MS doesn't matter!

Re: Manufactured Spending

JSS3 — Fri, 12 Sep 2014 14:03:58 GMT

@nmac wrote:
@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?
I would argue that there are many instances where buying a gift card with a credit card is not manufactured spending and that there are a variety of was to manufacture spending to meet a minimum spending requirement that don't involve purchasing gift cards. I don't feel that you can use either of those criteria to pin down the definition of manufactured spending.

I personally only consider purchases that are eventually turned back into cash or cash equivalences and used to pay the card bill to be manufactured spending. For example I would say that using serve to make a car, rent or mortgage payment wouldn't be manufactured spending. Where as using serve to pay off the credit card used to load the serve account would be manufactured spending. I don't consider buying a amazon gift card at a grocery store and using it to buy stuff to be manufactured spending. While buying a gift card and selling it for cash would be manufactured spending.

To me manufactured spending has nothing to do with whether or not your trying to meet a minimum spend requirement, it has to do with the nature of the actually spending. I only consider purchases that are circular in nature meaning that the value of the purchase is eventually used to pay off the card as manufactured spending. That being said the term is not concrete in nature like APR or grace period. Rather it is in the same group of terms that are up for debate like "thick file" or "prime card." Other forum members (or for that mater banks) may have more or less restrictive definition of manufactured spending then me.

Great breakdown! I agree with this and understand the concept much better.

Re: Manufactured Spending

Closingracer99 — Fri, 12 Sep 2014 15:19:36 GMT

@juggalo9er wrote:
@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?
both!

Not Really "Both" ..... MS is when your trying to spend to make a bonus like Spend $3,000 in 3 months and get 40,000 UR points with the Chase Sapphire PReferred card

Re: Manufactured Spending

Anonymous — Fri, 12 Sep 2014 15:20:31 GMT

I'm sorry, but what is manufactured spending??

Re: Manufactured Spending

Closingracer99 — Fri, 12 Sep 2014 15:23:03 GMT

@Anonymous wrote:
@nmac wrote:
@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?
I would argue that there are many instances where buying a gift card with a credit card is not manufactured spending and that there are a variety of was to manufacture spending to meet a minimum spending requirement that don't involve purchasing gift cards. I don't feel that you can use either of those criteria to pin down the definition of manufactured spending.

I personally only consider purchases that are eventually turned back into cash or cash equivalences and used to pay the card bill to be manufactured spending. For example I would say that using serve to make a car, rent or mortgage payment wouldn't be manufactured spending. Where as using serve to pay off the credit card used to load the serve account would be manufactured spending. I don't consider buying a amazon gift card at a grocery store and using it to buy stuff to be manufactured spending. While buying a gift card and selling it for cash would be manufactured spending.

To me manufactured spending has nothing to do with whether or not your trying to meet a minimum spend requirement, it has to do with the nature of the actually spending. I only consider purchases that are circular in nature meaning that the value of the purchase is eventually used to pay off the card as manufactured spending. That being said the term is not concrete in nature like APR or grace period. Rather it is in the same group of terms that are up for debate like "thick file" or "prime card." Other forum members (or for that mater banks) may have more or less restrictive definition of manufactured spending then me.
I agrree that the term is loosely defined. For those that do MS, a key criterion is the circularity, so that it is (in theory) repeatable indefinitely.

Of course though, it is the issuer's view that matters, and that is where "intention" is ignored. If you buy a gift card, it could be a real gift, a way of meeting minimum spend, or the start of an MS cycle. It's easier for the issuer, especially if it happens a few times, to assume that it is MS, and any argument about whether it is "real" MS doesn't matter!

Yes

Buying Gift cards isn't MS unless you are doing it to meet a spending requirement or to make points which is usually a bigger amount or a monthly amount around the same time

I usually buy $0.50 Amazon Gift cards on my SD cards to keep them active and cards around $100 to give to friends and family for their birthday or etc

Re: Manufactured Spending

JSS3 — Fri, 12 Sep 2014 15:23:46 GMT

@Closingracer99 wrote:
@juggalo9er wrote:
@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?
both!
Not Really "Both" ..... MS is when your trying to spend to make a bonus like Spend $3,000 in 3 months and get 40,000 UR points with the Chase Sapphire PReferred card

I thought so initially, but it seems to come down to interpretation and craftiness.

Re: Manufactured Spending

Closingracer99 — Fri, 12 Sep 2014 15:26:25 GMT

@JSS3 wrote:
@Closingracer99 wrote:
@juggalo9er wrote:
@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?
both!
Not Really "Both" ..... MS is when your trying to spend to make a bonus like Spend $3,000 in 3 months and get 40,000 UR points with the Chase Sapphire PReferred card
I thought so initially, but it seems to come down to interpretation and craftiness.

I buy gift cards to give to friends and no way does that money reach my account to pay off buying said Gift cards. I send them to Friends or ETC for birthday or etc and why spend it in Cash when i can get points and float the money for a bit

Re: Manufactured Spending

JSS3 — Fri, 12 Sep 2014 15:29:28 GMT

@Closingracer99 wrote:
@JSS3 wrote:
@Closingracer99 wrote:
@juggalo9er wrote:
@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?
both!
Not Really "Both" ..... MS is when your trying to spend to make a bonus like Spend $3,000 in 3 months and get 40,000 UR points with the Chase Sapphire PReferred card
I thought so initially, but it seems to come down to interpretation and craftiness.
I buy gift cards to give to friends and no way does that money reach my account to pay off buying said Gift cards. I send them to Friends or ETC for birthday or etc and why spend it in Cash when i can get points and float the money for a bit

This is another good point. I guess the keyword then is circular spending. Buying something on a card to get points then pay back that card with what you've bought.

Re: Manufactured Spending

Closingracer99 — Fri, 12 Sep 2014 15:32:32 GMT

@JSS3 wrote:
@Closingracer99 wrote:
@JSS3 wrote:
@Closingracer99 wrote:
@juggalo9er wrote:
@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?
both!
Not Really "Both" ..... MS is when your trying to spend to make a bonus like Spend $3,000 in 3 months and get 40,000 UR points with the Chase Sapphire PReferred card
I thought so initially, but it seems to come down to interpretation and craftiness.
I buy gift cards to give to friends and no way does that money reach my account to pay off buying said Gift cards. I send them to Friends or ETC for birthday or etc and why spend it in Cash when i can get points and float the money for a bit
This is another good point. I guess the keyword then is circular spending. Buying something on a card to get points then pay back that card with what you've bought.

Yeah I buy usually $0.50 amazon Gift cards to keep my cards active, send to friends and family and the one time I had an issue was buying a $300 dollar Amazon gift Card at Rite Aid ( IDK are those national but it's like CVS) and Discover blocked it for possible Fraud and went through fine after calling them. Bought a $300 gift card because i was buying a Xbox one and it as $500 and only had a $750 CL so i decided to get the gift card a few months before the system was released and put it toward it

Re: Manufactured Spending

JSS3 — Fri, 12 Sep 2014 15:48:28 GMT

@Closingracer99 wrote:
@JSS3 wrote:
@Closingracer99 wrote:
@JSS3 wrote:
@Closingracer99 wrote:
@juggalo9er wrote:
@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?
both!
Not Really "Both" ..... MS is when your trying to spend to make a bonus like Spend $3,000 in 3 months and get 40,000 UR points with the Chase Sapphire PReferred card
I thought so initially, but it seems to come down to interpretation and craftiness.
I buy gift cards to give to friends and no way does that money reach my account to pay off buying said Gift cards. I send them to Friends or ETC for birthday or etc and why spend it in Cash when i can get points and float the money for a bit
This is another good point. I guess the keyword then is circular spending. Buying something on a card to get points then pay back that card with what you've bought.
Yeah I buy usually $0.50 amazon Gift cards to keep my cards active, send to friends and family and the one time I had an issue was buying a $300 dollar Amazon gift Card at Rite Aid ( IDK are those national but it's like CVS) and Discover blocked it for possible Fraud and went through fine after calling them. Bought a $300 gift card because i was buying a Xbox one and it as $500 and only had a $750 CL so i decided to get the gift card a few months before the system was released and put it toward it

For Discover to have initially blocked it, it comes across as not "normal" spending when one purchases hundreds in gift cards...even if it's allowed. Good data point.

Re: Manufactured Spending

Anonymous — Fri, 12 Sep 2014 15:56:59 GMT

@JSS3 wrote:
@Closingracer99 wrote:
@JSS3 wrote:
@Closingracer99 wrote:
@juggalo9er wrote:
@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?
both!
Not Really "Both" ..... MS is when your trying to spend to make a bonus like Spend $3,000 in 3 months and get 40,000 UR points with the Chase Sapphire PReferred card
I thought so initially, but it seems to come down to interpretation and craftiness.
I buy gift cards to give to friends and no way does that money reach my account to pay off buying said Gift cards. I send them to Friends or ETC for birthday or etc and why spend it in Cash when i can get points and float the money for a bit
This is another good point. I guess the keyword then is circular spending. Buying something on a card to get points then pay back that card with what you've bought.

Again, it depends on who is caring! If I want to start out and "do" MS, then repeatability is key, so I need to pay off the card(s) used with the proceeds. But an issuer doesn't know (or care) about intention, it just sees the purchase of some (near) cash-equivalents, and MAY choose to shut you down. It's obviously more likely if you are indeed repeating this, but that can be buying gift cards for friends fairly frequently or buying gift cards regularly for real MS. So even near a holiday, buying say 10 $50 cards could still attract attention, even if it is really innocent.

The key thing is that many T&Cs exclude purchases of cash-equivalents (sometimes spelt out to include gift and reload cards) from getting rewards. The problem is that we just make the purchase, and have no control whether the CCC gives rewards or not, so it's not really OUR issue, but the CCCs choose to make it that. And, in clampdown mode, buying these things can trigger AA. And no explanations will help.

Note this applies only to true cash equivalents, buying retail gift cards such as Amazon really shouldn't cause grief (partly because they can't be used to pay off the credit card)

TL;DR Definition is really unimportant, what counts is what the issuer thinks, and any buying of a V/MC/Amex card COULD be considered grounds for AA, even though it is not prohibited in the T&Cs (just like high util isn't!)

Re: Manufactured Spending

heyitsyeh — Fri, 12 Sep 2014 16:40:47 GMT

Like many posters have stated, my definition of MS is simply buying items that can be cashed out or have the essential versatility of cash (money you were going to spend anyway eventually on something) in a larger quantity than your normal spending pattern, usually for one of these reasons:

1. Get some sort of reward (signup bonus, spending threshold bonus)

2. Generate usage/traffic in a card which looks good for reporting purposes (up to a certain extent of course).

Items noted would be MoneyPak, PayPal gift cards, any payment network Gift cards, etc.

Re: Manufactured Spending

yfan — Fri, 12 Sep 2014 16:36:41 GMT

I would differentiate between putting money into Serve and buying an Amazon gift card. What you put into Serve becomes a cash equivalent. Meaning that you can do anything with it that you can do with cash. Buying a gift card for a particular store is not cash equivalent, because you cannot use that card outside of that store. That's the key difference between buying say a Visa gift card and a Starbucks one.

Re: Manufactured Spending

juggalo9er — Fri, 12 Sep 2014 17:39:09 GMT

@Closingracer99 wrote:
@juggalo9er wrote:
@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?
both!
Not Really "Both" ..... MS is when your trying to spend to make a bonus like Spend $3,000 in 3 months and get 40,000 UR points with the Chase Sapphire PReferred card

yes both, if i buy gift cards with my upromise card just for the cash back thats ms

Re: Manufactured Spending

Ghoshida — Fri, 12 Sep 2014 17:44:15 GMT

@JSS3 wrote:
@Closingracer99 wrote:
@JSS3 wrote:
@Closingracer99 wrote:
@JSS3 wrote:
@Closingracer99 wrote:
@juggalo9er wrote:
@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?
both!
Not Really "Both" ..... MS is when your trying to spend to make a bonus like Spend $3,000 in 3 months and get 40,000 UR points with the Chase Sapphire PReferred card
I thought so initially, but it seems to come down to interpretation and craftiness.
I buy gift cards to give to friends and no way does that money reach my account to pay off buying said Gift cards. I send them to Friends or ETC for birthday or etc and why spend it in Cash when i can get points and float the money for a bit
This is another good point. I guess the keyword then is circular spending. Buying something on a card to get points then pay back that card with what you've bought.
Yeah I buy usually $0.50 amazon Gift cards to keep my cards active, send to friends and family and the one time I had an issue was buying a $300 dollar Amazon gift Card at Rite Aid ( IDK are those national but it's like CVS) and Discover blocked it for possible Fraud and went through fine after calling them. Bought a $300 gift card because i was buying a Xbox one and it as $500 and only had a $750 CL so i decided to get the gift card a few months before the system was released and put it toward it
For Discover to have initially blocked it, it comes across as not "normal" spending when one purchases hundreds in gift cards...even if it's allowed. Good data point.

Discover blocks transactions that seem to be odd: and it seems like transactions involving cash or cash-like instruments are sometimes blocked. For me, the first time Discover blocked a transaction with fraud alert was when I used the Cash Over facility for the first time at my neighborhood Randall's store. I have never had problems with Cash Over ever since.

I don't know if Discover takes AA for Cash Over.

Re: Manufactured Spending

Anonymous — Fri, 12 Sep 2014 17:48:05 GMT

@juggalo9er wrote:
@Closingracer99 wrote:
@juggalo9er wrote:
@JSS3 wrote:
Is simply buying gift cards on your credit card considered ms OR is doing so WHEN trying to meet a bonus spend after first receiving a card the MS?
both!
Not Really "Both" ..... MS is when your trying to spend to make a bonus like Spend $3,000 in 3 months and get 40,000 UR points with the Chase Sapphire PReferred card
yes both, if i buy gift cards with my upromise card just for the cash back thats ms

+1. As I said earlier, to "do" MS on a regular basis, it needs to be repeatable, but at its heart, the question is

"Does this purchase serve any real purpose beyond just getting rewards?" (i.e. if I didn't have any rewards cards, would I have still bought this). Again, the issuers don't care about this, it's the purchase that matters, but this can act as a guide!

So, I regularly buy $2,500 in gift cards at a local supermarket, and pay $2,529,75 I use them myself (so they are not gifts) and clearly there is no good non-MS reason for me to incur the extra $5.95 per $500 charge.

Re: Manufactured Spending

Anonymous — Sun, 28 Sep 2014 16:32:44 GMT

If yu go into say Vons/Safeway and buy a gift card. Can the credit card companys see what your buying? If you just buy say strait $500 then it may look like a ift card. But what if you buy a coke or somthing with it. Would they still beable totell if its a GC? I just spent $500 on my PRG card at CVS to buy a GC for my friends wedding next weekend. How does Amex treat this? I had never heard of MS at the time.