Beginner’s Guide to Manufactured Spending | Part 2 – Use a Top Rewards Earning Credit Card: The Best Options

| Updated: May 27, 2015
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Beginner’s Guide to Manufactured Spending Series Index

Part 1   |  Introduction to Manufactured Spend: What is it?

Part 2  |  Use a Top Rewards Earning Credit Card: The Best Options

Part 3  |  How to Purchase Visa Gift Cards and Money Orders

Part 4  |  Guide to American Express Gift Cards

Part 5  |  Guide to Using BlueBird and Serve

Part 6  |  Guide to Using Evolve Money

Which Credit Cards are the Best for Manufactured Spend

There are a couple ways of going about manufactured spend in terms of what the end goal is. The first thing that needs to be answered is what type of travel, and thus what type of rewards points you want to earn:

  1. Airline miles
  2. Hotel points
  3. Flexible points (Transfer to Airline + Hotels)
  4. Cash back

From here you can decide which credit card offers the highest rate of return and the most valuable travel redemptions for you. For simplicity sake, I will use one manufactured spend example using gift cards to compare each credit card within this post:

  • Value of gift card purchased: $500
  • Gift card fees: $4.95
  • Purchase location: Gas Station

Airline Miles

While airline branded credit cards do not offer bonus categories outside of the airline itself, it might still be worth it to explore manufactured spending with co-branded airline credit cards if:

  • It is the only card that the airline offers or earns their airline miles
  • The credit card has a mega sign-up bonus with large spend requirement

For instance, for several months now the Citi Executive / AAdvantage World Elite MasterCard has been offering a mega 100,000 mile bonus after spending $10,000 spend in 3 months. While, this isn’t a normal everyday spend for the average person, manufactured spending can easily make hitting the minimum spend on the offer manageable.

On the card all non American Airlines purchases earn 1 mile per dollar therefore, a single $500 visa gift card yields:

  • Miles Earned = 505
  • Net Cost = $4.95
  • Cost per Mile = $0.0098


This means that for $99 in gift card fees ($4.95 x 20) you can put $10k of manufactured spend on this Citi Exec AA card and earn 110,000 (100k bonus + 10k spend) American Airlines miles! It’s needless to say how tremendously value this is.

Taking a quick peek at the AA partner award chart, 75,000 miles gets you a round trip ticket to Oceania which includes Australia, New Zealand and French Polynesia. From the US, any of these destinations even during off-peak seasons will cost ~$1,400+.

Hotel Points

Hotel branded cards are more complex to analyze because the redemption rates and products among various hotel chains differ greatly. Also, not all chains have properties in the same regions, or even countries of the world. Therefore, the first factor to consider is what country or region you plan to visit. Secondly use a tool like Award Mapper to find which brands have a presence in the location of choice.IHG

I will look at three popular brands for this analysis: Starwood Preferred Guest, Club Carlson, and IHG.

Each of these Hotel brands also have their respective credit cards, SPG Preferred Guest by AMEX, Club Carlson Premier Visa and IHG Mastercard. Here is a quick look at the redemption ranges for all three brands.

HotelMin Points RequiredMax Points RequiredTop Category
SPG3,00035,000Category 7
Club Carlson9,00070,000Category 7
IHG10,00050,000Category 9

SPG only offers bonus category spending at their own properties, but IHG offers 2x points at gas stations and grocery stores, while Club Carlson offers 5x points on all purchases. Using the same assumption as before, let’s see which one comes out ahead when purchasing a $500 gift card from a gas station:


  • Points Earned = 505
  • Net Cost = $4.95
  • Cost per Point = $0.0098


  • Points Earned = 1,010
  • Net Cost = $4.95
  • Cost per Point = $0.0049

Club Carlson

  • Points Earned = 2,525
  • Net Cost = $4.95
  • Cost per Point = $0.0019

While it may seem that Club Carlson has blown away the competition, if you’re looking to book an upper-tier (category 6 or higher) resort in the Fiji Islands or Hawaii then Club Carlson may not be the hotel chain to go with. It has no properties to even offer you an award night in Hawaii!


In Fiji, Club Carlson only has one category 4 property. Meanwhile, IHG has no properties in Hawaii as well, but has three properties in Fiji (category 3, 4, and 5). On the other hand, SPG has eleven properties (range from categories 4 to 7) in Hawaii and four properties in Fiji (two category 4 and two category 6.)

This clearly shows that you should put the legwork in before you go out and manufactured spend for an upcoming trip. After all, you want to earn the hotel points that will get you the most value and that can easily be redeemed for stays on your trip.

It shouldn’t be a surprise that award nights at popular destinations sell out quickly so having multiple properties at your disposal is a great advantage. If you are less concerned about the hotel category, then this also changes the value you assign to each hotel point you earn.

This is by no means an exhaustive look at Hotel redemptions, nor is it comparing the actual credit cards for their full benefits. I’m simply outlining how the various factors, such as ‘properties per location’ can actually influence the ultimate value of manufactured spending with each hotel branded credit card.

Flexible Points

Flexible rewards points are often referred to as ‘bank-points’ and are points that are transferrable to certain hotel and airline programs. The most popular bank-point programs include Chase Ultimate Rewards, Amex Membership Rewards, Citi ThankYou Rewards,  and even Starwood Points.

The advantage of earning bank-points is that for manufactured spend purposes these give you the most flexibility, therefore the value of your points has a wide range depending on whether you transfer the points to an airline or a hotel.

Chase Ink Plus, Ameicant Express Gold Card and the Starwood Preferred Guest by Amex are the cards that will be used for our analysis.


Recall that both Chase Ink and Amex Gold earn 2X at gas stations while SPG doesn’t have a bonus spend category. However, SPG does offer 5k additional bonus points for every 20k points you transfer to an airline, which essentially means 1.25x points on all purchases!

Going back to our Visa debit gift card example:

Chase Ink

  • Points Earned = 1,010
  • Net Cost = $4.95
  • Cost per point = $0.0049

Amex Gold

  • Points Earned = 1,010
  • Net Cost = $4.95
  • Cost per Point = $0.0049


  • Points Earned = 631 (505 x 1.25)
  • Net Cost = $4.95
  • Cost per Point = $0.0078

Here the value of the points really depends on the transfer partners, therefore despite the SPG card lagging behind in net points earned, there are 32 partners and if the airlines of interest is unique only to SPG then this can be of great value.


Cash Back

While I primarily have focused on airline and hotel points, it’s always good to diversify your portfolio. Cash back credit cards are a dime a dozen, as every bank has one or two types to offer. The one caveat is that most of the no annual fee cards, come with a $1500/quarter or $6000/year limit on the bonus category and everything after will be a mere 1%. That said, let’s look at the premium cards.

Barclays actually tries to bridge the gap between travel and pure cash back with their Barclaycard Arrival Plus™ World Elite MasterCard®.


The Arrival Plus card earns 2X miles on all purchases and you get 10% back when you redeem miles for travel purchases. This essentially means you get 2.2 miles per dollar spent on all purchases!

Now these aren’t actual miles of any particular airline, which is why I referred to them as a  bridge between cash back and airline miles. Since you can redeem Arrival miles for a statement credit for travel purchases, Barclays is essentially marketing it as cash back for travel costs.

The Amex Blue Cash Preferred earns 6% cash back at grocery stores albeit there is a limit of up to $6000 per year and thereafter it will be 1%. However, it also earns unlimited 3% back at gas stations!


Going back to our example of a single $500 visa gift card purchased at a gas station:

Barclays Arrival Plus World MasterCard

  • Points earned = 1,111 (505 x 2.2)
  • Net Cost = $4.95
  • Cost per Point = $0.0045

Amex Blue Cash Preferred

  • Points earned = 1,515 (505 x3)
  • Net Cost = $4.95
  • Cost per Point = $0.0033

Just for fun let’s take a look at if we were to include only the first $6000 spent at grocery stores what our value would be:

  • Points earned = 3,030
  • Net Cost = $5.95 (most grocery stores tend to carry the visa gift cards that have a $5.95 fee)
  • Cost per Point = $0.0019

Take a look at that value! Of course, this is only good for the first $6000 or 11 such gift cards per year since the 12th will go over the limit.

Having said that, one key thing to note here is that although the Amex Blue Cash Preferred is throwing all the right jabs and hooks, it fails in the sign-up bonus category since it only offers $150 cash back where the Arrival Plus card offers 40,000 bonus miles which can be used for $440 in statement credits when redeemed for travel.

Quick Recap

As I mentioned in the previous post, there is a learning curve involved in this game that takes time and experience. In this post, I showed you how the simple value definitely has its priority but depending on what kind of a card it is (airline, hotel, flexible points, cash back) the sign-up bonus and the brand associated with the card can tilt the scale to really unlock the best card for your needs.

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3 thoughts on “Beginner’s Guide to Manufactured Spending | Part 2 – Use a Top Rewards Earning Credit Card: The Best Options”

  1. I have an Amex and Alliance Bankcard and I’m looking at replacing the Amex. I want to get a rewards card to replace the Amex by my March
    renewal date so I don’t have to pay the $150 annual fee. Wondering how much
    of a hit to the scores for cancelling one card and getting another will
    be and how long until the scores recover? I expect we’d take a hit, but
    don’t want to take too bad a hit in case something comes up.

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