What else can I buy to boost my reward points?
The Internet is filled with plenty of ideas for 'manufactured spending,' but be careful
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Dear Cashing In,
I have a card with a $15,000 line of credit, with 0 percent interest for 15 months. I have been trying to figure if there is a good way to earn rewards mileage. I once heard of buying travelers checks, but wonder if that is over. Any ideas of what people may be doing to maximize rewards miles? I suppose that dollar coin program was a pretty good one, but what else is out there now? -- Roger
This is an area where there are so many possibilities that there really are too many list. And as soon as there is a list, it would quickly become outdated, as deals and programs change.
A lot of times, if your goal is to accumulate credit card rewards, it can be smart to shift your spending away from checks and cash toward placing expenses on your credit card -- say, by charging utility bills, or seeing if you can pay for part of a major purchase that you're planning to finance (such as a car) using a card, or checking with a site such as EVReward to see what rewards are available when shopping online. This doesn't increase the amount you spend. It merely runs your regular spending through a credit card to maximize rewards.
Here, you're talking about something quite different. You are asking for strategies to earn rewards through increasing your overall spending. You should proceed with caution before embracing such a strategy, which is commonly known among those who do it as "manufactured spending." That's because you would be increasing your credit card bills, and you would need to be sure to find a way to pay for them -- and pay in full and on time.
Generally, these strategies entail finding ways to buy something with a credit card that can be converted into cash. You receive the credit card reward points, then use the cash to pay the credit card bill. Unfortunately, these tactics are the same ones crooks use when they have stolen credit card numbers. They, too, want to find ways to convert credit-eligible purchases into cash. In practice, this means that a lot of these strategies get shut down because of fraud concerns.
As you note, some infamous strategies from prior years, such as the dollar coin program, are no longer available. That program, made famous on the front page of The Wall Street Journal in 2009, allowed people to buy $1 coins from the U.S. Mint on credit. They then deposited that money right back into their bank accounts. One buyer, who identified himself in online chat boards only as "Mr. Pickles," claimed to have bought $800,000 worth of coins just for the purpose of racking up reward points.
If you take look through Internet chat boards and blogs, you can see some of the details of practices some people are using. Often, they involve buying gift cards at places where you can earn a category bonus on a particular card, then loading the balance of the gift card onto a reloadable debit card, such as American Express' Bluebird or Serve card. People withdraw the money as cash or use it to pay bills they cannot charge.
Note that this strategy can also be time-consuming. In this example, you have to find a store willing to sell gift cards on credit. Then, you have to go to a store that allows you to load the gift card onto the reloadable card, since typically such transactions cannot be performed online.
There are surely plenty of other ways to boost reward balances using similar techniques. But some of the best ways are probably not advertised on public Internet boards. There is an ethos among bloggers not to ruin a deal by exposing it.
If you're looking for a place to start, the manufactured spending board at FlyerTalk might come in handy. You'll quickly see that people are passionate about rewards and have boundless and creative ideas of how to accumulate them. But it is a pursuit that is not for everybody.
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