Wednesday, April 23, 2014

MS is Alive and Well

MS is Manufactured Spend.  It's a term used to describe the practice of spending money for the sake of spending money -- typically for the purpose of meeting a credit card minimum spend or earning extra points.

Typically, manufacturing spend isn't free.  For example, if I purchase a tablet on sale for $500 and sell it on ebay for $450, I can manufacture $500 of spend, but it would cost 10% plus a lot of time and hassle.  In some cases, manufactured spend is free, but only in small amounts.  For example, I can send  $1000 to a friend using Amazon Payments for free, but I'm limited to $1000 per month.

Two of the more notorious MS schemes involved a) buying coins from the US mint and b) buying Vanilla Reloads and loading them to a Bluebird card for paying bills.  Purchasing coins with a credit card was since shut down, putting a stop to the first scheme.  Vanilla Reloads may still be available to purchase with a credit card; however, most major retail chains are now "cash only", making the second scheme very difficult to pull off.

So, what are your options when you need to put $10,000 worth of transactions on a credit card in three months?  Sometimes, buying grocery store gift cards is an easy fee-free way to generate spend.  However, having $5k of grocery gift cards sitting around is problematic.

Here's my current method:

  1. Sign up for an American Express Serve prepaid card with free bill pay.  Better yet, sign up for a Serve account using Isis Mobile Wallet (a mobile app) so you avoid any monthly fees, get a $25+ signup bonus, and receive increased limits on credit card loads.
  2. You can load small amounts to the card directly with a credit card.  This is free.
  3. To load greater amounts, find a store that sells GreenDot MoneyPak reload cards with a credit card.  Since GreenDot cards are sold all over the place, you should be able to find a retailer or two in your area.
  4. Load the GreenDot MoneyPak cards into your Serve account using GreenDot's website.  There is no charge for the load, but you'll typically be charged a $4.95 service fee when you purchase the reload from a retail outlet.
  5. Now, use the free bill pay feature to pay all your bills from your Serve account; even bills you'd typically pay with a check.  If you want to be evil, you can pay your credit card bill with Serve's bill pay feature, but that crosses the ethical line for me.
  6. You can also withdraw money from Serve at any MoneyPass ATM.  Don't do this excessively if you want your account to stay open.
Obviously, you can use this method to get pretty crazy, and many people are manufacturing $10,000+ per month using similar methods.  However, please remember that buying reload cards is not free and MS can get pretty shady if you're just moving money around without actually doing something with it.  In order to keep everything on the up-and-up, I only use GreenDot Reloads and Serve for paying mortgage and utility bills where I otherwise wouldn't be able to use a credit card.  In other words, I'm using each product for its intended purpose and everyone is getting their cut.

There are lots of other ways to manufacture spend out there.  What are your best ideas?

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