Earning the points you need for that dream vacation might not be as hard as you think if you plan ahead. I think it’s useful, especially to beginners, to provide an example of the cost breakdown of manufactured spending to prove it’s worth, so this post should serve as a manufactured spend example of how to earn enough points for a First Class ticket to Asia.
For the purposes of this example, I’ll be trying to earn AA miles so I can fly on Cathay Pacific’s First Class, which is one of the top First Class products there is in my opinion. I’ll use a popular way of manufactured spending: buying gift cards and then liquidating them using either Bluebird or Money Orders.
How Much I Need to Earn
So how many points do I need to earn to make this redemption possible? According to American Airlines’ Oneworld award chart, I’ll need a total of 135K miles (67.5K each way) to make this trip happen. This will get me to Asia (minus the Middle East/Indian Subcontinent which is considered a different region).
The Method
I want to earn American Airlines miles in this example, so I’ll be using either an AA credit card or my SPG Amex card, which can transfer points to AA. The method here is fairly simple, at least if you’re familiar with this sort of “work” already. Simon malls sells gift cards up to $500 for a $3 fee for normal personal/consumer purchases. I’ll buy these gift cards, liquidate them using Bluebird or money orders, pay off my credit card bill, then repeat.
How Much I’ll Need to Buy
As I mentioned earlier, I need 135K miles. Using an AA credit card, that means I’ll need to churn $135K worth of gift cards. It sounds like a lot, but if you handle them in batches of $5k-$10K then it isn’t so bad. Heavy hitters with an established routine easily do $10k/day in a matter of 3 hours or less.
Let’s see the breakdown of spending $135K on $500 gift cards with a $3 fee:
It will cost $810 in fees to buy $135K in gift cards. If using an AA credit card, this will earn you enough points for your round trip First Class ticket. This, however, is not the smartest way to earn these points. As I mentioned at the beginning, planning ahead can make a big difference, and here’s where it comes in. Using your SPG Amex card is a far better value because for every 20K points you transfer from SPG to AA, you get a bonus of 5K.
With the bonuses factored in, you’ll need to spend “only” $110K on your SPG Amex to get the same 135K AA miles. That’s 5 transfers of 20K that turns into 25K miles (so 125K miles total) plus another 10K. Using this method, here’s how much our cost would be. Note that the multiple 5K bonuses have been factored in to the total points earned in the bottom right.
We saved ourselves $150 just by using the correct credit card. You can actually do even better than this if you were smart to be using your SPG Amex all along. AA announced that during July there will be a special bonus – an extra 5K miles for every 20K transferred. That means for every 20K SPG points to AA miles, you’ll get the SPG bonus of 5K miles plus an AA bonus of 5K miles for a total of 30K. Let’s see what the math looks like if we took advantage of that for this example.
With this extra AA bonus, you’ll do 4 transfers of 20K + 10K bonus, which totals 120K miles. Another $15K in spend (for a total spend of $95K) gets you the extra 15K miles, which I’ve added on to the total points earned in the bottom right corner. We saved an additional $90, bringing our cost to $570.
Liquidating the Gift Cards
There could be a cost to liquidate your gift cards as well. If you’re using the Bluebird method, where you load your Bluebird card at Walmart using these PIN-enabled gift cards, then your cost will be $0. Loading this way is free and just requires your time and gas money. If you have friends and family that you can enlist to get more Bluebird cards, this method is the preferred method because there’s no cost. Again…plan ahead.
If you don’t have any friends whose Bluebird cards you can use, then the first thing you need to do is go make some new friends. But otherwise you can use money orders.
Walmart sells money orders extremely cheaply, but if you put in some time to research your local area, you’ll likely find there are many other grocery stores or other establishments that accept debit cards for money orders. Walmart charges $.70 per $1K in money orders. For the purposes of this example, I’m going to use a cost of $1 per $500, which is more in line with what a local store might charge and far exceeds what you’d be charged at Walmart.
The math for this one is easy: just $1 per gift card purchased. Using our primary example of $135K spend on an AA card, that’s an extra $270. If you used an SPG card, it would be another $220. If you happened to be using the SPG card all along and had the points available for the special July AA bonus, it would be another $190.
Again, this is just for illustration. If you’re able to get all your money orders at Walmart, then definitely do that. $135K in Walmart money orders would cost only about $95, which is cheaper than any of the above examples.
Final Cost
We’re using three examples here so I’ll go through each one separately.
1) Spending on an AA card: There’s $810 in gift card fees. If you used Bluebird only, that’s your final cost. If you didn’t, then add $270 in money order fees, for a total of $1,080. You successfully got First Class for cheaper than the price of a round trip economy ticket!
2) Spending on an SPG card: There’s $660 in gift card fees. If you used Bluebird only, that’s your final cost. If you didn’t, then add $220 in money order fees, for a total of $880.
3) Using July’s special AA bonus: There’s $570 in gift card fees. If you used Bluebird only, that’s your final cost. If you didn’t, then add $190 in money order fees, for a total of $760.
Summary
I kept this example simple to prove two things: 1) There’s tremendous value to be had by manufacturing spend. You can easily pay less than the price of Economy for First Class; 2) Some blogs make it sound free, but there’s still a very real cost to manufactured spending this way. It’s not always easy to see, so breaking it out like I did above hopefully helps see those costs.
Note that the mall gift cards are actually only $2.95 per $500, so you can do this even cheaper. Also, if you really know what you’re doing you can get that fee down to $2.50 or less (maybe even $0).
I also didn’t mention the cost of gas or your time. Remember – if you’re just starting, start with small numbers until you figure it out. Once you build your routine, you can do much larger numbers relatively quickly and easily. Your premium cabin travel really isn’t that expensive if you plan ahead.
Good, solid advice. Simple and to the point!
Great post TS. Good to see the total cost assuming no sign up bonuses. Assuming the 100,000 Citi AA Exec offer was still around, you would have to spend only $35,000. If you got $500 GCs from Simon Malls, then you would only need 70 GCs x $3 = $210 + $250 annual fee = $460 out of pocket for free Bluebird/Serve reloads.
Thanks! The 100K bonus definitely helps too haha.
Since Walmart /Bluebird/money orders, stopped accepting Vanilla Visa cards from CVS I’ve not found another source of pin cards as you mentioned.
Where is the mall or other sources to buy $500 cards?
Thanks
You can either go to a Simon Malls location, or online: https://www.simon.com/giftcard/.
Buying Visa cards on Simon Mall online the fee is $5.95
Any way to reduce this cost?
A Simon mall or outlet center. See Simon website.
Find a B&M location and buy them there. You can buy much higher quantities in person.
What and where is B&M?
By B&M I meant brick and mortar, or a physical mall location.
My local Simon mall only sells $250 max per gift card @ $2 per card. Local Walmart charges 68c per $1,000 money order. Dallas, TX So, $8.68 per $1,000 MO.
That’s very strange – the first time I’ve heard something like that. Try buying online from the simon website. It may turn out to be cheaper that way (although smaller quantities).
I really think that posts like this will speed up the process of losing this method for manufactured spend.
I didn’t even provide any new information here! I literally just explained the costs. How can that kill a deal?
I was just going to say that I really enjoyed this post because while it didn’t “expose” some brand new way to MS, it simplifies the process in a way that many other sites haven’t. So, thanks for posting this, TS!
Those were my thoughts as well. Glad it helped!
Sigh. Another pimp exposing details that shouldn’t be exposed.
Sigh…another commenter who didn’t bother to read my post to see I didn’t have a single affiliate link.
Kathy, keep your comments to yourself and return to your (joke of a) blog. People that read tips like this appreciate them as we’re thankful for the advice. You come across as selfish which is reason enough for you to not have a blog on travel…
You selfish woman. Will immediately block your blog. What did you write to contribute the community?
can you address earning miles through AA eshopping portal please. It seems that you do not register your card anymore. So, do you get miles when you purchase through their portal using ANY credit card?
Yes, any credit card should work.
I found out that anything bought from a portal can be bought cheaper locally. The few miles/points don’t compensate.
If you have a USAirways credit card this would be double dipping(sorta).
your analysis is very good but I fear all the tips and points are just like those of pointers and arrows. the state of the game is in very fragile with less and less avenues to MS. there should be a balance of what should be written and whats not. lets learn from the past and be a steward to the game.
Eek. According to my calculations, you would have to go to Wal-Mart 90 times to liquidate all of those cards. And I don’t even know what the monthly BB load limit is for these. How much lead time would you need to do this?
At my nearby Walmart money center, a new restriction is only 3 (or 4?) debit cards per money order transaction. So, you do multiple transactions.
Right but my issue was with the $1000/day load limit
As of July 1, it’s $2,500 per day.
Nice! So that brings us down to about 38 trips with 1 BB. If you max the load of 5K a month, it will take 19 months to liquidate it all? Man, you definitely need more BB for this one!
If you have multiple bluebird cards and a functioning money center machine, you can easily cut that down to 20 trips. It really depends on how many bluebirds you can obtain.
Or, become besties with the moneycenter people.
Multiple BBs?!? I have to investigate.
I have 7 so far. My friends and family are good people 🙂
Got 4 only. Working on some more through this Ashley Madison website that keeps emailing me telling me they have many members who would LOVE to get to know me better so who am I to turn down potential new BB cards hehe
The Casual Encounters section of Craigslist works great for this as well 😉
I check for locations of the nearest mall, it’s a schlep! I’ll check out the online path.
Do you have any preffered type of card when purchasing online?
As I do not have a BB but I do have a Serve which I just received I want to stick with this one for a short while, do you have calcuations that would involve Serve?
You can load Serve at Walmart for free as well, so the calculations in this post apply to Serve also.
Thanks! (I loathe going to WM)
Do you have a prefered type of card when purchasing online?
I never purchase online. I’ve built a very good relationship with the Manager at my local mall and it’s made my life much easier.
In case it’s not obvious to everyone, DON’T BUY THE AMEX CARDS. Buy only the US Bank Visas!
Thanks again!
This type of post certainly does not contribute to the long term viability of deals. It assists in killing it. I understand the pressure of doing this full time and needing traffic. So, from a friend, you have a yellow card. I am disappointed. Now watch MMS post about this with huge pics and arrows….
I must say I’m pretty surprised by this reaction. With the MO post, I definitely understood the criticism. This one I don’t. I simply laid out the costs. If that earns me a yellow card then I’ll have to simply shrug it off.
I’m not even earning any money from this post. No affiliate links and no ad revenue from BA/P2B.
readers are intelligent, they will figure out things even without points and arrows, a look through these comments and the beans are spilled.
Well I wasn’t exactly trying to be cryptic.
George, I think it’s BS when so-called travel bloggers such as yourself give fellow bloggers a hard time for posting something like this. Stop whining about breaking down costs and approaches like this, you don’t deserve a blog. How about not being a selfish d-bag?? I won’t be reading your blog anytime soon since it’s clear you have an issue with sharing good information with people. The yellow card comment is stupid, this isn’t soccer clown. Quite your whining too Choi, I’m sure he saw your first comment, no need to reiterate yourself.
BK: I respect your opinion. Obviously, we don’t agree. Funny I am being called a selfish d-bag, that made me laugh! Frankly, I don’t care if you read my blog because it is obvious you would never click on my Amazon link anyway lol.
TS: You should know better man, this source is in borrowed time and not because of you but it certainly does not help. Yeah, the costs was good info indeed.
Of course you are not earning anything…yet! Posts like this can generate traffic and new readers. Heck, it made me comment twice already which is a first for a blog other than my own 🙂
TBB
selfish douchebag LOL
“We saved ourselves $150 just by using the correct credit card.” Huh? You need to consider at the opportunity cost of foregoing more efficient MS alternatives that buying Simon GCs with SPG. I’d estimate you are paying at least 3 cpp in opportunity cost for those SPG points. That’s not “tremendous value”. It’s dumbass MS.
WOW…such negativity. All this has been on many blogs as well as through MO and FT. Thank you TS for breaking it down. I don’t believe deals are killed by those of us who do a few thousand a month but rather those who do $10,000 per day – those are the ones you should aim your poison darts at.
BK has an anger problem. There’s medication for that. sea kelp.
I laugh when people complain someone is “killing a deal” because they post information to help others. Of course they always see themselves and being in the “in group” who should have such knowledge. The few, the proud and the brave who should be the gatekeepers of knowledge. Where is that list of people? Because it seems everybody feels they should be on that list….
What’s a Wal*Mart…I’ve never been?
Look up Walmart online to see if one is near you.