The (Somewhat) Shady Way Some Miles Gurus Earn Free Flights

You won't believe the lengths they'll go to

Travel Credit Cards
Robert Schrader

Although I've publicly questioned the usefulness of "travel hacking" in my own trips, I've always maintained that the people who do it deserve a great deal of respect for their tenacity. I'm thinking people like The Points Guy and Lucky of One Mile at a Time, to name just a couple of the most notorious travel hackers.

With this credit being given, I go back to the premise that underlies my above-linked blog post, which is that the math of travel hacking requires an absolutely enormous scale to produce a substantial return-on-investment, certainly one large enough to create a brand around it, as the two gentlemen I've mentioned have done.

Indeed, while I cast no aspersion about the techniques any particular person uses, I will go one step farther in a general sense: Travel hacking effective requires tactics that are shady, at best, and potentially unethical. Case in point, something colloquially known as "manufactured spend."

Travel Hacking: The Credit Card Method

For most of the time travel hacking has existed, credit card points have been but one prong of the overall strategy. Travel hackers would apply for travel credit cards in order to get generous sign-up bonuses, then use them to earn points for spending, and accumulate a certain percentage of their overall miles and points in order to book free travel, be that first- and business-class plane tickets, hotel rooms and suites, or whatever else they prefer.

Lately, however, as airline loyalty programs continue to experience unprecedented devaluations, travel credit cards have become the primary source of valuable points—and, by some estimations, the only one. Desperate times call for desperate measures, both in travel and in life. 

A Manufactured Spend Example

One of the primary ways travel hackers have learned to supersize their spending (and, thus, their miles/points) is to actually create spending out of thin air. Known as "manufactured spend," this technique involves purchasing instruments that can be redeemed for cash, either freely or cheaply, then using said cash to pay off the credit card, earning points in the process.

Let's say, for example, you're 10,000 points shore for a flight you want to take, and you don't have the time to wait to spend $10,000 in an organic way. According to the theory of manufactured spend, you could simply buy a $10,000 prepaid Visa or American Express gift card or send yourself money using (separate) Amazon Payments accounts, among other options. Obviously, if you have a credit card where you earn more than one point per dollar spent, the amount of "spend" you need to "manufacture" decreases proportionally.

While manufactured spend techniques such as these are, at least for the moment, legal, they are ethically questionable, to say nothing of the tedium their execution entails.

Alternatives to Manufactured Spend

Want to earn lots of points from using travel credit cards, but don't want to behave like a total tool in order to do so? The simplest way to do this is to get in the habit of using your credit card(s) of choice for all your life's purchases, then (of course) paying them off in full. That way, you literally earn a point (or more) for every single dollar you spend.

To take this to another level, you can strategically make big or huge purchases around the time you know you're going to use a lot of points. For example, if a given dealership allows it, you could use your travel credit card to purchase a new car (netting you tens of thousands of points, depending on the vehicle), to pay your annual tax bill or even to pay your rent or mortgage every month. The possibilities (and, indeed, the earnings opportunties) are endless, albeit not as much so as if you choose to indulge in the shadiness of manufactured spend.