Loyal3 Ending Stock Purchases with a Credit Card

Got an email today from Loyal3. Bad news! The website will be terminating credit card purchases of stocks on Loyal3. The email states that as of 11/18/2014 you will no longer be able to use a credit card to purchase stocks. The email continues to say that monthly purchase plans using a credit card will be available until 12/11/2014.

I found it very interesting the wording in the email from Loyal3  "In order to put an end to the "gaming" of LOYAL3, and to maintain fee-free investing, on Tuesday, 11/18/2014, we will be removing credit and debit cards from the LOYAL3 platform. Automatic Monthly Plans (monthly recurring investments) using credit and debit cards will continue to be active until Thursday, 12/11/2014, to allow time to switch over to ACH (checking account transfers)."  Apparently, I'm one of those people "gaming"  Loyal3.

This is a big disappointment for me as I have been doing a significant amount of manufactured spending with Loyal3 over the past 4 months. So far I have purchased and sold more than $40,000 worth of stocks on Loyal3. All of the purchases were made using my Barclays Arrival Plus Mastercard which gives 2.22% back in points to be redeemed for travel related purchases. All together I have earned more than $888 in points from Loyal3 as well as very modest amount of capital gains totaling $177.

Through the process I had the Loyal3 account in my name shutdown because of my selling off the stocks too frequently. I am currently using an account under my partners name with a Barclays Arrival Plus Mastercard authorized user card.

Although the email from Loyal3 says that credit and debit cards will be removed from the Loyal3 platform on 11/18/2014, my understanding is that you will still be able to use a credit card to purchase stocks on Loyal3 until 12/11/2014 when automatic investment plans are also unable to use credit cards. You can do this by simply setting up an automatic investment plan to buy $50 worth of stock for today. Then go in a few days later and change the automatic investment plan to that day which will initiate another purchase. You can continue doing this with as many stocks as you want. 

The limitation is that you will only be able to make one $50 purchase of a single stock per day. That means only $50 of Google, $50 of Amazon, $50 of Walmart… I frequently purchase $200 of an individual stock per day by doing 4 different $50 purchases. I guess I will just have to branch out from the 10 stocks that I am currently purchasing.

I have found Loyal3 to be the easiest method of manufactured spending that is currently available. This method also comes with a certain amount of risk, but also reward. In my case I have made $177 in capital gains. I also could have lost $177. Last month when the stock market was experiencing a lot of volatility my portfolio dropped by about 4%. I was forced to hold onto stocks longer that I normally do at the same time I was purchasing more stocks. At one points I had more than $13,000 tide up in Loyal3. This is a lot of money to float. I held of selling any stocks until the values climbed back up.

The only stock that I have that is still down significantly is Discovery. My original $800 investment in Discovery is down more than $100. My total capital gains of $177 includes the cost basis loss of $100 in discovery. If it wasn’t for the Discovery stock my capital gains would be $277.

Deals come and go. The use of credit cards on Loyal3 is coming to an end in a little more than a month. If you need to make some minimum spending with Loyal3, get started soon!

Update: Using Loyal3 to Make Money and Meet Minimum Spending Requirments

[Update: Loyal3 has ended the use of credit cards to purchase stocks therefore making the us of Loyal3 uselsess for miles and points enthusiasts] I have posted before about the opportunity that Loyal3 offers to manufactured spending enthusiasts. My earlier post: How to Meet Minimum Spending Requirements with Loyal3 gave details on how to use Loyal3 to meet minimum spending requirements.

As a recap, Loyal3 lets you buy a limited selection of stocks for a maximum of $50 at one time (fractional shares) for no fees and lets you use a credit card. What's the catch? Loyal3 has two business days before it has to initiate the purchase meaning you do not know what price you will buy in at. Also, when you choose to sell your stock the sale will go through by the market close of the day you initiate the sale which means you won't know exactly what your stocks will sell for.

I have been playing around with earning miles from Loyal3 over the past two months. So far I have had great success using Loyal3 for manufactured spending. To date I have manufactured more than $20,000 in spending through Loyal3. Not only have I gained the valuable rewards from my credit card, but I have also managed to turn a small profit on the buying and selling of the stocks. These profits are very small. For the $20,000 of stocks that I have bought and sold, I have made approximately $90 in profits.

I have used my Barclays Arrival Plus World MasterCard exclusively for all of my purchases on Loyal3. This credit card gives a return of 2.22% back to be used for travel related purchases. This means that my $20,000 in manufactured spending on Loyal3 earned me $444.44 in travel rewards plus another $90 in short term capital gains. All this in less than two months.

I must add in that I am not a professional investment adviser. Proceed at your own risk. It is possible to lose money in the stock market.

I will share a little more about how I am doing this. First, my strategy has been to buy in for $5,000 per week at $1,000 per weekday. I need to select at least 10 different stocks. This is because there is a $2,500 maximum purchase of each stock per month. If I buy $100 of a stock each weekday for a whole month I will purchase around $2,200 per month of an individual stock. You run the risk of getting your account audited if you accidentally try to purchase more the $2,500 of an individual stock in a one month period.

Purchasing $1,000 per day requires 20 purchase transactions at $50 each. When I do this manually it takes me about 13 minutes every day.

Tip: Want to save yourself some time. Check out iMacros for Firefox. This add on allows to to record and replay repetitious browser tasks. That's what I'm using.

I try to sell frequently. My strategy has been to track all of the stocks that I have purchased with the portfolio tracker with Google Finance. Every weekday I look to see which stocks are up for the day. I sell the stocks that have made small gains more than the price I paid for the stock with Loyal3. Some sales I might only gain $1.00 on $500 worth of stock.

There is some lead time when using Loyal3.  For me there is generally a 10 day period from the time of purchase to the time the money form the sale makes it to my checking account. For each step in the process it takes time:

• Purchase stock - 2 business days until stock is purchased posted to your account
• Sell Stock - 3 business days until the sale is finalized and funds are available in your Loyal3 account
• Transfer Funds form Loyal3 to your bank account. Most funds transfers can take up to 3 days to complete

With these time restrictions, it is not possible to cycle through the process within one week so a weekend will be included. This makes for some delays.

When I use my Barclays Arrival Plus World MasterCard I get 2.22% back for travel related purchases. If I invest $5,000 per week and $20,000 per month, getting 2.22% return each week this comes out to a great return of 8.88% per month.

With an expectation of an 8.88% monthly return there is really no reason to want to hold on to any of the stocks. I doubt there are any stocks analysts predicting any stocks to make an 8.88% return per month.

You need to be careful though or you run the risk of getting your account shutdown. Here are some reason that may lead to your account being shut down:

• Changing credit cards frequently for purchases
• Attempting to purchase more than the maximum of $2,500 per stock per month
• Selling stocks with no regard for profits and losses
• Selling stocks too quickly (I try to hold onto the stocks for at least two days)

Also be aware that starting out by purchasing $1,000 in stocks (that means 20 $50 transactions) with Loyal3 may initiate a fraud alert with your credit card. Start slowly.

If you have any questions or comments, feel free to leave them below.

Amazon Payments Fee Free $1,000 Person to Person Payments Ending Oct. 13!

Just got the word via The Points Guy that the $1,000 fee free transfer by credit card from one person to another is ending as of October 13, 2014. Bad news for those using this for manufactured spending. This gave and easy $12,000 of credit card spending each year utilizing the maximum $1,000 per 30 days.

Amazon Payments allowed users to transfer up to $1,000 per month with a credit card to another Amazon Payments user. This worked by transferring funds to a friend or partner, even creating a loop with several individuals to return funds back to your account.

I wrote about using Amazon Payments to meet minimum spending requirements in a previous post: How to Meet Minimum Spending Requirements for Credit Cards - Amazon Payments.

This has been a great way to meet minimum spending requirements and I am sorry to see it go. I will make sure to do my last $1,000 before the deadline. Make sure you do too!

Meeting Minimum Spending Requirement Plus Make $25 with Lending Club

I recently stumbled upon Lending Club, a peer to peer lending site. Lending Club totes itself as the leading platform for investing in and obtaining personal loans. Basically you can loan money to others for a return depending on the risk of the particular loan. You can loan as little as $25 per loan. Your lending is combined with the lending of other users to fulfill the whole loan amount. The helps to diversify the risk.

The benefit to those who want to manufacture spend is the ability to initially fund your Lending Club account with up to $5,000 using Paypal with a credit card. Once you have funded your account you will have to invest the funds before you can withdraw the funds again. In general you are looking at a 6 month minimum investment, so this is only for those that want to invest and want to diversify their portfolio. As an added benefit, I found a link that offers a 1% bonus if you deposit $2,500 or more and fully invest in loans. You could invest the full $5,000 with a credit card and receive a $50 bonus.

For more information, this FlyerTalk Thread about meeting minimum spending using Lending Club is a great resource.

If you are interested in other methods of investing using a credit card check out my previous post:

How to Meet Minimum Spending on Credit Cards with Loyal3

How to Meet Minimum Spending on Credit Cards with Loyal3

Using Loyal3 to manufacture spend comes with some risk, but I have been churning credit card transactions with this method successfully for a profit for the last several months.

This is the fourth post on how to meet minimum spending requirements for credit cards. For links to my other posts on the subject see below.

How to Meet Minimum Spending Requirements for Credit Cards - Amazon Payments

How to Meet Minimum Spending on Credit Cards - Debit Gift Cards to Money Orders

How to Meet Minimum Spending on Credit Cards - Bluebird

Loyal3 is stock broker where you can buy a limited number of brand name stocks for no fees using a credit card. Loyal3 is able to do this because they batch process all of the stock orders received for the day into one order. So your stock purchase order will be combined with all of the other Loyal3 investors that want to purchase a particular stock on that day. The downside is that you do not get to pick the price that you buy the stock for. If you submit your purchase order before 2 PM EST, your stock purchase will be processed by the end of market close on that day.

There are only a limited selection of stocks available for purchase. My favorites to purchase are Google, Intel, Apple, Walmart, Berkshire Hathaway, and Microsoft. These are high volume stocks that tend to be very stable meaning the stock price does not vary much.

Most brokers charge fees from $4 to $12 per stock trade. This makes buying stock for the purpose of manufacturing spending not worthwhile. Also, you are not able to buy stocks with a credit card at any stock broker.

Loyal3 charges no fees to buy or sell stocks. Their website is very user friendly and easy to navigate. If you want to buy stocks with a credit card, you are limited to $50 per transaction. This means that you will be buying fractional stock shares. My method is to select my favorite stocks and buy $50 at a time with a credit card. You can buy multiple times at $50 for the same stock. You just need to wait a few minutes between purchases or the website or it will think that it is a duplicate purchase. There is a maximum of $2,500 purchase for each stock in a month which not too many of us will be concerned with. You are reducing the risk by purchasing several stocks rather than just one or two.

This Flyertalk thread has a wealth of information on using Loyal3 for manufactured spending. Follow the link for more info on Loyal3.

These were my results with my last three batches of buying and selling with Loyal3. I bought $1550 worth of various stocks over a seven day period. I then sold all of the stocks on the same day. I bought the stocks with my Barclays Arrival Plus World Mastercard which give me 2.22% back on all purchase redeemed for travel. I received $34.41 in travel credit for the purchase with my credit card. When the stocks sold I received $1546.62 which means I sold my stocks for a loss of $3.38. My travel credit of $34.41 - $3.38 in stock loss = $31.03 profit or a 2% profit in little more than a week.

For my next batch of purchases I bought $2,300 in various stocks over a 10 day period. I sold all of the stocks on the same day for $2,326.80. So I made a $26.80 profit from selling the stocks plus the 2.22% for another $51.06 for a total profit of $77.86 or 3.39% in less than 2 weeks.

My third batch of purchases included $2,450 worth of stock purchased over seven days. I sold all of the stock on the same day for $2,449.38 or a $0.62 loss. With the 2.22% that I made from my Barclays Arrival Plus World Mastercard I made $54.39 - $0.62 = $53.77 in profit or slightly more than 2%.

There are some delays. After buying your stocks it can take two business days before they show up in your account. When you sell your stocks it will take at least 3 business days before the sale is finalized and the funds are available to transfer to your bank account. Once the funds are available, it will take another 3 business days for the funds to be deposited into your bank account.

As I said before, this method is not without risk just as any stock purchase has inherent risk. If some of the stocks you purchase drop in price after you buy them you can hold on to them until the price goes up if you are able to float the cash. Buying a variety, say five different stocks can help reduce your risk. One or two stocks may drop in price, but some of the others will likely increase in price evening out any losses.

This can be an easy way to meet minimum spending requirements for your credit card and even make a profit in the process.

If you have any questions or comments, I am always happy to hear from readers!

How to Meet Minimum Spending on Credit Cards - Bluebird

This is the third installment of "How to Meet Minimum Spending on Credit Cards." See the links for earlier installments.

How to Meet Minimum Spending Requirements for Credit Cards - Amazon Payments

How to Meet Minimum Spending on Credit Cards - Debit Gift Cards to Money Orders


Bluebird is a bank checking account alternative from American Express. Bluebird is a re-loadable debit card of sorts, but with many added benefits including:

• No fees
• Fully functioning Bill Pay
• Direct Deposit
• ATM withdrawals
• Online check deposits
• Reload ability at Walmart cash registers

Bluebird is a staple in the manufactured spender's wallet. The primary reason is that Bluebird allows loading your account with up to $5,000 per month from debit cards including debit gift cards. You can do this without any fees. Once you load your Bluebird at Walmart you can then login to your account and set up a free bill payment to pay your mortgage, student loans, car payment, or other expenses that you cannot pay with a credit card directly. I pay my mortgage and condo dues every month with my Bluebird. Its free to apply and open up an account. Do not bother with the $5 temporary Bluebird card sold at Walmart. You still have to apply for a permanent card online.

I frequently use my favorite credit card to buy debit gift cards and load my Bluebird. Then I immediately login to my Bluebird and set up a bill payment to pay off the credit card that I just used to buy the gift cards.

Before several months ago, you were limited to loading a maximum of $1,000 per day to your Bluebird. Now Bluebird has increase the daily loading limits to $2,500 per day. This means you only have to visit Walmart only twice per month to load the maximum monthly load amount of $5,000. My fiance is also signed up for a Bluebird card. I am able to bring both of our Bluebird cards two Walmart and I load $2,500 each to two Bluebird cards included $2,000 in money orders during the same visit. I am able to liquidate a total of $7,000 in one Walmart visit.

You are restricted to four card swipes per transaction at Walmart cash registers. This means the maximum you could load to a Bluebird account at one cash register is $2,000 with four $500 debit gift cards. It will be necessary to go to several check out counters to load $5,000 to two different Bluebird cards.

There are many places to buy gift cards to use to load your Bluebird, but you cannot just buy any gift card. You are looking for Visa or MasterCard gift cards that say "Debit" that allow loading up to $500. American Express Gift Cards will not work for this method. AMEX gift cards are never set up for debit transactions. Visa and MasterCard debit gift cards are the only ones that will work for this process. If they do not say "debit" than they will not work. 

All of the gift cards have a fee which varies from $2.95 to $6.95. Find the gift cards with the lowest fee possible. Grocery stores and department stores often sell gift cards with a $5.95 fee. You can buy variable load debit gift cards at some gas stations, drug stores as well. Look at the local stores in your area and see what is available.

Additionally, do not buy One Vanilla Visa Gift cards. I use to buy these frequently from Walgreens. These gift cards no longer work as debit cards at Walmart.

Recap: If you want to be able to pay your mortgage or other expenses where a credit card is not allowed. Purchase $500 debit gift cards at the lowest possible fee (shop around). Go to Walmart and load up to $2,500 per day to your Bluebird. Set up a bill payment to pay your mortgage or other expenses. This is a great way to make the minimum spending requirement for your credit cards.

How to Meet Minimum Spending on Credit Cards - Debit Gift Cards to Money Orders

Buy Debit Gift Cards and Liquidate with Money Orders at Walmart

This method is the bread and butter for many manufactured spending enthusiasts. There are many places to buy gift cards, but you can not just buy any gift card. You are looking for Visa or MasterCard gift cards that say "Debit" that allow loading up to $500. American Express Gift Cards will not work for this method. AMEX gift cards are never set up for debit transactions. Visa and MasterCard debit gift cards are the only ones that will work for this process. If they do not say "debit" than they will not work. 

All of the gift cards have a fee which varies from $2.95 to $6.95. Find the gift cards with the lowest fee possible. Grocery stores and department stores often sell gift cards with a $5.95 fee.

Once you buy the gift card(s) you will have to set up a pin. The process for doing this depends of the debit enabled gift card. Many of them you just call the 1-800 number on the back to set one up.

After you set a pin, you go to the money center at Walmart and ask to buy a money order. Money orders cost $0.70 each. Money orders at Walmart have a maximum of $1,000 and you are limited to two money orders per day. To minimized the fees as a percentage of the total being manufactured it is best to do a $1,000 money order with two $500 gift cards. If you paid a $5.95 fee each for two $500 gift cards plus the $0.70 money order fee your total cost for manufacturing $1,000 is $12.60 or 1.26%. This is fine as most points are valued at more than $0.01 per point. And you are doing this to get a large sign up bonus. You probably would not want to buy $500 gift cards with a $5.95 fee just to earn the points unless you have a category bonus with your credit card for example that gives 2x points at grocery stores.

Note: Walmart is not the only location that sells money orders with the ability to use debit cards, but Walmart is one of the cheapest locations to buy money orders.

Additionally, do not buy One Vanilla Visa Gift cards. I use to buy these frequently from Walgreens. These gift cards no longer work as debit cards at Walmart.

Hint: I usually ask for a money order at Walmart for $999.30 which is two $500 gift cards minus the $0.70 fee.

Once I have the money order in my hands, I fill it out with my own name on it and deposit it to my bank account just like you would a check.

If you have any questions or comments, leave a comment and I will be happy to respond!

How to Meet Minimum Spending Requirements for Credit Cards - Amazon Payments

For many people wanting to apply for several rewards credit cards at one time, the primary barrier is the inability to meet minimum spending requirements. Most rewards credit cards have a minimum spending requirement that must be met within the first 90 days of account approval.

As a result of not being able to meet minimum spending requirements, a person will not apply for a credit card or will only sign up for one or two credit cards at a time so that they can meet the minimum spending requirement with there every day credit card spending.

In comes manufactured spending! Manufactured spending is the term used to describe spending money on credit cards without really spending money, or purchasing cash equivalents with a credit card for the purpose of earning points, then liquidating to cash as quickly as possible.

Earlier this year I signed up for three new credit cards and my fiance signed up for two credit cards for a total of five credit cards. These are the five credit cards we signed up for:

1  Citi Executive Aadvantage World Elite MasterCard - $10,000 in 3 months
2  CitiBusiness Aadvantage World MasterCard  $3,000 in 3 months X 2
2  Chase British Airways World Elite MasterCard   $2,000 in 3 months X 2

This comes up to a minimum spending of $20,000 in 3 months. I have no where near $20,000 in regular credit card spending in 3 months. My average regular credit card spending is closer to $1,000 per month.

I use manufactured spending techniques on a regular basis. Over the next few posts I am going to describe in detail my most used methods of manufactured spending. There are many other methods of manufactured spending with different prepaid cards and other financial instruments. In my posts,  I am only going to talk about the manufactured spending techniques that I am currently using and I know work for me.

Amazon Payments

This is the lowest lying fruit. Sign up for Amazon Payments and you can send up to $1,000 per month to anyone else who has Amazon Payments. I do this every month and generate an easy $1,000 in manufactured spending. The best part is there are no fees for doing this. Many other types of minimum spending that do result in fees over 1%. This is a great way to create no fee manufactured spending. If only you could transfer more per month!

After you sign up, you will need to link a bank account so that you can withdraw your funds to after they are transferred from another user. To avoid your account getting too much attention, send a maximum of $500 per payment and make sure to select "goods & services" as the reason for the payment. Once you get set up with Amazon Payments it is an easy process to add a bank account and transfer the funds into your bank account.

This works great for a couple. One person transfers $1,000 per month in two $500 transactions to the other person. Do not transfer both ways as this will look suspicious and could lead to getting your account shut down.

Doing $1,000 per month is an easy way to generate $3,000 in 90 days of manufactured spending for absolutely no fees. Some people get more creative and do a four person transfer. Person 1 transfers $1,000 to Person 2 who transfers to Person 3 who transfers to Person 4 who the transfers back to Person 1. If you can work together with a couple or a whole family this is an easy way to manufacture $4,000 per month at $1,000 per person. Make sure to use a credit card with your name on it to make the payment. Do not use a credit card with your significant other's name on it to pay from your account.

Note: Before you are able to transfer the full $1,000 per month (this is a rolling 30 day not the calendar month) you will need to verify you bank account with trial deposits.

Follow along over the next few days and I will post other methods of manufactured spending to meet minimum spend requirements on credit cards.

How to Earn the Most Miles and Points

The fastest way to earn free travel is through generous credit card sign up bonuses. This is the primary tool for earning travel rewards. Rewards credit cards offer generous bonus for spending certain amount of money in a limited period of time often 90 days for account opening.

Credit card bonuses are not the only way to earn bunches of reward points. Manufactured spending is another way. Manufactured spending is when you artificially create credit card spending that you would not normally make. Usually this means turning credit card purchases back into cash through the use of prepaid debit cards for example. If you are able to do this with bonus categories for example 5x points for purchases at office supply stores with the Chase Ink Bold and Chase Ink Plus credit cards than you can quickly rack up a substantial number of points. I will discuss in detail methods of manufactured spending in future posts.

One of the more obvious methods for earning miles is actually paying for airline tickets and receiving miles for the distance flown. I earn virtually 0 miles using this approach because it is my goal and mile habit to never actually pay for an airline ticket with money. My goal is to earn enough miles to pay for all my airline tickets with miles that I acquired for almost free.