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 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.