CONSTANT CASHBACK BY MANUFACTURE SPENDING

• Rev.001-first posted on 2021-06-27

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Today I am going to cover (just a bit) on the topic of manufacture spending, I am saying a bit because this is all I know and I would like to share it out.

First of all, what does manufacture spending mean? You can understand it literally, basically using a credit card to buy cash-like products (gift cards, pre-paid credit cards); will doing this generate constant cashback you might ask, the answer is positive but the process might be a bit complex and time-consuming.

Here is how:

• In order to get cashback by manufacture spending, a credit card with high reward ratio for grocery category is needed
  • For example, Amex Cobalt Card. Since this card has about 5% rewards on grocery shopping. This card can be applied through this link. 
  • Or the Scotiabank Gold Amex Card, which has 5% rewards on grocery shopping. This card can be applied through this link.
• Purchase a Paypower Pre-paid Mastercard (see pic above) from Save-on-Foods, Safeway, Sobeys or etc. And load 500 dollars to the card. There is a fee of 9.95 for new activation. Every reload after new activation the max amount to load each time is $500 and there is a fee of $6.95 for every load. 
• Also there is a monthly fee of $4.95 if there is any fund available in your Paypower Pre-paid Mastercard account.
• Go to https://paypower.ca/ to register your card and upgrade it to “Reloadable Power” Tier. In this step a KYC (know your client) routine is performed and security questions are asked regarding your credit history. Make sure to pass this KYC process.
• Then this Paypower Pre-paid Mastercard can be used to pay other credit card bills. There is a $1.95 fee for every bill payment. Basically, you are buying “money” with either one of the cards mentioned above, and use this “money” to pay other credit card bills. Because the cost of buying “money” is lower than the rewards obtained, there will be constant gain.

Best practice:

• It is best to use either card mentioned above to manufacture spending, because those have high reward ratio on grocery shopping; of course there are other cards with decent grocery cashbacks, such as Scotiabank Momentum VI card, but this card only has 4% cashback for grocery shopping.
• Be reminded both Amex Cobalt Card and Scotiabank Gold Amex Card have a cap on the annual amount for grocery shopping, which is $30,000 and $50,000 respectively I believe 
• It is better to pay other credit card bills in increment of $1000, so you can reduce the frequency of paying the $1.95 fee.
• There is a daily $1,000 limit for bill payments on “Reloadable Power” Tier from Paypower Pre-paid Mastercard, a weekly $2,500 limit and a monthly $5,000 limit.
• It is better that you pay your credit card bill right away after loading the money to Paypower Pre-paid Mastercard, to avoid the $4.95 monthly fee, basically always deplete the account right away.
• It is better to buy something from the grocery store together with the money load, in order to avoid being flagged.

Math:
Let us say you max out the monthly $5,000 bill payment limit and you always deplete your account so the monthly fee is avoided.

• The first month: 
  • cost=9.95+6.95*9+1.95*5=82.25
  • rewards (let us say the reward ratio is 5%)=(5000+6.95*9+9.95)*5%=253.625
• The following months:
  • cost=6.95*10+1.95*5=79.25
  • rewards=(5000+6.95*10)*5%=253.475
• So every month there is about $170 return.

Questions? Please leave your comment below, I will answer questions as much as I can. Thanks.