[Update] Is it Safe to Manufacture-Spend to meet the Signup Bonus Spend Requirement?

Is it Safe to Manufacture-Spend the Minimum Spend Requirement for the Signup Bonus? People often ask us this question, especially those newer to credit cards. They want to know if it’s okay to buy gift cards or similar schemes in order to meet the signup bonus spend requirement on a given credit card.

I can think of two cases where it would be ill-advised to do so:

• American Express cards. Over the past couple of years, Amex has gotten pesky and unstable, and can deny the signup bonus for any reason. It’s never entirely clear what their reason was, so I’d try avoiding buying any large gift cards at all to keep in the clear.
• U.S. Bank Altitude. With the U.S. Bank Altitude card we saw extra observation since that card earns 3x on mobile wallet payment. Probably just an issue with Altitude, not with other U.S. Bank cards.

Since the signup bonuses usually just requires between $500 and $5,000, these small amounts are usually fine to buy gift cards or other such ideas as they fall under the radar. It might be better to split it up and not do the entire $5k in one shot.

As far as the larger question of manufacturing spend in an ongoing manner, just about any bank may raise a flag when they see such activity. I’d especially avoid it with the larger banks when you want to keep in their good graces. That said, everything depends on volume. A lot of people manufacture spend on their INK Plus/Cash card, for example, with a few thousand dollars of gift cards per month. The shutdowns are usually for those doing much larger volumes or those doing such volumes across many cards from the same bank.

In conclusion, nothing is ever entirely guaranteed as being safe as there are various factors at play. But generally a few thousand dollars worth of gift cards shouldn’t cause an issue, with the exception of Amex and the US Bank Altitude where I’d recommend avoiding it. (The Amex scrutiny seems to be about the signup bonus in particular, not about manufactured spending in general.)

Update 11/2/22: Sporadic reports say that lately American Express considers tax payments to be manufactured spend to deny signup bonus or other spend bonuses. (1, 2) The vast majority of people, myself included, are getting signup bonuses from Amex with tax payments as the spend. This issue is probably related only to those who spend on their temporary instant-issue card which doesn’t always seem to track toward a minimum spend requirement. Also interesting is that Chase specifically promotes paying taxes with a credit card to meet a spend requirement.