Maximizing Manufactured Spending with Kiva Loans: A Step-by-step guide
Manufactured spending is a popular technique used by many savvy credit card users to earn rewards points or cashback. It involves buying items with a credit card and then liquidating those purchases to pay off the debt, thus generating credit card rewards without actually spending any money. While there are many ways to manufacture spending, one lesser-known method is through Kiva loans. Here’, we’ll explore how to use Kiva loans for manufactured spending.
What are Kiva loans?
Kiva is a non-profit organization that allows individuals to lend money to borrowers in developing countries. The loans are typically used for business or personal expenses, such as education or home improvements. Kiva loans are funded by individuals all over the world, with loan amounts ranging from $25 to several thousand dollars. Once the loan is repaid, the lender can withdraw the funds or relend them to another borrower.
Using Kiva loans for manufactured spending
To use Kiva loans for manufactured spending, we’ll follow these steps:
Step 1: Sign up for a Kiva account and deposit funds.
To get started, sign up for a Kiva account and deposit funds into your account. You can deposit funds using a credit card or a bank transfer. Keep in mind that Kiva charges a small fee for each transaction.
Step 2: Find a borrower to lend to
Once you have funds in your account, browse the list of borrowers on the Kiva website. Look for borrowers who are requesting a loan that matches the amount you want to spend. Keep in mind that Kiva loans are not guaranteed, so choose a borrower wisely.
Here, I suggest using KivaLens, to diversify your risk. This lets you deep dive into the history of each borrowers, to ensure that you find reliable people to lend to.
I also suggest spreading your loans across multiple borrowers. You should assume a 1% default rate on your loans, to be realistic. You should also take a look at the different lenders, and use KivaLens to find the lenders that have a history of repaying in full.
Step 3: Lend money to the borrower
Once you have found a borrower, lend them the money. You will receive updates on the borrower's progress and will be repaid once the loan is complete.
Step 4: Liquidate the loan
Once you are repaid, that’s it! You can then transfer your funds to your bank account.
Benefits of using Kiva loans for manufactured spending
Earn rewards points or cashback on your credit card
By using a credit card to fund your Kiva account, you can earn rewards points or cashback on your purchases.
Help others in need
Kiva loans help borrowers in developing countries who may not have access to traditional lending options. By lending money to these borrowers, you’re helping to support entrepreneurship, education, and other important initiatives.
Low risk
Kiva loans are relatively low risk, as they are typically repaid within a short period of time. This makes them a good option for those who are new to manufactured spending and want to minimize their risk.
