The one major hurdle in getting your points from a credit card offer is that the bank requires you spend a good chunk of money up front. They do this to recoup some of their losses, they also do this to get you in the habit of using their card. They want you to continue using the credit card even after you have met the minimum spend. (and hopefully rack up interest charges, but that is a NO NO)
Most minimum spend requirements look like this:
• 90 days (usually the timer starts when your app is approved, always double check to be sure)
• $1,000 – $3,000 spend
• does not count if you return an item
• cash advances do not count
The way I look at it is even if you do have to pay a few “service fees” in order to meet your minimum spend, it is worth it in the long run to score your free points. If you end up spending $30 in credit card processing fees but receive $400 in free flights, well that is an easy trade off. If you can avoid the fees, great, but don’t feel bad getting charged 1-2% to hit your minimum spend.
My favorite way to hit my minimum spend is to buy debit gift cards. They are essentially a pre-loaded debit card that has a pin number. You can use it just like a normal debit card, so make sure to protect it like cash.
If you are coming up on your 90 days to hit your minimum spend, go to your local grocery store and buy a $500 MasterCard Gift Card. Make sure it says debit. The cards do have a one time activation fee of $5.95. That means you are only paying a 1.2% service fee, not bad at all. My local grocery store will allow me to purchase the gift cards with my credit cards which means I also earn extra points since my credit cards give me 2x points on groceries. If you look at it this way, I am getting 2% cash back on groceries and it is costing me 1.2% for the purchase, I am still on the positive side!
Once I buy the $500 gift card it will show up on my credit card statement as a $505.95 purchase at my grocery store. Once you have the gift card you can slow your spending down and use the $500 when you need it over the next months for gas, groceries, bills, etc. (instead of rushing to buy things you don’t need within 90 days)
Another way to help meet your minimum spend is to pay bills. So exciting, right? But hey, if paying your bills gets you free travel then I suppose all is well that ends well! I like the site chargesmart.com.
Charge Smart will allow you to send a payment to many companies online while paying with a credit card. You can even pay your mortgage and car payment with a credit card. (they don’t accept Amex, however)
You will just need your account number and the total payment amount to be sent. Charge Smart does take about 2.7% on the transaction so this isn’t my first choice to meet a minimum spend but if it means you will receive free travel, it may be worth it. One thing to remember, many credit card companies start the 90 day “spend” timer at the day the application was approved, not when you receive the card. If you are not sure when your 90 spend window is, make sure to call the credit card company. Nothing breaks my heart more than missing out on a sign up bonus.
You can also send money through PayPal for a “service”. That service could be ‘companionship’ or it could be for ‘quilting lessons’. It doesn’t matter what you add for the service. This will allow you to use any credit card to send somebody money, IE rack up charges on your credit card to meet your minimum spend. You could send your buddy $999.00 and your credit card will be charged $999.00. Your buddy will just withdraw that $999 and give it back to you in cash from his/her bank account. (bank accounts get linked to PayPal accounts so this is an easy one). The only catch is they do charge a 2.9% transaction fee. But again, if you have to pay $30-50 dollars to meet your spend then later receive $400+ in free flights, it will be worth it in the long run.
Of course Churches and Charities are a great way to meet your minimum spend while helping a good cause! Almost all non profits will let you donate via credit card and they will absorb the transaction cost (or it may be waived for them since they are non profit).
One of the most overlooked ways to hit your minimum spend, come the end of the year, is to pay your taxes! Whoo, so fun. Some people actually claim exempt half way through the year so they will owe a BIG chunk of change at tax time. Let’s say you owe $6,000 in taxes because you deferred paying them until tax time, you could sign up for 2 or 3 travel credit card at the end of the year and then pay your taxes and be done with your minimum spends right away.
You can pay taxes with a credit card for as little as a 1.9% fee. That means on $6,000 you would be paying $114 in transaction fees. However, if this means you get sign up bonuses from 3 credit cards, that will easily net you over $1,000 in travel, depending on the cards you sign up for. Keep in mind you are also earning, at a minimum, 1% on all purchases, even during your minimum spend period. If you receive 1% cash back on the $6,000 purchase, you will be getting $60 back. So subtract the $60 cash back and your $114 fees turns into $54 in fees, when all the dust settles. $54 in fees to receive $1000 dollars in travel is sooo worth it.