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LESSON 09

How To Meet The Minimum Spend To Earn Travel Rewards Bonus

 

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Updated, January 28, 2020

What You’ll Learn In This Lesson

What you need to do to meet minimum spends on your credit cards
What a category bonus is (and why it's important)

A big part of earning points and miles involves earning significant sign-up bonuses. But typically, you need to spend a certain amount of money (usually a couple thousand dollars) to meet the bonus requirements.

Luckily, there are plenty of ways to go about doing this. First, let’s take a closer look at what exactly these bonus offers are, and why you even want to meet the minimum spend requirement.

How Bonus Miles And Points Are Earned

An example would be, “spend $3,000 in the first three months to earn a 50,000-mile bonus.”

Most bonuses are awarded after the statement closes where you hit the spending requirement. This can be as soon as that first month! There are even some rare instances like with the Capital One® Venture® Rewards Credit Card  where you are awarded your bonus miles almost immediately upon reaching that spending requirement.

Remember, the idea is to only spend money that you were already going to in order to earn those bonuses.

With that in mind, here are some ways to meet the minimum spend of your new cards.

Consolidate Your Spend

Put all your normal spending on the card you are working on. Gas, groceries, dining out, utilities, and so on.

Then, think about all the things you’re not using credit cards to pay for and figure out if you can use credit cards (preferably without transaction charges).

If you can use a credit card instead of cash, check, or bank transfers, do that.

Pre-Pay Your Bills

If you already have recurring payments like subscriptions or utilities set up to pay with credit cards, you should avoid messing with those.

It would be quite painful to have to reset everything each time you get a new card.

But you can use the new card to make extra payments. That way you transfer the spend from the credit card you have on file, to the one you are trying to meet minimum spend on.

Paying For Work-Related Expenses

If you’re employed, see if your employer will let you pay using your own card, then reimburse you for it. If you are one of the lucky ones that gets to choose and pay for your flights and lodging, congratulations!

If you run your own business, or have a side hustle, use your new card to pay for business expenses.

Carrying A Gift Card Balance On Amazon

If you do a fair amount of shopping on Amazon, you might want to use your credit card to buy some Amazon gift codes for yourself to use down the road. You can load them into your Amazon account to have as a gift card balance for future purchases.

Or, stockpile a few Amazon gift cards if there is a birthday, anniversary, or other celebration coming up.

Buy Gift Cards From Grocery Stores

Since we’re discussing Amazon gift cards, you could also consider buying gift cards from grocery stores to help meet the minimum spend. The neat thing about buying most gift cards from grocery stores is that you usually earn discounts for gas too, which is extra valuable!

Some useful gift card brands include:

  1. Gas for your car, like Shell, BP, and 76.
  2. Fast food and restaurant chains that you frequent.
  3. Travel gift cards, like AirBnB, Hotels.com, and various airlines.
  4. Hardware stores like Lowe’s and Home Depot if you have a remodel project scheduled for later in the year, or if you have rental real estate.
  5. If you have a gadget purchase coming up, you could load up on eBay and Best Buy gift cards as well.

Less Optimal Options

Third Party Payment Services

Use third party payment services to pay for things that you would usually write a check for, such as rent, mortgage, or tuition.

This is not the best option because there is usually a fee (~2.5%) involved, but if you need to meet spend, then know this option is out there. You’ll still get more value from the bonus points than the cost of the fee, but clearly, it’s a less optimal way to meet spend.

Pre-pay Your Estimated Taxes

Another sub-optimal option is to pre-pay your estimated federal and state taxes.

Again, there is always a transaction fee. If you go down this path, our first choice is Pay1040.com–the IRS-approved service provider that currently charges the lowest fee, at 1.87% (as of March 2019).

Enlist A Partner

If you have a spouse or partner who has no interest in the logistics of earning free travel, see if they might be open to helping out by putting their spending on your card.

Make it super easy for them to help, though. Give them just one card to use at the beginning, and label it so they know where to use the card.

Rinse and repeat if there is another card to work on.

What’s A Category Bonus?

Great question!

Aside from the initial signup bonus, many cards also give a multiplier on points or miles earned based on the category of the spend.

Some of these categories include:

  1. Travel
  2. Dining
  3. Groceries
  4. Office supplies
  5. Gas
  6. Drug stores
  7. Home Improvement & Furnishings
  8. Online Shopping

The multiplier varies between 2x through 5x. Occasionally, it may go as high as 10x for specific promotions, but those are usually temporary.

Some of the cards provide the bonus category year round, and any multiplier is applied automatically. Other cards have categories that rotate every three months, and you have to activate them ahead of time.

Category bonuses are a neat way to continue earning accelerated points and miles when you are in between new minimum spends.

Final Thoughts

Sign-up bonuses are common with most credit cards these days, and luckily they don’t have to be difficult to earn.

As long as you’re only spending on purchases you were already going to make (think of everything from utilities to groceries and gas), you can easily make the minimum spend requirement.

Next lesson, we get into the nitty gritty details of using your rewards to earn almost-free travel. Stay tuned!

If you found this course on travel rewards helpful, you may also enjoy this free illustrated guide, packed with many other ways to get more for your buck and win back your financial independence.

Course content originally produced by ChooseFI was edited/updated by CardRatings for this lesson.