Credit card spend requirements

Often credit cards have a minimum spend requirement to get the signup bonus.  For example, my latest credit card churn involved applying for four credit cards in one day of which three had significant spend requirements to get the signup bonus.  One of the cards had a requirement to spend $1000 within four months, another card required spending $3000 within three months, and another card (with a very substantial signup bonus) requires me to spend $10,000 within five months to get the bonus (only fourth card gave the bonus after the first purchase with no minimum spend).

Now I would never spend that much money on credit cards in such a short period of time based on normal spending patterns.  But there are several strategies that can be used to increase credit card spending without actually buying extra things you don’t need just to spend the money.  Here are a few:

1)  Buying gift cards:  If time is running out to meet the minimum spend requirement, consider buying gift cards.  You can buy Amex or Visa gift cards with your credit card at no extra cost (you pay $100 for a $100 gift card).  You obviously will eventually have to buy something with the gift cards, but you can use this strategy to meet the minimum spend requirement before the deadline and then use the gift cards whenever it is convenient.  You can also buy gift cards to a store that you might shop, such or Costco.

2)  Kiva loans:  Kiva is a great charitable organization that allows people to lend money via the internet to micro-finance institutions in developing countries around the world.  The loans are used to provide funding to entrepreneurs and small businesses that do not have access to traditional banking systems.  The loans will not earn you any interest, and they are not guaranteed, but the historical repayment rate is almost 99%.  You can choose which entrepreneur/business you want to support, and you can see the repayment timeline before you decide to lend.  Loans can be made with a credit card using Paypal, with no credit card fees charged to the donor or recipient of the loan.

3) Paying taxes:  In my jurisdiction, I can pay my property taxes (which are about $6000/year) using a Visa or MasterCard for a convenience fee of 1.9% (This may vary depending on where you live; for me works out to about $110 when charging $6000).    This isn’t bad when you consider the miles you will be earning from the signup bonus (essentially, you’re paying $110 for 50,000+ miles).  In fact, I think you could extend this logic to any type of large one-off bills that accept a credit card but charge a fee.  The fee is worth paying to help meet a large minimum spend, because (depending on how you value miles), the fee should be more than offset by the miles and/or bonus miles that you get.

4) Sending money:  There are online services out there that will allow you to send money (generally up to $1000 per month) to friends/relatives using a credit card with no fees.  I won’t publish the names of these services here, but email if you are interested in learning more.

5)  Paying ordinary bills:  If you are paying bills with debit cards, checks, or automatic withdrawal from your bank account, you should check to see if credit cards can be used.  I’ve found that many (but not all) regular bills can be paid with credit cards.  I pay my electric bill, cable bill, auto insurance, homeowner’s insurance, and cell phone bills with credit cards.

Note that you may have heard about dollar coins, specifically frequently flyers using them to gain hundreds of thousands of essentially free miles.  Until a few months ago, you could buy dollar coins at face value (free shipping) with your credit card from the U.S. mint.  The Mint allowed this because they were trying to put coins into circulation, but eventually they realized that many people were abusing the system by purchasing tens of thousands of coins just to earn credit card points and then taking them straight to the bank without even unrolling them. Unfortunately for us, the Mint finally put a stop to this, and you can no longer purchase dollar coins with a credit card.  NPR wrote an article about this practice, and it was shortly after this article that the program was quashed.

This is one of the reasons that certain deals in this community are intentionally not well publicized.  It’s important that with credit cards and other promotions, moderation is always good, because you start drawing the wrong kind of attention if you overly exploit any good promotion.