Travel Question: How Do I Meet My Spending Threshold?

There are some fantastic credit card deals out there. Unfortunately, many of them require the card user to meet a particular spending threshold before the they receive the bonus. That can be anything from $1,000 up to $10,000. For most people, that would not be a problem, but the company requires that it be done within a specified time – typically somewhere between 3 – 6 months. Many people ask me how they can meet these requirements since it kind of takes them back a little when they initially hear the numbers. Once I break down the amounts and how easily it can be reached, they feel more comfortable. So, I thought I would outline some of the easiest methods to meet the spending requirements. There are many different methods, some complicated, so I will try to focus on the easiest. One thing to remember with these methods is that many of them require a certain percentage of the transaction. Many times, they are over 2% of the amount. This is NOT an efficient means to accrue points on a normal basis. Most of the redemption rates that you can expect are not going to be a lot higher than  what it is costing you to get the points, but these are good ideas when you are just looking to spend a high amount of money quickly.

• Taxes – tax day is coming up soon! You can use a service like this to pay your taxes with a credit card and get your spending up quickly. They charge 2.35% of your total amount
• Mortgage – believe it or not, you can pay your mortgage with a credit card. Check out this site for more information. The fees are levied by the bank and they start at 2.2% (plus a $4.95 fee).
• Auto Loans – Chargesmart also can process your auto loans with similar percentages as above
• Utilities – Many utility companies allow you to use your credit card right with them (plus a $2.25 fee or more)
• Cell phone bills – every cell phone carrier allows you to use your credit card at no extra charge
• Purchase grocery gift cards for your purchases in advance – no charge
• Warehouse clubs – Sam’s Club, for instance, only takes Mastercards, Discover, and debit cards. If you have a card that they do not take, purchase a Wal-Mart gift card from Wal-Mart.
• Authorized Users – get additional cards for CLOSE family and friends. Allow them to use it for their purchases and they can reimburse you.
• Personal Payment services – Amazon Payments, Paypal, and Squareup can be used to pay other people with your credit cards.

Let’s break it down (monthly):

• Average cell phone bill (for 2 people) – $120
• Average mortgage (on the low side) – $700
• Average electric bill (on the low side) – $150
• Average auto loan (on the low side) – $200
• Average grocery bills (family of 4) – $400

This totals – $1570. This is without using the tax service (which would all depend on your actual tax bill), personal payment services, and day to day purchases. With most consumer credit cards requiring an average spend of $3,500 in three months, these basic payment methods for three months will guarantee your big bonus.

Now, figuring an average of a 2.25% fee, your extra out-of-pocket cost will be $23.62 a month, so that nice bonus will cost you approx. $71. That is nothing when you consider a great credit card (like the Chase Sapphire Preferred) will give you a bonus of 50,000 points for $3,000 spending in 3 months. If used on two typical US award tickets (after transferring to a partner like United/Continental), your value from those points could be around $800! Who wouldn’t give $71 to get $800? 🙂 If you have any other ideas that are not of the too complicated nature, feel free to share them!