Monday, January 14, 2019

Attaining Credit Card Reward Bonuses


I see a lot of people wondering how they can achieve the spend requirements on credit cards to receive the sign-up bonuses. Many cards these days offer bonuses of 50,000 points or more. In my example, I am going to use the Venture card by Capital One. This card gives 50,000 points worth $500 as a statement credit toward travel when you spend $3000. If you would like to see a good review of the card check out this full review by The Points Guy 

Let's get down to how we are going to spend the $3000. In order to makes this work for most people, you will have to have some extra money to pay some bills ahead of time. It's time to get out your budget. If you don't already have a budget its a good time to make one. What I like to do is check off whether an item can be paid with a credit card or not. Currently, I can pay my Car Insurance, EZ Pass, Electricity, Phone, Groceries and Entertainment Costs by credit card. For me, this amounts to about $600 a month. I can also pay my Auto Registration by credit card, but this requires careful timing. As you will see $600 a month over 3 months is only $1800 so we will need to be a little clever. How are we going to get the remaining $1200?

First I can pay car insurance in blocks of 6 months for about $645 if I time opening the card correctly. This brings us up to $2122.5 since the $1800 included 3 months of auto insurance.

The second thing I can do is time my payments so that I have 4 electric bills during this period. My bills are due on the 4th of the months and I receive them on the 10th. This adds about $200 dollars. We are now up to $2322.5.

Now its time to get a bit creative. If you are already planning a trip you may be able to spend the remaining $678 on that. If not let's start by talking about things you can prepay. First I can prepay for tolls on EZ Pass lets say $100. Next, you can prepay for anything that offers gift cards. This means gas and groceries, but also even things like Netflix and Apple Music. I prefer to buy my gift cards at a discount on Raise. In the following example, you could spend $300 on grocery cards, $200 on gas and $80 on normal entertainment expenses. You can get very creative here and often save a lot of money on discount cards. Plus you can even get an addition 1% cash back through Swagbucks.

So here is how it all adds up.
$1800 in normal monthly expenses.
$322.5 in prepaid car insurance
$200 by timing your electric bills
$100 in prepaid EZ Pass
$300 in Grocery Gift Cars
$200 in Gas Gift Cards
$80 in entertainment cards
Total $3002.50

The great thing about this plan is that it is all things I would buy anyway and the fees for this are very low. The only charges for using credit are from the electric company which charges $1.5 a transaction for a total of $6. See how you can get creative with this. Make sure you only spend money you have and you pay the credit in full each month. Otherwise, the interest will quickly eat up your savings.

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