In America it’s nearly impossible not to be bombarded with credit card offers.
Whether in the mail or at the checkout counter at a grocery/department store, there are countless credit cards that are begging to be applied for. It’s probably because it’s so easy to dig oneself into a hole of debt by swiping all at once and paying later (especially in America’s consumer culture and with many cards offering appealing promotional offers of 0% APR for six, 12, 14, 15 and 18 months).
Last December, credit card debt was up to $642.2 billion.
What’s particularly tempting are credit cards that offer free money (under a certain spending requirement), and that’s one of the ways I’ve managed to save for travel. Yes, that money could also be used for other expenses, so this can also be used as a reference on how to make the most of the endless credit card offers that come your way. Grabbing this free cash is based on a few assumptions:
- The credit card holder has good to excellent credit
- The borrower is responsible and pays on time
- The borrower pays always pays in full (with the exception of when the card comes with a 0% APR. In this case, the borrower may not pay in full each month but will ensure the balance is entirely paid off by the end of the promotional period, so as to avoid interest)
I’ll try to be as comprehensive as possible in this post, although some of you probably already know these things. But if you have any other suggestions or comments on how you take advantage of credit cards, leave a comment or drop me a message!
Here’s a scenario where you could get $800 for free with six cards that have no annual fee and offer cash back with a minimum spending requirement:
Capital One Venture One Rewards
Promotional cash back: 20,000 miles (equal to $200)
Spending requirement: $1,000 in the first 3 months
Amex Everyday
Promotional cash back: 10,000 points (equal to $100)
Spending requirement: $1,000 in the first 3 months
Chase Freedom
Promotional cash back: $100
Spending requirement: $500 in the first three months
Barclaycard Arrival World
Promotional cash back: 20,000 miles (equal to $200)
Spending requirement: $1,000 in the first 3 months
BankAmericard Travel Rewards
Promotional cash back: 10,000 points (equal to $100)
Spending requirement: $500 in the first 90 days
U.S. Bank FlexPerks Select+
Promotional cash back:10,000 points ($100)
Spending requirement: $1,000 in net purchases in the first four months
Things to keep in mind
These cards would have to be applied for at different times as it is not advisable to apply for more than a few cards every six months. Otherwise, your credit score takes a hit. Additionally, this may not work for everyone. It can become challenging to keep up with so many cards, and applying for these also means you provide your information to companies who will probably send marketing material to you. Furthermore, it’s important to determine, can you meet the minimum spending requirement? I’ve found them easy to meet in America’s consumer culture: groceries, transportation costs, going out moderately, but again, this may not be the case for everyone.
One strategy I use is applying for cards like this during times I have larger expenses coming up. For example, if you’re paying for a transit pass/getting new tires or other car expenses/paying for certain insurance at the end of the month, that’s a good time to get the card. That saying patience is a virtue is key if you choose to get free money through credit cards. Since you can only apply for a few at a time, it can take up to a year or more to get that $800.
But hey, that’s still money you may not otherwise have.
Other tips
Staying up to date on credit cards on the market is important because offers do change. I’m frequently online, browsing around for those with rewards points and promotional cash back offers. At this point, I’m not yet willing to pay a yearly fee for cards, so I stick to those with no annual fees. Also be aware of your spending habits and the specific rewards credit cards offer. For instance, those who shop on Amazon moderately to frequently can earn 3 points per dollar spent on the online store using the Amazon.com Rewards Visa Card. That adds up in the long run.
For gas and groceries, the Blue Cash Everyday card from American Express gives you 3 points per dollar on groceries and 2 points per dollar on gas. Similarly, the BankAmericard Cash Rewards gives 3 points per dollar on gas and 2 points per dollar on groceries. Find which cards works best for your purposes, but keep in mind spreading them out too much will increase the time it takes to accumulate points. Many cards require a minimum of 2,500 for redemption.