How I got a credit card sign-up bonus without bankrupting myself

I realized last year that my first credit card (and my only one aside from the Old Navy credit card I’d close if it didn’t have a ridiculously large line of credit for something like $7,000 which would greatly negatively affect my overall ratio of available credit if I got rid of it) was one I’d gotten in college and really wasn’t doing much for me anymore, so I got a cash back card. Who doesn’t like cash back, right? However, this year I’ve been reading about travel hacking and have always idly been considering a credit card that would get me travel rewards.

I do love travel even if I don’t do a ton of it right now (or at least nearly as much as I’d like), and the idea of getting miles or points I can use for travel while doing my normal spending is appealing. So I decided to do some further research into my options. Both the Mad FIentist and TravelMiles101 have the Chase Sapphire Preferred as one of their top ranked travel cards and I have to admit that their arguments for why Chase Ultimate Rewards points are some of the most flexible travel points + the 50,000 points sign-up bonus was pretty tempting.

However, the $4,000 spending minimum required in the first 3 months in order to hit the sign-up bonus gave me pause for at least a month. My normal spending levels hover around $2,000 each month and half of that is my rent (which doesn’t go on a credit card), so I was likely going to be at least $1,000 short at the end of the first 3 months. Signing up for a travel card that has an annual fee and not getting the sign-up bonus is a pretty dumb idea and I didn’t want to create an extra $1,000 of spending that I’d either have to pay off right away or pay lots of interest on[*]. So I filed away the CSP idea as interesting but not feasible at the moment and figured maybe I’d end up getting something like a CapitalOne travel rewards card for the meantime until I was more of a Real Adult/could handle that higher level of spending even though the CSP was a better card overall.

But then I realized that timing was everything. I opened up my account on March 15 and actually just saw those 50,000 points deposited into my account the other day. Here’s how I managed to spend that $4,000 in actually a bit less than 3 months without bankrupting myself (although yeah maybe my spending reports beg to differ…). Some of these ideas might be helpful for anyone else considering opening a new credit card and wondering how to reach a sign-up bonus responsibly [**].

Everyday spending:
All of my normal, every day spending went on my new credit card, regardless of whether it would get me the double points on travel and restaurants. The first three months with a new card are not the time to try to maximize points or cash back by using various cards: everything went on my CSP. This included groceries, gas (which sadly does not count as “travel” for the double points), and the metro (which does count as travel). This also included less frequent things from doctor appointment copays and prescriptions to restaurants and bars. If you’re going out with friends, you can ask them if you can put the whole bill on your card and have them pay you back. I did this once with a friend who sent me the money as we were sitting at the table. Bonus: I got the double points for her half of the bill, too!

Recurring spending:
It’s a pain in the ass, but you can switch monthly bills to your new credit card for those three months (and either leave them on the card after or switch them back. Personally my monthly bills are back to my cash back credit card now because strategically that makes more sense). I paid for car insurance, our internet, our utilities, and my barre membership on my CSP in March and April.

However, even those things wouldn’t have been enough: I don’t spend that kind of money and I couldn’t have afforded to boost my restaurant eating and grocery stocking up just for the sake of it. Besides, I don’t have enough room to store all the food I would’ve had to buy in massive visits to Costco in order to hit $4,000 on my card! But this is why timing is everything: I waited to get the card until I was both about to travel and also before I made some one-off purchases.

I’ve already written about the Azores trip, and I definitely strategically got my new CSP before it so I could pay for part of the trip on my card (and accrue double travel points on my travel). The fact that it doesn’t have a foreign transaction fee was also nice, especially since I don’t believe my mother has a credit card that has the same perk so she would’ve been paying a 3% fee on every transaction. (Side note: my bank doesn’t charge for ATM withdrawals in foreign countries, which is how I dealt with money when I was studying abroad for two semesters. Thanks, Capital One 360! I did withdraw cash on the Azores trip for places that didn’t accept my credit card, and I would’ve withdrawn more if I hadn’t had my card because I hate the thought of paying a foreign transaction fee, even if my mother had been okay with it.) So, whenever they’d accept it I paid with my credit card, usually for food either at restaurants or at the grocery store. I also mentioned in previous posts that I went up to New Jersey in May for one of my best friends’ wedding, and that hotel room and the Uber rides to/from the venue were also things I knew I’d put on my card in those first 3 months.

I also bought some one-time purchases right after I got the CSP. Some were in conjunction with the trip (see: my new carry-on travel backpack and new raincoat. I was going to replace my old raincoat anyway and the trip was a good time to do that), and some were just purchases that I’d specifically held off on until I could use them for the sign-up bonus. These included my Vitamix, an online budgeting course, and the annual hosting for this website!

You could also time getting a new credit card around annual bills like car insurance, renter’s insurance, or car registration. In fact, I unexpectedly paid for a year of car insurance on my card, which definitely helped me out.

Other ideas that I didn’t utilize:
I sincerely thought about paying my rent via RadPad or a similar company. I would’ve incurred about $60 worth of fees, but it would’ve easily eaten up over half of my $4,000 goal in one fell swoop. Doing this was especially attractive because it would’ve been easy to pay back right away and not incur interest on since I pay our landlord the full rent every month and my roommate pays me her half beforehand. It would most definitely have been money I would spend anyway. It turned out I didn’t need to use this method, but I could’ve paid my June rent this way if I hadn’t made the limit before if for some reason I couldn’t use my card while we were in the Azores (like we needed to pay cash for more meals, etc).

Buying gift cards: you could stock up on gift cards for Amazon, your grocery store, or something else you normally spend money on and use them after the 3-month period. Of course, you need to have the cash flow available to spend a ton on (ostensibly) groceries at once before you could enjoy seemingly free groceries for a while after. I would’ve also used this method for probably a few hundred dollars’ worth of gift cards if I’d needed to.

I’ll talk about my current credit card strategy in another post, but now that I’ve reached the limit, I’m just going to use my card for the things that count as travel/otherwise get me double points: restaurants, metro travel, Uber, and any flights or hotels or bus rides in the future.

[*] Credit card interest is no joke. If you can’t pay your balance off in full every month, don’t get a credit card. (I’m also here to tell you that super personally. I just saw a $5 interest fee on my CSP yesterday morning because I didn’t schedule the last payment to clear out last month’s balance in time for it to hit my account before the statement closing. I’m not perfect but that was a dumb mistake. Also that was $5 on $100. Just imagine what it would’ve been if I hadn’t paid off the $4,000 I put on the card!)

[**] I am so serious about the word responsibly. If you can’t afford whatever the amount is for the sign-up bonus, don’t get the credit card. I don’t care how attractive the bonus is or if it’s an unbelievable limited time offer that will never happen again. Also, if you have a problem with overspending on credit cards and can’t pay your balance off in full every month, don’t get a credit card!!

2 Replies to “How I got a credit card sign-up bonus without bankrupting myself”

  1. Hey there. Spent a good deal of time reading some of your posts. You should get on twitter and share your content there. There is a very welcoming FI community there. You have a very interesting story living in a high cost of living area on a modest income. Hope to see you around.

    1. Thanks for reading, Guy on FIRE! I keep telling myself that I’m actually going to use my Twitter account but so far that keeps not happening. Perhaps some day soon!

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