As you would know if you are a regular reader of this site, there are frequently offers on credit cards, where signing up for a points-earning card comes with a very lucrative sign-up bonus.
These offers usually require you to spend a minimum amount on the card, within a certain time period, to trigger the bonus points. The idea here is to get you used to using the card to make up the spending target, in the hope that you will get in the habit of using the new card.
For example, the current 100,000 Qantas Points offer on the ANZ Frequent Flyer Black card requires a total of $4,000 spend in 90 days, and the Citi Prestige offer of 410,000 bonus Citi Rewards points which requires a minimum spend of $1,000 every month for 20 months.
Depending how much you normally spend on credit cards, for some it could be harder to meet the minimum spend target without spending more than you usually would and remaining financially sensible—that is where this guide comes in.
I will take you through some ideas for how to make the minimum spend for sign-up bonuses on credit card offers, without overspending.
It is worth reiterating—do not go into needless debt just to earn points. Interest rates on rewards credit cards are usually high, and you need to be able to pay the full statement balance to avoid paying any interest.
Almost all the options discussed are about methods to timeshift when you spend but that also means you will have to bring forward when you pay that off your bill. So, ensure you only consider offers and transactions which you know you can repay.
Interested in more tips about how to use credit cards? Start by reading our guides to how the Australian credit system works →
Here is a summary of the methods for meeting minimum spend discussed:
- Put everything on your card (the obvious one) ↓
- Pay bills on your cards and/or paying them early ↓
- Pay rent ↓
- Pay for others ↓
- Bring forward a big ticket purchase ↓
- Put credit onto gift cards ↓
- Use them for business or work expenses ↓
- Bring forward travel bookings ↓
- Some creative options!
The most obvious, and easiest way, to make up the minimum spend on a new card is to put it at the front of your wallet and use it for everything possible until you have made it. All your shopping, all your bills, every coffee, eating out, take away, etc. Most people would be able to make up the requirements of most cards within a couple of months.
The key here is to not spend any more than you otherwise would—otherwise it would be easy to suggest going on a shopping spree!
This is probably the most boring option out there but one of the easiest.
Most (not all) household bills will let you overpay to credit future bills. Even if you are set up for automatic payment of your bills, you can usually make a manual payment for the amount of your choice. If you are set up for online billing it should be an easy matter to log on and make a payment.
Personally, in the past, I have done this for electricity and phone bills. I have found it a good way to quickly hit a minimum spend target and it is a nice feeling to see the words ‘no payment is required’ on your next bill that comes around!
On the subject of bills, if you have sizable monthly or quarterly bills—think: council rates, health insurance, car registration and insurance, gym membership, education fees—then consider paying them for the full year in one go.
If the offer you are chasing is not time-limited to a point that makes this option prohibitive, you can time your sign-ups so that your bill will fall within the window and you can use it to hit your minimum spend.
For example, if there is an offer that expires at the end of February that requires a $5,000 spend in three months, and you know you have a $2,000 insurance bill at the start of May, you might choose to delay your sign-up until the end of February rather than applying at the start of January, so that you can pay that bill on your new card to help you hit your target.
Depending on acceptance by your landlord or real estate agency, you may be able to pay your rent by credit card but you will probably have to use a third-party company and pay a surcharge to do so. Payments via American Express and Diners Club cards are usually significantly more than those charged on a Visa or Mastercard.
Some businesses providing this service include:
We have all been in the situation where you go out to a restaurant with a group of people and the dreaded time comes to split the payment. Be the hero by volunteering your card for the entire purchase and have everyone transfer money to you separately. Obviously, it is more work for you to work out how much to charge everyone but it can certainly boost your expenses quickly.
You could also ask trusted family and friends if you can pay their bills on behalf of them and then have them transfer the money. In my experience, most people (who are not earning points anyway) are happy for me to do this and see no real difference whilst you reap the rewards.
If you are thinking about a new fridge or lounge, or any other big ticket item, you could consider bringing this purchase forward to help you hit your minimum spend (potentially in one fell swoop). Normal financial advice applies not to overextend yourself on credit obviously!
Buying Christmas or birthday presents for others at any time of the year is a good way to contribute to your minimum spend requirement. Make sure you are maximising your purchases by shopping through a points-earning online mall.
We have covered ways that you can make gift cards work for you before. If you are a few hundred dollars short, you could buy a gift card now that you can then use after the time limit of your offer. For example, you can buy a supermarket gift card to hit your target, that you can then use over the next couple of months to buy your groceries.
As always with gift cards, be aware that you will lose any protection of insurance that you would have had if you bought something directly on a credit card (although how important that is will depend on what you are buying—you are not likely to need extended warranty cover on a loaf of bread!).
If you are lucky enough to work for a company that will let you purchase work-related goods or services and reimburse you, you can use your card to make the purchase and get paid back, adding some extra dollars towards your target.
If you have got travel coming up you need to pay for, book it slightly earlier in order to make up your spending target.
Obviously, if you choose to do this for travel a long way off, you will need to take into account the risk of your plans changing, or the extra cost of flexible bookings (if you do not routinely book them).
Put down a deposit
People looking for solutions for meeting minimum spend targets often look for transactions that can be made now and then refunded in future. As for the ethics of doing this—that is up to you to decide.
For example, you could research whether you would feel comfortable drop $1500 on a refundable deposit on a Tesla and then decide if it is or is not for you later.
Another option but doing some social good and adding a little risk and time—you could do some social good and give someone in the developing world a short-term loan to start a business.
Transactions are made through PayPal fee-free, including loading up your account and withdrawing your loan repayments.
Be aware that Kiva operates in US dollars so while you should be repaid your loan, you might end up with more or less depending on currency movements.
There is also the risk of default—Kiva does not guarantee that your loans will be repaid. You also do not earn any interest on the loan but that is not the point.
If you frequent a local eatery or other establishment, you may consider running up a tab for future purchases (with the cooperation of the business, of course).
Some creative thinking about your upcoming spending should yield plenty of ideas of ways to hit the minimum spend on your credit card, without spending money you otherwise would not.
Making minimum spend should not be a challenge or costly if you put your mind to it and if you can absorb expenses from others and have them pay you back.
Do you have any other tips to help meet a minimum spend requirement? Share in the comments below!