A couple months ago a friend approached me with a frantic look on her face. Ready to change a tire, use my knife, or recommend a brand of scotch (hey, I thought it might be a real emergency), I sprang to my feet. “I’m afraid,” she stammered. “I’m afraid I won’t be able to meet the minimum spend on my new United card….”
Knife and pride restored to their proper place, I reassured her: there are many creative ways to meet the minimum spend.
The normal way to meet minimum spend is to use the card to buy whatever you normally would have purchased with another card. But sometimes you may find that the amount you need to spend exceeds the amount of your normal purchases. When that is the case, what you don’t want to do is buy a bunch of stuff you don’t need.
Rather, consider the following 5 techniques to ensure you meet the card’s minimum spend requirement.
5 Creative Ways to Meet Minimum Spend
- Have Others Reimburse You: If you have trustworthy family or friends, you can pay for things for them using your credit card. They can then reimburse you. For instance, my frantic friend paid a big bill for her parents, and they paid her back.
- Buy Gift Cards: Let’s say you’re a few hundred dollars short of meeting the minimum spend with time running out. An easy fix is to pop in to your local grocery store or drug store and buy gift cards to stores you are sure to shop at later, such as Amazon. Stores often sell Amazon gift cards in denominations up to $500 with no fee. Alternatively, you could buy a Visa or Mastercard gift card in denominations up to $500. While they charge a fee, typically in the $5 range, they grant you the utmost in flexibility. $5 is a small price to pay to make sure you get your credit card’s signup bonus.
- Pay Taxes: You can pay taxes using your credit card for a fee of 1.87% – 2.25%. Just this week the FrequentMiler published a great writeup on this technique. While the fee is higher than in the case of buying gift cards, at least you aren’t left with gift cards that you have to spend down.
- Pay Bills via Plastiq: Plastiq allows you to pay many bills by credit card that you otherwise could not. For instance, I use it at times to pay all or a portion of my monthly mortgage payment. Plastiq varies their credit card fees from time to time. Right now the fees are 2% if you use an AMEX card or 2.5% if you use a Mastercard or Visa credit card. While this service is usually more expensive than paying taxes, I use it for three reasons when I need assistance meeting minimum spend. First, it is easy to use. Secondly, I find it simpler to make a payment toward a bill I have than to estimate a tax payment. Thirdly, having used it many times, it has never failed me once.
- SquareCash or Venmo: SquareCash and Venmo are services that allow you to send money from one person to another. While there is no fee for sending cash from your debit card or checking account, there is a 3% fee for sending cash from your credit card. To meet minimum spend, let’s say you sent $100 to your spouse or mom, at a cost to you of $103. They would receive $100 from you and could then write you a check in that amount. Imagine this worst-case scenario. You opened the Chase Sapphire Reserve. You have to spend $4,000 in 3 months to get the 100,000 points, which are worth at least $1,500. There are only a few days left to meet the minimum spend, and you have not used the card a single time. You decide to send your mom $4,000 via SquareCash, for which she promptly writes you a check in that same amount. SquareCash charges you $4,120 to send the $4,000–a loss of $120 (i.e. 3% of $4,000). What is your end result? You just bought 100,000 points, valued at at least $1,500, for $120. You met the minimum spend and came out ahead $1,380. Not bad, and this is the worst-case scenario!
Two Words of Caution
Two cautions before I close.
First, before executing the above techniques, the conservative play would be to contact your credit card issuer and ask them to remove the cash advance feature on the card or else lower your cash advance limit to $0. Credit cards charge significant fees when you use them to provide you with cash advances. It is likely that none of the above techniques will be considered a cash advance by your credit card issuer, so zeroing out your cash advance limit shouldn’t be necessary. That said, it’s the safer play.
Secondly, be sure never to count a card’s annual fee toward the card’s minimum spend requirement. If the card has a $3,000 minimum spend requirement and a $95 annual fee, you need to spend $3,000 in addition to paying the $95 annual fee. In the case of cards that offer certain credits—e.g., a $200 credit for spending $200 on airline incidental fees—it is sometimes the case that the $200 spent counts toward the minimum spend, but sometimes not. You are always better off spending a couple hundred dollars more on the card than you think you might have to in order to ensure you get the signup bonus.
This post is the fifth in the following series:
- Imagining the Possibilities of Free Travel
- Leveraging Credit Card Sign-up Bonuses for Free Travel
- Understanding Credit Scores and the Effect that Credit Card Applications Have on One’s Credit Score
- Which Credit Cards to Get to Maximize Free Travel
- 5 Creative Ways to Meet the Minimum Spend Requirement in Order to Get the Sign-up Bonus (this post)
- How to Use the Miles and Points You Earn
- How to Decide Whether to Keep or Cancel Credit Cards
Question: Are there other techniques you have used or would consider using to meet minimum spend? You can leave a comment by clicking here. And if you liked this post, sign up here so that you never miss a future post.