Sunday, April 25, 2010

How to Spend Without Spending

The most generous credit card offers often require spending large sums of money in order to earn the bonuses. For example, Amex Premier Rewards - 25,000 Points - Limited Time Offer; Maybe Another 10,000 BA Miles For Spending $3,000; 15,000 bonus points with the Amex Starwood for spending $15,000 during your first six months.

Q. What can you do if you don't spend that kind of money on a regular basis? Especially if you got a few cards for people in your family. As a side note, I like to keep all my regular spending on the same couple of cards, it's easier to keep track that way.
A. Spend without spending. In other words, reach the spending threshold your card requires, without actually buying anything. Here are some options. Read each one and decide for yourself which one works for you.
  1. Coins from the Mint
    It's pretty straightforward: You are using your credit card to purchase cash. The only question is what to do with all those $1 coins. You are not really meant to be depositing all the coins straight into the bank, and bringing a large quantity of coins to the bank can be quite heavy.
    If all you need to spend is a few thousand dollars, this can be a great option. If you want to assuage your conscience, take out a roll or two before depositing the coins in the bank.
    See this post for more info.

  2. Amex Gift Card
    Purchase a gift card and use it like a credit card when you shop. So, in a sense, you are using your credit card to buy another credit card. This allows you to quickly reach the spending requirements, but only make purchases when you need to. Bear in mind that when you pay for something with a gift card, you forgo the protection offered by the credit card.

    When you buy an Amex gift card, they tack on a purchase fee and a shipping fee. Here's how to knock both fees off:
    The purchase fee comes off with code GEN235.
    shipping fee comes off through signing up for a free three month trial for their Premium Shipping Plan. You have to sign in to your Amex account first. If you don't cancel within three months, the annual fee is $99.

    The total charge for a $1,000 gift card should be $1,000. No more.

    If you click through a cashback site (MrRebates or eBates) before purchasing the Amex gift cards, you can even earn 1% on the deal. So on a $1,000 gift card, you'll get back $10. Then, if you click through a cashback site before using the gift cards, you will earn cashback again!

  3. Store Gift Card
    Purchase gift cards from specific stores, like Amazon or Macy's. This allows you to spend the money on the card now and purchase items later. The problem with this method is that your money is locked into the store where you have the gift card and you won't have the protection your credit card offers. If you choose a store known for good customer service, like Amazon or Lands End, it's not necessary to have the credit card protection.

    Note: You can often find store gift cards for 10-20 percent off on eBay. See this post for more.

  4. Fully Refundable Ticket
    Flight, train etc.
    They can cost up to thousands of dollars, and can be refunded weeks or months later, which can be really useful...

  5. Statefarm Gift Card
    Buy a Statefarm gift card and deposit the money into a bank account.
    See this post for more info.
    They might block you from buying gift cards if you buy too many.

  6. Buy and Sell
    Buy something for a friend. Or, buy something, like an ipad, and sell it.
Making Small Purchases
There are times when you need to make small purchases on your card, like those promotions that require you to make 5 purchases a month. Some ways to make those small purchases: Fill up a dollar's worth of gas at a time, pay a small amount of your cell phone bill, sending money through PayPal, or consider donating to the US Government.


Levi said...

"donating to the us government"?! :)
aint you a laugh :p

Mendel said...

Really great post. Thanks!

Anonymous said...

how much is too many?
what do they track by? credit card? social security number? billing address? home phone #? email?
(most can be changed) said...

I don't know.

If you figure it out, please let us know.

Anonymous said...

what's the source/language for the limits on statefarm? said...

I don't know if there is an official limit, but if you're constantly unloading their gift cards into a bank account, they might start blocking you.

They do have a daily limit though:
"In order to protect against potential fraudulent card activity, State Farm Bank limits the number cards purchased per day to five cards. Also, the maximum value that can loaded on one card is $500. The maximum total purchase per day (including card fees and express shipping) is $1,100."

Anonymous said...

got a call form statefarm today, triggered by a bad SSN but they mentioned that my last few cards where unloaded, and if i unload any more, i'll be blocked.

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