Sunday Reader Question: What’s the Cheapest Way to Hit Credit Card Spend Requirements?

by on December 18, 2011 · 22 comments

in Credit Cards, Sunday Reader Questions

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TPG reader Brenda writes:

“Could you kindly refer me to past blog postings that suggest ways to meet the $3,000 in first three months spend on a Delta Gold Amex card?  I know that the mint coin offer is no longer possible, but I sure could use some help with other ways to attain the goal so that I can get the 45,000 mile bonus.  I live in the South, and Delta serves my local airport with frequent departures.  It is a good match for our family.”

I get this question, in some shape or form, every day. We all want the huge credit card bonuses, but not all of us can spend the amounts required to hit the spend thresholds. My best advice is to put as many of your expenses on your credit card as possible, but be warned they aren’t all free. There’s no way, to my knowledge, to pay car payments with a credit card for free – most financing companies will charge a fee.  However, there are a number of ways that will help you hit those spends:

1. Free Electronic Payment Services: Many people use cash or checks to pay people, but savvy points aficionados know that there are a couple payment systems out there that will sync up to your credit card for free. These programs allow you to send payments to other people using that points-earning credit card – without posting as cash advances.

I personally use Venmo and Amazon Payments for a lot of my legitimate personal and business spend. These sites are actively encouraging new members, but you cannot abuse this feature (such as sending thousands of dollars to yourself to create points out of nowhere) or else your account will get shut down forever. To be conservative, you can send about $1,000 a month on each service to other people free of charge using your credit card every month. So the next time you and your group of friends are out to dinner, pay them for your portion using Venmo or Amazon Payments. This is the new future of cashless banking, so I suspect more and more banks will encourage people to switch their financial transactions to become more electronic.

2. Rent/Mortgage/ Car Payments: Though most people pay by their monthly car payments by check as well, there are also services such as Charge Smart that allow you to make such payments by credit card. Just be sure the bank or car finance company through which you secured your loan will accept payments, and you can start making them on your credit card through here. You generally pay a 3% fee, so this may not make sense unless you absolutely have to hit a spend threshold or you will lose out on a bonus.

3. Utilities: You usually have to pay gas and electric with a bank account, but all your other utilities—phone, cable, internet—should all be set up to be paid through a points-earning credit card if that opportunity is given.

4. Dining: Almost all restaurants take the major credit cards—especially Visa and Mastercard—plus many of the major airlines including American and United have dining networks that allow you to earn double points, and up to five points per dollar spent at participating restaurants, so be sure your cards are registered. See here all about double dipping with dining programs.

5. Expenses, Groceries and Gas: Literally every other expense that you can possibly charge, from groceries to dry-cleaning to gym memberships to gas (which can often earn you double points) should be charged to your points-earning card. Remember, if you have the American Express Premier Rewards Gold card you get 2x points on gas and groceries.

6. Insurance: This is a big part of all our lives—homeowner’s, car and medical insurance make up a big chunk of monthly expenses that stretch into the hundreds and even thousands. The good news is that many major insurance companies accept credit card payments, so be sure to check with them, and if they do, make your payments that way rather than by check, because otherwise you’re leaving tons of valuable points on the table. In fact, most will even give you a discount if you pre-pay your insurance premiums six months in advance – that way you can pay your insurance now in order to get your bonus quicker and save money.

7. Gift cards: Buy a few Amex gift cards when you know you’ll be spending some money soon, and use the gift cards instead. It’s basically like using your credit card to make charges you’ll be making anyway. But you don’t have to stop there. Instead of buying presents or goods outright, you can use credit cards to purchase gift cards for your friends and family at merchants such as Amazon and iTunes so they can purchase what they want for themselves. Gift cards like this are also a great way to pay people such as babysitters or pet-walkers, or to give them a holiday tip rather than just handing them cash.

8. Shopping: If you’ve been reading my blog, by now you know that most of the major airlines such as Delta, American, Southwest, US Airways, and United (and some credit cards like Amex Membership Rewards and Chase Sapphire Preferred) have online shopping malls where you can earn tons of bonus points, especially over the heavy holiday shopping period. In fact, with certain merchants, you can earn up to 10 points per dollar.

9. Charity: If, like many people, you’d like to make some charitable donations before the end of the year, put away that checkbook and make your donation on a points-earning card instead. Chase Freedom is giving 5 points per dollar on all charitable contributions until December 31, 2011. I recently made a donation to a charity and they were more than happy to take my American Express card with no questions asked.

10. Taxes: Still paying off your taxes from 2010? Well, if you’ve been doing it by check or cash, you’ve been wasting points. For property and state taxes, you can use Official Payments as a third party service, while for federal taxes, check the IRS list of tax payment service providers, many of whom accept payment by credit card. Just beware the convenience fees many of them charge since these may negate the value of points you earn—though if it’s for earning a massive minimum-spend bonus, it can still be worth it.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • noel

    It looks like there are some changes happening on Amazon Payments. You now need to include your social and they may be charging transaction fees. I’m not totally sure, but here’s the flyertalk thread:

  • zale

    Don’t try Amazon Payments with Amex, they will very likely slap you with a FR. There have been tons of reports about this. The same goes for Paypal.

    Credit Card companies don’t intend on letting you get cash from the card without paying a hefty interest. Amazon Payments and Paypal are currently the biggest red flags. I wouldn’t be surprised if Square is up next.

  • Jerry Fu

    Add to the list? It sort of falls under charity, but it’s really a loan, and there’s something like over a 98 or 99% chance that your loan is repaid in full.

  • Agee19 is a great site to buy giftcards at a discount. I am always stocking up on these cards when I need to meet a charge deadline then I use them when I need to.

  • Anonymous

    Any suggestions on how to pay a student loan? I have an over $400 monthly payment graduate school loan that just kicked in this month. AES asks for the payment through your checking account, but I feel like I’m wasting points!

  • Dgc300

    One of the best ways is to pay in avance on Verizon and Verizon wireless. Pay each one 750 and you will not need to make another payment in the next few months. Also you can get gift cards at supermarket stores on several merchants and even their grocery store. Spend the money on things you would anyway in the next few months.

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  • anne

    I have a question: I have a basic Amex and its dull, I have heard good things about the SPG Amex card, but luxury travel isn’t my top priority. Is SPG just for luxury travel?

  • Anonymous

    SPG amex isn’t just for luxury travel- its good because the points transfer at a 1.25 ratio to many frequent flyer programs (where you can book for either coach or premium travel) or at low hotels or high end.

    The other Amex card you might want to consider is the Premier Rewards Gold because it gives 3 points per dollar spent on Airfare and 2 points on Gas and Groceries and the annual fee is waived the first year

  • Karl Kroger

    I’ve been wondering if Amazon Payments will cause the receiver to have to report the money has income to the IRS?

  • smedleyb

    I found that my electric co. charges $2.25 to pay the monthly bill with a CC, and my gas co. charges $5.95. Rather than pay that each month, which amounts to roughly 3% of my bill and about $100 a year, I pre-pay roughly 4 months worth of bill 3 times a year. Yeah, it’s $25 worth of pointless fees, but if I can knock off the equivalent of $3000 CC spend worth $500-1000 in points, it’s definitely worth it.

  • anne

    Is the PRG worth the $175? Is the Chase Sapphire Preferred like the PRG because I was reading the good reviews on that too?

  • Jason

    I was wondering the same thing, as I send my roommate rent each month through Amazon Payments… Can anyone offer any clarification on this??

  • Tzhao2

    I’m actually pretty curious about this. Could you please post some reports of people getting FRs from using Amazon Payments?

  • Anonymous

    The Sapphire PReferred is a better card and the annual fee is only $95 (waived for the first year)

  • Fewtreezy

    From the Q&A

    “We will track your unadjusted gross payment volume and number of transactions, and if they both exceed the reporting thresholds ($20,000 and 200 transactions) by the end of a calendar year, we will send Form 1099-K to you and to the IRS early the following year.”

    “Will you file Form 1099-K for my account if I only exceed one of the two thresholds?

    No. Unless you exceed both thresholds ($20,000 in gross payment volume and 200 transactions) we will not file Form 1099-K for you.

    If I have multiple accounts that exceed the thresholds when the account totals are combined, will you file Form 1099-K for my accounts?

    Yes. Unadjusted gross payment volume and transaction volumes will be consolidated for all accounts that have the same Taxpayer Identification Number (TIN).”

    Is the $20,000 calculated based on net payment volume or gross payment volume?

    As required by the IRS regulations, the $20,000 is calculated based on unadjusted gross payment volume. Unadjusted gross payment volume means the total payments received, unadjusted for fees or refunds. The amount that you receive in your Amazon Payments account is the gross payment amount for the transaction, even if a rebate applies or the transaction is later refunded.

  • Bohemiana

    I don’t care about luxury travel either but our SPG card is are FAVORITE card. Here’s why: like TPG said, you get 1.25 ratio for American, which we did this year for a ticket. But most importantly, we take advantage of Cash & Points so we can stay at decent places for the price of Motel 6. We just got back from Tucson and paid $30/night at the Sheraton. Other places we have stayed for Cash & Points include: Westin Seattle –$90, St. Francis San Fran–$90, FourPoints Sydney–$60, Kuala Lumpur Sheraton–$60, Amman Westin–$40, etc. All of those cities are extremely expensive even to stay in dumps. Our next trip is Hawaii and we’ll stay at the Sheraton in Kona for $60/night!

    We did a 5-month trip around the world in 2010 mostly staying at cheap guesthouses but when we got to cities like Sydney, it was fantastic to have a great place to stay for less than a guesthouse there and it rejuvenated us. Depending on where you want to travel, it has some great deals. If you can reach the spending requirement, I highly recommend this card if you travel to larger cities.

  • Anonymous

    Moscow Hotel Imperial this summer for $90+4800, when the rack room rate was over $350/night. Yeah, the SPG is pretty awesome.

  • zale

    You can start here:

    That forum is in no particular order, so you will need to search through the forum to find posts on this.

    This is only one of the many places I have seen reports of this. To me it is clear that personal Amazon payments raises a red flag.

  • Anonymous

    This past year when I had a whole lot of credit card minimum spend to make I started using WilliamPaid for rent payments. They charge ~2.4% but unlike a lot of rent payment companies they take Amex. I started using it to make spend on my SPG card, and “expanded the program” to include my Platinum and Sapphire Preferred.

    When I was done, I was really on the fence about keeping it since I’m in the lull between credit card application rounds, so I did a bit of math. I certainly don’t think it’s worth paying $30/month for 1250 Amex MR or Chase UR.

    There are 2 exceptions though. (1) is the Amex PRG card, which gives you 15K extra bonus when you spend 30K/year. I wouldn’t put that through my Amex normally but 15000$ in rent goes a long way. Then your rent is actually netting you the 15K bonus + the 15K spend or 30,000MR/year for $360. I’d take that deal.

    (2) is the SPG card. It’s easy using Cash & Points to redeem for over 5-10 cents per point, and pretty damn hard to redeem for less than 2.4 cents per point. So worst case you break even and best case you can get 200-400% interest on the rent payment fee. That’s probably not the best way to look at it but it’s worked out okay for me so far :)

  • mikes

    I do the same. Here in NM, its $2.95 for gas or electric. I pay electric $500-600 at a time. Gas I only do in winter since our summer bills are trivial and I don’t care to pay more thana few months in advance. Using Cap1 for a $500 payment, I come out $7 ahead. Not much, but maybe $30/year. I can use that to reimburse a $25 cruise ship credit –> 3.5 free drinks !

  • mikes

    No fee to pay AT&T online, and they just gave me $25 to sign up for AutoPay. 3 months required, one $25 GC per year. I believe it was targeted.

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