Attention! Strategy Adjustments Needed as Credit Card Bonuses Adjust

A year or two ago was the heyday for mileage collectors.

There were multiple offers for 100,000 (British Airways and Capital One), and it seemed like there was no point considering anything less than a 50,000 point or mile offer.

But times are changing once again.

As the times change, so must our strategy.

Proof that Credit Card Bonus Offers Are Changing

  1. Until a few months ago, the Chase Sapphire Preferred offered a 50,000 point sign up bonus.  That amount has now been reduced to 40,000.
  2. A year or so ago, you could get a Citi Visa and/or Citi American Express with a 75,000 mile bonus.  50,000 is currently the best available offer.
  3. The Ink Bold used to offer 50,000 UR points after a $5,000 minimum spend.  50,000 points is still up for grabs, but the minimum spend has doubled to $10,000 now reduced again to $5,000.
  4. When the British Airways 100,000 bonus came back this year, it was set up to appeal to high spenders.  In order to get the full 100,000 points, you need to be prepared to spend $20,000 in a year.  Last year, there was a minimal minimum spend.
  5. A couple of years ago, the Capital One Venture Rewards bonus offered to match up to 100,000 frequent flyer miles with 100,000 Venture Rewards.  Last year when they re-introduced the offer, they matched up to $100,000 worth of spending on a credit card.

So I’m guessing you get the point.

The glory days are probably over.  

And it makes sense for credit card companies.  Their focus is to use the bonus to entice new customers whom they hope will stay with them for a very long time.  One way to ensure you’ll stick with them for a longer term is to increase the minimum spend and give people longer to make that spending limit.

An ideal customer is a long term, high spender.

But it’s not all bad news.  Back a decade ago, I’d be doing credit card applications for 25,000 miles.  Most current bonus amounts are still close to double that amount.

Strategy Suggestions and Adjustments to Maximize on Credit Card Bonus Offers

  1. Carpe Points – Seize the points.  If you’ve been a sideline reader and you’ve thought about pulling the trigger but felt nervous, then it’s time to take advantage of the current offers before they go away.  I’m not predicting doom and gloom.  I’m not saying the bonuses will disappear, but they are more likely to become less lucrative instead of more lucrative.  If you’ve got questions or you’re uncertain about any aspect of signing up for cards for bonuses, please feel free to email me htcheap at gmail dot com.  I personally respond to every email I get (even if it takes me time to get back to you sometimes).
  2. Explore Creative Spending Options – One of the biggest reservations or inhibiting factors for most people is the minimum spend.  I need to tread a fine line here.  I don’t want you to hear me saying find ways to spend more money.  That’s bad advice.  Instead, I’m saying be willing to creatively explore how you can turn current expenses into credit card spending.  Are you currently using Amazon payments for legitimate purposes?  When I owe family members money, this is my preferred system as I can get that many dollars closer to my minimum spend.  Are all of your ongoing bills being paid with a credit card?  Have you ever considered using a credit card to pay your tax bill?  I did that last month for the first time.  It cost me more ($50) in fees, but I was able to get a $3,000 minimum spend on my credit card.
  3. Consider Fewer Applications Spread Out Over a Longer Period of Time – When it comes time to apply for a credit card, my first question is: how much minimum spend can I meet?  Typically, I actually spend more than I anticipate because things always come up.  Once you’ve explored your creative spending options, then you should try and apply for the best credit cards that will give you the most points for your upcoming expense.
  4. Always Apply for a New Card When You Have a Bigger than Normal Expense Coming Up – I see large purchases as a golden opportunity for meeting your minimum spend.  House repairs?  Moving?  Purchasing an expensive item?
Disclaimer:  Once again, I’m not talking about spending more to get more points (unless spending more makes sense, like my tax bill).  I’m talking about strategically cycling as much of your current spending as possible through a credit card to help reach the minimum balance on a larger number of cards.

Now, get out there and start earning.

Hat Tip: This post was inspired by a recent article that talked about credit card companies playing hard to get.

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