Signup Bonuses And How to Hit Minimum Spend Without Manufactured Spending

One of the biggest misconceptions about successful travel hacking is that it requires you to do crazy/risky/maybe illegal things to manufacture spending in order to generate points. This couldn't be farther from the truth. You can generate enough points for amazing travel experiences without doing anything unseemly. Here's how.

(Before we move on, this is a good time to remind you that you should not be engaging in these practices if you can't pay your credit card balances in full every month.)

Signup Bonuses are your friend

By far, the easiest way to earn points or miles is through signup bonuses. A signup bonus works like this...

1. Credit Card Company makes an offer

It might be publicly available. It might be mailed to you. It might appear when you log into the company's website. Or you might have to jump through some hoops to find out what offers are available to you. You can visit CardMatch, for example. Or there might be an offer available only if you go into the physical bank branch and speak with someone. For an online offer, it'll look something like this:

A Chase Sapphire Reserve signup bonus offer

A Chase Sapphire Reserve signup bonus offer

Most signup offers take the same form. They offer X points if you spend Y dollars within Z months. Some signup bonuses require $5000 spending in 3 months. Some require just a single purchase in 90 days. Some offer 100,000 miles. Some offer $150 cash back. Why would a credit card company do this? First, they want people to get the card. Second, they want people to run up a balance that the credit card company will collect interest on. Rule #1 - don't put a balance on a card that you won't be able to pay off in full before it accrues interest. Even for a signup bonus.

2. You Apply for the card through the offer and get approved

This is simple, but important. You need to use a link or application that clearly advertises the offer you're pursuing. Many cards have multiple public offers at a time, and sometimes one link will have a much better offer (even double) than another.

This public Citi AAdvantage link offers 60,000 bonus miles

This public Citi AAdvantage link offers 60,000 bonus miles

This public Citi AAdvantage link only offers 30,000 miles (but for less spend)

This public Citi AAdvantage link only offers 30,000 miles (but for less spend)

Take screenshots showing what link you clicked and what offer it came with. Similarly, if you mail in an application, keep copies of the documents you used.

3. You spend the required amount in the required timeframE

This part is straightforward, and we discuss it more below. You'll need to hit the "minimum spend." There are two ways to do this. One way is to manufacture spending. A simply manufacture of spending would look like this. You get a new card. You buy $3000 of gift cards with it to get the signup bonus. You sell the gift cards on eBay. You've earned a signup bonus for $3000 spend, but you've really only spent the amount you lost on the gift cards (plus eBay fees, plus paypal fees). This is a really bad manufacture strategy, but it's a simple example of the concept. 

Gift card resale is one (difficult) way people manufacture spending

Gift card resale is one (difficult) way people manufacture spending

We don't manufacture spend, even though Google seems to refer a lot of people here for the search "manufacture spending." We're not philosophically opposed to it, but it requires a lot of time, energy, and organization that we don't want to commit to it. Instead, we use our ordinary, day-to-day spending to hit signup bonuses. Before we get to that, just one last thing about signup bonuses...

4. The bonus posts to your account

Signup bonuses take a variety of times to post to your account. Some will show up as "pending" immediately. Some will post when your statement closes. Some will post after 2-3 billing cycles go by. Since it doesn't always happen immediately, if you spend just over the minimum spend, you might be stuck worrying whether the bank is going to deny you the offer because you clicked the wrong link, or because some of your spend didn't count. Or maybe you returned an item and forgot that it counted against your minimum spend (it does).

I've got two American Express signup bonuses pending

I've got two American Express signup bonuses pending

Always spend comfortably more than the minimum spend. If your bonus hasn't posted after a full billing cycle has gone by, call the issuer and see what's up.

How to Hit Minimum spend without manufacturing spending

Here's how you can get signup bonuses without manufacturing spending.

1. Be Organized and Know Your Spending

As a couple, we know that if nothing else, we will put about $400 per week onto credit cards just in our day-to-day spending. This is money we spend on things like groceries, dining, new clothes, Starbucks, and transit. In three months, the usual window for a minimum spend, that's about $4800 of spending. If we can get that onto a single account (either by using a single card or through one of us being an authorized user), we'll easily hit any spending bonus short of $5000 in three months.

The easiest way to hit minimum spending is simply to be organized and put your spending on the right cards

The easiest way to hit minimum spending is simply to be organized and put your spending on the right cards

2. Buy Gift Cards to Places You'll Go Anyways

It's important to understand three things about this option. First, if you buy gift cards to places where you have to spend more money than you otherwise would, you're wasting money. Second, this doesn't work as a long-term strategy because once you've bought gift cards, you have to actually spend them. And again, like all of these strategies, you shouldn't do this if you can't pay off the balance on your card.

For example, I spent at least $20 at Starbucks every week. Let's say I messed up my spending this month and I need to spend and extra $400 by the end of the week to hit a minimum spend. I can put $400 on a Starbucks gift card. I'll get the minimum spend, and it will take me 20 weeks to spend the gift card. This is great, except it also means it will be harder for me to get minimum spends for the next 20 weeks because I'm putting all my Starbucks on that gift card.

3. Pay Your Mortgage or Rent with a Credit Card

In many cases, you may be able to pay your mortgage or rent with a credit card. If your particular bank or landlord doesn't offer this option, you should look into Plastiq, which, for a 2.5% fee, will cut a check to your bank or landlord and bill your credit card. Keep in mind that 2.5% means that using Plastiq to generate points is a bad idea unless you're going for a signup bonus. Conversely, if your landlord doesn't accept Plastiq but charges 5% for credit card, it might still be worth it to pay with a card in order to hit your minimum spend. If your rent is $1000, then 3 months rent on a card would allow you to hit a $3000 minimum spend. At a 5% fee, you'd spend $150 in fees. But you're only need 15,000 points to break even on that if you value the points at a very low 1 cent per point. With 50,000 point bonuses easy to find, this will be a good option for many people.

4. Pay Your Taxes with a Credit Card

Like paying your mortgage or your rent, there is usually going to be a fee that comes with paying your taxes by credit card. Exactly how you do this may depend on to whom you owe taxes and what filing service you use, but like paying your rent or mortgage, this is a big required expense, and using it to hit a minimum spend could make the fee worth it.

5. Prepay your Bills

Frugal Travel Guy has a post on how you can prepay your bills to hit minimum spends. Like paying for gift cards, this method is tricky because it will reduce your ability to hit minimum spends going forward. That said, if you're really all about a specific minimum spend (and you should always be worried most about the ones you're actively working on), this could be a good option.

Do you have questions or tips about signup bonuses or minimum spend? Let us know below!