How to Score Credit Card Incentives Without Going Broke

Kat Tretina

May 23, 2017  •  3 Minute Read

Credit Cards

When it comes to shopping for a new credit card, there are hundreds of bonus offers and sign-up incentives. Sometimes worth hundreds of dollars, credit card companies tempt thousands of airline miles or cash back rewards to convince you to apply for their card.

While those lucrative offers can sound appealing, you need to be careful. If you’re not prepared, you could end up building up credit card debt to chase rewards. Find out what you can do to reap the benefits without losing money.

How Credit Card Offers Work

Most companies offer special incentives designed specifically to attract new customers. However, you don’t get the reward just for signing up. To qualify, you must meet a pre-determined spending quota within a set time period, like spending $4,000 in 90 days.

If you meet the spending minimum, the company then issues you your reward for you to use, whether it’s airline miles or a statement credit.

However, if you don’t usually use credit cards, reaching the spending minimum can be difficult. And the benefits sound so appealing that many consumers end up charging way more than they intended, just to hit the necessary amount to get the bonus.

Using Credit Strategically

Instead of using your credit card to pay for unnecessary spending, develop a plan on how to use your card and meet the rewards spending quota. With some forethought, it’s like the credit card companies are paying you for using the card. You can meet the bonus goal without racking up debt or interest charges with these three strategies:

1. Charge Fixed Expenses

Rather than buying things you don’t need, set up automatic payments on your credit card for your fixed expenses like rent, utilities, cable or your cell phone. Those are bills you would have to pay anyway, but instead of withdrawing from your checking account, you’ll charge to your credit card.

For example, the Capital One Quicksilver Cash Rewards Credit Card you can earn a one-time $200 bonus if you spend $500 within the first 3 months from account opening. If you just used the card to pay for gas each month for your commute, you could easily meet the spending requirement and get the $200. And if you use the money you had set aside in your checking to pay off the balance each month, you’ll never carry a balance or accrue interest charges.

*Information for this card is not reviewed by or provided by Capital One

2.Use your Card for Business Expenses

If you have work expenses, such as buying supplies or booking travel, use your credit card to make those purchases rather than a company card. Afterward, you can submit your receipts to your employer for reimbursement and pay off the charges in full. If you travel or make a lot of purchases for work, this approach can help you meet your quota quickly.

With the Capital One Venture Rewards Credit Card you can enjoy a one-time bonus of 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 in travel. If you travel for work, you can meet that goal if you book one business trip, including airfare and hotel, on your card. Once your work reimburses you and you pay off your balance.

*Information for this card is not reviewed by or provided by Capital One

However, note that not all employers allow you to use your personal card for business expenses, so check with your company first.

3.Shop for a Card When you Need to Make a Major Purchase

If you want to get a new card with great benefits but don’t want to build up debt, coincide with a major purchase with your new card. For example, if you need to buy a refrigerator to replace an old one, charging that purchase on your new card can be a smart way to get bonus rewards. Just use the savings you’ve set aside for the big purchase to pay off your credit card bill.

With the Barclaycard CashForward™ World Mastercard® (Offer Expired) you can get $200 in cash rewards if you spend $1,000 in the first 90 days after account opening. If you charge a new appliance, you can meet that requirement in just one purchase.

Shopping Thoughtfully

Credit companies know that cash back rewards or bonus airline miles can attract new customers. Many end up so excited about the benefits that they spend extra money, which can end up costing them in the long run. Instead, use the above strategies to use your card wisely and score your bonus without building a balance.