Maximizing credit card bonus offers can be confusing at first, but with these tips, you’ll be confident in deciding which offers to choose. These offers are a great way to make extra cash and build your credit score!
In 2018, I was working as a tour guide making about 10k and I thought credit card rewards were a scam. Once I learned how to maximize them, I ended up backpacking in Colombia, Uruguay, Argentina, Chile, and Mexico for 6 months in the off season thanks to points. I took that time to listen to personal finance podcasts, learn about investing, and I came back to work as a stockbroker which prepared me to be the money coach I am today.
What are credit card bonus offers?
Whenever you sign up for a new credit card, you always want to know what’s in it for YOU. Credit card companies want you to sign up for their card and reward you within a set time frame for using it.
For example, the Amex blue cash preferred card’s offer at the time of writing this post: if you rack up $3,000 in expenses in the first 6 months, you’ll earn $400. Yes, that’s $400 in FREE money.
Be cautious of intro bonus offers
Credit card companies don’t want you to pay off credit cards. They make money off of you if you can’t pay your cards in full all the time. Do not sign up for an intro bonus offer unless you’re financially able to pay off your card mostly, or in full by the closing date of each month.
If not, even if you meet the requirements for the bonus intro offer and make those $400, you may end up paying far more than that in interest rates and late fees. It’s really easy to get carried away and spend to reach the minimum (in this case, $3,000), but it’s important to have a budget and stable income streams before jumping in.
How to decide between credit card bonus offers
The more companies offer you as an credit card intro bonus offer, the more they’re going to expect you to spend, or the shorter the time frame they’ll give you. If you’re a business owner, it’s important to separate your personal from business transactions not only for legal and accounting reasons, but for your sanity. I give an example above of several different intro offers for business credit cards, but the same can be applied for personal cards.
When deciding between bonus intro offers, be real with yourself about being able to pay off your card in full, on time, whether you get the intro bonus offer or not. If you’re not sure which one to go with, my go to is just to start with the no-annual fee card, try it out for a year, and then upgrade.
That’s what I did with the Chase Ink Business Preferred card. I’d used the free card for a few years, but once I started my digital nomad life and traveling outside of the U.S., I upgraded to the $95 annual fee card, and it has been worth not paying foreign transaction fees. Those add up!
How credit card bonus offers helped my credit score reach 800+
By paying my card off ON TIME. One year, I opened 4 separate cards. Opening the cards dinged my credit score each time by a few points, but because I paid my cards off on time, my credit score went from being about 700 to 809. I had about $45,000 in access to credit across all these cards, but I never used it all. Creditors want to know that you won’t go wild with more access to credit, and you’ll be rewarded for being disciplined.
Having a high credit score is important because it will give you better interest rates on loans like mortgages or car loans. I don’t plan on buying a house anytime soon, but when I do, I’ll have a solid credit score.
Bonus intro offers for big expenses
If you have a big purchase, trip, or move coming up, that is a great time to get rewarded for your spending with a credit card bonus offer. When I moved to Indianapolis to work as a stockbroker, I opened the Amex platinum card because it would reward me for spending $3,000, which I easily reached within just 2 months with all of the moving expenses. After a year, I decided to close the card because it wasn’t worth the annual fee, and instead shifted to the blue cash preferred card, but I still got hundreds of dollars in free money.
Want to learn even more about credit cards? Watch my masterclass on making credit cards your b*tch here!