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If you churn rewards credit cards with any regularity (like I do), then you probably are familiar with the phenomenon my family is currently facing. First you get into a rhythm where everyone knows which card to use for each type of purchase, and then it all changes. You have hit the minimum spending requirements you were working on, you are temporarily out of gift cards (thanks to an unexpected mad rush on your local office supply store), and quarterly bonus categories have changed. Now what do you put on each card? Do you even still have the right cards in your wallet? The reality is that at least every couple of months you probably need to take a look at your rewards credit card situation and see where it makes sense to focus different types of purchases. That is what my family is doing today, so I will share our thoughts and strategy in case they mirror some of your own situations.
1. Minimum spending requirements:
This always has to be the first priority when deciding which card to use as the sign-up bonuses are only lucrative if you can hit the spending requirements in time. Our last churn was in mid-August, and we have met the spending requirement on the Amex SPG Business ($5000), are close on the Bank of America Hawaiian Airlines card ($1000), and are on hold with the US Bank Card ($2500) as the rest of the minimum spending requirement will be made via a charity donation in a month or so that will earn 3x points and get us to the magic 40,000 point level that will translate to two $400 airline tickets.
With the end in sight on spending requirements, that means it is time to get back to really maximizing the bonus categories of the cards that we have.
2. 4th Quarter Bonus Categories
The fourth quarter brings us new category bonuses on the Chase Freedom Visa. This card now awards 5x on hotels, airlines, Best Buy, and Kohl’s purchases. Read this post for full details on those bonuses. I will have no problem hitting the $1500 maximum with some planned hotel stays and airline purchases this quarter, but I would rather use some of the $1500 on Black Friday Best Buy purchases, as I otherwise would usually get 1x there (excluding going through portals/using gift cards), but I have other cards that can give me 2x and 3x on hotel and airline purchases. I am also really hoping for some awesome Ultimate Reward shopping portal bonuses for holiday shopping – just like we got last year!
Like many of you who have the US Airways card, I was also targeted for a promotion that awards 5x on purchases at department stores, electronics stores or restaurants (including fast food). This promo runs through the end of the year is capped at $500. I will probably put $500 worth of restaurant purchases on here, and then go back to putting dining expenses on my Sapphire Preferred card at 2.14x once the cap is reached.
3. Working toward hitting annual spending thresholds
The only card that we have where we try to hit an annual spending threshold to trigger an extra bonus is the United MileagePlus Explorer card. This awards 10,000 bonus United miles after spending $25,000. We put all of our “boring” expenses on this one like insurance bills, swim lessons, club dues, etc. We hit $25K a few weeks ago and have received our 10,000 bonus miles. I will be upgrading this card to the United Club Card next month when my club membership expires. I will then get 1.5 miles per dollar for all my recurring boring expenses, and won’t have to worry about an annual spending threshold. I am upgrading my card rather than applying for a new one as I want to keep this lengthy account history, avoid a credit inquiry, and keep my account number as it has so many auto-payments attached and I am too lazy/busy to change them all.
The Amex Premier Rewards Gold Card, British Airways Card, and a few others also have annual spending thresholds that trigger additional perks or bonuses, so pay attention to where your spending for the year is on those cards as we are now in the final stretch of 2012. Determine if it makes sense to funnel spending in the direction of one of those cards or not.
4. 5x Gift Cards Routine
As you may have seen on Twitter (@Mommy_Points), I suffered from some moderate shock/withdrawal when I went to my local Office Depot this week to stock up on some gift cards using my Ink Bold Charge Card, only to find out they had been totally wiped out of all types of gift cards that I would be interested in. No one was able to tell me when they would get more as they just kept saying that “stock is automatically replenished when it is out of stock”. Great, but when?!!! I’ll try back in a few days, and I’ll hit another Office Depot a few miles down the road to see what their gift card situation is like.
For those wondering why I would want a gift card – the short answer is because when purchased at an office supply store with an Ink Bold Charge Card or Ink PlusSM Business Card (and yes you can get both!) you earn 5x on the purchase. You are then basically earning 5x Ultimate Reward points on everything you purchase with the gift card. Read this post to learn more about why the 5x potential makes the Ink cards my favorite of all cards on the market today.
Those are the things we are considering when deciding what to use in Q4. What is your credit card plan for the next few months?
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