Fourth Quarter Credit Card Strategy

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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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  1. Hey Mommy P, how much do you usually get for the Reload cards?….i’m always trying to get more data points bc i don’t want to blacklisted by Chase.

    Also do you think the US Air Promo applies to amazon?

    • @Ryan, I am on the very low end due to being pretty conservative with my approach, so probably not helpful for your data points. I was/am planning on upping it some soon. From what I can tell, if you stay between $1000 – $2000 a month you probably are fine.
      @FFU, you and me both! Can’t wait!
      @mikityz, I bet we will find out soon but I haven’t seen them yet.

  2. I am sure it just a typo but 40,000 points with the US Bank card are worth about $800 in tickets (not $400) unless you are going to redeem the points for gift card or cash.

  3. Cool thanks Mommy P.! Do you think it’s $1K-$2k TOTAL or for each card? I have the Ink PLus and Ink Bold. Iv’e been reading Flyertalk as much as I can on this as well.

    Also, USAir Promo—-does amazon count you think? (it’s a department store no?)

  4. I was excited about Freedom’s last quarter category. I’m headed to France for a few days and wanted to pay for the hotel with my Freedom card until I realized there is a foreign transaction fee. So I guess using the Sapphire card is the way to go.

    • @Patty, I personally would not pay a foreign transaction fee just to get the 5x….even though it could be worth it depending on how you value UR points. Sapphire would be a my personal choice in that situation.

  5. Planning to purchase some hotel gift cards in the 4thQ for an upcoming Hyatt stay. This might also be a workaround for the foreign transaction fee if you buy in the U.S. and take out of the country. That is, IF you are staying a chain that has gift cards. What do you think?

    • @Jetsfan, I thought about that too, but I am not sure which chains sell gift cards at the hotels themselves. Would be interesting to see how that works out though. I love the idea!

  6. Any idea how to waive the annual fee on the United Club Card? I’d like to follow the same strategy with my United cards, but the $395 fee is killing me…

  7. @Dee, it says it is worth two $400 tickets. 😉
    @Ryan, don’t know – doubt it is a dept store, but that would be great.
    @Liz, there are some targeted offers for that that waive the annual fee the first year. Log into your UA account and see if you were targeted. My husband is from time to time. I am upgrading though so no way out of the fee.
    @Will, people are doing that with one card. I am typically personally below that for now.

  8. I already have the United Club Card and just got approved for the Sapphire Preferred. I agree, the Club Card with the 1.5 is a great vehicle for charging all of the “boring expenses” that don’t otherwise receive 2x or 3x miles from your other cards. Looking forward to optimizing all of my spending patterns accordingly!

  9. I bought Hyatt gift cards at my local Hyatt, right at the check in desk. I used them to meet an Amex promotion that required a spend at certain vendors. I used the cards a month later. Earned credit card points at purchase, and Hyatt points when I used the gift cards. Additional data: my local Sheraton does not have Sheraton gift cards for sale.

  10. Thanks for the info! I have a Chase United card that isn’t doing anything for me, and based on your card upgrade discussion I’m going to call and see if I can get the United Club card or the MileagePlus Explorer card. Fingers crossed!

  11. Hello MommyPoints…

    So, you’re going to upgrade the UA Explorer to the Club? And bypass the 40,000 miles or whatever the current bonus is for getting the Club card? Why not keep the UAE, get the Preferred (assuming they’ll allow it), and transfer some of your credit line to the new card? You don’t think the $95 you’d have to pay for the UAE for one more year is worth the 40,000 miles? 40,000 mi / 9500 cents is over 4, meaning you’d only being paying < 0.25 cents per mile doing this. Of course its another card, at Chase, and thus you'd be giving up some other opportunity presumably. But if you value the Club card for the Lounge access, I presume you're expecting to fly United, so the miles must be worth SOMETHING to you.

    Forgive me, I'm a newb.

    • @longroller, good questions. I don’t see a working link right now, but maybe that is accidental? Let’s see what happens.
      @Glenn, there is no sign-up bonus with that card. The normal off is $95 reduction. Some have targeted offers, but the normal offer just saves $95. There are no bonus miles.

  12. Hi MP
    I too have the MileagePlus Explorer card and was initially tempted by the extra 10,000 miles for $25,000 spend.
    But then I realized that putting that $25,000 on my Sapphire Preferred would get me at least 25k UR points which I can then transfer to United.
    If I put it on my Freedom, I’d get 25,000 plus 10% UR points!
    So the Explorer card went in a drawer once the first purchase was made, and my Sapphire Preferred and Freedom continue to take a beating. 🙂

  13. Don’t get too excited with card spending and spending $1k or more for gift cards. I got a friend who got his CHASE INK BOLD and CHASE SP and Freedom all closed and blacklisted by chase. He says no exact reason was given despite number of calls to chase executive reps. He says he used IB a lot for gcs last few months and and Freedom once for $1k gas cards at gas stations last month.
    I’d stay away with these deadly, regrettable tricks to earn lots of points.

  14. Becareful with the chase credit cards at office stores If you don’t want chase to shut you down for life & say good bye to ULTIMATE REWARDS POINTS.

  15. similar story here, my grandmother’s little sister bought 2 gift cards for 5x and got her account frozen by CHASE and a FR and the cardinals are coming we have been exposed!!!!!!

  16. @jim – I think the folks that get all their Chase cards closed by Chase for abuse due to buying giftcards are probably doing a bit more than 1k per month. The real problem with this for many is finding an OD that still carries or has in stock the cards that you want.

  17. I would try calling Chase and asking about canceling the United card prior to upgrading it to the Club card. They may throw 10,000 miles your way for spending so much. Additionally, I would try to status match on Turkish Airways, get gold status and then you wouldn’t have to pay for a United Club membership at all; you would get Star Alliance Gold status, which would allow you access to United Club.

  18. What is the spending bonus threshold that you referred to regarding the Amex Gold Card? I followed your link and didn’t see anything noteworthy. I just got this card and would like to know if I missed a perk. Thanks

  19. UPDATE:

    I got my IB and other 2=UME & SP shut down 2 days ago.

    I couldn’t log in and thats when I knew something went wrong. Called and spoke to reps but they had no exact explaination as to why I am banned. The 4rth Manager I spoke to yesterday asked me whats and whys about my IB usage at OD in the last 3 months. But he told me no one has authority to restore banned accounts. It f***kin sucks! I did use my cards for other purchases too and paid off full balance due weeks before due date.

    I will try opening new chase CC next year and see if it works.
    If you want relationship with with this company, Stay away from OD trips.

    • @Jeff, I am approving this comment just because I want to point out to others that I think there are some unnecessary scare tactics out there. This person has posted similar info under many names always with different names. The email address is invalid – so I’m not sure why people are trying to scare folks away from the OD route, but take what you read with a grain of salt. I do 100% advocate people being smart with OD purchases with the Ink cards, but be aware that there is some “back story” to these “I was shut down” stories you may be reading on some sites. If they were really real then I doubt the person would be using different names/story variations/email addresses to tell similar stories.

  20. While I do think a lot of people have too much time on their hands – ie.. Jeff story. I did, however, have a scare at OD one day. My account was frozen by Chase for making a $6– OD purchase. I called in and was transferred two times and the security ban was lifted. It was merely that I was in a different state making a large purchase. I’ve had a great relationship with Chase for about three years and I would think they wouldn’t mind large purchases as they are making a profit from the purchase still- if they weren’t making a profit then they would not have the 5x category.

    • WM, I absolutely think folks should be careful with this and don’t get crazy. I’ve just had it with fake info being posted on this and other deals. Glad yours was just a security issue that got cleared up!

  21. Does anyone know if buying a gift certificate on would qualify? I realize it says “tickets purchased with the airline only” but gift card certificate would be sold by united.

    The reason I am thinking about it is that the 1500 cap is a b**ch if you need to buy a 3k airfare for instance, which could be paid with gift certficate + sapphire

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