Many of the credit cards with high signup bonuses come with some sort of minimum spending requirement. Usually, you are required to charge a certain amount in purchases onto your credit card within three months in order to be eligible to receive the signup bonus.
The clock starts ticking on the date of your application approval, so most of the time the real window for meeting the spending requirement is a little less than three months, given the time it takes to receive your card in the mail.
Most spending thresholds on Canadian credit cards are actually pretty reasonable targets. For example, quite a few of the American Express cards award the following bonuses upon completion of a $1,500 minimum spend:
- The Gold Rewards Card awards 25,000 Membership Rewards points
- The SPG Card awards 20,000 Starpoints
- The Business SPG Card awards 20,000 Starpoints
Many people would be able to meet these requirements "organically", or in other words by spending money regularly on purchases they would make anyway, such as gas, groceries, food and drink, etc.
There are, however, a few cards whose minimum spending thresholds are more exorbitant.
The Platinum Card awards 60,000 MR points upon spending $3,000 within three months.
In addition, both the Business Gold Card and the Business Platinum Card in the American Express Membership Rewards family require you to spend $5,000 within the initial three-month period in order to net 40,000 MR points and 75,000 MR points respectively.
However, these cards are indeed more geared towards high net worth individuals and business owners; the high spending threshold therefore makes sense in theory.
This can't be said for the RBC British Airways Visa Infinite, whose seasonal 50,000 Avios promotional offer has the highest minimum spending threshold I've ever seen in Canada: a whopping $9,000 within three months. That's an insane $3,000 per month of pure expenditure if you want to meet the spend organically, which just isn't feasible for most people.
Even if you are fortunate enough such that these amounts are attainable with your normal spending patterns (do keep in mind that many establishments don't take Amex), there are many reasons why it would be useful to have some tricks up your sleeve in terms of meeting high minimum spending requirements.
For example, you could be chasing the bonuses on two or more cards with high thresholds at once during an overlapping three-month period.
Or, if you ever wanted to dabble in US credit cards and grab the insanely high points bonuses available south of the border, the minimum spending thresholds on those cards can be upwards of US$10,000!
So let's go through a few tricks and strategies worth knowing in order to meet high spending requirements and rack up the points.
Prepay Future Expenses
There are many ways to meet a minimum spending threshold within three months by effectively bringing forward your future spending, which would otherwise take place after the three-month window.
For example, if you normally spend $250 a month on gas, and you're aiming to meet a $1,500 spend within three months, you could go to Shoppers Drug Mart or London Drugs and buy up six months' worth of gas station gift cards. You'd be able to easily meet the spend, and in the next half a year as you're filling up the tank, you'd use up the gift cards you bought.
Or, you could prepay your cell phone, cable, or internet bill for a few months (any bill that can be paid with a credit card would work) –you'd overpay your bill by a large amount using your credit card, helping you to meet the spend, and then the credit amount sitting in your account would be used up over the next few months.
Of course, the disadvantage of this method lies in the time value of money. By prepaying future expenses, whether by buying gift cards or prepaying bills, you're giving up the return you could've earned on that money in the intervening period. However, this return that you're giving up is almost always far outweighed by the bonuses you earn as a result of meeting the minimum spending requirement.
Eat the Cost
Another good trick to know is that you can often blow many minimum spends out of the water if you're willing to pay a small fee. This fee will again be dwarfed by the bonuses you earn as a result of meeting the minimum spend.
One good strategy that falls under this category is by making use of bill payment services such as Plastiq. These services allow you to pay bills you normally can't pay with a credit card, such as mortgage payments, rent, taxes, tuition, and utilities. They usually charge nominal fees of around 2.5%, though they often run promotions in which the fee is lower.
Let's say you're trying to meet the minimum spending on a spanking new Business Gold Card of $5,000. If you went ahead and paid a few months' rent or your kid's tuition fees using Plastiq, you'd pay 2.5% x $5,000 = $125 in fees. This outlay would be more than offset by the welcome bonus on the Business Gold Card of 40,000 MR points.
What's more, Plastiq is one of the merchants you can designate as a "favourite supplier" on the Business Gold Card, allowing you to earn 2 MR per dollar spent. So you'd also earn $5,000 x 2 = 10,000 MR for your payment. That's 50,000 MR in total, which is easily redeemable for $1,000 in value.
The advantage of this method is that it's quick and easy; the $125 fee allowed you to easily knock the minimum spending off your list. It's also nice to earn 2 MR per dollar spent with Plastiq on the Business Gold Card. The disadvantage, of course, is the presence of the fee itself: while it was just $125 in this example, the fees can really start adding up if you're chasing bonuses on multiple cards.
Buy More Time
This is a more preferred method in my opinion, because it doesn't cost you anything extra, whether that's in the form of foregone returns on present-day money or transaction fees. The idea is that you use find ways to extend your three-month window into however long you need to meet the spending requirement organically.
One of the ways to do this is by making refundable hotel bookings. Say you've completed $3,000 of the required $5,000 minimum spend for the Business Platinum Card, and the three-month deadline is fast approaching.
What you do is hop onto Expedia and book a $2,000 fully refundable hotel stay many, many months into the future. This takes you over the spending threshold before the three months are up, and you are awarded the 75,000 MR points.
The problem now is that you're on the hook for this $2,000 hotel stay. No worries. You simply keep spending on the card until you've actually spent an additional $2,000, after which you cancel the hotel stay and receive a full refund.
You can take your time completing this organic spending, as long as it's before the date of your dummy hotel booking. Since your total life-to-date spending never dips below the $5,000 threshold, there's no risk of Amex "clawing back" your welcome points.
If you don't want to make dummy hotel bookings, you can leverage the same trick by buying expensive items from retailers with generous return policies (i.e., no limit how long you have to return an item) and then returning them after you've met the spend organically. Large department stores work best for this.
This method of meeting minimum spends is pretty great all around. It's quick and easy, since you can do it from the comfort of your desk, and it costs you nothing. A small disadvantage is that you'd still have to make your usual monthly payments, which means you might have to "float" the extra amount – $2,000 in our example – with your own money. If that's daunting to you, remember that the price of peace of mind is as low as 2.5%.
One very brief word about manufactured spending (MS). Basically, you find ways to make purchases on your credit card, transform those purchases into cash of (near-)equivalent value, and then pay off your credit card. This not only allows you to easily meet minimum spending thresholds, but also to amass huge amounts of free points.
Manufactured spending is not easy. It also, by definition, imposes a cost on a third party other than yourself, since someone has to be paying for the free points you're earning. That's why good MS techniques are often closely guarded secrets in the miles and points world. Shoot me an email if you're curious and would like to chat more about this!
This has been a question I've received quite a few times, so I thought I would do an in-depth summary of the best ways to meet your minimum spending thresholds. Often, figuring out how to spend a couple thousand dollars on your credit card can be the last obstacle between you and your dream luxury trip, and besides organic spending, not all of the methods out there are immediately obvious.
I hope the examples I've given are not only informative, but also get you thinking along certain directions so that you'll eventually be able to come up with your own methods. And if you've got any methods of your own you'd like to share, get in touch via email or comment below!