Author Topic: Credit card cash bonuses  (Read 5341 times)

Baylor3217

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Credit card cash bonuses
« on: March 28, 2013, 11:13:28 AM »
I've been researching ways to drive additional cash as a side effect of my normal day to day habits. 

In looking at creditcards.com, it seems I could easily generate an extra $1,000 by signing up for several credit cards and meeting their requirements, then shutting them down.

I haven't paid any interest on credit cards in probably 15 years.  Anyone done this before?  Any downsides or issues?

tuyop

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Re: Credit card cash bonuses
« Reply #1 on: March 28, 2013, 11:19:33 AM »
I've been researching ways to drive additional cash as a side effect of my normal day to day habits. 

In looking at creditcards.com, it seems I could easily generate an extra $1,000 by signing up for several credit cards and meeting their requirements, then shutting them down.

I haven't paid any interest on credit cards in probably 15 years.  Anyone done this before?  Any downsides or issues?

Applying for lots of credit at once lowers your credit rating. If you care about your credit rating, then that is a downside.

unitsinc

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Re: Credit card cash bonuses
« Reply #2 on: March 28, 2013, 11:22:13 AM »
I've been researching ways to drive additional cash as a side effect of my normal day to day habits. 

In looking at creditcards.com, it seems I could easily generate an extra $1,000 by signing up for several credit cards and meeting their requirements, then shutting them down.

I haven't paid any interest on credit cards in probably 15 years.  Anyone done this before?  Any downsides or issues?

Applying for lots of credit at once lowers your credit rating. If you care about your credit rating, then that is a downside.

But it's a pretty temporary hit.

AJ

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Re: Credit card cash bonuses
« Reply #3 on: March 28, 2013, 11:25:19 AM »
But it's a pretty temporary hit.

Not if the credit actually gets opened. Inquiries don't bug you for too long, but opening and closing a bunch of new lines will drag you down for a couple years. That said, if you don't plan on making any major purchases that require a credit rating for the next couple years, it sounds like a sound plan to me :) Or, if you already have >800 score, you will probably still be fine even with the hit.

the fixer

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Re: Credit card cash bonuses
« Reply #4 on: March 28, 2013, 11:42:15 AM »
I'm in the process of doing this. In January I got the $125 bonus from ING/Capital One 360 for opening an Electric Orange checking account on Black Friday. A couple months ago I got an American Express Blue Cash card which comes with a $150 bonus for spending $1000 within first three months. I just passed that limit, so now I've applied for a Citi Dividend card with a $100 bonus for spending $500 in the first few months. I look at this as a part-time job that pays about $100/hour tax-free (except for the checking account bonus which is taxable).

I think that will be the end of my run for a while, though, since I haven't seen any other good deals that will work for me. The Chase Sapphire Preferred is tempting, but isn't that the one that requires $1000/month spending? That's more than my budget so isn't worth it to me.

I also stay away from miles, travel, and gift card rewards because I don't think they're worth the time I'd have to put in to understanding them and figuring out how to use them. But if I run out of good cash options I might reconsider.

Jamesqf

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Re: Credit card cash bonuses
« Reply #5 on: March 28, 2013, 11:47:36 AM »
...card which comes with a $150 bonus for spending $1000 within first three months.

There's the rub.  What if you don't normally spend $1000 in 3 months (or whatever): then you either don't get the bonus, or are sucked into excessive spending.  Of course you can plan ahead to some extent, and bunch your purchases, but for me, at least, I'd be limited to opening maybe one card every 6 months or so.

the fixer

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Re: Credit card cash bonuses
« Reply #6 on: March 28, 2013, 11:56:47 AM »
Yep, that's why I only work on one at a time. I easily spend $1000 in 3 months, but definitely not $1000/month and couldn't meet the minimum on more than one card at once. That essentially limits my earnings per year to around $500.

The Citi one is nice, though, since it only requires $500 of spending.

TheDude

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Re: Credit card cash bonuses
« Reply #7 on: March 28, 2013, 03:21:44 PM »
There are plenty of ways around spending requirements.

http://www.fatwallet.com/forums/finance/1024148/

kendallf

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Re: Credit card cash bonuses
« Reply #8 on: March 28, 2013, 08:17:28 PM »
I just picked up that Sapphire Preferred card, as my spending is unfortunately more than enough to hit the minimum and get that bonus.  We'll be spending some money on travel for the next four years as our youngest daughter is going to college in Michigan (we live in FL).

I got a Discover card a few months ago on Mint's recommendation (another thanks due to MMM for sending me to Mint in the first place!).  I've been using that for everything and have earned something like $50 in cash back so far.  I'm eyeing one more card, the Blue Cash Preferred, as it has big cash back on groceries and gas, two of my biggest expenditures each month.  Yes, I am trying to cut those back, but I might as well make some positive out of the expenses.

I don't need credit for anything in the near future, so I'm not particularly worried if the new accounts bump me down a bit.  I may check in six months or so and report the results.  :-)

CanuckExpat

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Re: Credit card cash bonuses
« Reply #9 on: March 29, 2013, 02:11:58 PM »
We've done this a bit, usually for larger bonuses ($100-$500) or for free flights. I wouldn't be daunted about the high spending requirements, with some googling and ingenuity you can usually work around it for free, or for small fees. Paying ~$10 in fees to get a $500 sign-up bonus isn't bad.
Someone already mentioned Amazon Payments in this thread. That is an easy way to generate an extra $1000 in spending a month. The other big one you might want to look into is Bluebird and Vanilla Reload cards.

Alexandria

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Re: Credit card cash bonuses
« Reply #10 on: March 30, 2013, 07:21:40 AM »
I also recommend www.mymoneyblog.com for credit card bonuses and tips.

I've always utilized credit cards for rewards (never paid a fee or any interest, in 20 years).  BUT, the past 2-3 years have been incredible on the bonus front.  Being able to double up with my spouse, we made about $8,000 in two years.  (So, about $2k/each per year).   Other years more like $1,000 total (ongoing rewards).

Having a good credit score already, not spending money we wouldn't otherwise, and paying off the balance every month, has not been an issue.   My MO is generally to open the credit card, earn the reward, redeem the reward, and immediately close the credit card.  Even if there is an up-front fee, my experience is 100% fee refund when I close the card in the first few months.  Credit score takes temporary hit, but nothing substantial.  Of note, I also did a big 0% balance transfer game a few years back (when CD interest rates were more like 6%!).  The last two times I refinanced our mortgage was ironically when was in the middle of these credit cards  galore.  It didn't affect the bottom line.  So my FICO was 770 instead of the usual 820.  It makes no difference - still the best interest rates.   Last I checked I hadn't done any credit card deals in a few months and my FICO was back in the 800+ range.  Same for spouse - we maybe both opened and closed 8 credit cards in the past 2 years.

If you don't have a solid credit score, aren't disciplined, would be encouraged to spend more than otherwise, then definitely don't do it.  You've got to be a little non-average to make it work.    Sure, 90% of the people who sign up for these things end up losing.  I am sure FICO could be harder hit with different circumstances.  Having a mortgage and a lifetime 100% on-time payments, I find it hard to hurt my credit score.  I am sure my length of open history (I never keep old credit cards), and number of inquiries have been absolutely atrocious.   But these are very small pieces of the FICO pie, in my experience.  Keeping a good FICO score is important to me for insurance, working in the finance industry, being able to refi at will, etc.  So I do keep a close eye on it.

chucklesmcgee

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Re: Credit card cash bonuses
« Reply #11 on: March 30, 2013, 11:21:37 AM »
Sure, 90% of the people who sign up for these things end up losing.

Not sure if that's really the case. Banks may probably end up making money on 90% of these deals, but that's not the same as people losing. Card issuers will get around 1-2% of what you spend from the merchant even if you pay your balance on time. And even if non-mustachians end up paying interest on their balances, it's probably around the same rates as their other cards. Credit issuers still win though by directing these payments towards themselves as opposed to a different bank.