The best time to get a new rewards credit card is when you can get some big bonus points just for signing up for that particular card. And luckily, there is no time like the present since there are all kinds of bonus offers of up to 100,000 points to take advantage.
But keep in mind while it may sound good to reap the rewards, bonus offers do come with a catch or two: Most of the time you need to spend a certain amount of money on the card within the first few months of opening the account.
For example, you can earn 50,000 bonus points for getting some cards, but you must spend $4,000 in the first three months of owning the card. Usually, most cards require you to spend anywhere between $1,000 and $5,000 within the first 90 days of opening the account.
The last thing you want to do is forfeit a bonus chance because you couldn’t meet the spending requirement, so you’ll want to develop a strategy before applying for a new card.
Also keep in mind: The benefit of any credit card rewards and bonuses will most likely be wiped out by interest charges if you don’t pay off the balance in full each month, so only apply for a rewards card if you’re certain you won’t carry a balance. Also, carrying too much credit card debt will also negatively impact your credit scores.
Here are some more tips:
Timing is everything
Try to apply for a rewards credit card during the time of year when you know you might have big expenses coming up. Maybe it’s before the holidays, at vacation time or before you start in on a home remodel. Look at your schedule and see when you might be buying an expensive item or when you will accrue a lot of expenses.
Also make a point to show you are eligible for the spending bonus before you apply. If you’ve opened a previous account with an issuer, it could have restrictions on earning bonuses on a different card, so be keep apprised of the situation.
Be aware of your spending deadline
Keep track of your deadline that you need to complete the minimum spend with your credit card issuer.
Often, the time starts when you get approved for the card. Don’t assume it starts when you activate the account or when you get the card in the mail. Obtain the date from the issuer and mark the calendar each month with a reminder of how time remaining.
Place all purchases on your card
This may be a given, but the quickest way to earn a sign-up bonus is to move all your spending to this one credit card. Have bills that are automatically deducted from your checking account, shifted to this card for a while. If you pay cash for a lot of things, instead charge them. However, an exception might be if you’re charged extra for using a credit card instead of a debit card or check.
Purchase gift cards
If you shop at certain stores, think about buying gift cards for future use. For example, if you know you spend a certain amount of money each month at Walmart, use your new credit card to put six months’ worth of expenses on a store gift card and use that for Walmart purchases.
Again, make sure you can afford this—you shouldn’t be going into debt just to earn a sign-up bonus. But make sure that your credit card issuer counts gift card purchases toward the spending minimum because not all of them do.
Pay rent or mortgage with card
Most people’s largest monthly expense is their rent or mortgage payment. Most of us pay this from ur checking accounts. Find out if you can put the payment on a credit card. Some rental companies or mortgage servicers contract this option to third-parties.
Just be aware you may have to pay a 2% to 3% service fee, but there could be a waiver for the first time. And sometimes, a small fee could be worth the number of points you earn. If that’s the case, you’ll want to do the calculations to see if it works for your situation.
Pay off bills in advance
There may be certain bills that you can pre-pay to detonate the spending requirement. That could include insurance policies, Cable and cell phone bills. Ask if there’s a limit on how much you can prepay and whether you incur any penalties for prepayment.
In the end, understand that no credit card rewards bonus is worth going into credit card debt. Rewards cards usually have the highest interest rates of all cards, which means you could be paying an APR (annual percentage rate) of 29.99% or more on your purchases.