Eric loves his credit card rewards and I do to, obviously, since my forum/blog is dedicated to them. However on the flip side of the argument, I can understand why some people hate ‘em – they believe rewards encourage you to buy more. And you know what? That is a valid point. For some folks, the allure of earning more miles and cash back leads to higher spending. Foolish of course, but it happens nonetheless.
But for this topic, I think it might appease you regardless of how you feel about credit card rewards. Why? Because I’m going to share with you some strategies where you can actually earn MORE rewards for spending LESS. Hard to argue with that philosophy, right?
Strategy #1: Spending less and waiting for rewards bribe
Ironically there can be two holders of the same card, but the one who spends less might actually end up earning more rewards. How is this possible? Simple… they play hard to get.
In relationships, when you play hard to get, the other person will go to greater lengths to try and get you. In the credit card world, it works the exact same way.
In case the recent barrage of commercials from Chase and Bank of America haven’t clued you in, the credit card business is in-vogue again and they are fiercely competing to be in your wallet. Yes, we all know about the signup promotions, but did you also know there might be promotions available if you stop using your account, too?
I have tons of different credit cards and naturally, some of them remain dormant for extended periods of time. When I let a card lay dormant for 6 or 12 months, sometimes I get a sweet rewards incentive to use it actively once again.
For example, because I only use my Discover More card for the 5% categories (and previously those had low reward caps) hardly any spending went on the card. In October, Discover sent me an offer in the mail: “Make us your primary card and we will pay you a $75 Cashback Bonus.”
The deal worked liked this… spend at least $500 per month from Nov thru March and I would get the bonus, which is on top of the rewards I normally earn. $500 x 5 months = $2,500. If you do the math, $75 is like earning an extra 3% cash back on that amount.
The lesson? Sometimes by not using your credit cards, you will receive promotions in the mail to earn higher rewards than you normally would. During the past couple years I have received incentives in the mail for my Chase Freedom, Citi ThankYou Premier, Amazon Rewards Visa, and others. These types of offers are targeted so not everyone gets them, but based on what I’ve seen on my forum, a good number of people do.
Strategy #2: Asking directly for a rewards bribe
I could write a book about all the stories I’ve heard on my forum from customers who have negotiated statement credits, extra frequent flyer miles, and more from their credit cards.
For example, one member shared a story about his Citi American Airlines credit card. He wasn’t happy with the amount of miles he was earning so he stopped using it and said he would cancel the card after his current year was up.
Lo and behold, he calls up customer support for an unrelated issue (changing his billing address) and they asked why he’s not using his card. He explains the situation and says that if they want him to use the card, they have to sweeten the pot. The rep places him on hold and comes back asking if 10,000 bonus miles would incentivize him to keep and use his American Airlines credit card.
On a personal note, there have been a number of times I have also gotten better rewards by directly asking. Obviously it doesn’t work every time but when it’s an account that I’ve recently been spending less on, it can help to grease the wheels. Just last weekend I negotiated a rewards bonus of 0.25% on all my spending for the next few months on an account. The reason? Because I told them my 1 point per dollar wasn’t good enough when compared to my other credit card deals.
Instead of spending more to earn rewards, sometimes you can actually come out ahead by putting one or more of your credit cards on the back-burner. Remember, acquiring a new customer is expensive for banks so the smart ones will go that extra mile to keep you on board as an active customer.
Eric asks: (For those who use credit cards, obviously)What are some of the ways you work the system to get more rewards without going crazy with your spending? Have you ever tried to get anything from your bank by threatening to leave?