Back in the 2000s the rage among credit card enthusiasts, if there is such a thing, was 0% balance transfer offers. Not to pay down debt, but to get a free loan and earn interest. They would apply for 0% offers, max out the cards with a cash advance, then put that money into a savings account that earned 4, 5% or more. With a $20,000 credit limit that meant $1,000 a year in interest earned, a great deal.
Now, there are plenty of 0% offers, but not many ways to earn 4 or 5% in interest easily.
But something else is around that can be just as lucrative.
Bonus offers for rewards cards.
Now you can earn tens of thousands of points that can be used for cash back or travel rewards just by signing up for cards.
You don’t have to limit yourself to one card. In fact you can apply for several cards throughout the year to earn thousands of dollars in rewards. And you don’t have to mess around with moving money into and out of a savings account to earn them.
Most airline cards have big intro deals, like the latest airline credit card offers for 30,000 or more miles, or cash back cards that can offer a couple hundred dollars in rewards for signing up.
So how do you decide if this is right for you and get started?
Check your credit report
Applying for multiple credit cards during the year could temporarily dent your score, but not by much as it’s one of the smallest factors in your credit score. Expect about a 5 point hit per application, but this officially leaves the score calculation after a year. So if you have an excellent credit score above 720 or so you should be in good shape. Unless you’re about to apply for a big loan like a mortgage there aren’t a lot of benefits to a score much above 720.
Know what you can spend
The key limiting factor in how much you can earn in rewards is how much you can put on a credit card in spending each month. Most intro offers require you to spend a certain amount in a period of time to earn the rewards. For example, an offer could require you to spend $2,000 in 3 months to earn $200 cash back. That’s a great deal – it’s like earning 10% cash back on your $2,000 in spending. But you don’t want to spend on things you wouldn’t otherwise – making unnecessary purchases defeats the purposes of extra rewards.
The more you can put on your card each month, the more offers you can take advantage of. Ways to build that up include putting your cell phone and other bills on credit card autopay, adding your spouse as an authorized user to combine your spending efforts, and buying gift cards in advance for purchases you plan to make after the bonus period ends.
Set up a reminder on your phone
Once you know what you can spend on a card in a month you can narrow down the offers you can handle over a 2 or 3 month period. Try applying for one or to cards to get started.
Then set two reminders on your phone. The first should be a month before the bonus offer period is due, so you can check in on meeting the spending requirement. The second should be about 10-11 months after you first applied.
Many cards with intro offers have an annual fee. You shouldn’t be afraid of it, which is why you should set the reminder. When that reminder comes due, you can decide whether you want to keep the card for another year and pay the fee, or call the card company and see what they can do. You can either downgrade to a no annual fee version of the card, they could waive the fee, or they might offer you a bonus deal to stick with the card.
It all depends, but the point is you shouldn’t be afraid of annual fees. You just need to be organized and you can start earning the extra rewards you deserve.
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