One of the great things about credit cards is the sign-up bonus many of them offer these days.
But the big catch is the spending required to actually snag the bonus, which some might argue is counterintuitive, or worse, a quick path to unwanted debt.
What’s that old saying, “You can go broke saving money.” I think that’s how it goes and it can certainly be true if you’re only spending money to save money.
Fortunately, there are ways to meet minimum spending requirements while also earning cash back. And you don’t need to really buy anything you wouldn’t normally buy.
Buy Amex Gift Cards with Cash Back
There are multiple portals where you can buy American Express gift cards and earn cash back in the process.
These will not only help you meet minimum spending requirements, but they’ll also but cash back in your pocket without actually having to buy anything beyond money.
After all, you can use the gift card as your credit card if you’d like once you receive it, and purchase things you’d normally purchase.
For example, several websites offer 3% cash back on Amex gift cards, plus coupon codes to offset the shipping fee and/or purchase fee.
The downside to these gift cards is that there’s a purchase fee ($3.95) and a shipping fee, which can range from $5.95 to $8.95, depending on the denomination.
But at the moment, BeFrugal offers no shipping fee and 3% cash back. So if we do the math, a $1,000 Amex gift card would cost $1,003.95, which initially puts you in the hole slightly.
Once you factor in the 3% cash back, you’ve got about a $26 net profit after the purchase fee and discount for the free shipping.
It’s not necessarily a huge amount of money, but you’re actually getting paid to meet your credit card’s spending requirement.
If you buy a $3,000 Amex gift card, the maximum allowed for one card, you’ll earn roughly $86 cash back. That $3,000 would be enough to meet the minimum spend for the Chase Sapphire Preferred bonus.
So you’d earn 40,000 bonus points and $86 cash back through the portal. Not too shabby for a few minutes work.
If you just want the money, you’ve earned over $500 cash for doing very little (factor in the 3k points for the spending plus the bonus points). If you redeem for travel, you’ll get $500 in value from those 40k points plus the $85 cash back. More than $600 for a few minutes work.
Tip: There are often coupon codes that waive the purchase and/or shipping fee on Amex gift cards, so be on the lookout for those. Just ensure they don’t interfere with your cash back via the portals.
$700 for Doing Just About Nothing
The other benefit is that you won’t feel stressed trying to spend that $3,000 on stuff you don’t really want or need. And you can do this quickly, without having to worry about completing the spending within three months.
This can be really helpful if you don’t spend that much on your credit cards but still want to take advantage of lucrative sign-up offers, or if you plan to go after big bonuses such as the 100k bonus via the Citi Executive AAdvantage World Elite MasterCard.
The only downside is that the cash back from these portals can take a month or two to actually post to your account. But once it does, it’s easy to withdraw to PayPal in minutes and then to your checking account.
You’ll also have to liquidate the Amex gift card, though there are plenty of options for that these days. Additionally, be sure to watch out for credit card issuers that code these purchases as cash advances. Most don’t other than Citi, but you should still proceed with caution.
For the record, you can buy up to $5,000 in Amex gift cards in one single order, so there’s potential to earn $150 cash back less fees in one fell swoop.
That would be enough to meet the minimum spend on the Chase Ink card, which offers 50k bonus points once you spend $5,000. That’s roughly $700 in straight cash back value, or even more if redeemed for travel.
Just be sure to sprinkle in some normal everyday spending as well to avoid being targeted as someone just looking to get the sign-up bonus.
Read more: 8 Ways to Meet Minimum Spending Requirements