2 months ago I plunged head first
into my first A-O-R. Before I knew it, I was approved for 5 credit cards and was
looking at meeting hefty spend requirements to get those mouthwatering bonuses.
It was scary. $12,000 to be spent in 6 months. That was a lot of money to be
spent really fast. But once the enormity of it had dawned and then passed away,
I sat down to devise a plan to meet this requirement.
The first and foremost thing I
did was lay my cards out in the order in which I would meet the spend requirements.
Amex SPG had the heaviest amount but also the longest tenure - $5000 in 6
months. So it went right to the bottom of the pile. But it also had a first
spend bonus. So I made a mental note to make one small charge on the card. The
other 4 cards each had 3 months to meet the various spend requirement. So I
laid them in order of amount. Net result
1. First
expense on Amex SPG
2. Chase
Marriott ($ 1000)
3. Chase
United ($1000)
4. Amex
Gold ($2000)
5. Citi
AA ($3000)
6. Amex
SPG ($5000)
And now the game began in earnest.
The first thing to do was put the
cash in my wallet - away. Every dime from this point onwards was to be spent
through credit card. $2.13 for grocery - credit card; $0.99 in Dunkin donut –
credit card. This approach made sure that every cent helped me reach my sign up
bonus. In the last one month, I have spent just about $27 in cash. The rest all
went to my credit card sign up bonus fund. I also got add on card for all the
credit cards and gave it to my wife. Since she is not down on the Credit Card
game yet, all her expenses were also going towards my purpose.
Once I had this sorted, the next
thing to do was find out big expenses that I could channel to my credit card.
This is where friends are really helpful. Having lunch with friends? Offered to
pay for it with my credit card and collected cash from everyone. Friend needed
to borrow cash? Paid through Bluebird cheque and Amazon payments. Friend needed
to make some expense online but didn’t have a credit card – offered mine! My
friends who knew what I was doing were supportive. The ones, who didn’t know,
couldn’t care less. So it was a win-win. Overall I made more than $3000 in
payments to friends and group lunches and only $60 of it was actual expense.
The rest was just expense on my credit card that my friends paid for.
Next up, pre-paid expenses. I
looked for store and accounts on which I made regular expenses to see if I
could pre pay something. Telephone bills, grocery store, online stores,
anything that we knew we would be spending at any which way. There was just one
for us – Movie. My wife and I love watching movies, so I purchased $100 worth
of fangando gift cards. They also had an offer on, so I paid just $80 to buy
$100 worth of cards. That is what I knew I would easily spend in 4-6 weeks.
But this was still not going to
cut it out and I needed to pull out the big guns – enter Amazon Payments and
Amex Bluebird.
Amazon payment is an online
payment system introduced by Amazon to pay for goods and services to others,
specifically for purchases that are not through Amazon website. So if I needed
to pay my house help her payment and she has an Amazon payment account, I could
pay her through Amazon payment. The beauty of it lies in the fact that you can
make the payment through a credit card. Upto $1000 every month, without
incurring any charge. This was really helpful in channeling a lot of payments
that I would have otherwise made in cash. Any purchase, from a second hand TV
to a payment for household help, all could be channeled through Amazon payment.
The other person can withdraw the cash to their bank account at no charge.
And the biggest weapon in the
arsenal – Amex Bluebird. It’s a checking account alternative by Amex that was
the most important to meeting those spend requirements. Bluebird allows loading
cash on the account through Vanilla Reload card, which in turn can be purchased
through a Credit Card. The VR cards do cost $3.95 for each card, upto a maximum
of $ 500 per card. Once I had the money in the bluebird account, I could pay
bills online, pay rent, taxes or any other such amount that required a check
payment. How ? - Bluebird gives you a check book for payments. And the check
books were free till 8/13. So now my rent, which was being paid through check
from my checking account, without earning me any points, was now paid through
my BB account, helping me get my spend bonus. There is ofcourse the additional
0.79% cost for loading the VR cards, but that’s an expense I chose to bear.
Whether I would do it after I have met the spend requirements, is something I
haven’t thought about yet. This is the single biggest expense method through
the credit card that could be the difference between meeting all the spend
requirements and not being able to meet the spend requirements. However, being able
to load BB through VR is highly dependent on finding the VR cards at a store
that accepts CC as a payment method. And you also run the risk that your credit
card company MIGHT classify the transaction as a cash advance. So one
needs to be careful.
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| How I am tracking my expense !! |
I made some big mistakes in the
process and I would be careful next time around. I was afraid I will not be
able to meet the spend requirements and so I went all out in the first month
itself. Amazon payments, Bluebird, prepaid expense, group lunches, loaning
money, paying for others – everything in one month. My BB could have been
locked for excessive transactions. Same for my Amazon payments, thereby locking
me out of my money. I could get pulled for financial review. There could also
be a fraud alert on my account. Thankfully nothing happened, but it doesn’t
mean it couldn’t have happened. I needed to pace myself. If my average
requirement was $ 7000 in first 3 months and $ 5000 in next 3 months, then that
is what I should have done. Spending $ 5000 in first month, $ 4000 in second
month and $ 3000 in third month, got my work done quicker, but also gave me a
constant headache. So I would need to be better behaved next time. I also ignored the percentage of my total credit limit that I am using and was way above my personal 20% mark. Infact at one point I was 30% which is too high for me.
Last word of caution to anyone
planning to use BB or AP for spending – Please be mindful of what you are
doing. There are a lot of blogs out there which give a details risk and reward analysis
of these payment methods. There are a lot of grey areas of what is legal and/or
allowed in the terms and conditions and what is not. Make sure you read as much
as possible and are aware of the risks and the terms and conditions before you
make your move. This entire activity for me is one big game. I wouldn’t like to
risk a dime of my money or my security, credit report or legal file for this
game. I have acquired the knowledge out there to determine what I think is
right and wrong and made my choices accordingly. You need to make yours an
informed choice.
Next up – What am I doing with
those sign up bonuses.
