Introduction
Credit card welcome bonuses can be one of the fastest ways to build a large rewards balance, but many offers require you to spend a certain amount within a set period before earning some or all of the bonus.
For example, an offer might require $3,000 in eligible purchases during your first three months of Cardmembership.
The key is to meet that spending requirement with purchases you were already going to make. A welcome bonus loses its value quickly if you start buying things you don’t need, carry a balance or pay interest just to earn the points.
Before applying, make sure the minimum spend fits comfortably within your normal budget and upcoming expenses.
If you’re considering an American Express card, use the PointsWise Amex Canada Welcome Bonus History Tracker to compare today’s offer against historical highs and typical bonus ranges before applying.
A bigger welcome bonus isn’t automatically a better deal if the spending requirement isn’t realistic for you.
Before You Apply: Make Sure You Can Meet the Minimum Spend
Before applying for a card with a welcome bonus, consider these five things:
1. Never Carry a Balance Just to Earn a Welcome Bonus
Pay your credit card balance in full and don’t spend more than you can afford.
Interest charges can quickly erase the value of the rewards you’re trying to earn.
2. Check the Exact Spending Requirement
Read the current offer terms before applying.
Pay attention to:
- How much you need to spend
- How long you have to meet the requirement
- Whether the bonus is earned all at once or in stages
- Which purchases qualify
- Whether there are monthly spending requirements
Don’t rely on an old review, advertisement or previous version of the offer.
3. Don’t Apply Unless the Spending Requirement Fits Your Budget
A strong welcome bonus isn’t worth pursuing if you need to manufacture expenses to reach it.
Look at what you normally spend over the required period and any large expenses you already know are coming.
If the numbers don’t work comfortably, wait for another offer or choose a card with a lower spending requirement.
4. Track Your Progress
Keep track of eligible purchases from the day you open the account rather than waiting until the deadline approaches.
Returns, refunds and other credits can reduce your net qualifying purchases, so give yourself some room above the exact spending threshold.
5. Don’t Assume Every Charge Counts
Not every transaction necessarily qualifies towards a welcome bonus.
For American Express, interest charges, fees and cash-equivalent transactions are not purchases that earn Membership Rewards points. Welcome bonus offers commonly require a specified amount of net purchases to be posted to your account.
Check the terms for your specific offer before relying on an unusual transaction to meet the spending requirement.
Practical Ways to Meet a Credit Card Minimum Spend
The best strategy is simple: concentrate spending you were already going to do onto the new card.
Here are some practical ways to reach the requirement without increasing your overall spending.
Put Your Everyday Spending on the New Card
During the welcome bonus period, use the new card for as much of your normal eligible spending as possible.
This can include:
- Groceries
- Gas
- Restaurants
- Household purchases
- Pharmacy purchases
- Clothing
- Pet expenses
- Entertainment
- Online shopping
- Other normal day-to-day purchases
You might temporarily earn fewer category bonus points than you would by using another card, but earning a valuable welcome bonus will often matter more than optimizing every individual transaction during the minimum spend period.
Move Recurring Bills and Subscriptions to the Card
Review expenses that are already coming out of another credit card or bank account.
Depending on which providers accept your card, this could include:
- Cell phone bills
- Internet
- Streaming services
- Software subscriptions
- Gym memberships
- Insurance
- Other recurring services
Just remember to update the payment information again later if you don’t plan to keep using that card for the expense.
Time Your Application Around a Large Planned Purchase
This is one of the easiest ways to meet a larger spending requirement without changing your spending habits.
If you already know a significant expense is coming, consider applying shortly before you need to pay for it.
Examples could include:
- Travel
- Home renovations
- Furniture or appliances
- Vehicle repairs
- Dental work
- Eyeglasses
- Holiday shopping
- Wedding expenses
- Moving expenses
- Equipment or technology purchases
The important distinction is that these should be expenses you were already planning to make, not purchases you’re inventing just to earn a welcome bonus.
Add a Trusted Supplementary Cardmember
If your card allows Supplementary Cards, adding a spouse, partner or other trusted person can help consolidate normal household spending onto the same account.
With American Express, eligible purchases made on an Additional Card are considered qualifying purchases towards welcome bonuses.
Remember that the Basic Cardmember remains responsible for purchases charged by Supplementary Cardmembers, so only add someone you trust.
Plan Around Annual Expenses
Look ahead at expenses that may only occur once or twice per year.
Examples might include annual insurance premiums, professional memberships, school expenses, travel bookings or other predictable bills.
Rather than applying for a high-spend offer during a quiet month, timing your application around expenses already in your calendar can make the spending requirement much easier to reach.
What Is Manufactured Spending and Should You Do It?
Manufactured spending, or MS for short, is a bit of a controversial subject. While not illegal, it definitely straddles the boundaries of most reward programs terms and conditions and is not a strategy I employ in my efforts to earn points, though I have practiced ‘kind of variations’ (more on that below) of MS when I was new to travel hacking.
In short, Manufactured Spending is:
The process of putting through a large volume of spend on your credit card without actually spending any money. The simplest way is to buy items that can be easily converted into cash to pay off your credit card balance in full before the statement closes.
Manufactured spending generally involves loopholes and processes that wouldn’t normally come to mind for the everyday consumer. I’ll use a real-world example that was available to Canadians up until recently:
The Canadian Mint used to sell face value coins to the public and provided free shipping anywhere in Canada. The coins were limited edition and only a set amount per household could be ordered per release. That being said, the Canadian mint usually had anywhere between $2,000 and $3,000 in face-value coins available for purchase in various denominations, ranging from 20-100 dollars.
Because they are technically legal tender, banks had to accept them at their face value. So, anyone could order $2,000-$3,000 worth of coins, tax-free, without shipping costs on their American Express or any other credit card and bring the coins to the bank upon delivery and exchange them for cash.
In this example, you are basically buying cash with your credit card, earning reward points, without any cost to you (except for the time spent).
This went on for years with The Mint, with a lot of travel hackers cashing in thousands of dollars in coins per month. The Canadian mint recently discontinued the face-value coin program, and the opportunity ended for Canadians to earn thousands of points per month for buying cash on their credit cards.
How have I used manufactured spending in the past? I’ll give you two examples (I had a lot more free time when I did this):
Back when Costco accepted American Express cards for online purchases, I would buy Costco gift cards at face value and sell them on eBay. For whatever reason (I’m still not entirely sure why), Costco cards (and other gift cards) sell above face value on eBay, which pays for all of the shipping and transaction costs as a seller. So, I could buy a $500 Costco gift card with my credit card, sell it on eBay for $600, and then pay off my credit card and pocket $20-$50 after all the transaction fees were accounted for. While this was certainly an easy way to make a few thousand points per month (and a few hundred dollars), it ended up being too time consuming (you wouldn’t believe how many questions I would get asking where I got off selling gift cards above face value).
Also…
A few years ago I came across a promotion to buy the iconic HBC Point Blanket at a substantial discount. These blankets rarely go on sale, meaning they can usually be sold at retail price on eBay. I was able to stack the annual sale with another coupon, and this netted a 35 percent discount off the retail price. I would then turn around and sell the blanket on eBay at full price, and again make $50-$100 per transaction per blanket plus the points earned for purchasing the blankets with my Amex (they aren’t cheap – this was a great way to earn points). What made this even more lucrative is that HBC is an online retailer with the Aeroplan eStore. HBC would regularly run promotions for 5X the Aeroplan points for every dollar spent, and I was easily earning 20,000-30,000 Aeroplan miles per month reselling blankets! Like the Costco gift card game, this was time consuming, and I actually started to run into inventory problems with HBC. There were also a couple of times the blankets didn’t sell fast and I was stuck paying the credit card balance before they sold.
There are countless other methods one could employ if they really wanted to get into MS, and I’ll explore some of those options in an upcoming advanced level course. Manufactured spend techniques are usually short-lived however, as banks and retailers often close loopholes once discovered. I generally find most MS opportunities too time consuming now, but there are some great opportunities for those with more time than purchasing power, or those who like to flex their creativity in an effort to outsmart the system!
Do Returns and Refunds Affect Your Minimum Spend?
They can.
Welcome bonus requirements are generally based on net eligible purchases rather than simply the total amount initially charged to your card.
For example, if you need to make $3,000 in qualifying purchases and you spend exactly $3,000 but later return a $300 item, you may only have $2,700 in net purchases towards the requirement.
This is why I recommend giving yourself a reasonable buffer rather than stopping the moment your spending appears to hit the exact threshold.
Keep monitoring your account until you’re confident the spending requirement has been met.
Make Sure the Welcome Bonus Is Worth the Minimum Spend
Before worrying about how to meet a spending requirement, make sure the offer itself is worth pursuing.
American Express welcome bonuses change throughout the year. The same card can sometimes offer significantly more points at another time, while other cards tend to stay within a fairly predictable range.
The PointsWise Amex Canada Welcome Bonus History Tracker lets you compare:
- The current welcome bonus
- Historical highs
- Typical offer ranges
- Recent bonus changes
- Annual fees
- Estimated net bonus value after fees
If the current offer is weak and the minimum spend feels difficult, waiting may make more sense.
If the offer is historically strong and the spending requirement fits naturally into expenses you already have coming up, that’s a much better time to apply.
Compare current Amex welcome bonuses against their history
Bottom Line
The best approach to meeting a minimum spend is to apply when you already have enough normal expenses coming up, move your everyday purchases and recurring bills to the new card, and track your progress until you’ve comfortably passed the required amount.
If reaching the minimum spend requires you to buy things you don’t need or carry a balance, the welcome bonus isn’t worth it.
And before you apply for an Amex card, check the Amex Canada Welcome Bonus History Tracker to make sure today’s offer is actually worth locking in.
