Earn Credit Card Rewards With Gift Cards
Credit card programs offer significant benefits, from money backs to free flights. Experienced card users know how to get the most out of these rewards without overspending, and one way to play the game of credit card rewards responsibly is to buy gift cards.
Some credit card reward programs contain introductory offers that require you to spend a certain large amount within the first few months. If you are not sure that you can spend so much during this time, you should not buy unnecessary items just to meet the limit.
Instead, John Ganotis, co-founder of Credit Card Insider , suggests buying a large gift card and then using it for purchases throughout the year. For example, if you know you will spend $ 1,000 on Amazon over the course of a year, you might consider buying a gift card for that amount. You will receive the required amount for the reward, and you can still use it for the things you buy.
Business Insider notes that this method can work outside of these introductory sentences:
… his strategy can be useful at other times as well, such as when you have a surplus in your monthly budget, but know that the next month will be difficult. By paying for future purchases in advance with a gift card – not necessarily for Amazon, of course – you can either balance your budget or actively use your credit card.
Of course, there are several important factors to consider when using this method. First, you want to make sure that you actually have the funds to pay off these gift cards. In fact, you want to make sure you have the funds to pay off any balance on your bonus cards. Otherwise, you will simply run into debt. Second, using that much credit at one time can cause a temporary spike in credit usage that will affect your credit rating (again, if you pay it off, it will drop). And finally, as Ganotis himself points out, some cards actually prohibit this practice, calling it “artificial spending.” So you will want to check the fine print of your map first.
For more information follow the links below.
8 Ways To Increase Your Credit Card Rewards | US News and World Report via Business Insider