If you are thinking about making a big purchase, plan it smart and you can likely get a free flight or free hotel night. How? Simply leverage a credit card sign up bonus and use the new card on your big purchase to gain rewards. This may sound too good to be true, but it really isn’t, you simply need a decent credit and a general understanding of how to manage your finances. Let me give you a use case scenario on how to achieve this.
Let’s say it’s time for a new car (or engagement ring) and you are looking at your finances to understand what you can afford. If you are planning on putting a couple thousand down on a car, you have an easy opportunity to get a free flight or hotel night out of it. For this example, you plan on putting down $2,000 and finance the rest of the car. Instead of writing a check, using a credit card or debit card you currently have in your possession, you could get a new credit card and leverage a sign up bonus of airline miles or hotel points.
A typical sign up offer has a minimum spending requirement in a specific time frame. The minimum sign up spending requirement can range from $1,000 – $5,000. Usually the time frame ranges from the first two to three months of opening the card to accumulate the reward.
There are also cards where you can receive the bonus as soon as you make your first purchase. However these tend not to have the most lucrative rewards (like Spirit’s Master Card that gives you 15,000 miles after your first purchase, which is equivalent to 3 round trips). A common airline credit card sign up bonus that you will find is 30,000 to 50,000 miles after you spend $3,000 in the first 3 months of opening the card. 50,000 with an airline like American Airlines, United Airlines, and Delta Airlines can get you two round trip flights from coast to coast.
You can do this by searching online for the best credit card offer and apply for the card before purchasing the car. What you will find is credit card companies are very generous in their credit card offers. They offer individuals like you and me sign up bonuses that can equate to big time points and miles!
Look out for annual fees that come along with these credit cards that offer sign up bonuses. If you do your home work, you can find cards with great sign up bonuses and the annual fee is waived for the first year. Then after 12 months, if you are not satisfied with the card or do not think the card’s benefits out weigh the annual fee you can simply close your credit card.
I know there is a lot of fear about closing your credit cards and how it will impact your credit score. However it will not take as much of a hit on your credit score as you think. You can avoid this “hit” if you counter the removing of a credit card from your “portfolio” by adding a new one. It is recommended you do not close your credit card prior to 11 months of opening it to ensure a healthy credit score. It is important to always practice the “the credit card best practices”, which you can find here.
Next time you have a big purchase, take the first step to a free flight or hotel night with a new credit card. Leverage your big purchase to earn a sign up bonus!