Credit card signup bonuses are a good way to earn a lot of money or reward points. Most of the time, you will need to meet a spending condition to get the bonus. For example, a card might offer a $ 500 rebate after spending $ 3,000 on purchases in the first three months.
It sounds simple, but there are several transactions that do not count towards the required expenses. If you don’t know, you might mistakenly think you’ve spent enough and miss out on a valuable bonus opportunity.
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Charges are not considered purchases. As such, they won’t get you closer to spending minimal.
An annual membership fee is most likely to be confusing. Credit card companies charge this on the first billing statement. It’s easy to miss an annual fee that increases your balance if you don’t complete all of your transactions at the end of the month. And the annual fee can make a big difference in how close you are to a bonus, especially with feature-rich credit cards that cost $ 250 or more per year.
The same rule applies to other types of fees. So, if you are charged late fees or any other fees, remember that this will not count towards your card bonus.
2. Balance transfers
Some credit cards with balance transfer also offer signup bonuses. Since balance transfers are often large transactions, you might think you’ve already hit minimum spending after transferring one or two balances.
Balance transfers are not purchases, however. This means that they don’t help you earn a bonus. If you open a balance transfer card with a signup bonus, you will need to make purchases to get the bonus. If you’re trying to get rid of credit card debt, keep in mind that it might be best to ignore the bonus altogether. This way you can focus only on paying off those balances.
3. Reimbursed purchases
When a purchase is refunded, it no longer counts towards the minimum spend on a bonus. After all, you get the money back.
This could be a huge problem if you get a refund after the expiration of the time period required for the expenses. Let’s say a bonus requires you to spend $ 3,000 on purchases in three months. You’re at $ 2,800 in purchases with two days remaining, then place an online order for $ 300 to exceed the $ 3,000 requirement.
A few days later, the merchant says they can’t process your order and refunds the $ 300 to you. You return to $ 2,800 in spending and you run out of time for the bonus offer. You will lose the bonus in the most frustrating way possible.
If you cut it close to a minimum spending, be careful not to make any purchases that might be reimbursed later.
4. Cash advances
A credit card cash advance allows you to withdraw money from your card. Again, this is a type of transaction that is not considered a purchase.
Not only does this not help you get a signup bonus, but a cash advance is also one of the worst ways to use your credit card. Cash advances begin to earn interest immediately, the interest rate may be higher than other transactions, and there are additional charges for cash advances. This is why credit card cash advances are never recommended.
When you transfer money and pay with your credit card, this is also considered a cash advance. For example, sending money via Western Union is a cash advance if you use your credit card.
You won’t progress to a sign-up bonus this way, and you will also have to deal with the additional costs associated with cash advances.
Unfortunately, it’s not always clear which methods of sending money are classified as cash advances. Some forms of sending money with a credit card, such as PayPal and Venmo, are generally considered purchases.
Most of the services that could be considered cash advances will include a warning about this during the payment process. But to be sure, you can also ask the credit card company to set your card’s maximum cash advance amount as low as possible. In this way, any advance of funds exceeding the maximum will be automatically refused.
Do not lose your bonus on a technicality
No one wants to lose a bonus because of a technical detail. The main thing to remember is that only purchases count towards a credit card’s bonus requirement. If in doubt, remember that you can always contact your card issuer to check how much you spent on your bonus.