Balance Statement Credits – Are They Worth It?

I say yes. 

Here are some rules:

  • Make sure the card has no annual fees.
  • Once you have been approved for the card, call the company and learn the details on earning the credit.  For example, ask for the dates purchases need to be made in order to qualify.
  • Confirm that you will receive a credit for X dollars after X dollar amount in charges within X number of days. (Example: You will receive a credit for $300 after $1000 in charges within 90 days and the final date items can be purchased is December 20th, 2014.)
  • Check to see if there are any restrictions on purchases. Can you pay your rent or mortgage, or utility bills?
  • Find out how long it will take before you see the statement credit. Usually 8-12 weeks.
  • Do not use this opportunity as permission to go on a wild spending spree!  Use the credit card to buy the things you normally would, like gasoline, food and normally budgeted items. For example, if you have a clothing budget, use this card, but don’t be tempted to go over your budget.
  • Use the card for paying utility bills, or your rent or mortgage, if allowed and possible. (My mortgage company does not accept credit cards).
  • Sit down and make a plan for what you’ll be charging onto this card.  For example, if you spend $200 each month on gasoline, use this card for gas for the next three months and you’ll have $600 in purchases. Perhaps your Internet provider costs $50, that’s another $150.  Once you have a plan, stick to it.
  • Spend the amount well within the period of time allowed.
  • Remember that any returned items will decrease your amounts charged.
  • BE SURE to spend the required amount! You don’t want to lose out on your reward because you miscalculated and spend only $995 if you were supposed to spend $1000.
  • Pay this card in full each month, or better yet, send a payment each time you make a purchase. You don’t want to end up with finance charges cutting into your credit.
  • WATCH for the credit to ARRIVE. Call the company if it has not arrived by the longest estimated time. For example, if they say the credit will take 8-12 weeks, call at the 12 week time period.
  • When the credit arrives, use the card to charge items you would normally purchase.  Or, you could just look at this as free money and now you have my permission to go on a spending spree.
  • Stop using this card after earning the credit, unless it has a very good reward plan. That may make you think twice about retiring it.

The first time I went for one of these balance statement credits was when I signed up for my Wells Fargo credit card. The manager of the bank talked me into it by telling me I could earn $200, just for paying bills, buying food and gasoline.

That experience went over well so when I received three more invitations in the last month, I decided to go for it.  Two were from American Express, one to myself and one to my husband. If we spend $1000 on each card in three months, we’ll be rewarded with a $300 credit. That’s $600!  I couldn’t pass up this offer and went for it.

Then I received one from Capital One. It’s not as lucrative, but still pretty good. I’ll need to charge $500 onto the card within three months to be rewarded with $100.

Now I’m up to $700 “cash” back.

Let’s call these cards AMEX Wife, AMEX Husband and Capital One.

The main downside is the fact that it takes from 8-12 weeks for the credit to hit the account. Another downside is one more credit card to manage.  However, once I get the credit, I don’t plan to use these cards.

The easy part is anything counts, even paying for my utility bills.

So far I’ve charged just over $600 to AMEX Wife, so I just need to charge about $400 more in the next 10 weeks.

Whenever I participate in one of these promotions, I make a point to pay the credit card as soon as I get a chance to log into my checking account and send a payment. This way I keep that card paid in full. (I’ll deal with the balance statement refund later).

The initial problem is that there is no information for making a payment immediately because the first statement hasn’t been issued, and it’s usually a pain finding the “pay by USPS” address on the site.

So for the AMEX Wife card I’m doing things a little differently.  Instead of paying toward it immediately, I’m going to pay another card which has a balance  because I’m waiting on an insurance refund.

On September 20th, I changed my home insurance from one company to another which saved us $300. My escrow account had just paid the current insurance company so I had to pay for the new one out of pocket, then request a refund from the former and wait for the refund to arrive. The new insurance was $533 charged to my AMEX Costco card.  Finance charges begin to accrue after 30 days. I have still not received the refund from the previous insurance company so finance charges began to accrue on October 20th.

Just in the nick of time I decided to pay toward this card.  Now when the insurance refund arrives, which should get here within 30 days, I will pay that money directly to AMEX Wife.

When I was driving my employer’s van and spending up to $400 each month in gas, it was a no brainer for how to charge $1000 in three months.  Now I’m spending only a fraction of that in my new car.

Have you ever signed up for a credit card to earn a balance statement?

 

 

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6 comments to Balance Statement Credits – Are They Worth It?

  • Hi! I’ve done it before and as a matter of fact just applied for one under my husband’s name even though we already have that same card under my name with him as an authorized user. We’re waiting to hear. We’ll probably just use it until we qualify for the statement credit and then put it in a drawer, LOL.

    I use credit cards; they don’t use me. For the last 7 years, I’ve never paid any interest on my approximately 20+ credit cards and I always have at least one with a zero interest promotion going. I try to use the ones with cash rewards the most; I don’t like points towards merchandise. I’ve found that to be a ripoff.
    Deborah Collins recently posted..Is the Virgin Mary Appearing on Earth?My Profile

    [Reply]

    Mrs. Accountability Reply:

    Hi Deborah – I need to decide on a “drawer” to place my credit cards in. I have them in a few places, some in a filing cabinet, some in my purse. I was wondering if you know, and I am going to call the company find out, but I was wondering if I have a zero balance at the time of the statement credit, would I still qualify for the credit? Or does one need to have an outstanding balance at the time? I’ll make a note for myself to call them and report back. ~Mrs. A

    [Reply]

  • Walnut

    Since it sounds like you’ll end up with $700 in “cash” at the end of this, are you going to make sure the end result is $700 less in credit card debt? It seems like the best option for you would be to pay off the Bank of America card and eliminate a payment from your life.

    Also, will you close these credit cards after the offers are used? It seems mentally exhausting to have to keep track of so many details, cards and payments.

    [Reply]

    Mrs. Accountability Reply:

    Hi Walnut – yes, that is what I was planning to do, apply that money toward the credit card debt. And by paying off the Bank of America card I would eliminate one $25/month payment which I could apply toward another card. Thanks for the suggestion! I definitely should look into closing some of my credit cards but I need to have a number open for future balance transfers. Thanks again for your input and suggestions!! ~Mrs. A

    [Reply]

  • I’m fairly certain that your balance when it’s time for the statement credit has nothing to do with qualifying for it – it’s whether you charged the amount of money that was required to earn the credit in the period of time specified.

    We just got the credit card I applied for in the mail today and I told my hubby we’re going to charge the necessary amount to get the $100 cash back bonus and then into the “drawer” it goes, LOL! I just hope it doesn’t negatively affect our credit rating to have yet another inactive credit card!

    I’ll look forward to hearing what you find out about the statement credit.
    Deborah Collins recently posted..Is the Virgin Mary Appearing on Earth?My Profile

    [Reply]

  • I use Costco AMEX cards, one for personal and one for business expenses. They pay an annual kickback based on your spending over the prior twelve months. The Mastercard I use for outfits that won’t take AMEX also gives some kind of kickback, but you can claim that credit any time you want it. Occasionally I’ll use it just to pay off the MC bill.

    But…I don’t think I’d like an arrangement that rewarded me for spending a certain amount in a certain period. That’s pretty pushy. And it would be too much of a temptation to charge an impulse buy or something you didn’t really need just to push the balance into the kickback range. Exploitive.
    Funny about Money recently posted..Dollar$ and ¢ents, 2014My Profile

    [Reply]

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