Typically the way to maximize credit card rewards is to take advantage of the best credit card welcome offers and also to use the cards with the best bonus categories.
Many people may find themselves in a situation where they need to make a very large one-time purchase. Maybe you’re paying taxes by credit card. Maybe you’re doing a home renovation. Maybe your business has a huge purchase it needs to make.
Assuming your purchase isn’t in a category that otherwise qualifies for a bonus category (like dining, groceries, gas stations, airfare, hotels, etc.), what’s the best way to maximize rewards? Of course let me note upfront that this is contingent on having a card with a high enough credit limit for this kind of a purchase (otherwise, this is where a charge card could come in handy).
Admittedly there’s no one size fits all answer. It depends on what rewards and perks you value most, and it depends on just how much you’re spending (after all, “big spending” means different things to different people).
In this post, I’d like to take a look at how I’d go about deciding which card to use for a large purchase, so that you can hopefully at least come up with an approach that works for you.
In this post:
Reach a big credit card minimum spending requirement
Credit cards often have big welcome offers, and the spending requirements to unlock those bonuses can vary. Sometimes you can unlock the bonus after a single purchase, and sometimes you can unlock the full bonus after tens of thousands of dollars of spending.
So if I do have a big purchase to make, my first consideration is if there’s any card that I’ve been considering applying for that has a big spending requirement. These kinds of situations can be the ideal time to pick up a card like this. This would probably get you the highest return per dollar spent of any of the possible options.
Maximize your rewards on everyday spending
Another logical option for your spending would be to simply use one of the best cards for everyday spending.
Nowadays you don’t have to work hard to get a good return on spending, as you can earn 2x transferable miles per dollar spent with cards like the Capital One Venture X Business (review), the Citi Double Cash® Card (review), etc. Based on my valuation of points, those rewards can potentially equate to a 3.4% return on spending.
If you’re looking to earn cash back with no strings attached, it’s tough to beat the Ink Business Premier® Credit Card (review), which offers 2.5% cash back on purchases of at least $5,000.
While it takes a bit of effort, this is also an area where the Bank Of America® Premium Rewards® credit card (review) can come in handy. Bank of America has the BofA Rewards™ Program, where you receive bonuses if you have certain amounts deposited with the bank. Long story short, if you have at least $1,000,000 deposited with the bank, you can earn an incredible 2.625% back on all non-bonused purchases.
Earn airline elite status & perks
If you’re looking to earn something beyond just points or a welcome offer with a big spending amount, there are quite a few airline credit cards that offer significant incentives for spending. This can either be for spending any amount, or there are certain threshold bonuses. Let’s break this up into two categories, and I’ll list the opportunities I consider to be most lucrative.
For one, there are airline credit cards that can help you earn airline elite status, with the most lucrative opportunities being the following:
- With American AAdvantage’s Loyalty Points system, you can earn elite status exclusively through credit card spending, all the way up to Executive Platinum status; for example, spending $180K on the Citi® / AAdvantage® Executive World Elite Mastercard® (review) would earn you that status, including the 20K bonus Loyalty Points offered by the card
- With Delta SkyMiles’ Medallion Qualifying Dollars system, you can earn elite status exclusively through credit card spending, all the way up to Diamond Medallion status; this includes spending on cards like the Delta SkyMiles® Reserve American Express Card (review) and Delta SkyMiles® Platinum American Express Card (review)
- With United MileagePlus’ Premier Qualifying Points system, you can earn elite status exclusively through credit card spending, all the way up to Premier 1K status; this includes spending on the United Club℠ Card (review) and the United Quest℠ Card (review)
There are also airline credit cards that can help you earn companion perks, with the most lucrative opportunities being the following:
- Southwest credit card welcome offers and spending count toward the 135,000 point requirement for Companion Pass, which is Southwest’s generous perk that allows a companion to fly with you while just paying the taxes and fees; this could be on cards like the Southwest Rapid Rewards® Priority Credit Card (review), the Southwest® Rapid Rewards® Performance Business Credit Card (review), etc.
- The British Airways Visa Signature® Card (review) offers a companion voucher if you spend $30,000 on the card in a calendar year; this can be used to have someone travel with you on an award while just paying the taxes and carrier imposed surcharges (which can be high)
- While this is out of reach for a vast majority of us, the Aeroplan® Credit Card (review) probably has the single coolest perk of any card; if you spend $1 million on the card in a calendar year, you can take a companion with you on Air Canada or any partner airline in any class an unlimited number of times (Global +1), and 100% of the points redeemed for them will be reimbursed
Earn hotel elite status & perks
Not only are there lucrative airline credit cards if you’re spending big amounts, but arguably there are even more lucrative opportunities with hotel credit cards. This can either be for spending any amount, or there are certain threshold bonuses. Let’s break this up into two categories, and I’ll only list the opportunities that I consider to be most lucrative.
For one, there are hotel credit cards that can help you earn hotel elite status, with the most lucrative opportunities being the following:
- The IHG One Rewards Premier Credit Card (review) and IHG One Rewards Premier Business Credit Card (review) each offer IHG One Rewards Diamond status when you spend $40,000 in eligible purchases on the card in a calendar year
- The Hilton Honors American Express Surpass® Card (review) and The Hilton Honors American Express Business Card (review) offer Hilton Honors™ Diamond Status when you spend $40,000 on the card in eligible purchases in a calendar year; however, personally I’d prefer to earn this status simply by having the Hilton Honors American Express Aspire Card (review)
- The World of Hyatt Credit Card and World of Hyatt Business Credit Card both offer elite nights for spending, though you’ll have to spend a significant amount to earn World of Hyatt Globalist status
There are also hotel credit cards that can help you earn free night awards, with the most lucrative opportunities being the following:
- The World of Hyatt Credit Card offers an additional Hyatt free night award when you spend $15,000 on the card per calendar year, so to me that’s very much a spending sweet spot on the card
- The Hilton Surpass Card (review) offers a Hilton free night award when you spend $15,000 on the card per calendar year
My strategy when making big purchases
While the above are what I consider to be among the most lucrative options for big spending amounts, what’s my personal strategy? If I’m not trying to reach a minimum spending requirement on a card, usually my spending for big purchases goes onto one of three cards:
- I always make sure to reach $15,000 in spending annually on the World of Hyatt Credit Card
- I do usually end up putting a not-insignificant amount of spending on the Citi® / AAdvantage® Executive World Elite Mastercard® in order to requalify for AAdvantage status
- The balance of my big purchases usually go on a card earning transferable points, like the Capital One Venture X Business
Truth be told, though, I’ve picked up so many new cards recently with huge welcome offers (and equally big spending requirements), so a lot of my spending has been going toward that.
Bottom line
Many people view a big purchase as an opportunity to maximize their credit card rewards. There are several great strategies that you can take to maximize your rewards, as I don’t think there’s one best approach to take.
At a minimum, just use a card that’s best for everyday spending. However, ideally take advantage of a card with a welcome bonus that has a big spending requirement. Alternatively, airline and hotel credit cards sometimes have very lucrative spending bonuses, which can prove worthwhile.
What’s your credit card spending strategy for big purchases?
Thank you for the info on the Hyatt Card 15K spend.
I had to drop 50k last year on 2 unexpected funerals (and they were fairly basic aside from 1 of them required air transfer). I didn't do too much research on points at the time mainly due to feeling way too distraught. But one thing to know (for funeral expenses) you can spread the bills over multiple cards to maximize each cards bonus. Funeral homes expects folks to need to pay with multiple cards.
The information about the Bank of America card and the bonus is not correct. You do not need the money necessarily deposited into an account there. Having investments through Merrill Lynch could also qualify.
I just paid my estimated taxes on my AX Platinum card to finish getting to $75K spending - something I hadn't intended to do. But my wife and I both use the Skyclub a ton and I had an Amex offer for 8K points on $16K spend. So, I get nearly two years of the DL Skyclub for 2 people plus almost 2 points/dollar I spent on it. By the time I finished the math the $600 in fees were paid for multiple times over.
So I got my 3rd AmEx Biz Pltm for the signup bonus and hefty SUB Spend since we’re moving and the moving company accepts cc with fee amounting to $600 witch I add to most of the AF for cost per point. Slightly under a penny so not great but some fancy future first class experience with make redemption value high!
I should point out previous big spending requirements have been for taxes ;-)
Between SUB spend on new cards, I’ve also used the Hilton Biz card for 5x up to $100k spend. I usually get around .009/Hilton pt but even most blogger’s worst point valuations are .004, still a solid .02 value/pt (& can spend any amount up to $100k to earn).
Nice to stack a SUB/AU offer on an AMEX Biz Plat with $5k transactions at 1.5x (similar strategy with Chase Ink Premier).
I would add a consideration that depending on the type of purchase, the shopping protections offered by the Amex Platinum could be worth considering, though many of them exclude certain types of purchases or cap out at fairly low values.
High spending on the Amex Marriott Brilliant and Business cards earn an additional Free Night Certificate. Bevy and Bountiful come with no annual Free Night Certificate -- high spending alone earns one. Chase Marriott Boundless card earns an Elite Night Credit toward tier status for every $5k in spending. Chase Ritz Carlton card earns Platinum Elite status with $75k in calendar year spending.