What Is Minimum Spend?

The term “minimum spend” refers to the minimum amount of money that a customer must spend in order to qualify for the sign-up bonus associated with a credit card. It is short for minimum spending requirement.

How Minimum Spend Works

Credit card companies often o꧋ffer various incentives to attract ✅customers to sign up for new credit cards. One such incentive is the sign-up bonus.

With a 澳洲幸运5开奖号码历史查询:sign-up bonus, a new credit card customer earns a reward, often in cash, forꦓ signing up for the card, provided that certain conditions are met. Typically, this means spending a minimum amount in a specific period of time, such as spending $2,000 or more within the first three months of opening the account.

In practice, minimum spending requirements can differ widely from one card to the next. So consumers may wish to shop around to find a deal that works well wi🥃th their existing spending practices.

Minimum Spend Workarounds

Manufactured Spending

Some consumers have found creative ways to satisfy minimum spending requirements. These strategies are known as manufactured spending. They consist of spending now on items that they'll need later or creating the illusion of spending without incurring the full cost of the purchases involved.

Examples of using such strategies to meet the minimum spend include buying gift cards for a 澳洲幸运5开奖号码历史查询:grocery store or a gas station, or buying birthday or 澳洲幸运5开奖号码历史查询:Christmas gifts far in advance. The customer spends money earlier on it♌ems that they have toཧ buy in the future. In this way, they meet the minimum spend without increasing their overall spending.

In other cases, customers might meet their minimum spending requirement by making large payments on rent, 澳洲幸运5开奖号码历史查询:car loans, or 澳洲幸运5开奖号码历史查询:student loans.

Reimbursed Spending

A more direct approach to manufactured spending consists of simply using the credit card tಌo make purchases on behalf of friends or family, with the inten🎉tion of being fully reimbursed by them at a later time.

If the customer is especially enterprising, they might even purchase items in bulk using the credit card, with the intention of reselling them later through an online storefront൲. 

Regardless of the method used, customers must be careful to ensure that they can pay their credit card bills in full once they're due. Otherwise, the 澳洲幸运5开奖号码历史查询:interest charges or late fees incurred couldꦅ quickly erode or even exceed the sign-up bonus.

Example of Minimum Spend

Michael is reviewing an advertisement mailed to him by XYZ Credit. Under the terms of the ad, XYZ is offering all 🍒new credit card customers a sign-up bonus of $750. They can qualify for it by spending at least $5,000 over the first three months after opening an account.

Althoug🍷h Michael finds the $750 bonus attractive, he typically only spends $1,500 per month, and is therefore unsure of how he could responsibly satisfy the card’s minimum spend.

To solve this problem, Michael decides to use manufactured spending. To begin with, he notes that he typically spends $200 per month on groceries, and that roughly half of his grocery bill ($100) covers non-perishabl𓄧e items. Non-perishables have a long shelf life and can be b♛ought ahead of time.

He🐽 decides to purchase nine extra months of non-perishable items over the next three months,☂ This increases his planned grocery expenses in that time period by $900:

$100 for non-perishables x 9 months = $900.

ඣThus, Michael increases his overall, planned 3-month spending of $4,500 on the new credit card to $5,4ꦯ00:

澳洲幸运5开奖号码历史查询: $4,500 + $900 = $5,400

This su🎃rpasses the⛦ minimum spending requirement of $5,000 and qualifies Michael for the $750 bonus.

The Bottom Line

Minimum spend is the amount of money that a credit card company requires a new credit card customer to spend in a part🍃icular time period in order to qualify for its advertised sign-up bonus.

There are various and creative ways to meet this minimum spend requirement. But be sure that the reward is worth the minimum spend, and that you can pay off the resulting balance on your credit card before inte🍎rest charges start adding up.