Chase Sapphire Preferred: How I reached my 100k Bonus
[As of October 25, 2021, the 100k bonus points offer has officially ended. The intro bonus is now 60,000 points. Use my referral link to get 60,000 bonus points. Terms apply so please read the fine print.]
For the past year or so, I’ve been going back and forth about opening a credit card. I was an authorized user under my mom for American Express but had only used it for certain expenses during my time in school. Being 2 and a half years out from school, I didn’t use her card but was perplexed by the credit card game. I was always wary about getting and using a big girl credit card, especially now that I was out of school. I had my fair share of poor money management mistakes when I was a college student that included poor budgeting and overdraft fees, so I didn’t want to push myself into opening a credit line I wasn’t ready for. I knew better than to go crazy on spending because I’ve heard bad credit card debt stories, but that didn’t mean I was going to practice good habits. With a stable income and some financial wellness clarity in check, I wanted to make the next move and get my own credit card — one where I wasn’t an authorized user and one where I could handle the point system all by myself. But how do people do the whole credit card thing and are getting points really worth it?
How Did I Build My Credit
“Side Note:
Adding your child as an authorized user is one of the best things you can help your children with financially. As long as you have an outstanding credit history, adding them as an authorized user allows your child to build a credit history piggybacking off of your account. Because the card belongs to you, you as the parent are responsible for the payments, but you could potentially add them and not hand over the card, or work out an agreement that they must pay you back so that they can understand the credit card process.”
First, let’s talk about credit history which determines the kinds of loans and credit cards you may get approved for. Your credit history makes up your credit score. The older accounts of good standing you have, the better. My oldest credit line was about 8 years old, thanks to being an authorized user on a parent’s card. Over the years I eventually established my credit history through different student loans (private and public) and a short-term credit card I used abroad for a few months (that I tried to pay off as soon as possible). Different cards require different credit scores and it’s important to note where your score fits. My credit score was in the high 700s at the time. While this was reassuring, I was still nervous my application would get rejected. What if I got rejected and needed to call their reconsideration line? I had a good payment history, a good credit score, have tried to limit my new accounts, and have been diligent in lowering the amounts owed, is a rejection still possible?
How I Selected the Card
I ended up deciding on the Chase Sapphire Preferred. While I haven’t been travelling much due to the pandemic, I definitely want to travel and am a big planner when it comes to future trips. While I debated getting a United Explorer MileagePlus card (I typically fly out of EWR Newark, a United hub), I found the Chase card to be more valuable as a travel card than a United-branded one. I also liked that the CSP was a bit more advanced than a basic credit card. It wasn’t a beginner’s or student credit card. Additionally, I looked into the card benefits other than travel rewards, like the point multipliers and any free memberships or discounts it came with. There is a $95 annual fee. To me, this was manageable, but I don’t think I would have gone with a card that had a fee of over $100. When it came to doing some more research on cards, I often browsed NerdWallet and The Points Guy.
Pros
Generous, new cardholder bonus offer
Earn high rewards on certain spending
Great for travelers
No foreign transaction fees
Cons
Has annual fee
No intro APR offers
Require good/excellent credit
Can be complicated to figure out rewards and their portal
The offer on the table (at the time) was “Earn 100,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,250 when you redeem through Chase Ultimate Rewards®.” That $1,250 immediately sounded enticing. The first thing I needed to do was the plan for how I could meet that minimum spending requirement on the card without increasing my monthly expenses unnecessarily.
So I had to make a plan: Spend $4,000 in 3 months.
That was a lot, but I had to make some conscious choices.
Tips on Reaching Your Credit Card Bonus Spending Minimum
Time it well
Spending to reach a minimum within a certain time frame is all about timing it well. If you know you have some upcoming expenses, plan your credit card application and spending period to align with your purchases. If you know you have some trips, a major life event, the holidays, or some birthdays/celebrations on your radar, take advantage of those spending opportunities that are coming up. If you have a pretty quiet couple of months ahead, don’t apply for a credit card because you might end up struggling to reach that spending minimum.
When I originally thought about applying for the credit card, my goal was to figure out my moving plans and get the card just in time for some of my moving expenses - supplies, a truck, new furniture, and more. My roommate and I actually were able to negotiate our rent and decided to renew our lease for a 3rd year. Once I finalized that I wasn’t moving, I felt confident in applying for the credit card but I realized I wasn’t tied to moving expenses, but other events instead. I knew I was going on a few trips throughout September through November, so I decided to delay my credit card application so that the 3 month spending period would overlap those trips. It’s a lot easier planning to spend on trips and excursions, than when I’m just working from home. I also knew that if I didn’t reach $4k through my trips, I could at least get some early holiday shopping done too.
Reorganize and Reprioritize Your Finances
Be smart about how you are spending. Having a credit card means having another card and account to juggle and if you aren’t careful, it’ll be easy to mismanage it. For the sake of getting a bonus, you may need to evaluate your current spending habits and how it’s being charged. Find opportunities where charging your credit card will make sense -- spending you’re already doing (bills) or buying things that will reap good rewards (3x points, etc). Use the right cards for the right purchases. If you have disposable income that you use differently each month, consider your payment plan. Do you want to pay off the minimum payment every month, or do you want to have a $0 balance at the end of each pay period? Do you want to charge every single thing on your credit card, or do you want to balance between your credit and debit card?
I only have so much money that I could move around, but with the goal to spend $4,000 in those 3 months and be able to pay it off immediately, I needed to reprioritize and budget where my money went. “Extra” money that I normally use to invest or just sit around as disposable income, I would use to help pay off any balances on my credit card for that 3 month period. It’s important to stay on track of how much of your spending limit is being used.
Think Now and Ahead
Don’t get caught up with money that you don’t have. It’s easy to accumulate debt and high-interest rates will be your downfall. The satisfaction of spending now rather than waiting to finally have money can easily get out of hand, so it’s pertinent to think about how the spending will affect you in months’ time. Can you pay it all off in the future? Was it worth spending $xxx a few months ago?
An issue I found with a credit card was that I was able to pay for something I wanted in the future which can easily lead to frivolous spending habits. With a debit card, I could only spend what I had in my bank account. With my newfound credit limit, I had room to spend for something now, as well as for something way down the line. I got caught up in the idea that I could be buying something now, rather than waiting until I had enough money.
Ask for Help
If you are comfortable asking, ask to charge your card for a close friend, significant other, or family member’s expense to meet your spend bonus. It could be groceries, something for school, or a large purchase. Just make sure they pay you back immediately.
In this case, my boyfriend wanted an iPad, so we charged it on my card. If I went out for dinner with a group of friends, I paid and they all Venmo’d me back. This is an easy way to cover some spending ground.
Take Advantage of your Card Benefits Early
Use your card benefits to incentivize certain spending. Look over your card benefits and see where spending will be the most advantageous.
Are there spending areas that have a higher points multiplier?
Are there features you can opt-in and get money back for being a cardholder?
Do you get a statement or membership credit for certain goods and services?
By reviewing your rewards, you can make better decisions on your spending.
For the Chase Sapphire Preferred, there were some options that I immediately tried to take advantage of. For example, I immediately opted for the complimentary DashPass subscription, which waived fees on qualifying DoorDash purchases. When ordering in, I try to order from DoorDash rather than UberEats. I connected my Chase card to my Lyft app, which meant getting 5x points on Lyft Rides. For streaming services, I get 3x the points, so I made sure to update my card info.
The Breakdown
It was definitely daunting to think about spending thousands of dollars on purpose. I needed to reach a certain goal, but instead of saving or investing money, my goal was to spend it. I ended up hitting my goal early, but here was my spending breakdown:
My spending breakdown to reach the bonus spend for the Chase Sapphire Preferred.
Bills (Non-Rent) - I didn’t pay for my rent, but I did cover my internet bill and Spotify subscription. There were a few bills that I would normally Venmo someone else, so I didn’t end up using my card for those.
Groceries/Food - I’m only feeding myself, so when it came to actual produce and staples, I didn’t actually spend that much. However, when it comes to ordering in, eating out, and getting specialty groceries, the costs can quickly add up.
Travel (Rideshares and Public Transit) - I don’t have a car, so for me I couldn't use my card on car payments, insurance, gas, etc, but it may be a viable spending option for you. Personally, I find myself using rideshare during some late nights, or using my card to cover train/bus costs.
Shopping - I’ll admit, this is not one of my best spending categories. I fell into the credit card trap of spending for the sake of spending and unfortunately it was on more materialistics things. Yes, I went to Target. Yes, I bought from Amazon. And for the most part, I didn’t need it.
Entertainment (Tickets) - Outside of general shopping, I bought tickets for future excursions, whether for myself or to enjoy with a friend. This included concerts and tickets to new, cool things to see. I live in the NYC metro area, so there are always new and exciting things to check out. I tell myself that spending on experiences isn’t so bad, but it’s also very expensive.
Travel (Trips) - This category groups all my spending from 2 trips I took, that doesn’t include accommodations (because I booked those way before I had my credit card). This included meals, excursions, parking, and souvenirs. Not all trips have to be expensive, but I ended up spending a lot on this.
Tech - I am not typically a big gadget person, but in this instance, we charged my card for an iPad. If you are WFH, it could be worth upgrading or investing in your workspace. Otherwise, there are always new gadgets and models of items you may be interested in, whether it’s for your home, workspace, or personal use.
Fall Activities - Since it was autumn, I spent some money on fall activities, like apple and pumpkin picking, buying pies and apple cider donuts, etc. Seasonal activities can easily be applied for whenever, whether it’s spending on ski trips or ice skating, beach passes and parking, amusement parks, etc.
Gifts - A friend of mine had her birthday, so I got her a gift.
Final Thoughts
Learning to manage a credit card (whether your first or a new one) can be a difficult task. It requires discipline and planning, especially if you’re trying for a sign-up bonus. While trying to get bonus points for a credit card can be intimidating, it doesn’t have to be hard.
Now that I’ve gotten the 100,00 Chase Ultimate Rewards Points, it’s time for me to learn how to redeem them. My plan is to wait and accumulate more points and use them for travel purposes, whether it is to book hotels or flights. I’ll need to navigate the Chase Travel Portal, as well as evaluate where I can get the most value for my points, whether it’s through booking through the portal or transferring points to an airline or hotel partner. I’m excited to see how I can use credit to my advantage.
Interested in applying for the Chase Sapphire Preferred? Use my referral link to get 60,000 bonus points. Terms apply so please read the fine print.
Chase Sapphire Preferred: How I reached my 100k Bonus
