Thursday, 26 November 2015

A LOW COST WAY TO HIT THOSE CREDIT CARD SPEND THRESHOLDS


Credit card sign-up bonuses are a great way of giving your frequent flyer account a boost. From the current 15K MBNA AA bonus, to the on-going 35K American Express platinum card bonus, (or 40K if you do it the smart way, follow this link), there are cards out there that will tempt you with juicy incentives to apply for them.

40K Amex MR rewards are tempting, but how to do the £2000 spend ?
 All such cards have a spend threshold that needs to be met before the sign-up bonus is triggered. For the MBNA card, you need to spend £1500 in 90 days before you get the bonus, for the Amex plat card, £2000 of spend is required.

Now many people won't have too much difficulty in doing such spend. Some will have a lifestyle that results in habitual high credit card spend, some will have a big purchase in mind, maybe ordering a new bathroom, and others might be able to filter some business spend thru the card.

But, for the rest of us mortals, hitting £2000 for example can be problematic. So my interest was piqued when I came across these new pre-paid mastercards that can be ordered online, which effectively allows you to do deferred spending.www.theirperfectgift.co.uk

www.theirperfectgift.co.uk


Now before anyone gets too excited, this isn't a no-cost way of generating spend. The most economical cards (those between £175 and £500) have a 4% surcharge, so a £500 giftcard costs £519.99. However 4% compares very favourably with the 7.9% fee that you incur if you buy a £50 visa card from Tesco. They take payment by paypal (and thus can accept any card including Amex) and offer a free delivery option, and my best understanding is that the cards have no value until you activate them, the details of which are sent via email, but this would need to be confirmed.

If we take the example where you have generated £1000 of spend naturally, but you are £1000 short and coming close to the end of the 90 day spend period, for £40 you can buy 2x£500 mastercard gift cards, which you can then spend at your leisure. (weirdly, once you get above £500, the fee % rises, so don't buy any denomination higher than £500).

Another example of where this might be used, is in association with the BA Amex premium plus card, which has a £150 fee, but crucially will give you a "2-4-1" voucher if you spend £10K in a 12 month period. If you are £1K short and approaching the end of the 12 months, then this would allow you to trigger the voucher, allowing you to spend the £1K later, at your leisure, again at a cost of £40.

I haven't used these cards myself, so it would be a good idea to buy a small value one initially, to be happy that you can then spend them in a range of places.
  
4th December Update 
As a test, I bought a £30 card, paid the £33.99 using my amex gold card, via paypal. I can confirm that no cash advance fee was charged, and that upon receipt the card needed to be activated using a code that was received via email. So if that the card is lost in the post, you can contact them, they can confirm that the card is not activated, cancel it, and send another one.

No comments:

Post a Comment