Get points and rewards by charging moving expenses on a rewards card, as long as you pay it your bill pronto
About 35 million Americans move each year, and spend hundreds or thousands of dollars to do so. For those who smartly take advantage of credit card offers, promotions and awards, however, a big move can mean big rewards.
Consider Naomi Sachs. A busy executive for a multinational food corporation, she had two goals in mind when she moved her family from Los Angeles to Marin County, California: Stick to a budget, and maximize rewards points.
|MOVING AND YOUR CREDIT SCORE|
|The act of moving will not affect your credit score. However, moving comes with its own potential credit hazards:|
|• Opening too many new cards at once.|
The weeks before a big move are not the time to open a slew of new credit cards.“Keep in mind that a credit score takes a 3-5 point temporary hit each time there is a credit inquiry,” says Shawn Coomer, author of the points blog Miles to Memories. If you want to open several new cards, do that six months or more before you also plan to apply for a new mortgage.• Forgetting to pay bills.
In the hustle and bustle of changing homes, sometimes a credit card bill goes adrift.“Be vigilant about keeping up with paying your credit cards even if the mailed statements don’t all make it to your new address in a timely manner so you don’t tank your credit score and rack up fees,” wrote the Mommy Points blogger Summer Hull.
Sachs began saving money by calling around for the best deal on movers. Then she turned to rewards opportunities by ordering packing supplies online through a portal that gave her extra points per dollar spent at Staples. Every purchase went on a points-bearing credit card. The move cost more than $15,000, but she estimates it earned her more than 20,000 rewards points – enough to treat herself and her family to a birthday weekend at a Hyatt hotel in Napa Valley.
“Any big life event where you are going to be racking up some bills and expenses is an opportunity [for] potentially pretty big rewards,” wrote Summer Hull, a points blogger, in an email.
Getting a new card, meeting the minimum spendInterested? Great – then let’s start with credit card sign-up bonuses. They’re usually a trade-off: a big boost in points in exchange for a minimum spend in the thousands of dollars. Here are a couple ways to use big moving expenses to meet that minimum spend and get 20,000, 50,000, or even in some cases 100,000 bonus points:
Charging the cost of the moving van
Expect to spend anywhere from a few hundred dollars for a rental truck and packing supplies to more than $5,000 for professionals to manage the job. Charge it, and you’re at least making a dent in that minimum spend requirement, plus getting a chunk of points in the bargain.
These can help you use your credit card to transform big expenses you’d otherwise pay by check – for movers, for first and last month’s rent and security deposit, for a mortgage – into serious rewards points. Services such as Plastiq or Tio allow you to pay many bills with a Visa, Mastercard or American Express card, in exchange for a service fee of approximately 2.5 to 3 percent. That service fee is almost always higher than your rewards, so such services usually do not make sense financially, but if you need to make your minimum spend, they might be worth the cost.
Using existing cards
If you already have a Chase Sapphire card, you are eligible for 100,000 bonus points if you get approved for a new Chase mortgage before August 6, 2017.
Cable, internet and utilities
Some insurance companies offer their own rewards cards. If, for instance, you get Farmer’s Insurance, you can also get the Farmer’s Reward Visa card: 3x on gas, home improvement purchases and insurance expenses, redeemable for a credit on your insurance statement.
Home improvement stores and wholesale clubs
As always, common sense, not rewards, should drive spending decisions. Only spend what you can afford.
If you start spending more than you otherwise would, or don’t pay [the card] off each month, then you will come out on the losing end,” wrote Hull, author of the Mommy Points blog, “even if you got hotel award nights or 100,000 points when you first got the card.”
The 0-percent option
Finally, if the cost of moving houses is more than you can bear in one credit card cycle, remember that if your credit score is healthy enough, you may be able to transfer your balance to a 0 percent APR card and pay off the bill over six, 12 or even 18 months, without paying interest along the way.
But be sure, before you commit a debt to one of these cards, that you read the fine print. Most cards charge a balance transfer fee – they usually run around 3 percent – that you may be loath to pay. With others, the introductory rate can vanish early following a single late or missed payment – and the resulting interest rate may be higher than the one on your previous card.
Have a safe and rewarding move!