How the ultra-frugal score big sign-up bonuses and travel for free

Penny pinchers pay their bills with rewards cards and align their big buys with sign-up bonuses


Members of the FIRE movement – which stands for “financial independence, retire early” – are known for their extreme frugality. But many of these penny pinchers still love card rewards and use them for travel. Here’s how they find room in their bare-bones budgets to earn points.

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Unless you’ve been living under a rock, you’ve probably heard all about the “FIRE” movement by now.

The movement, which is described with the acronym for “financial independence, retire early,” has been sweeping the country since becoming popularized by blogs such as Mr. Money Mustache and Early Retirement Extreme.

The main tenets of FIRE are simple – earn as much as you can, save a terrifyingly high percentage of your income and stop working a 9-5 job the moment your nest egg is large enough to last.

Of course, the path to FIRE can be rather drastic – particularly if you plan to retire in your 20’s or 30’s. To cut spending enough to save 70 percent of their income or more, many FIRE proponents might bike to work, stop paying for cable television and entertainment and make all their meals at home to avoid dining out.

Some community members even go as far selling all their possessions and living in a van, as one CNBC piece portrayed last year. This article introduces readers to Matt and Alli Owen – a late 20’s couple who saved up $600,000 so they could transition into #vanlife full-time.

The pair blogs about their lifestyle at They make their finances work by keeping their ongoing expenses low, living a minimalist lifestyle, and of course, not having traditional housing expenses.

See related:  Want to shed debt faster? Think of all the money you’ll save

How do the ultra-frugal earn rewards?

One particularly perplexing thing to notice about the FIRE movement is how much these people love their rewards credit cards. Even the consummate frugalista, Mr. Money Mustache, has a page on his website dedicated to the top rewards credit cards and how to use them.

It seems strange for a community of penny pinchers who abhor debt to have such a penchant for borrowing money, but the key for the community is using credit the right way. This typically means using credit only for purchases they planned to make anyway, paying their bills early or on-time to avoid interest and maximizing their cards’ benefits to glean more value.

While many FIRE enthusiasts use these strategies to earn cash rewards and statement credits they can spend however they want, some also lean on travel rewards to go places. This is mostly due to the fact their bare bones budgets don’t have room for something so unnecessary as travel.

But, how do the ultra-frugal and FIRE community earn rewards? Just as expected, they smartly take advantage of the loopholes available to them.

Pay for everything with a credit card

According to 26-year-old Cody Boorman of Moses Lake, Washington, the key to earning big sign-up bonuses and ongoing rewards is ensuring your regular expenses are paid with a credit card.

This is important since most rewards credit cards offer welcome bonuses if you meet a minimum spending requirement within the first three or four months. Without maximizing all your regular bills and spending, it can be difficult to meet the threshold for a sign-up bonus organically.

Boorman, who is the author of “Clocking Out Early: The Ultimate Guide to Early Retirement,” says he and his wife spend less than $30,000 per year on their annual expenses, including their mortgage payment. To maximize their low spending rate, Boorman says they move all their auto-debited expenses to the rewards credit card they’re trying to earn a bonus on.

“Between our electric, gas, power, internet, insurance and phone bills, we’re adding between $350-$400 a month in spend,” he said.

His family also tithes to their church using their credit card, and they occasionally purchase a gift card for Walmart or a grocery store if they realize they’re cutting it close. Boorman is also able to pay for his health insurance with a credit card, which helps his family reach around $1,250 per month in credit spending. Since many rewards offers require cardholders to spend $3,000 in three months to earn a big bonus, they are usually well within range.

If regular spending isn’t enough, another frugal trick to try is prepaying some of your bills. You may be able to pay $500 toward your electric bill or gas bill with a credit card to meet a minimum spending requirement, for example, thus securing a credit against your account for future months.

See related:  These rewards cards can help you book a free summer vacation

Time your big purchases with credit card bonuses

Another credit card hack the ultra-frugal employ is aligning their credit card sign-up bonuses with big upcoming purchases.

Melissa Berry of Spokane, Washington, says she and her spouse have made it a point to leverage big upcoming expenses despite their frugal lifestyle.

The pair spends only $36,000 per year on living expenses, and they recently paid for a roof and a new air conditioning unit with a handful of rewards cards, including the Chase Freedom and the Barclaycard Arrival Plus World Elite Mastercard, Berry said. They also paid for a large chunk of their wedding with these cards and the Southwest Rapid Rewards Premier Credit Card.

Berry says these expenses are sporadic, so she can’t pursue sign-up bonuses all year long.

“You can’t get married all the time or replace your roof that often, so obviously we have to be judicious,” she said. “But if we’re ever planning something big, I make sure to plan ahead and study the best cards and sign-up bonuses.”

Leverage business spending to earn rewards

Mindy Jensen, a 46-year-old early retiree from Colorado who blogs at, reached FIRE with her husband several years ago. The couple uses credit cards regularly, they say, but only in moderation since their retirement lifestyle requires them to keep spending in check.

Jensen says, most of the time, they boost their rewards haul by using their credit cards for regular expenses, purchasing new equipment and stocking up on office supplies for their business. They also prepay utility bills and other recurring bills to meet minimum spending requirements.

But Jensen has a superpower when it comes to racking up cash back and travel rewards. She and her husband purchase and renovate rental properties, so their spending can occasionally reach tens of thousands of dollars per month.

Currently, the pair is gearing up to purchase a triplex that needs a lot of work. They plan on spending at least $30,000 on their project, so they are currently surveying the rewards scene so they can decide which cards to sign up for.

“I open cards one at a time and meet the spend, then open another one and do it again,” she said. “With $3,000 minimums the norm, I can open at least 10 new cards.”

With several new cards under her belt, Jensen anticipates earning a few hundred thousand points and miles with this single remodeling project – or, as she puts it, “lots of free travel in my future!”

See related:  Should you use your tax refund to score a sign-up bonus and book a summer trip?

More tips to boost your rewards

Sign-up bonuses may be the holy grail when it comes to traveling for free, but experts warn against forgetting about the power of earning cash back or travel rewards on your regular spending.

Certified Public Accountant Logan Allec, who writes about financial matters at Money Done Right, says even the ultra-frugal can earn meaningful rewards outside of sign-up bonuses – if only they take extra steps to maximize their regular purchases.

For starters, Allec suggests making sure you’re always using a card that earns rewards for your regular bills and expenses. He uses the Citi Double Cash Card and the Fidelity Rewards Visa Signature Card because he prefers to earn cash back, he says.

Even little purchases can add up, so make sure you’re using credit whenever you possibly can, provided there are no additional fees for doing so.

Second, make sure you’re taking advantage of any lucrative bonus categories. For example, Allec says he uses the Uber Visa Card to earn 4 percent back at restaurants each time he dines out.

He also uses the Blue Cash Preferred® Card from American Express when he shops for food, since the card offers 6 percent cash back on up to $6,000 in U.S. supermarket spending each year (after that, it’s 1 percent). Allec says having a credit card that offers such a high rate of cash back on grocery spending incentivizes him to eat at home.

If that doesn’t fit the agenda of FIRE and the ultra-frugal, we don’t know what does.

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