5 Types of Spending That Don't Count Toward a Credit Card Sign-Up Bonus

by Lyle Daly | Updated July 21, 2021 - First published on Feb. 21, 2021

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If you're working toward a spending minimum for a credit card sign-up bonus, you need to know which types of spending qualify.

Credit card sign-up bonuses are a nice way to earn a big chunk of cash back or rewards points. Most of the time, you'll need to meet a spending requirement to get the bonus. For example, a card may offer $500 back after you spend $3,000 on purchases in the first three months.

That seems simple, but there are several transactions that don't count towards the spending requirement. If you're not aware of these, you could mistakenly think you've spent enough and miss out on a valuable bonus opportunity.

1. Fees

Fees aren't classified as purchases. As such, they won't get you any closer to a spending minimum.

An annual fee is the most likely to cause confusion. Credit card companies charge this on the first billing statement. It's easy to miss an annual fee that increased your balance if you don't go through all your transactions at the end of the month. And annual fees can make a big difference in how close you are to a bonus, especially with feature-packed credit cards that cost $250 or more per year.

The same rule applies to other types of fees. So, if you get charged a late fee or any other fee, remember it won't count towards your card's bonus requirement.

2. Balance transfers

Some balance transfer credit cards also offer sign-up bonuses. Given that balance transfers are often large transactions, you might think you've already hit a spending minimum after you've transferred one or two balances over.

Balance transfers aren't purchases, though. That means they don't help you earn a bonus. If you open a balance transfer card with a sign-up bonus, you'll need to make purchases to get the bonus. If you're trying to get rid of credit card debt, keep in mind that it could be better to ignore the bonus altogether. That way you can focus solely on paying down those balances.

3. Refunded purchases

When a purchase is refunded, it no longer counts towards the spending minimum on a bonus. You are, after all, getting the money back.

This could be a huge problem if you get a refund after the time period for the spending requirement runs out. Let's say a bonus requires you to spend $3,000 on purchases in three months. You're at $2,800 in purchases with two days left, and then you make a $300 online order to go over the $3,000 requirement.

A couple of days later, the merchant says it can't fulfill your order and refunds the $300. You're back to $2,800 in spending, and there's no time left on the bonus offer. You'll lose the bonus in the most frustrating way possible.

If you're cutting it close on a spending minimum, be careful not to make any purchases that could be refunded later.

4. Cash advances

A credit card cash advance allows you to get cash from your card. Once again, this is a type of transaction that isn't considered a purchase.

Not only does it not help you get a sign-up bonus, but a cash advance is also one of the worst ways to use your credit card. Cash advances start to accrue interest immediately, the interest rate can be higher than other transactions, and there's an additional cash advance fee. That's why credit card cash advances are never recommended.

5. Money wires

When you wire money and pay with your credit card, that's also considered a cash advance. For example, sending money through Western Union is a cash advance if you use your credit card.

You won't make progress towards a sign-up bonus this way, and you'll also face those extra costs that come with cash advances.

Unfortunately, it's not always clear which money-sending methods are classified as cash advances. Some forms of sending money with a credit card, such as PayPal and Venmo, are usually considered purchases.

Most services that could be considered cash advances will include a warning about this during the payment process. But to be safe, you can also ask the credit card company to set your card's maximum cash advance amount as low as possible. That way, any cash advances over the maximum will be automatically denied.

Don't lose your bonus on a technicality

Nobody wants to lose a bonus because of a technicality. The main thing to remember is that only purchases count towards a credit card's bonus requirement. When in doubt, remember you can always contact your card issuer to double check how much you've spent towards your bonus.

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