I have a big purchase coming up, should I sign up for a store card?
Community question is a new series where I feature questions that I receive from members of The Points of It All community. You can submit a question in the comments, by emailing me at elizabeth@thepointsofitall.com, or sending me a DM on Instagram.
I have a big purchase coming up, should I sign up for a store card?
I get a version of this question a lot. Often, if you know you have an upcoming large purchase, it is a great time to sign up for a new credit card because you know you will be able to meet the minimum spend to reach the sign up bonus.
In this case, someone reached out because they were planning to make a large purchase at Wayfair, and they wanted to know if they should sign up for the Wayfair credit card because it was offering $40 off a purchase of $150 or more at the store. If you are in a similar situation, here’s how I recommend you think about this decision:
First, consider how valuable this offer is. At maximum, this particular offer will allow you to save $40 off of your purchase.
Then, weigh that against other offers. Just because you are primarily shopping at a specific store does not mean you will get the best deal from that store’s credit card.
Which offers are relevant to you?
At any given time, there’s a lot of credit card offers out there. Here are the questions to think about to help narrow down your options:
How much can you spend on a credit card in a month?
This will help you determine what type of minimum spend you can meet. For example, if you typically spend $1000 in a month, plus you are making a large purchase of an additional $1000, you probably don’t want to sign up for a card that would require you to meet a minimum spend of more than $4000 in three months (unless you have a savings account you would be willing to dip into to meet a higher spend with some more advanced tactics). Keep in mind that you should only be spending money you have on a credit card, and should pay off the balance in full each month. Don’t count any money that you can’t put on a credit card (your rent or mortgage typically fits into this category, although there are exceptions).
How much are you willing to spend on an annual credit card fee?
Everyone has a different answer to this. Typically your response will be one of the following:
“I am never willing to spend any money on an annual fee, even if the benefits outweigh the cost.”
“I am not willing to spend more than $X on an annual fee, even if the benefits outweigh the cost.”
“I am willing to pay any annual fee as long as the benefits outweigh the cost.”
“I am willing to pay any annual fee as long as the sign up bonus outweighs the cost, and I will reconsider the card next year.”
How much effort are you willing to put in to maximize the benefits of a card?
Different cards offer different benefits. Every time you add a benefit onto a card, it adds an extra thing you have to pay attention to make sure you are using it for its greatest value. Again, everyone will have a different answer to this question, but your answer may be one of the following:
“I want to earn points on my spending without paying any attention to the benefits of the card.”
“I am willing to put in some effort to pay attention to some benefits or using the right card to maximize rewards, but I don’t want to have to follow up on a lot.”
“I want to maximize the benefits I receive and have the time and energy to make sure I do so.”
Try It Out
Now that you have the answers to these questions in mind, let's weigh some offers! Keep in mind that these offers are available at the time of publishing, so if you are viewing this article at a later date, check to see what the current best offers are!
Find the Offers
There are many places you can go to find the best credit card offers right now. You may have already come across some that you are interested in considering. Here’s where I recommend checking out for the best offers right now:
For a curated list of best offers most relevant to The Points of It All audience, visit my Cards page.
For a ranked list of all the available offers right now, visit Frequent Miler’s Best Credit Card Offers page.
For a list of suggestions specific to you, check out Travel Freely’s CardGenie (only available after you sign up and input your information).
Consider the Offers
Now that you have identified the offers that you think would be a good fit, compare them to find the best deal! Here’s a few examples of how to review them:
Bonus: 100k Capital One miles after spending $10,000 in the first 6 months, plus a $200 statement credit on vacation rentals purchased with your card in the first year.
Best for: Someone who can spend $2000 per month (including any large purchases you have coming up in those six months), is open to an annual fee of $395 per year, and is willing to put in a little effort to maximize the $300 annual travel credit.
Potential value: At least $1200 in travel funds the first year, minus an effective annual fee of $95 per year.
Bonus: 125,000 Membership Rewards points after you spend $6,000 on purchases in 6 months. Plus, earn 10x points on eligible purchases at restaurants worldwide on up to $25,000 during your first 6 months.
Best for: Someone who can spend $1000 per month (including large purchases), is open to an annual fee of $695 per year, and is willing to put in a lot of effort to maximize the card benefits.
Potential value: At least $12,500 in travel funds the first year, minus an effective annual fee of ~$95 (you consider the value of the benefits to you, and determine the effective annual fee yourself).
Bonus: $200 bonus after spending $500 on purchases in your first 3 months. Plus, earn 5% cash back on gas station purchases on up to $6,000 spent in the first year.
Best for: Someone who can spend $167 per month (including large purchases), prefers no annual fee, and wants one card to put all purchases on.
Potential Value: At least $200 in cash back the first year.
Bonus: 80,000 Thank You points after spending $4000 in your first 3 months.
Best for: Someone who can spend $1334 per month (including large purchases), is open to an annual fee of $95, and wants a card that doesn’t require a lot of effort to maximize benefit.
Potential Value: At least $800 cash back in the first year.
Decide
There are many other valuable offers out there that you might consider, but hopefully this gives you a starting place and a sense of how to compare offers.
Now that you know which offers are relevant to you, compare them all and pick the one that offers the best reward for you. You may have other factors you want to consider too, and that will help you narrow the pool.
As you can see here, even the no annual fee Chase Freedom Unlimited is offering a better sign up bonus than the Wayfair card right now. Typically I think you will find a card that is more rewarding than a store card, although you have to do the math to be sure.
Make sure you apply for the card 1 - 2 weeks before you need to make your purchase so you have time for the issuer to review your application and mail the card. To save even more on your specific purchase, check cash back portals like Rakuten and coupons associated with your cards like Amex Offers and Chase Offers to see if the store you are shopping at is offering a deal.
What points and miles questions do you have? Share them with me to be featured in an upcoming post!
