There are dozens of articles online featuring this same strategy, which only goes to show that this is a strategy that works and is worthwhile.
Chase has an entire “Ink” credit and charge card line designed for businesses. These cards are by far some of the most profitable travel points program earning cards on the market now. They’re great for businesses (I use them for my small business), but there’s also a great strategy for regular consumers (who don’t own their own business) to sign up for these cards to easily leverage a roundtrip ticket to Europe and Asia per year. And that’s what this article is primarily about.
Chase Ink Bold, Ink Plus, and Ink Classic cards allow special points earnings of 5x points in select categories such as office supply stores. Let’s take a look at the Ink Bold charge card in particular, which is one of my personal favorites and always in my wallet.
The Chase Ink Bold charge card is a premium MasterCard with the following highlights:
- Earn 5x points per dollar on the first $50,000 spent annually at office supply stores, and on cellular phone, landline, internet, and cable TV services.
- Earn 2x points per dollar on the first $50,000 spent annually at gas stations and for hotel accommodations.
- No foreign transaction fees.
- Free employee cards.
- Transfer points you’ve earned to participating frequent travel programs at a 1:1 value.
Also, since it’s a premium Chase card, it comes with great travel insurance and purchase protection benefits for the primary cardholder. That being said, the 5x points per dollar spent at office supply stores is the primary reason why this card is such a valuable card for travel hackers and miles enthusiasts. The second being that the points go to the Chase Ultimate Rewards program (same as Chase Freedom cards) and therefore can have the points you earn transferred to many major airlines, including United Airlines, at a 1:1 point ratio!
The Chase Ink Bold card currently offers the following sign-up promotion:
- 25,000 bonus points after your first purchase
- Another 25,000 additional bonus points after you spend $10,000 within 3 months of opening your account (and points do not expire)
- First year annual fee is waived (you pay $0), and afterwards your annual fee will be $95 for the card
- Charge card so you pay no interest since you pay the full amount at the end of the billing period
So you might be thinking now, well, I don’t really shop that much at office supply stores…why would I care about the 5x points? Or maybe you’re thinking that “Wow, I’d never spend $10,000 within 3 months on this card to get the additional sign-up bonus.”
You have to think creatively about this one. Most major office supply stores such as Staples, Office Max, and Office Depot all have dozens of gift cards and prepaid cards that can be purchased in-store. The gift cards usually have no additional fee (you want a $25 Starbucks card for example, then you just pay $25), whereas the prepaid cards (i.e. a Visa or American Express prepaid card) often have a small $3-$6 fee to activate it.
So let’s do the math here.
Let’s say you spend $100 each month on gas, and you spend $100 a month eating out. (Quick bites to eat during your lunch break.) That’s $200/mo.
Now, instead of just paying with a credit card for gas or at Subway or Panera, stop by Staples or Office Depot before you go and purchase a Shell gas gift card, Subway gift card, Panera gift card, or one of the dozens of other restaurant gift cards that are available. That would automatically mean that the $200 you spend a month becomes 1,000 points ($200*5points) per month you can have go towards your travels. With United miles valued at 2 cents a mile, that’s a $20 value you are getting back for doing what you normally do.
But here’s where the jackpot comes in: how to reach the bonus $10,000 spend within 3 months if you normally don’t spend that much.
Office Depot offers prepaid Visa and American express cards with values of up to $500.00. They also have a product called Vanilla Reload that allows you to purchase reloads to existing gift cards (up to $500 reload) at a small fee. The $500.00 prepaid cards have a $4.95 activation fee the last time I checked. So let’s be creative here.
Say you have any large purchases coming up (new laptop, new car, new anything), you could make the purchases using prepaid gift cards and get 5x points per dollar you spend, no matter where you’re spending it. But another way is for the purposes of simply hitting the $10,000 within 3 months spend requirement for the sign-up bonus is to purchase the $500 prepaid cards and simply paying yourself back with them.
Both Paypal and Square allow anyone to setup their own merchant account in order to process and accept credit cards, gift cards, and debit cards. Paypal has a 2.9% + $0.30 per transaction merchant fee, whereas Square has a 2.75% per transaction merchant fee. The fee difference is small, so I would say it’s up to personal preference–and if you don’t have a personal preference, Square is a smarter choice due to the lower transaction cost. Both will transfer your purchases straight back to the bank account of your choice without any additional fees. For those of you signing up for the first time, you can choose “sole proprietorship” as your business type and just use your full name as your business name. In most states, you are allowed to do business in your own name without registering your business. In this situation, your Employer Identification Number (EIN) can simply be your SSN.
For the purposes of this example, we’ll use Square.
Let’s say you purchase $4,000 worth of prepaid gift cards (8 $500 value prepaid cards) in one month, $4,000 the second month, and then $2,000 the third month in order to meet your $10k spend requirement. Here’s the math:
- 20 $500 prepaid cards = $10,000 of prepaid cards
- 20 $500 prepaid cards * $4.95 activation fee per card = $99 total in activation fees
- Remember no tax can be charged for gift card purchases in California (Make sure your store clerk doesn’t try to tax you!) (If you’re in another state, check your state laws)
- $10,000 * 2.75% transaction fee for Square = $275 in merchant processing fees
- Total fees incurred from the full $10,000 card run = $99 + $275 = $374.00
- $10,000 of prepaid cards * 5x points = 50,000 points
- + meeting the $10k spend requirement = additional 25,000 points (sign-up bonus offer)
- TOTAL POINTS EARNED: 75,000 points (more than enough for a roundtrip ticket from San Francisco to Europe or Asia)
This spending run (where you are paying yourself) really only makes sense to get the initial sign up bonus. But after really only taking a $374 hit, you score enough points for a full round-trip ticket (albeit economy) to just about anywhere! That’s easily a $1,000 to $1,500 value for only $374! Definitely a great score since you are essentially getting each mile at $0.005 (half a cent) each. Miles are generally valued (at least United Airline miles are) at 2 cents EACH, which makes this a FANTASTIC deal. Talk about leveraging your dollar and making it go the extra miles!!!
Also keep in mind that you can help reach the $10k spend limit by prepaying for your internet and phone bill for the entire year at once (which could easily be anywhere from an additional $1,000 to $2,000).
Downsides/Words of Warning/Caution:
With such a huge bonus, Chase is definitely losing money on this kind of deal in order to get you as a loyal customer. There have been rumors that folks who abuse the system end up getting their account shut down or worse–getting banned from Chase points altogether. Since Chase operates the vast majority of the big miles-earning credit and charge cards in the market right now, getting on their naughty list would definitely not be in your best interest. Because of this, I highly recommend you that you do all of this logically in a way that makes sense and also benefits Chase. Here are a few ways you can ease into this and still score the points while not raising red flags:
- Start a Chase checking account if you don’t already have one. Chase, like all banks, want your business. They offer great benefits and service, and since most miles-earning cards are with them, it wouldn’t hurt to show that you’re a loyal customer. (There’s also a $150 bonus cash sign-up offer going around for new checking accounts. Ask a banker.)
- Don’t purchase all $10,000 at once after you open your Ink card. Spread it out between several weeks (within two or three months). Just be wary of the time limits of that 3 month offer for the bonus 25k points.
- After you’re doing running the 10k limit, try spending your Ink card at locations other than just office supply stores to show that you have some variety
- Pay your bills on time and make sure you don’t do anything else that would cause any scrutiny to your account
- The annual spend limit for the 5x categories is $50,000. That’s a lot of money. Chances are you won’t be hitting that unless you’re running a full-fledge business operation. (That would require you to be spending at least $4,167 a month on your Ink card in those 5x bonus categories!)
The Ink line are GREAT cards to earn those extra miles on. The no foreign transaction fee also means that it’s one of the first cards that I’ll have in front of my wallet when I’m traveling outside of the United States. Again, be cautious about not abusing the system. But definitely keep in mind that Staples and Office Depot have a HUGE gift card selection. I was just in the store today and I saw over two dozen restaurants on there, as well as gas cards. With a selection that wide, there really is no reason not to be earning 5x points on the vast majority of your purchases.
And with Black Friday and the holiday shopping season coming up in just a couple of months, it’s definitely a good time to apply for an Ink card if you don’t already have one. I haven’t covered the common Free-After-Rebate offers that most office supply stores often have, but as you might imagine, that’s a great (and virtually free) way to flex your money and earn 5x points at the same time too!
Here’s a quick link to Chase’s landing page for the Ink family: https://www.chase.com/online/business-credit-cards/ink-business-credit-cards.htm