Use this clever credit card hack to rack up rewards without buying stuff you don’t need

Mobile boarding pass
Your next flight could come from credit card rewards. Flickr / British Airways

To get credit card rewards, you have to actually buy something.

As obvious as that is, it’s also a potential spending trap.

If you start mindlessly swiping your card in pursuit of miles or points, justifying any and all purchases with “But I need to spend enough for rewards!” you could find yourself spending money you didn’t want to spare for things you never really wanted to buy.

The stakes are heightened when you’re in a time-sensitive situation, like when you’re required to spend a certain amount during your new card’s introductory period to receive the offered points or miles.

John Ganotis, cofounder of Credit Card Insider, shared a smart way to get around this dilemma with US News and World Report:

You could buy a $US1,000 gift card from and put it in your account and make your purchases throughout the year. It’s basically like you’ve prepaid for your items and are getting the rewards on your credit card.

While Ganotis is specifically discussing introductory offers, his strategy could be useful at other times as well, like when you have a surplus in your monthly budget, but know next month will be tight. By paying for future purchases in advance with a gift card — of course, it doesn’t have to be for Amazon — you can both keep your budget balanced and give your credit card some heavy use.

A few caveats, though:

This strategy isn’t nearly as effective if you cannot pay your entire credit card bill when it comes. Are you willing to trade months of paying high credit card interest rates for a plane ticket or other reward? Spending money you don’t have is rarely a recipe for success.

If the required spending means you’ll be shelling out more than 10% of the total credit available to you (including any other cards), it has the potential to adversely affect your score based on a factor called “credit utilization,” or how much of your total credit you use at one time. A one-time spike probably won’t make much of a difference, but if you’re aiming to put your credit score to use and buy a house or a car in the next few months, you might not want to chance it.

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