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If you’re like me, you love earning sign up bonuses on credit cards. They’re one of the fastest ways to earn a large chunk of points in a short period of time. In most cases, all you have to do is meet a minimum spending requirement in a limited time frame to earn the bonus.
While the spending minimums and time frames differ from card to card, it isn’t always easy to meet the minimum spending requirements.
If you’re short of earning your signup bonus, car insurance premiums may be just what you need to put you over the top and earn your bonus.
If you’re frugal, and looking for lots of ways to save money, then spending three or four thousand dollars might not sound very easy. And credit card companies make it difficult on purpose. If it was too easy, they’d have to award signup bonuses to everyone and that just wouldn’t be profitable.
If you’re short of earning your signup bonus, car insurance premiums may be just what you need to put you over the top and earn your bonus. Here’s why car insurance premiums are such a great candidate to help you earn sign up bonuses.
Not sure what this all means? Check out our Beginner’s Guide
Average Car Insurance Premiums Add Up to Big Spending
Car insurance rates fluctuate wildly depending on where you live, your driving record, your age and many other factors. Unfortunately, no matter how careful you are, auto insurance isn’t cheap. According to ValuePenguin, the average car insurance rates by age vary from as high as $8,226 per year for a 16 year old to as low as $1,845 per year for a 55 year old. That’s at least $150 per month of spending just on auto insurance.
Of course, you should do what you can to save money on your auto insurance. Price shop, get quotes form a bunch of insurers, and get the best deal you can find. But chances are, it will still end up costing you a good chunk of money.
Many Car Insurers Accept Credit Cards
Thankfully, most car insurers accept credit cards as a form of payment. While this may seem obvious to you, many people don’t realize car insurers often take credit cards. Many home insurers as well as utility companies don’t allow credit card payments or charge a convenience fee if you do decide to pay with a credit card. So, many people falsely assume car insurance is the same way.
If You Have Online Access, Changing Your Payment Method Is Usually Easy
How your insurance is set up can make a big difference in terms of convenience for paying with a credit card, and for changing the credit card on file. Personally, I’ve always had access to my auto insurance account online and can make changes myself. I could change my credit card on file every day if I wanted to and no one would care.
I usually try to make sure to get a signup bonus card a few weeks before my biannual car insurance payment is due, as it helps meet my minimum spending requirements.
I’ve never gone through an insurance agent to purchase auto insurance, though. If you do, you may have to call your agent to change your payment method. Though in many cases you might work with the agent initially, and then set up an online account. On the off chance that you can only change your payment method over the phone with a local agent, I would imagine they’d get a bit perturbed if you changed the card on file frequently. However, changing your card once or twice a year wouldn’t be the end of the world. And this likely won’t be an issue at all because online accounts are the norm.
Many Insurers Offer Multiple Payment Options
Car insurance premiums aren’t always paid on the same schedule, depending on your personal situation, preferences, and insurer. My insurer actually offers a discount if I pay for my insurance once every six months. Naturally, I take advantage of the discount. This means I have a giant auto insurance payment (usually close to one thousand dollars) once every six months that I can use to put toward a sign up bonus. As such, I usually try to make sure to get a signup bonus card a few weeks before my biannual car insurance payment is due, as it helps meet my minimum spending requirements.
If you don’t have the cash to pay for all six months at once, you can usually make monthly auto insurance payments as well. This requires less planning when it comes to applying for sign up bonus cards as you’ll have an auto insurance payment to put toward the bonus every month. But even a few hundred bucks over the course of three months (the common signup bonus spending period), can make a big difference.
Changing Your Payment Option to Earn a Bonus
If you usually make your auto insurance payments monthly and you’re short of the spending required for your next sign up bonus, talk to your insurance company to see if you can switch to a biannual payment plan and make a payment today. It may just get you enough spending to reach your bonus.
You could put it on your favorite credit card to earn travel points or a flat cashback rate.
Another option is getting new car insurance quotes to make sure you’re still getting the best deal. If you find an insurer with a lower rate for the same insurance and service, switch companies and pay for six months up front to reach your sign up bonus. If all things are equal, you might also look for which companies offer flexible online payments and allow you to pay for multiple months at once.
Not Working Toward a Signup Bonus? Other Options to Still Earn Rewards
Spending $2,000 or more a year on auto insurance is a great opportunity to earn rewards even if you aren’t working toward a sign up bonus. You could put it on your favorite credit card to earn travel points or a flat cashback rate. The Discover it® Miles – Unlimited 1.5x Rewards Card would be a great option, since it earns 1.5 percent and the earnings are matched the first year (3 percent cashback in total).
Or, if your insurer offers it, you might consider their credit card. To our knowledge, State Farm offers the best deal in this regard.
No matter how you pay for your auto insurance, make sure you’re earning rewards by paying with a credit card. And like always, this advice comes with the caveat that you must pay your balances off in full, and that you should still make the purchase as inexpensive as possible by shopping around.