Credit card bonuses vary widely. Most are in the form of bonus points in a specific rewards program. But, there are also cards offering bonus cashback and vouchers. They are one of the most widely known ways to boost a rewards program's balance of rewards points. There are a few hoops to jump through—typically spending a certain amount over a set period of time from sign up—before the bonus will be deposited into your account.
David Boyd, co-founder of Credit Card Compare, shares, "Sign-up bonuses have changed considerably over the years since we started Credit Card Compare. It used to be that a sign-up bonus could be triggered simply by applying and getting approved. Those days are long gone now, with banks typically requiring a certain amount of spend over a specified period of time before paying out. They're still one of the fastest ways to rank up a lot of points, but you do need to be careful. Avoid chasing spending targets and buying things you don't need."
How sign-up bonus credit cards work
Sign-up bonus credit cards typically require cardholders to spend a certain amount of money on the card within a specified period, usually the first few months after opening the account. Once the spending threshold has been met, the cardholder becomes eligible to receive the sign-up bonus.
It's essential to carefully read and understand the terms and conditions of sign-up bonus credit cards to ensure you qualify for the rewards.
Benefits of sign-up bonus credit cards
- Earn reward points: Sign-up bonus credit cards allow cardholders to earn bonus points that can be redeemed for rewards such as frequent flyer miles and points, merchandise, gift cards, or cashback.
- Cashback offers: Some sign-up bonus credit cards offer cashback rewards, giving cardholders a percentage of their purchases back in the form of statement credits or actual cash.
- Introductory 0% APR: Some sign-up bonus credit cards come with an introductory 0% APR period on purchases or balance transfers, allowing cardholders to save on interest charges.
- Complimentary travel benefits: Certain sign-up bonus credit cards offer additional travel perks such as airport lounge access, travel insurance, or airline fee credits.
- Waived annual fees: In some cases, sign-up bonus credit cards may waive the annual fee for the first year, providing cardholders with a cost-saving benefit.
How to choose a sign-up bonus credit card
When selecting a sign-up bonus credit card, consider the following factors:
- Bonus offer: Assess the value of the sign-up bonus, including the number of points offered or the cashback percentage.
- Minimum spend requirement: Determine whether you can comfortably meet the required spending threshold to qualify for the sign-up bonus.
- Rewards structure: Evaluate the ongoing rewards program of the credit card to ensure it aligns with your spending habits and preferences.
- Annual fees: Consider the credit card's annual fee and whether any waived fees are temporary or ongoing.
- Additional benefits: Review any supplementary benefits such as travel perks, purchase protection, or concierge services offered by the credit card. These offer value to you only if you plan to use these perks.
