Types of Credit Card Bonus Offers
Credit cards that offer sign-up bonuses will offer them in two different ways, either in cash back or points/miles. Here is the break down of both.
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Cash-Back Bonuses
Cash-back bonuses can be more flexible than earning points. Typically, you won’t earn as much cash back as you would point and miles, but it is easier to spend. To redeem your cash-back bonus, just request a statement credit or have the bonus transferred to your bank account.
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Points & Miles
Other cards reward you in points or miles. This can turn your bonus into a free vacation. These points/miles usually go farthest when redeeming them for travel. Some cards will allow you to redeem your points/miles for cash, account credit or gift cards, but the conversion rate isn’t always as high. Redeeming points or miles might take a little more legwork since you have to make sure you are redeeming your hard-earned points/miles for top dollar travel plans.
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Choosing a Bonus Offer How to Choose a Card with a Sign-Up Bonus
When choosing the best rewards credit card for your budget, look at the sign-on bonuses. Weigh them carefully with the card’s everyday spending rewards — for example, if you are torn between two cards, which one will give you more cash back throughout the year rather than just upfront. Here are a few questions to ask when you are comparing credit cards:
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Make Sure the Spending Threshold Fits Your Budget
This isn’t as simple as just going on a grand shopping spree. Calculate how much you must spend to reach the threshold and if it fits into your budget. Anyone can blow $5,000, but not everyone can afford to do so without digging themselves into debt. Your sign-up bonus will not be worth it when you have a high-interest rate that comes when you carry thousands of dollars of debt.
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Decide Whether the Annual Fee is Worth It
If the card comes with an annual fee, weigh the fee against the perks. Cards with smaller annual fees typically come with smaller bonuses, but they also have lower spending minimums to activate the bonus also.
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Check if Its Really the Best Offer
Credit card offers come and go. Try to research other offers the card issuer has promoted within the past calendar year. There is a good chance similar bonuses will occur again.
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Choose a Bonus According To How You’d Use It
It is also wise to be realistic about how you will use the bonus. If you don’t love to travel, then you will probably take a lower cash value for your bonus — i.e., your 50,000 points might only be worth $350 in cash rather than $500 in travel redemption. Also, the promised 50,000 points a card might offer might only equate to $500 in perks when redeemed for a specific airline or hotel chain. Make sure to research the card’s bonus redemption options, so you aren’t stuck with a bonus you can’t use.
Maximizing Rewards How to Maximize a Sign-Up Bonus
Once you know which credit card bonus you will be pursuing, it is time to make the most of it. Just a little more effort could land you more bonus points.
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Time Your Applications Carefully
Timing is everything when it comes to credit cards. You want to apply when the card has the best offer, and you also want to apply at a time you were planning on spending more money, such as right before Christmas or right before booking a vacation. This will help you reach the spending limit faster. Make sure you have let enough time pass between similar credit card offers. For example, you must wait 24 months to receive another sign-up bonus from a Chase credit card.
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Never Overspend
The desire to meet your spending limit might put you in a shopping flurry. Keep track of your spending to make sure you reach the minimum without racking up debt.
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Look for Special Offers
Sometimes a card will allow you to add an authorized user for additional points. Other times, you can activate offers on your card to make your spending go even further.
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Watch Out for Hidden Fees
Not every retailer lets you swipe your plastic for free. Some purchases will incur a convenience fee. These fees are common for online ticket vendors or third-party companies that allow you to pay your rent with a credit card.
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Understand What Counts Toward Your Spending Threshold
Most cards will not count annual fees, transferred balances or cash advances toward the spending threshold. Many cards will also not count gift cards, lottery ticket purchases and similar purchases toward the bonus, either. Read your card’s fine print thoroughly before you spend. When in doubt, a quick chat with your card’s customer service line can help.
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Be Careful About Returning Items
Any returns made on your card will not count toward your purchase total. Even if you return an item after you receive your bonus, the issuer can reclaim the bonus if your original purchases did not meet the spending requirements. This is at the discretion of the card issuer. But what if you really hate the sweater you bought? Try returning items in exchange for store credit rather than getting credit back on your card.
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How to Compare Bonus Offers
When using a rewards credit card, you are able to earn cash back, points or miles for each dollar you spend. But while it’s always helpful to earn a couple of points with the best travel credit cards on all of your purchases, it’s even better to snag thousands of them at once, thanks to an impressive bonus offer.
Credit card bonuses are frequently available to new cardholders in exchange for meeting certain spending requirements. The best credit card bonus offers are often worth hundreds of dollars (or more), giving you a jump-start on your cash-back earnings and easily canceling out any annual fees your issuer may charge.
Methodology
While the right rewards credit card for you will depend on a number of factors, these are some of our favorites right now that are also offering enviable sign-up bonuses.
We considered a number of factors when choosing these cards, including the value of the bonus, redemption options and whether or not the card charges an annual fee. To help ensure that the card is a great choice for you beyond that initial bonus, we also looked at the benefits included and the rewards rate on future purchases.
With each of these cards shown, you will enjoy either no annual fee or a fee that can easily be recouped with the benefits and/or bonuses offered.
Tips to Improve Credit Scores
If you don’t have a strong credit score, you may be wondering what your chances are of getting approved for a card. Unfortunately, it’s difficult to say because credit card issuers don’t disclose their eligibility criteria publicly. However, here are some tips for improving your chances of getting your next credit card.
- Improve your credit score: If your credit score isn’t in great shape, consider working on improving it before you apply for a new account. Check your credit report to see which areas need work and address them as quickly as possible.
- Apply within your credit range: Rewards credit cards are appealing, but most of them require good or excellent credit (that’s a FICO credit score of 670 or higher). If your credit score isn’t quite there yet, focus on cards that market to people who are working on building their credit.
- Don’t give up: If you’ve had a credit card application declined recently, it can be easy to take it personally or get discouraged. In some cases, you may be able to call and ask them to reconsider. If they won’t, just because one card issuer denied you, it doesn’t mean all of them will. While it’s best to avoid applying for multiple credit cards in a short period, don’t be afraid to apply again in the future.
As you follow these steps and consider these tips to improve your credit score, you’ll be in a better position to apply for and get the credit card you want to have.
Credit Card Bonus Offers FAQ
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Many credit cards will offer a sign-up bonus for new cardholders who spend a specific amount in their first three months. This amount varies by credit card, but typically cards with higher sign-on bonuses require users to spend $4,000 to 5,000 in qualifying purchases in their first three months. Balance transfers, cash advances and annual fees will not count toward this bonus minimum. Credit card bonus offers can come in the form of cash back, miles or points. For some cards, the initial point bonus will qualify them for more perks, such as the use of an airline companion pass.
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Rewards credit cards and co-branded travel cards typically have the best sign-up bonuses. Many cards are very similar in the everyday spending rewards they offer. Therefore, they might offer an enticing sign-up bonus to attract more users. Popular cards like the Chase Sapphire Preferred and the Amex Platinum Card offer two of the biggest and most valuable bonus offers for frequent travelers. Look for a rewards credit card that not only gives you an awesome sign-on bonus, but also a card that rewards you for how you spend money. If you don’t spend a lot of money on travel, research cards that offer more rewards back on groceries and gas instead of travel.
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Thankfully, most credit card bonuses are not taxable. As long as you earn your bonus through meeting a spending limit and it’s for a personal account. The same rule applies for any money, points or miles earned through everyday spending. Individuals using credit card bonuses for business purposes should consult a tax expert to ensure they are claiming bonuses correctly. If a credit card rewards you points, miles or a cash bonus just for signing up, then your bonus would be considered taxable.
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Chase Ultimate Rewards is considered one of the best travel rewards program available. Chase Ultimate Rewards points are a valuable currency you can use to purchase flights, hotels, cruises, vacation rentals, travel activities and more. Chase offers multiple credit cards that earn Chase points with every dollar you spend. They may even come with a sign-up bonus worth tens of thousands of points worth enough for multiple round-trip flights.
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A foreign transaction fee is a charge your credit card issuer imposes anytime you make a transaction with your card in a foreign currency or through a foreign financial institution. In processing these international transactions, your card issuer levies an extra transaction fee at a certain percentage of the amount of your total transaction. This percentage usually falls somewhere between 1% to 3%. Typically, travel credit cards do not charge a foreign transaction fee as part of the suite of benefits provided to cardholders. However, many cash-back cards, like the Citi Double Cash Card, do charge a foreign transaction fee.