What is the best rewards credit card sign-up bonus?
Many rewards credit cards offer introductory bonuses as an opportunity for cardholders to benefit from signing up for and making a purchase with a new card. New cardmember bonus offers, often referred to as introductory, sign-up, or welcome bonus offers can come in the form of points, miles or cash back. To choose the best offer for you, you should compare rewards cards and consider your spending and rewards preferences.
What is a rewards credit card sign-up bonus?
A sign-up bonus is an offer to earn rewards for spending a certain amount of money on the card within the first few months after opening your account. Rewards cards typically offer benefits such as points, miles or cash back.
You have to earn the sign-up bonus
When signing up for a rewards credit card, remember that you will not automatically receive the welcome offer. A sign-up bonus is an offer to earn rewards if you meet the spending requirement, so you will have to spend at least the minimum amount required to qualify. If you do not meet the spending or time frame needed to earn the incentive, then you will not benefit from the bonus points, miles or cash back.
How new cardmember bonuses work
Once you sign up for a rewards card with a welcome bonus, you have a set amount of time to meet the purchase requirements and receive your rewards. A rewards credit card that earns cardholders points, for instance, may offer 40,000 bonus points if you make $3,000 in purchases on your card within the first 3 months after opening your account. A cash back card could have an introductory bonus of $200 after you spend $600 within the first few months.
Whether your rewards card offers points, miles or cash, you must spend at least the minimum amount required to qualify for the earnings detailed in the welcome offer.
Is a rewards card sign-up bonus worthwhile for you?
Getting a rewards credit card may be worth the spending required for the sign-up bonus and can allow you to optimize your spending if:
You will use the rewards
Before choosing a rewards card with a sign-up bonus, you should make sure that the rewards offered would be valuable to you. If you are planning to go on a trip soon, then a welcome bonus with points that you can redeem for travel can get you a discount on your next vacation. If you want to use your rewards to get money back or receive a statement credit, then you could look for a cash back rewards card where the minimum spending requirements can be easily met by your budget.
You can meet the spending requirement
Before signing up for a rewards credit card with an introductory offer, you should be sure that you can earn the bonus without breaking the bank. If you are planning on making a big purchase, such as a new phone or going on a vacation, then a sign-up bonus can be a great way to earn rewards for purchases you are already planning to make. And if you don't have any bigger spending coming up, you should make sure you can easily meet the spending requirements for the sign-up bonus before getting the rewards card.
How to find the best rewards card sign-up bonus for you
Consider your lifestyle
When looking for the right rewards card and sign-up bonus, you should consider your lifestyle and what rewards would benefit you the most. If you want to earn money back from your spending, then a cash back rewards card will be a better option than a travel rewards card.
Frequent travelers may want to consider a travel credit card sign-up bonus, as the points or miles they earn may amount to a hotel stay or a discount on a vacation. Travelers can also benefit from the ongoing benefits and added travel perks that these types of cards provide, whether they want a general travel, airline, or hotel credit card.
If you enjoy traveling and are loyal to a particular airline or hotel brand, then getting a co-branded travel card will give you miles or points that you can redeem for a plane ticket or hotel stay. Finding a co-branded card with an attractive sign-up bonus can load up your rewards points balance and allow you to cash the points in for a valuable travel-related redemption.
Consider your budget
A high sign-up bonus may be tempting, as you would have the opportunity to earn better rewards bonuses. But before signing up for any rewards credit card for the bonus, be sure that the spending requirements match your budget. An introductory bonus of 100,000 points may look like a great offer, but if you can't afford to meet the $5,000 spending minimum in 3 months, then you might not receive the bonus or go into debt during the process.
Consider the ongoing rewards
A credit card with rewards that you would take advantage of will provide you with added benefits long after you earn the sign-up bonus. Consider finding a rewards card with bonus points for purchases you tend to make, as this will allow you to earn and redeem points. If you typically spend money at grocery stores or going out to eat, then a card offering extra points for these reward categories can help you earn rewards in the future.
Compare APRs
As with any credit card, know how APRs may add additional costs to any purchases whenever you carry a balance from month to month. Looking at cash back cards or travel cards to how APRs compare can help you find the card that will apply the lowest APR against your balances.
Precautions for rewards card sign-up bonuses
Don't spend more than you can afford
Sign-up bonuses could cause you to fall into debt if you spend over your budget. Make sure that you choose a rewards card with a welcome offer you can meet, as you do not want to incur interest charges and late fees to get the rewards. If your debt grows as a result of meeting the sign-up offer, you may want to consider another credit card as an option.
