Q: What are the most lucrative credit card sign up bonuses currently in the marketplace? Many people find themselves in the market for a new credit card from time to time but given the impressive level of bonus offers banks are using to compete with one another it can be worth the time to do a bit of research before taking the plunge.
A: So, if you’re going to apply for a new rewards credit card (and you have good credit, of course) you should rightfully expect to get something upfront. Otherwise, you’re simply leaving money (or points or miles on the table)! This is one area of life that a sense of entitlement is justified.
There are three main types of signup bonuses that credit cards offer. There is no right answer – it’s really just a matter of personal preference in terms of what they find most motivating. Some people need the immediate gratification of cash back. Others like the thrill of being able to go on a shopping spree with accumulated points and others being able to use miles for air travel or hotel stays. See which type appeals the most to you:
Cash – This is a cash back bonus which will show up on your account shortly after applying. Usually it can be redeemed in the form of a statement credit or a check. Cash that you can spend on anything you want is the best credit card signup bonus in my personal opinion.
Points – Most reward cards these days operate on a points system. If you apply for a sign up bonus credit card that gives you points, you will probably be able to redeem the points for gift cards, travel, merchandise, and maybe even a statement credit.
Miles – Many travel rewards credit cards will give you a sign up bonus for airline miles. Some of these offers are quite lucrative, but one drawback is that good travel cards usually have annual fees. So weigh the cost of the card’s sign up bonus against the annual fee.
Is there a limit to how many bonus offers I can get? If you are applying for different cards from different banks, they are completely separate offers so you can take advantage of all of them. If you already have the specific card (for example, the Chase Sapphire card) and you want to apply for a second Chase Sapphire to get the bonus, that’s not going to work. That being said, there is precedence for applying for three of the same card and receiving the promotional points on all of them (but like in all matters, you mileage may vary). In order to play it safe, however, you should probably choose different cards if you want to take advantage of multiple credit card sign up bonuses. The good news with this strategy is that if your credit is pulled multiple times in a short period of time like a few days the impact is far less than spreading it out over weeks or months.
Some caveats to be aware of…
- For the airline miles, as you probably know these aren’t always easy to use. You may encounter blackout dates and an unexpectedly higher number of miles being needed for the flights you want. For this reason, if you want free travel, I would recommend the credit cards that aren’t affiliated with a specific airline.
- For the point-based programs, be careful with how your spend them. With some reward programs (like Bank of America’s WorldPoints) you can get screwed big time depending on how you use the points – i.e. gift cards might convert on a 1 point = 1 cent basis, but for a statement credit it might be 2 points = 1 cent.
- Don’t overspend just to meet the bonus requirement. If you do that, you’re wasting money and not saving it. Instead, here’s a better idea on how to fulfill the spending requirement; use your new credit card to buy gift cards at the grocery store. Buy gift cards for everyday places like gas stations, drugstores, supermarkets, etc. Then in the coming months, you can spend those gift cards. All the meanwhile, by “pre-paying” those expenses in advance, it allows you to fulfill the spending requirement.
You can view more cash back offers here (if you add them all up, they’re worth over a $1,000!)
This post was written or last updated January 29, 2015