Best Sign-up Bonus Credit Cards

Sign-up bonuses credit card offer a way to jump-start rewards earnings, offering from $100 to $1,000 in cash back or travel rewards. Requirements and earnings for sign-up bonuses vary depending on the card you choose, so it’s a good idea to compare sign-up bonus offers and other card details before you apply.There is no time like the present to be in the points and miles game as sign-up bonuses have been topping the charts lately. There have been some as high as 75,000 points. Recently, American Express and Chase have both offered sign-up bonuses like that. These offers can go fast and sometimes be fleeting, so if you come across one, jump on it. Many banks are starting to institute policies which will limit bonuses or make them more difficult to get. If you have good credit, you should ride the wave before they waive the bonuses.

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Best Sign-up Bonus Credit Cards (4)

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What is a sign-up bonus credit card?

If you relish the idea of rewards for making purchases you were going to make anyway, take a look at cards with sign-up bonuses.

A sign-up bonus is your first incentive to open and use a rewards card, whether a travel card or a cash back product. You might earn the bonus in the form of cash back, miles, points or free hotel nights.

The advantage to getting a sign-up bonus is that you can bulk up on rewards upfront to be used as statement credits, for travel, and more. If the card has a waived annual fee, that increases the value of the sign-up bonus even more, because you are getting a bonus free and clear, provided you don't carry a balance and pay interest charges. Sign-up bonuses are a good way to build up your points or miles, augmenting your ongoing rewards. Sign-ups also allow you to earn points upfront, rather than cards that pay a bonus at the end of the first year, such as Discover it® Cash Back's match program.

How do sign-up bonus credit cards work?

Most sign-up bonuses require you to spend a certain amount of money on your card within a certain time period to receive the bonus. Some, but not many, cards offer a sign-up bonus after your first purchase with no spending requirement.

Sign-up bonuses are awarded as points, miles, cash back or statement credits depending on the card. They can be redeemed for cash back, travel, gift cards, merchandise or other rewards.

Cards with the best sign-up bonuses are rewards cards, including travel, airline and cash back rewards cards. These cards often have higher credit score requirements than cards without sign-up bonuses.

For example, the Chase Sapphire Preferred Card offers 50,000 bonus points after you spend $4,000 within the first three months of opening your account. Chase Ultimate Rewards points are valued at 1 cent per point, so this sign-up bonus is worth $500. However, points are worth 25 percent more when redeemed for travel through Chase Ultimate Rewards, so this sign-up bonus is worth up to $625 if used for travel.

Is a sign-up bonus credit card right for you?

With that said, a sign-up bonus can be an excellent way to earn a lot of rewards in a short amount of time. Earning a bonus is almost always worth it, if you can outmatch the card’s annual fee (which is usually the case), and if you redeem the bonus in a timely manner.

For example, the Chase Sapphire Preferred card offers 50,000 points to new cardholders who spend $4,000 in the first three months. Chase Ultimate Rewards points can be redeemed for travel through the Ultimate Rewards portal for a 25 percent bonus, so 50,000 bonus points are worth $625 of Ultimate Rewards travel. The Preferred card charges a $95 fee, but it’s waived the first year, so, if you can meet the spending threshold and use the bonus before the annual fee comes around, you can get more than $600 in value out of the card in its first year.

However, if you don’t redeem the bonus in the first year and continue to hold the card without using it, your rewards value drops nearly a $100 each year, due to the card’s annual fee. And if you don’t redeem the bonus at all, the value of your bonus amounts to $0, because credit card points have no value outside of the rewards that you redeem them for.

It may seem obvious that you need to use your points to get value out of them, but cardholders do sometimes sign on to a card for its sign-up bonus, only to squander the bonus because they aren’t able to use it in time. Before you apply for a card to earn a sign-up bonus, it’s best to study the card’s rewards program and have a plan for redeeming the bonus.

Selection criteria: what makes a great sign-up bonus credit card?

Reasonable spending requirement: You have to be able to meet the requirements for the bonus, which usually means spending a certain amount with the card. There are many ways to reach minimum spend requirements besides just your typical shopping habits.

Enough time to meet the spend requirement: Most card offers give you three months to reach a spending requirement, while others might only give two. Be sure to keep track of how much time you have, starting as soon as your card account was opened.

Good return for your spending: The best intro bonuses offer a high return on the required spend, like 20% or more. But smaller bonuses can be valuable too, because you’re still getting rewarded for spending you were already going to do.

You can make good use of your bonus: Cash back cards are pretty straightforward, but some other cards provide reward points with several different redemption options. These different options might provide more or fewer cents per point, so be sure to use the method that will give you the best value.

Annual fee you can handle: Some cards with signup bonuses have annual fees, while others don’t. If you get a card with an annual fee, be sure that it’s worth the cost.

Other card features are good too (or tolerable): The signup bonus isn’t the only thing that matters. The other card features should fit your lifestyle as well, like the bonus categories, benefits, and fees.

How to make the most of your sign-up bonus credit card?

Choose a card with a signup bonus that fits your lifestyle. Take a look at your budget and consider where, and how much, you plan to spend during the first three months with your new card. (90 days is the standard cutoff for earning a signup bonus.) Choose a credit card with a signup bonus that aligns with your spending so that you don’t risk overspending for the sake of the bonus.

Make sure you understand how to redeem your rewards. Both the Discover it® Miles and Chase Sapphire Preferred® Card earn travel rewards. But the Discover it® Miles allows you to redeem your rewards as cash back or as a statement credit towards travel purchases, whereas Chase Ultimate Rewards® lets you redeem rewards points for travel, gift cards, and more. Simply put, make sure that the card you get offers the type of rewards you want.

Watch out for fees. There are plenty of luxury cards with enticing rewards and perks. But depending on how much you plan to spend, the annual fee might cut into some or all of your bonus value. It’s also best to pay your card off in full each month to avoid late fees and interest payments.

Keep your eye out for new offers from different card issuers. Investigate new credit card offers every year to see whether you could improve your rewards rate or score a new signup bonus. Just remember: Applying for a new card will result in a hard inquiry, which can impact your credit score. (Closing accounts can also impact your score by elevating your debt utilization ratio.)

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