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The signup bonus — one of the most valuable and coveted credit card features, with the potential to put a huge dent in your spending or help you score free flights and hotel stays. Many rewards cards come with signup bonuses, also known as introductory bonuses or welcome bonuses. These bonus offers can provide a surprising amount of value, with returns on spending ranging from around 20% on average to more than 50% in some cases.
By Brendan Harkness
Signup bonuses are pretty easy to evaluate. Spend some money, get some rewards. But not all bonuses are created equal.
By Brendan Harkness
Do you like money for free? If so, a signup bonus credit card might be right for you.
It’s not really free money, because you need to spend with credit cards in the first place, and if you’re not responsible you could wind up with fees. But it’s about as close to free money (or travel) as you can get.
A signup bonus is a reward that usually takes the form of bonus points or cash back, which you receive for reaching a certain spending threshold in a certain amount of time — think 40,000 bonus points for spending $3,000 in 3 months, for example.
You should never spend money just to get a signup bonus, of course. You should only use credit cards to buy things you would normally buy. Pay off the statement balance by the due date or you’ll be charged interest, cutting into your rewards (unless you have a 0% intro APR). And we don’t recommend opening new cards purely for the bonuses.
But if a card fits in with your spending habits and offers a great bonus too, why not go for it? Follow the simple rules above and credit card bonuses can be effectively free. You won’t need excellent credit scores to nab a sweet bonus, but cards for better credit tend to have better bonuses.
Here are some situations where welcome bonuses can make big differences.
A signup bonus, often known as an introductory bonus, an intro bonus, or a welcome bonus, is a special offer created to spur credit card spending.
Signup bonuses are usually awarded in the form of points, cash back, or a statement credit after the cardholder spends a set amount of money within a given timeframe after the account is opened. The intro bonus for a given card may change quite frequently.
Less commonly, credit card issuers will change it up. Other types of signup bonuses include travel rewards like free hotel stays, or offers like Discover’s Cashback Match, which doubles the cash back earned during your first year as a cardholder.
All spending to secure your signup bonus must be done within the allotted time, and in most cases only purchases count — your annual fee won’t help you earn a welcome bonus, nor will balances transferred from another account.
Plus, bear in mind that the countdown begins the moment you’re approved for your credit card and the account is opened. It’ll generally take a few days for you to get the actual card, but in some cases, issuers will allow you to use your account details online and by phone right off the bat.
There are both public signup bonuses and private signup bonuses. Public offers are open to anyone, and private offers are only available to select groups of targeted consumers.
Private offers are typically better than public, perhaps offering $250 or $300 cash back instead of $200. The spending requirement may remain the same or it could change.
You may get private credit card offers online, by email, or by postal mail. Consider checking if you’re pre-approved for any credit cards, which may show you private offers that you’re eligible for (although it won’t always show you every available private offer).
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