Credit Card Guides
Guide to Credit Card Sign-Up Bonus Offers
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When you’re looking for a new credit card, what do you look at first? Is it the type of card? The bonus categories? Auxiliary perks? Or perhaps it’s the sign-up bonus. If you choose the lattermost option, you’re certainly not alone. After all, these bonuses are what card issuers use to attract new cardholders. Luckily, when used correctly, these bonuses can be quite lucrative for consumers.
So how do credit card sign-up bonuses work and how can you make the most of them? Let’s take a look at a few basics you should know about these bonuses as well as a few current offers that might be worth considering.
Note: Click here for information on how to apply for a rewards credit card.
What to Know About Credit Card Sign-Up Bonuses
Spending requirements and timeframes
Traditionally, sign-up bonuses, also known as SUBs, require new customers to spend a set amount of money within their first few months as cardholders. As an example, you might see a sign-up bonus of $300 back as long as you spending at least $3,000 on your new card within the first three months. Moreover, some cards (mainly business cards) may have subsequent bonuses for further spending targets. Meanwhile, there are some exceptions — such as cards that pay a bonus after your first year or don’t have sign-up bonuses at all — but, more often than not, the $X back/X points after $Y spent is the most common bonus structure you’ll encounter.
Potential restrictions on bonuses
When applying for a card, you’ll want to double-check that you’re actually eligible for the sign-up bonus presented. For example, several American Express cards have a “once in a lifetime” rule that prevents you from earning new sign-up bonuses on cards you’ve previously held. Because of this, it’s definitely worth taking the time to read carefully as you complete your application and accept your card offer.
Tracking your progress
Since sign-up bonuses can be so lucrative, you’ll want to make sure you don’t miss your opportunity to earn one. As part of this, it’s recommended that you keep close track of your spending to ensure you hit the minimum requirement. Some card issuers will provide a tracker either on their website or mobile app to help you do this, but others will leave it up to you to keep tabs on your progress. Remember: it’s in your best interest to make sure you know what you’ve spent so that you don’t miss out.
Meeting your spending requirements
Before you sign-up for a new card, you should always consider whether or not you can reasonably meet the minimum spend requirement in the stated amount of time. If this isn’t likely or will require you to take on debt, it’s probably not a good idea to obtain the card at that time. That said, if you are on the cusp of hitting your SUB and are looking for ways to put you over the finish line, you may want to look into services that might allow you to put bills like rent on your new credit card. Keep in mind that these services may charge you a fee that exceeds the rewards you would normally receive from such a transaction — but, since sign-up bonuses can be sizeable, it may still make sense to allow for a one-time exception.
Regarding annual fees
If you’re applying for a card that carries an annual fee, it’s important to note that this fee will typically not be counted toward your required spending. Thus, if you’re applying for a card with a $550 annual fee that requires $5,000 in initial spend, you’ll actually end up spending at least $5,550 in your first three months in order to unlock that SUB and pay your annual fee. This is something to be aware of both when determining if you can afford to obtain a sign-up bonus and when you’re tracking your progress toward that spending threshold.
Exploring Credit Card Sign-Up Bonuses Available Now
Now that you know the basics of credit card sign-up bonuses, it’s time to see them in practice. Let’s take a look at a few current offers across a variety of card types that could benefit you now and down the road.
No Annual Fee Cards
Capital One SavorOne
- Card type: Cashback with well-rounded multipliers
- Current SUB offer: $200 back when you spend $500 in your first three months
- What it features: 3% back on dining, 3% back on entertainment, 2% back on groceries, and 1% back on everything else
For a no-annual-fee card, the Capital One SavorOne has a lot to offer. First, it boasts 3% cashback on both dining and entertainment spending as well as 2% back on grocery store purchases (plus 1% back on everything else). It also waives foreign transaction fees, which can certaintly come in handy while traveling.
The SavorOne also has an attractive and achievable SUB, earning your $200 back when you spend just $500 in your first three months. This happens to be one of the highest spend-to-reward ratios at the moment and is definitely solid. So if you’re seeking a cashback card that’s great for now and for when you start getting out again, this could be a great pick.
Chase Freedom Unlimited
- Card type: Cashback — formerly a flat-rate card that now boasts some intriguing multipliers
- Current SUB offer: $200 back when you spend $500 in your first three months
- What it features: 1.5% back on everything, 3% back on dining, 3% back at drugstores, 5% back on travel booked through Chase Ultimate Rewards
- Note: Refresh went into effect on September 15th, 2020
Fresh from a significant update, the Chase Freedom Unlimited card is now one of the most intriguing cashback cards on the market. Building upon its 1.5% cashback on everything base, the card now also offers 3% back on dining and drugstore purchases as well as 5% back on travel you book using Chase’s Ultimate Rewards portal.
If all that weren’t enough, the Freedom Unlimited also has a fantastic sign-up bonus, offering $200 back when you spend $500 in your first three months. This ratio is among the best you’ll find and the updated card is more attractive than ever. In other words, if you’re seeking a cash back driver, this is nearly a no-brainer.
P.S. — if you prefer a 5% back rotating quarterly bonus category instead of 1.5% flat, the new Chase Freedom Flex card may also be worth a look.
Delta SkyMiles Blue American Express Card
- Card type: An entry-level airline card that earns Delta SkyMiles
- Current SUB offer: 10,000 SkyMiles when you spend $500 in your first three months
- What it features: 2X miles on restaurant purchases made worldwide, 2X miles on Delta purchases, 1X miles on everything else, 20% back (in the form of a statement credit) on in-flight purchases from Delta
At the moment, it may be unclear when travel will resume. However, there’s nothing stopping you from banking miles in the meantime. If you’re a fairly infrequent flyer but want to save up for free travel, the Delta SkyMiles Blue American Express Card could be a good starting point as it carries no annual fee, earns 2X miles on restaurant purchases, 2X miles on Delta purchases, and 1X miles on everything else. Additionally, when you do fly, you’ll earn a statement credit equal to 20% back on in-flight purchases of food, beverages, etc. It’s also worth noting that Delta SkyMiles do not expire, so there’s no rush on trying to rack up enough miles to make them worth using.
To get you a little closer toward your next trip, this card also currently offers a sign-up bonus of 10,000 SkyMiles when you spend at least $500 in your first three months. By the way, down the road, you might consider upgrading or adding one of the other Delta SkyMiles cards from American Express, including the Gold, Platinum, or Reserve.
Note: Click here for information on how to apply for a no annual fee rewards credit card.
Annual Fees Cards
American Express Blue Cash Preferred
- Card type: A cashback card with some suped-up multipliers
- Current SUB offer: A $300 statement credit after you spend $3,000 in your first three months
- What it features: 6% back on U.S. grocery store purchases (up to $6,000 per year in purchases, 1% back after that), 6% back on U.S. streaming service subscriptions, 3% back on U.S. gas station purchases, and 1% back on everything else
- Annual fee: $0 introductory annual fee for one year, then $95
Do you have a sizeable monthly grocery budget? Then the American Express Blue Cash Preferred card could be a smart cashback option. With 6% back on up to $6,000 in U.S. grocery store purchases per year, you could potentially earn $30 in cash back on $500 in supermarkets spend each month. Elsewhere, the card also offers that same 6% cashback on U.S. streaming services plus 3% back at U.S. gas stations and 1% back on everything else. While it does carry a $95 annual fee — which is currently being waived for your first year — making the most of those top multipliers can easily make it worth it.
The American Express Blue Cash Preferred also has a decent current welcome bonus, earning you a $300 statement credit after you spend $3,000 in your three months (this is in addition to the $0 introductory annual fee for the first year). Of course, if you’re spending big on groceries, you should have no problem hitting that minimum spend and racking up even more cash back along the way.
By the way, if you prefer a card without an annual fee, the American Express Blue Cash Everyday still offers 3% back on U.S. grocery store purchases (up to $6,000 in spend per calendar year), 2% back at U.S. gas stations and select U.S. department stores, and 1% back on everything else.
Southwest Rapid Rewards Priority Credit Card
- Card type: An airline card that rewards frequent Southwest fliers
- Current SUB offer: Earn Companion Pass through 2/28/2022 plus 30,000 points when you spend $5,000 on the card in your first three months
- What it features: 2 points per dollar spent on Southwest purchases as well as Rapid Rewards hotel and car rental partner purchases, 1 point per dollar spent on everything else, $75 in annual Southwest travel credits, 7,500 bonus points on your cardholder anniversary each year, four upgraded boardings per year when available, 20% back on in-flight drinks and WiFi
- Annual fee: $149
While the Southwest Rapid Rewards Priority card features a number of perks that will come in handy when you fly Southwest in the future, it also allows you to start saving up miles now. Then, when you do get to travel again, you’ll enjoy such perks as $75 in annual Southwest travel credits, up to four boarding upgrades per year (when available), 20% back on in-flight purchases, and more. You’ll also be rewarded each year you renew, earning 7,500 bonus points. Therefore, if you’re a frequent flyer, you’ll get more than the $149 annual fee in value from this card.
Plus, for a limited time, new cardholders can earn Southwest’s famed Companion Pass (valid through 2/28/2022) as well as 30,000 points when they spend $5,000 on the card in their first three months. With Companion Pass, your friend can fly with you, paying only taxes and fees for their ticket. Meanwhile, the same bonus is also being offered on the Southwest Rapid Rewards Premier card, which lacks some of the travel perks of the Priority card but carries a lower $99 annual fee.
American Express Gold Card
- Card type: Membership Rewards points card best suited for travel and entertainment
- Current SUB offer: Earn 60,000 Membership Rewards points when you spend $4,000 in your first six month
- What it features: 4X points on dining, 4X points at U.S. supermarkets (up to $25,000 in spend per calendar year), 3X points on flights booked directly through airlines or via Amex Travel, 1X points on everything else, $120 in dining credits ($10 a month for Grubhub, Seamless, or select restaurants), $120 in Uber Cash ($10 per month), and more.
- Annual fee: $250
For those looking to enter to American Express ecosystem, the Gold Card is a good candidate for getting started. What’s more, its multipliers and perks are perfect for 2020, offering 4X Membership Rewards points on dining, 4X points at U.S. supermarkets (up to $25,000 in annual spend), and up to $10 a month in dining credits good for purchases on Grubhub/Seamless or at select restaurants including The Cheesecake Factory, Ruth’s Chris, Shake Shack, and more. Plus, the card now also earns $10 a month in Uber Cash, which is also good on Uber Eats orders. Something to note is that this isn’t quite like a typical credit card in that some purchases will need to be paid for at the end of your billing cycle while others can be carried over using Amex’s Pay Over Time and Plan It features.
As for the sign-up bonus, the current offer is a very impressive 60,000 Membership Rewards points when you spend at least $4,000 on the card in your first six months. These points can then be transferred to various travel partners, allowing you to maximize their value (with some users reporting seeing 2¢ per point in value). However, if redeemed for select gift cards, these points could still amount to $600, which easily exceeds the $250 annual fee.
When it comes to choosing a new credit card, the sign-up bonus can be a major factor in making your decision. Whether it results in a sizeable chunk of cashback, a nice boost to your frequent flier mile bank, or an injection in other rewards points, these SUBs can more than make up for any annual fee you might encounter. With that said, before applying, be sure you can meet the minimum spend requirement needed to earn these bonuses and that the card is worth holding onto in year two, three, etc. You can find the latest card requirements here. Happy card hunting!
Frequently Asked Questions
Q:
What is a sign-up bonus on a credit card?
A:
To entice new cardholders, credit card issuers will often offer what are called sign-up bonuses, rewarding users with sizeable cash, points, or miles bonus when they spend a certain amount in their first months of having the card. For example, you may be able to earn a $200 bonus after you spend $2,000 on your new card in your first two months. Sign-up bonuses can change over time, so be sure to monitor them if there’s a particular card you have your eye on.
Q:
Are credit card sign up bonuses taxable?
A:
In most cases, if you have to spend money in order to earn a credit card sign-up bonus, it is viewed as a rebate and is non-taxable. This is also the case for subsequent cash back or points you may earn through credit card spend. However, if you earn referral bonuses for getting friends or family to sign up for a card, you may need to report those specific bonuses as income on your taxes.
Q:
Are credit card sign up bonuses worth it?
A:
Sign up bonuses can be a lucrative way to earn cash back, points, or miles. That said, they are only worth it if you are to maintain your good credit, ensure that you’re making on-time and in-full payments on all of your cards each month, and can afford to spend the amount required to earn your bonus.
Q:
Does your credit card fee count towards sign up bonus?
A:
Typically, your annual fee is not counted toward your sign up bonus spending amount. Therefore, if your sign up bonus requires $5,000 in spend and the card carries a $550 annual fee, you’ll need to spend a total of at least $5,550 in your first three months in order to earn your bonus.
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