A sign-up bonus, also known as a sign-up offer, welcome offer or welcome bonus, is a reward offered by some issuers as an enticement to sign up for one of their credit cards. Because they’re intended to attract new customers, sign-up bonuses are more generous than what cardholders will earn for ongoing spending. A sign-up bonus can come as a cash offer, points, miles or whatever rewards are offered by the card.
Typically an issuer will offer a sign-up bonus if you meet a minimum spending amount within a certain time period after opening a new account. In some cases, an issuer may offer a tiered sign-up bonus with an upfront reward after meeting a minimum spending amount and then an additional bonus after meeting an amount of spending within a longer timeframe.
Should you get a credit card with a large sign-up bonus?
Just as there’s no one right credit card for everyone, there’s also no one have-to-have-it sign-up offer. Although a juicy welcome offer can be tempting, consider the attributes of the card beyond any initial points bonanza. Applying for a new card can temporarily ding your credit score so you want to be sure that any new card you get makes sense for your particular spending patterns and financial needs.
Should you keep the card after earning the bonus?
Some issuers state in the card’s terms and conditions that they will claw back any welcome offers if you cancel your card within a certain time period. If you are considering canceling a card, be aware of how long the issuer stipulates you must keep your account open to keep your bonus.
If you find that a particular card doesn’t fit your spending patterns or if your needs have changed, consider other options before closing a credit card account. If you show a pattern of opening and closing credit card accounts, issuers may consider you a risk and deem you ineligible for new accounts. Some issuers won’t give you a sign-up bonus on a card if you have carried it before, opened or closed the same card product within a certain period of time or opened any new accounts with that issuer or other issuers recently.
How to Earn a Credit Card Sign-Up Bonus
The terms for earning a credit card bonus are always spelled out on the card’s information page. Most often, you’ll earn the bonus by spending a set amount of money within a designated amount of time. Nearly all purchases count, though card fees and returned items do not add toward the minimum spending.
It’s important to keep an eye on both your running purchase amounts and the timeline in question: If you’re off by one penny or one day, you’ll forfeit the bonus. When in doubt, contact your credit card company and ask if you’ve met the spending requirement.