How Sign-Up Bonuses Work on Credit Cards
Joy Wallet is advertiser-supported: we may earn compensation from the products and offers mentioned in this article. However, any expressed opinions are our own and aren't influenced by compensation. To read our full disclosure, click here.
JoyWallet has partnered with CardRatings for our coverage of credit card products. JoyWallet and CardRatings may receive a commission from card issuers.
Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
Credit card bonuses are a popular way to earn free money. The idea is, you sign up for a credit card, complete a minimum spend within a designated time period, and then get a chunk of cash back, points, gift cards, or other rewards. It sounds easy, but there's much more to it than that.
Here's everything you need to know about credit card bonuses, as well as our pick for the best offers available now.
Jump To
What are credit card sign-up bonuses?
Knowing how credit card sign-up bonuses work is the most important thing you can do as a credit card user. Credit card sign-up bonuses require you to spend a certain amount of money within the first few months of opening your account, and some have restrictions on what types of purchases qualify. But if you can meet the spending requirement and use your points wisely, a credit card sign-up bonus can easily earn attractive rewards.
The rewards can be in the form of cash back, points, or bonus miles, and can easily be worth up to hundreds or even a thousand dollars in free cash and travel. In addition, some issuers offer a second bonus for spending a certain amount within a set period of time after opening an account.
Raise Your Credit 80 points*
- 5 star service trusted by over 450,000 members
- Have processed over $11,000,000 in bill payments for members
- No deposit, no credit check, no interest
- New member promotions available
*Potential increase based on StellarFi member data. StellarFi numbers observed an average of 80 points VantageScore® 3.0 increase during a member’s lifetime. Score increase based on members with an incoming score range of 300-499 pts, who made regular on-time payments, with regular on-time payments. Results may vary.
How to earn a sign-up bonus?
Qualify for a welcome bonus
Do some digging to determine which credit cards offer the best welcome bonuses you will likely qualify for. It's important to compare the benefits of each card before deciding because different cards will offer different types of bonuses and earn them in different ways.
However, keep in mind that the cards with the most lucrative rewards usually require good to excellent credit scores for approval.
Use the credit card for all purchases
There are many benefits to using a credit card, including meeting spending requirements without overspending. You can use your credit card for everyday purchases, including bills and groceries. Just be sure to avoid making unnecessary purchases to meet the spending requirement.
Time your application with large purchases
If you’re planning to spend big soon on a dream vacation or an engagement ring, there are ways to make sure you can earn the money you need. One way is to get a welcome bonus credit card and coordinate your spending with the bonus.
Only apply for cards that you plan to use
Before you apply for any credit card, make sure that you will use the card. This may seem obvious, but it is a mistake many people make when applying for a card. It is important to note that credit card companies will pull your credit report and see that you applied for a card, even though you are not approved for it.
Pay off your balance on a timely basis
To make the most of your credit card rewards program, always pay off your balance in full during the grace period. Carrying a balance from month to month will negate any rewards you may have earned.
Related: Best Sign-Up Bonus Cards of 2023
Ways to maximize your credit card sign-up bonus
Understand how a credit card sign-up bonus works
It's important to familiarize yourself with how welcome offers work before you apply for a credit card. Here are a few things to look for in a sign-up offer: how much do you have to spend to earn the bonus, and what is the time frame for earning the bonus? Make sure you know how much spending is required to reach the minimum spending threshold and receive the reward.
Choose a card with a high rewards rate
If you're looking to get the most out of your credit card bonus, it's important to look for a card with a high rewards rate on the spending categories you use most often. This way, you'll be able to maximize your rewards and get the most value out of your bonus. For example, if you spend a lot on travel, look for a card that offers great rewards on airfare and hotels. Or, if you dine out often, find a card that gives extra points at restaurants.
Select a card with a low introductory APR
Credit card companies often offer a low promotional interest rate to new customers for a limited time after they open a new account. Some credit cards also offer introductory APRs on purchases, balance transfers, or both. The introductory rate could be just a few percentage points or even 0% and is typically offered on cards with variable APR.
Use bonus rewards and sign-up bonuses responsibly
You’ll need to use your credit card bonuses wisely to get the most out of sign-up bonuses and bonus point offers. Purchasing items with your new credit card that qualify for these perks can add to your earnings and allow you to make the most out of the rewards. Making responsible purchases will also help you meet any spending requirements necessary to receive the bonus in the first place.
Raise Your Credit 80 points*
- 5 star service trusted by over 450,000 members
- Have processed over $11,000,000 in bill payments for members
- No deposit, no credit check, no interest
- New member promotions available
*Potential increase based on StellarFi member data. StellarFi numbers observed an average of 80 points VantageScore® 3.0 increase during a member’s lifetime. Score increase based on members with an incoming score range of 300-499 pts, who made regular on-time payments, with regular on-time payments. Results may vary.
Credit card providers offering some of the best sign-up rewards
Chase Sapphire Preferred® Card
Chase Sapphire Preferred® Card
Card Name
Chase Sapphire Preferred® Card
APR
21.49%-28.49%
Recommended Credit Score
Excellent, Good
Annual Fee
$95
Special Offer
Earn 60,000 bonus points
Special Offer Terms
after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Travel℠.
Rewards Rate
Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases, $50 Annual Chase Travel Hotel Credit, plus more.
Terms
Why We Like It
- Generous bonus points offered.
- High points for travel and dining purchased through Chase Ultimate Rewards® and points on all purchases.
- Complimentary one-year access to DashPass.
Blue Cash Preferred® Card from American Express
Blue Cash Preferred® Card from American Express
Card Name
Blue Cash Preferred® Card from American Express
APR
19.24% - 29.99%
Recommended Credit Score
Good, Excellent
Annual Fee
$0 intro annual fee for the first year, then $95.
Special Offer
Earn a $250 statement credit
Special Offer Terms
after you spend $3,000 in eligible purchases on your new Card within the first 6 months.
Rewards Rate
6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). 6% Cash Back on select U.S. streaming subscriptions. 3% Cash Back at U.S. gas stations. 3% Cash Back on transit (including taxis/rideshare, parking, tolls, trains, buses and more). 1% Cash Back on other purchases.
Why We Like It
- Buy Now, Pay Later options.
Citi® / AAdvantage® Executive World Elite Mastercard®
Citi® / AAdvantage® Executive World Elite Mastercard®
Card Name
Citi® / AAdvantage® Executive World Elite Mastercard®
APR
21.24% - 29.99%
Recommended Credit Score
Excellent, Good
Annual Fee
$595
Special Offer
Earn 70,000 American Airlines AAdvantage® bonus miles
Special Offer Terms
after spending $7,000 within the first 3 months of account opening.
Rewards Rate
Earn 1 Loyalty Point for every 1 eligible AAdvantage® mile earned from purchases
Terms
Why We Like It
- Generous bonus miles offer
- Admirals Club® membership for you with access for up to two guests traveling with you
- First checked bag is free on domestic American Airlines flights for you and up to 8 companions
Marriott Bonvoy Boundless® Credit Card
Marriott Bonvoy Boundless® Credit Card
Card Name
Marriott Bonvoy Boundless® Credit Card
APR
20.24% - 27.24%
Recommended Credit Score
Excellent, Good
Annual Fee
$95
Special Offer
Limited Time Offer! Earn 100,000 Bonus Points
Special Offer Terms
after spending $3,000 on purchases in your first 3 months from account opening with the Marriott Bonvoy Boundless® Credit Card!
Rewards Rate
Earn up to 17X total points for every $1 spent at over 7,000 hotels participating in Marriott Bonvoy® and 2X points on all other purchases.
Terms
Why We Like It
- Earn 3 Free Night Awards bonus as well as one Free Night Award every year after the account anniversary.
- Automatic Silver Elite Status.
- No foreign transaction fees.
Raise Your Credit 80 points*
- 5 star service trusted by over 450,000 members
- Have processed over $11,000,000 in bill payments for members
- No deposit, no credit check, no interest
- New member promotions available
*Potential increase based on StellarFi member data. StellarFi numbers observed an average of 80 points VantageScore® 3.0 increase during a member’s lifetime. Score increase based on members with an incoming score range of 300-499 pts, who made regular on-time payments, with regular on-time payments. Results may vary.
FAQs
What to look for in a credit card with sign-up rewards?
You should always choose a credit card with a lower APR than the sign-up bonus to get the most out of it. It is even better if the card offering a welcome bonus has no annual fee.
What is the fastest way to get a sign-up bonus?
The fastest way to gain a welcome bonus is by meeting the spending requirements of the credit card company. You will normally be required to spend a certain amount within the first year after account opening.
Are credit card welcome bonus offers worth it?
Signing up for a new rewards card can definitely be worth the effort, as you can earn hundreds of dollars – or even over a thousand dollars – back in free money. Plus, most of these sign-up bonuses are non-taxable since you have to spend money to earn them.
The bottom line
Credit card sign-up bonuses are a great way to earn free money and travel rewards. They come with spending requirements, but plenty of people earn enough miles, points, and cashback to cover the cost of their next trip. Keep in mind that a card’s annual fee and bonus rewards are the two major factors you should consider before signing up for one. Also, consider your budget and long-term goals before making a decision and review the terms and conditions of each credit card offer to avoid any potential pitfalls.
Joy Wallet is an independent publisher and comparison service, not an investment advisor, financial advisor, loan broker, insurance producer, or insurance broker. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. Joy Wallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. We encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Featured estimates are based on past market performance, and past performance is not a guarantee of future performance.
Our site doesn’t feature every company or financial product available on the market. We are compensated by our partners, which may influence which products we review and write about (and where those products appear on our site), but it in no way affects our recommendations or advice. Our editorials are grounded on independent research. Our partners cannot pay us to guarantee favorable reviews of their products or services.
We value your privacy. We work with trusted partners to provide relevant advertising based on information about your use of Joy Wallet’s and third-party websites and applications. This includes, but is not limited to, sharing information about your web browsing activities with Meta (Facebook) and Google. All of the web browsing information that is shared is anonymized. To learn more, click on our Privacy Policy link.
Images appearing across JoyWallet are courtesy of shutterstock.com.
JoyWallet has partnered with CardRatings for our coverage of credit card products. JoyWallet and CardRatings may receive a commission from card issuers.
Writer
Aimen Hakim is a business writer with over six years of experience covering the financial, global markets and real estate industries. In her off time she likes to paint and photograph.
Share this article
