There are very few industries that are both as competitive and as a profitable as the credit card industry. This rare combination means that credit card issuers are willing to go to great lengths to attract new customers.
There’s no better example of this than the generous signup bonuses that most cards offer new customers. When you open an account with a rewards credit card, you can expect to receive hundreds of dollars’ worth of points, miles or cash back.
The Best Signup Bonuses for Cashback Cards
#1 Savor® Rewards From Capital One®
Earn $300 in cash back after new applicants spend $3,000 on purchases within three months of account opening. This card also offers you unlimited 4% cash back on dining and entertainment, 2% at grocery stores and 1% cash back on all other purchases. There’s a $95 annual fee for this card that’s waived the first year, and no foreign transaction fees.
#2 Blue Cash Preferred® Card From American Express
With this card, you can earn $250 in bonus cash back (as a statement credit) after you spend just $1,000 within three months of account opening. This is a great card for spending on everyday items. Each year, you’ll earn 6% cash back on up to $6,000 spent at U.S. supermarkets. (After that, the cashback amount is 1%.) When it comes to filling up your car, you’ll earn 3% at gas stations in the USA. There’s a $95 annual fee.
#3 Chase Freedom Unlimited®
This card normally offers 1.5% cash back on all purchases, but new applicants have received an additional 1.5% cash back on up to $20,000 worth of purchases during their first year, worth a total of $600 in cash back. And right now, there’s a special boost. Chase will double that 1.5%, to 3% cash back on up to $20,000 spent in your first year. There’s no annual fee for this card.
#4 Disney® Premier Visa® Card From Chase
If you’re wishing upon a star for a signup bonus, you’re in luck. Earn a $200 statement credit after spending just $500 in new purchases within three months of account opening. You’ll earn 2% in Disney Rewards Dollars on select credit card purchases and 1% on all other purchases. That makes it great for the Disney-phile. There’s a $49 annual fee for this card.
#5 Wells Fargo Cash Wise Visa® Card
Earn $200 in bonus cash back after you use this card to spend $1,000 within three months of account opening. It’s no wonder this is Wells Fargo’s most popular card. You’ll also earn 1.5% cash back on every purchase you make with your card. There’s no annual fee.
The Best Signup Bonuses for Frequent Flyer-mile Cards
#1 Citi®/AAdvantage® Platinum Select® World Elite™ Mastercard®
This airline card is now offering 60,000 American Airlines AAdvantage® bonus miles after new accounts spend $3,000 in purchases within your account’s first three months. There’s a $99 annual fee for this card, but that’s waived the first year.
#2 Platinum Delta SkyMiles® Card From American Express
Earn 75,000 bonus miles after new applicants spend $3,000 in purchases within three months of account opening. You’ll also earn a $100 statement credit after your first purchase with the card within three months of opening the account. There’s a $195 annual fee for this card.
#3 Delta SkyMiles® Card From American Express
Earn 75,000 bonus miles and 5,000 Medallion Qualifying Miles (MQMs) after spending $5,000 in purchases within three months of account opening. You’ll also earn a $100 statement credit after your first purchase with the card within three months of opening the account. There’s a $195 annual fee for this card.
#4 Capital One® Venture® Rewards
This card continues to offer new customers a class-leading signup bonus. New applicants can still receive 50,000 bonus miles after making $3,000 in new purchases within three months of account opening. There’s a $95 annual fee for this card that’s waived the first year. Read our full review here.
The Best Signup Bonuses for Flexible Travel Reward Cards
#1 Citi Prestige®
This card now offers 50,000 bonus points after spending $4,000 within three months of account opening. You’ll earn 5x points on air travel and restaurant purchases made with the credit card, along with a yearly travel credit and a fourth-night hotel benefit. There’s a $495 annual fee for this credit card.
#2 Chase Sapphire Preferred® Credit Card
Earn 60,000 points after spending $4,000 within three months of account opening. There’s a $95 annual fee for this card that’s waived the first year. Read our full review here.
How Do Signup Bonuses Work?
A new credit card user represents a significant long-term value to card issuers, and they’re willing to spend a certain amount to acquire each one. Much of that spending is dedicated to advertising and marketing, but card issuers have discovered that their money can be well spent simply by offering potential customers valuable rewards for opening a new account. In most cases, you’ll have to complete a minimum spending requirement in order to receive the signup bonus.
For example, an offer for a travel rewards card might be for 50,000 bonus miles after new applicants use their card to spend $3,000 within three months of account opening. For a cashback card, you might receive a $200 signup bonus after spending $3,000 within three months of account opening. And with premium cards, customers can expect larger rewards.
Furthermore, you always have to be aware of the language in these offers that can prevent you from receiving the same signup bonus multiple times. For example, Citi often restricts these bonuses on cards that applicants have held in the last 48 months while American Express can restrict applicants from ever receiving a signup bonus from a card that they’ve had in the past.
Are Signup Bonuses Worthwhile?
Many people see the generous signup bonuses and think that these offers must be too good to be true. A skeptical observer might conclude that there’s some hidden “catch” that negates the value of the bonus. These offers are legitimate and can be extremely valuable to most cardholders. However, there are some potential pitfalls to look out for.
For example, many potential credit card applicants are concerned that signing up for a new credit card will hurt their credit score. While a single new application for credit will not make a significant difference in your credit score, opening up many new credit cards within a short period of time can hurt your score. The drop in your score will be both small and temporary, as credit scoring formulas can interpret multiple new credit accounts as a sign of potential financial distress.
Yet the most important drawback of signing up for a new credit card is the possibility of incurring debt. If you’re the type of credit card user who will quickly spend your available credit and incur interest charges while paying it off, then it wouldn’t make sense for you to open a new account, despite the opportunity to earn a signup bonus. The same is true for those who are unable to make their credit card payments on time. Finally, you should never apply for a credit card with a signup bonus that requires you to spend more than you normally would. When you make unnecessary purchases to earn rewards, you will almost always lose money in the end.
Signup Bonus FAQs
How Do I Choose a Signup Bonus Card?
Although it’s tempting to choose the credit card with the biggest signup bonus, there are a few other factors to consider:
- What’s the Annual Fee? Signup bonuses are great, but if the annual fee is large, you may find the value of the bonus diminished. Do the math before jumping in.
- Is There a Limit to the Bonus? Most signup bonuses are limited, especially to a maximum amount. Check to make sure you’re not choosing a card with a low bonus threshold.
- What Is the Type of Bonus? Different cards offer different types of signup bonuses. Generally, you’ll find either points, travel miles or cash back. Choose the bonus you can take the most advantage of.
What Are the Typical Signup Bonus Amounts?
Currently, the average cashback signup bonus is only about $100. If you’re looking for either travel miles or points, you’ll find that the average bonus is about 25,000 miles or points.
Are Signup Bonuses Taxable?
No, signup bonuses aren’t taxable. That’s because you need to spend before you receive the bonus. (It can be considered more like a refund.) However, make sure to study the fine print before jumping into any bonus deal.
These cards offer the best signup bonuses available in each category, but you should always look beyond the amount of points offered and consider a card’s other terms and benefits. By considering a credit card’s signup bonus as well as its other advantages and drawbacks, you can find the right card for your needs.