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The 3 rules of credit card signup bonuses

Julian Kheel
April 30, 2024
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Opinions, reviews, analyses, and recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

Practically every credit card that earns rewards offers new customers a lucrative upfront bonus. These signup bonuses are often the best way to quickly accumulate enough points, miles, or cash to take an awesome trip right away, without having to spend years earning rewards from travel or spending on your card.

But with all the different cards and bonuses floating around, how do you figure out which one is the best? I've come up with 3 rules that I like to use when considering whether a signup bonus makes sense for you. I'm sharing them with you here so you know what to look for, and what to consider before signing up for a new credit card.

Not sure which credit card to get? Take a look at our list of the best credit cards of 2024.

Rule #1: Bigger numbers aren't always better

A lot of credit cards like to advertise a big bonus number, like “80,000 bonus miles” or “150,000 bonus points.” But all points and miles aren't created equal. So you need to know what those miles or points are actually worth in order to calculate how much value you're getting.

At Points Path, we analyze the value of miles for the airline programs we track and use them to calculate our deal recommendations. You can use those same valuations to determine how much a signup bonus is worth on credit cards issued by those airlines.

For instance, if an airline is offering a credit card with a 50,000-point bonus, and their points are worth 1.2 cents apiece, that bonus is worth $600 (because 50,000 times 0.012 is 600).

You can find our most up-to-date valuations for the airline programs we cover in our FAQs on our home page.

Check out Points Path’s list of our favorite airline credit cards and their signup bonuses.

Rule #2: Make sure you can meet the spending requirement

A signup bonus on a credit card is typically earned by spending a certain amount on the card in the first few months after you open the account. For example, you might see a card offer like “earn 75,000 miles after spending $3,000 in the first 3 months.”

Before you apply, you want to be sure you can meet that spending requirement. But while it may look like a big number, remember that it's split across the number of months you have to do it. So in the example above, you actually only need to spend $1,000 each month for the first 3 months to make it to $3,000.

Of course, that still might be more than you can afford (and you should never overspend on a credit card just to earn rewards or a bonus). Fortunately, there are a few strategies you can use to meet a spending requirement without spending more than you should.

First, while you should never buy things you don't need just to spend more, you also shouldn't pay for anything with cash or a debit card when you can use your credit card instead. Make sure you're putting everything you possibly can on your card. This includes bills you might not normally think of putting on a credit card, such as an insurance payment or a utility bill.

Also, remember that you typically have about a month to pay your credit card bill without owing any interest. So if you need to, you can prepay certain expenses a month ahead of time in order to have them count toward the spending requirement. You’ll still have a month before you have to pay the bill, so you can safely pay ahead while remaining within your budget.

Finally, whenever you're out with friends and family and they want to pay for something with cash, it's a great opportunity for you to pay for them with your card and take cash from them in return. You can do this almost anywhere — restaurants, stores, movie theaters, and so on.

Just make sure you don't stick that cash in your wallet and spend it elsewhere. You want to save it and use it to pay your credit card bill. In fact, the best option is to have your friends send you their money via Venmo or Paypal, so you can keep it safely in your account and have it when you need it.

Make sure you’re earning cash back or points on everything you buy with one of these rewards credit cards.

Rule #3: Ask yourself if the bonus fits your needs

Getting a big signup bonus is always exciting, but it's only helpful if you can actually use the points or miles you're earning. Obviously if you're earning a bonus on a cash back card, then you don't have to worry about how to use it. But if your bonus is in points or miles, you'll want to know how you can actually redeem those rewards.

For instance, if you see one airline with a credit card bonus that's larger than another airline, but the airline with the big bonus only has limited service to the airport nearest to you, those extra miles may not be that useful.

Points Path can help on this front. Use it to do a little advance research by finding flights you'll be likely to take and seeing what kind of miles you'd need for them. Then you'll have a general plan in mind for what you're going to do with your signup bonus before you get the card.

Finally, if you're considering a card with an annual fee (and it isn't waived for the first year), make sure you're actually going to be able to use the perks of the card. You might be willing to pay an annual fee just to earn a big bonus, but the card you're getting should also have extra features such as bonus categories, travel benefits, and other features that match your needs.

Find the best travel credit cards and signup bonuses here at Points Path, and read our guide to transferring bank points to airline miles.
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