Are Credit Card Sign-Up Bonuses Worth It? — Maximize Rewards

I completely understand why some people are afraid to use credit cards. I was. It seemed like a surefire way to get into credit card debt seemingly overnight. But between rewards credit cards and sign-up bonuses, I realized credit cards can be used for good — a lot of good.

Credit card sign-up bonuses can offer you an extra few hundred dollars or even a free plane ticket just for spending the way you normally would. The sign-up bonuses I’ve received from credit cards have paid for a camping vacation, a concert, and a few train tickets for a weekend getaway. 

Big or small, you can likely find a sign-up bonus that works for your spending habits. But are they worth it? To figure that out, you need to know how they work and how to evaluate them. 

How Credit Card Bonuses Work

Credit card bonuses are perks credit card companies offer to win your business. Bonuses typically involve the credit card company offering extra cash, points, or miles when you sign up, though you usually have to do something first, such as spend a certain amount. 

The cash price of the reward depends on the card you choose. Some sign-up bonuses are worth a few hundred dollars, while others are valued at $700 or more. You typically find that the higher the spending requirement, the higher the reward.  

Types of Credit Card Bonuses 

Credit card bonuses all look slightly different and have different requirements. While credit card issuers can technically make anything they can legally give you a bonus, there are some common types.

  • Cash-back bonuses. Cash-back bonuses are pretty straightforward. You spend a specific amount during a specified time and get some form of cash back, such as a statement credit, check, or redemption for products or experiences. Cash-back bonuses tend to be smaller than other bonuses. For example, you might see a $200 bonus when you spend $500 in the first three months. 
  • Travel rewards bonuses. Some travel rewards cards offer travel bonuses if you spend a certain amount in a certain time frame, such as 75,000 bonus miles after you spend $4,000 on purchases within the first three months.
  • Points bonuses. Points are essentially another form of cash back. Once you reach certain point thresholds, you can cash those points in for statement credits, travel purchases, or another option your credit card issuer offers. For example, you might see cards that offer 75,000 or even 100,000 points after you spend $2,000. 
  • Referral bonuses. Some credit card companies offer a small bonus when you refer someone who applies for a card. For example, a card may offer you a $200 statement credit if you get one of your friends to apply for the same card within the first 60 days. 

How to Evaluate Credit Card Bonuses

When trying to pick the right bonus, there are a lot of factors outside the cash you earn. It’s vital to compare the bonus in the context of the card’s full value potential to decide whether the credit card bonus is worth it to you. 

Bonus Value

When searching for the right bonus, think about what you’ll use it for. Perhaps you’re planning for an upcoming family vacation or you want to take a weekend trip with your friends. A 75,000-point bonus can get one of you a free flight. Or if you’re saving up for a big purchase like a new flat-screen TV or couch, a cash bonus of $200 can help offset the price. 

Annual Fee

Annual fees have a huge range, from $0 to almost $1,000. The higher the annual fee, the nicer the reward. But there’s no use in earning a bonus if the continued annual fee is too much. A 150,000-point travel bonus sounds sweet, but the next year when you face a $650 annual fee, it might not seem so worth it. 

Consider how much you’re willing to pay on an ongoing basis, not just the first year. If you’re willing to switch cards next year and can do so without negatively impacting your credit score, go for it. But if you’re looking for a long-term relationship, make sure you can afford it. 


Ensure the rewards you earn outweigh the annual fee. You want the rewards you earn now, including the bonus, to be more than the annual fee, to be sure.

But in future years, will you use the card enough to continually justify the fee? If not, you’re just paying to keep a credit card in your wallet. 

Additionally, think about how the rewards offered can help you reach the bonus. Pick a card that encourages you to spend in your regular areas, which helps you rack up enough in purchases to earn the bonus. 

Similarly, be wary of a card with rewards that conflict with your go-to card for that spending category. If you already get excellent gas rewards, is it worth switching to another card for those?  

Spending Requirement

Ensure you can spend enough to earn the reward bonus. You can find spending requirements that are fairly low at a few hundred dollars, but some require you to spend thousands. 

Look at your budget and think realistically about how much you spend regularly. A credit card shouldn’t increase your spending; it should simply reward you for spending in the right areas. 

Even if you already have a rewards card you use for certain purchases, it still might be worth it to sign up for another one that’s currently offering a bonus, even if the rewards you earn are slightly less. 

Do the math to see how what you earn in rewards each month from your original card compares to the bonus you would earn combined with the additional rewards you earn on the new card. You can use the card just for a few months to earn the bonus and switch back to your old card after. 

But that’s not the only way to meet spending requirements. You can put streaming services on your card. Some credit cards even offer cash back on these recurring subscriptions. Or put a big purchase you’ve been planning on the card or add a trustworthy authorized user to get two people spending on the card for a few months.

Other Card Benefits

Many credit cards have perks and features beyond rewards and sign-up bonuses. These features offer benefits you may not even realize you need. 

For example, if you travel overseas frequently, check to see if the card you’re interested in has a foreign transaction fee. Most of these fees hover around 3%, so it can add up if you use your card a lot while traveling. If you can find a card without one, you can save hundreds or even thousands per trip. 

But that’s not all. Look for features like low balance-transfer rates or special security features. Do you want the ability to lock and unlock your card at will? Do you want extra verification steps when you make online purchases? Some issuers offer these features, while others don’t, so make sure you’re reading the fine print. 

Your Spending Habits

Your spending habits play an outsize role in choosing the sign-up bonus that’s right for you. 

If you have a large family and can put your everyday spending on the card, even temporarily, you likely have enough expenses to reach a higher spending requirement. For those with tighter budgets, sticking with a smaller sign-up bonus makes more sense because they also come with lower spending thresholds. 

Bonus cards are also perfect for large purchases. For example, if you’re thinking of buying a new couch, a sign-up bonus card that offers $200 back for just $500 in spending is the perfect choice. If you buy a $700 couch, you’re essentially getting a $200 rebate just for putting the purchase on the right card.  

Other Factors to Consider

Even if you evaluate the bonus and decide it’s worth it, you need to check out the terms and conditions to ensure they won’t impede your progress toward the spending goal. While they can vary by issuer, there are a few that exist on almost every card.  

Only New Cardholders Are Eligible 

One of the biggest catches of sign-up bonuses is that they exist to attract new customers, not keep existing customers happy. That’s outstanding for anyone looking to add a new card to their wallet, but those who already have that card need to look elsewhere for a sign-up bonus. 

Your Time Already Started 

The time you have to reach your spending requirement starts the day you receive approval, not the day you get the card. You usually get your card in the mail within a few days to weeks, depending on where you live. 

That shortens the already brief few months you have to meet the spending requirement. That said, some cards allow you to activate a virtual version of your card before it arrives. 

Some Transactions Don’t Count

Spending requirements for bonuses can get tricky. Larger bonuses tend to have stricter requirements or limits on what purchases count toward your spending minimum. Check the fine print to see the exact requirements for your card. 

For example, the fine print might say balance transfers and lottery tickets don’t count toward your spending requirement. 

The Bonus Value May Depend on How You Redeem It

More complex bonuses may offer a greater value if you redeem the bonus for something other than cash or have specific rules for how you can use the bonus. 

For example, you might earn 75,000 travel points worth $750. That’s more than the $500 they’d give you if you took your bonus as statement credits (which is essentially cash). But you can only use it if you spend it on purchases through your credit card’s travel portal.

If you can’t or won’t do that, you need to take the cash bonus, meaning that’s what you should base the credit card bonus evaluation on. 

The Bonus Might Expire

Certain credit card bonuses expire if you don’t use them in time. That mostly applies to points or miles. And many cards already have rules about the expiration of points or miles, which apply to your bonus too. Check the bonus offer’s fine print to see if there’s a time limit on your rewards. 

Are Credit Card Bonuses Worth It? 

Plenty of people sign up for bonuses, so that must mean they’re worth it, right? Not always.

If you can meet the spending requirements without overspending, love most other things about the card, and need a new credit card, then yes, earning a bonus is a sweet deal. 

But if you’re likely to struggle to spend hundreds or thousands just to earn a small bonus, it’s probably not the right time for you to get a new card, rewards be damned. Or if getting a new credit card entices you to spend more than you need, the bonus won’t offset the interest. 

Don’t be enticed by a sign-up bonus you see on a flashy offer you get in the mail. Always consider your motives outside the bonus, no matter how good it sounds. Remember, credit card companies don’t offer these bonuses out of the goodness of their hearts. There’s something in it for them too. 

Final Word

Credit card bonuses are an added benefit to strong rewards credit cards. They come in all sizes, and all have specific requirements you must meet to be eligible for the bonus. Still, when thinking about your next credit card, the sign-up bonus should be closer to the bottom of your list of incentives. 

Focus instead on what you really need. That might be a balance-transfer credit card that offers a 0% interest rate to help you finally pay off your debt. Or if you’re looking to rebuild credit, a secured credit card is a better idea. 

But if the card you want has a sign-up bonus that isn’t too hard for you to earn, don’t leave money on the table. 

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