6 reasons to jump on a credit card sign-up bonus
Here’s when you should grab a credit card sign-up bonus.
Here’s when you should grab a credit card sign-up bonus.
Considering they give you the opportunity to earn some serious cash back or travel rewards, credit card sign-up bonuses can be a major selling point for potential cardholders.
But applying for a new credit card isn’t always a clear decision. You will need to be sure that you can be approved for the card and meet the bonus requirements, otherwise you are wasting your time. It’s also important that you get the right card and bonus for your financial needs.
If you’re not sure if you should complete that credit card application, here are the best reasons to take advantage of a bonus opportunity.
1. You have a trip coming up
Travel reward cards are known to have some of the biggest sign up bonuses, so they are the perfect way to save money on vacation. Depending on the card and where you’re going, your bonus could end up paying for your airfare, your accommodation, or maybe even both.
As there are many travel cards available, you’ll have plenty of options to help pay for your trip no matter where you plan to go. Just make sure you apply for the card early enough so you can get it in the mail and earn the bonus by the time you need to book everything.
2. You are sure you can meet the minimum spend
Many sign-up bonuses have minimum spend required to get the bonus. For a smaller bonus, the minimum may be $500 or $1,000 spent on the credit card in the first three months. Larger bonuses might require you to spend $3,000, $5,000 or more in that time frame.
Where a sign-up bonus has a spend minimum, check that you can comfortably reach that minimum with your usual spend. You don’t want to miss out on your bonus because you can’t spend enough, nor do you want to make unnecessary purchases just to reach a minimum.
3. You still want the card
Here’s a simple one: if a credit card has caught your eye because of the benefits it offers, then you should go ahead and apply for it. You already want the card, so you can consider the sign-up bonus as the icing on the cake.
4. You have good credit
Your credit card options are somewhat limited if your credit is below par. You might have trouble getting the best credit cards or the most valuable sign-up bonuses.
Everything changes once your credit score is in the range of good to excellent. To clarify, good credit range is a FICO® score of 670 to 720, and excellent is anything above 720.
When you’ve secured your credit at this point, it makes sense to use that high score to your advantage. A smart way to do this is to find a card with a valuable sign-up bonus. You have the credit to qualify, so might as well use it.
Even if you haven’t been looking for a new credit card lately, you might want to consider checking out some refund cards. You can find many cards with $100-$200 sign-up bonuses that only require you to spend $500-$1000. And most cashback cards don’t charge an annual fee.
Bonuses like these are basically free money. As long as you pay your credit card bill every month, you are guaranteed to come out on top.
6. You have an expensive purchase to make
One way to make a big purchase a little less painful is to use it to meet the minimum spend on a sign-up bonus.
Maybe you need to put new tires on your car, furnish your living room or buy tickets for an event. If you’re going to spend money anyway, it makes sense to take a bonus out of it. It is also a great way to reach a minimum of expenses that you could not reach with your usual expenses.
The right time to grab a bonus
As you can see, there are many situations in which it makes sense to get a sign-up bonus with a credit card. When you have the credit score for an approval, you should definitely check what types of bonuses exist that can help you save money.
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