For consumers, the great thing about the credit card industry is that it’s extremely competitive. There are few other products available that will pay you just to give them a try. Yet that’s essentially what credit card issuers do when they offer generous welcome bonuses — sometimes worth $1,000 or more — when you open a new account and meet the spending requirement.
How credit card bonus offers work
With most reward credit cards, new account holders should expect to receive a generous welcome bonus. But you must earn that bonus first: There’s usually a minimum spending requirement that has to be completed within a limited amount of time. For example, an airline credit card might offer new applicants 50,000 bonus miles after using the card to spend $3,000 within three months of account opening.
To be sure to receive the bonus, remember that your account is opened the day your application is approved, not when your card is mailed, received, activated or first used. With most card issuers, you’ll receive your bonus shortly after your statement closes in the month that you complete the minimum spending requirements.
Should you close your account after getting the bonus?
There are many people who choose their credit cards, in large part, based on the welcome bonus offered. You may be tempted to cancel your account after receiving the bonus. But you should really avoid doing that.
Cancelling your card right after receiving a bonus may violate the terms of some card issuers, and they may decided not to do business with you in the future. Also, it’s often not in your best interest to cancel a credit card account that you just opened. Why? For one thing, you’ll lose out on the rewards and benefits that the card offers.
Credit card welcome offers exist to give you a chance to evaluate a new card, and that’s what you really should do. The expectation is that you will keep the card account open and in good standing for at least a year, and then decide if it meets your needs. By cancelling a card quickly, you’ll reduce the average length of your account history in your credit report, which is a small, but significant factor in your credit score. What’s more, you likely won’t receive a refund of your annual fee if you cancel.
What’s the best credit card welcome bonus for you?
The best credit card welcome bonus will be the one that’s most valuable to you. When it comes to cash back, it’s pretty easy to determine what the best bonus is. Things gets more complicated when trying to assess the value of bonuses awarded as reward points or miles. So you must figure out how much those rewards or miles are really worth.
For example, if you see that a hotel credit card offers 100,000 points, that’s meaningless until you research the value of the free night stays that those points can be redeemed for. To find out, go to the hotel’s website and see how many points are required for a free night some place that you’d like to go. Then, compare it to the price you would otherwise pay in dollars.
At the same time, you should consider the card itself, outside of the one-time bonus. Does it have features and benefits that you can use? Does it offer competitive rewards for spending? Are the fees reasonable? When you find a card has both a great welcome bonus and compelling rewards, along with strong features and benefits and acceptable fees, then that’s the a great card for you.
Best Credit Card Bonus Offers: September 2020
Chase Sapphire Preferred
This popular travel rewards card just increased its welcome bonus to the highest amount ever. Also new for this year, the Chase Sapphire Preferred card is offering ways to earn and redeem bonuses for everyday purchases, not just travel. With an annual fee of $95, it’s a great way to get started with rewards credit cards.
- Welcome bonus: Earn 80,000 Ultimate Rewards points, worth $1,000 in credits towards everyday spending or travel booked through Chase, after spending $4,000 within three months of account opening.
- Rewards for spending: 5x on streaming purchases and Lyft rides, 3x on gas and 2x on travel and dining.
- Annual fee: $95.
Capital One Venture Rewards Credit Card
Here’s another leading rewards card that’s recently increased its welcome bonus and made changes to offer more non-travel rewards. This latest offer provides 100,000 bonus miles, worth $1,000 in rewards, after you spend $20,000 within a year of account opening. To earn that bonus, you’d have to spend an average of $1,667 per month with the card. Alternately, you can still earn 50,000 points by spending just $3,000 within three months of account opening.
The Venture Rewards card offers unlimited double miles on all purchases, plus 5x miles on all food delivery and pickup orders with Uber Eats (through January 31, 2021). Miles can be redeemed for one cent each as statement credits towards travel purchases, and until the end of 2020, you can redeem your rewards for recent, eligible restaurant delivery, takeout and streaming service purchases from thousands of merchants. You can also transfer your Capital One Miles to airline miles or hotel points. There’s a $95 annual fee for this card.
- Welcome bonus: Earn 100,000 bonus miles after spending $20,000 within a year of account opening. Or, earn 50,000 points by spending just $3,000 within three months of account opening.
- Rewards for spending: Earn unlimited double miles on all purchases plus 5X miles on all food delivery and pickup orders with Uber Eats (through January 31, 2021).
- Annual fee $95
Chase Freedom Unlimited® Credit Card
This is a no-fee rewards card that currently features a welcome offer that includes both cash back and a special bonus at grocery stores that’s good for one year. You earn a $200 bonus after spending just $500 within three months of account opening, plus you receive 5% cash back on up to $12,000 spent at grocery stores within 12 months of account opening. So the spending offer is potentially worth as much as $600. Otherwise, Freedom Unlimited offers 1.5% cash back on all purchases, with no limits, and it has no annual fee.
- Welcome bonus: $200 bonus after spending just $500 within three months of account opening, plus you receive 5% cash back on up to $12,000 spent at grocery stores within 12 months of account opening.
- Rewards for spending: 1.5% cash back on all purchases, with no limits .
- Annual fee: $0
Blue Cash Preferred® Card from American Express
This card may be one of the best cash back cards offered today, and it’s even better with this big welcome bonus. While the $250 welcome bonus is generous, you could earn even more cash back each year from its offer of 6% back on up to $6,000 spent at U.S. supermarkets with the Blue Cash Preferred card. All of these opportunities to earn rewards makes its $95 annual fee well worth it.
- Welcome bonus: Earn a $250 statement credit after making $1,000 in new purchases within three months of account opening.
- Rewards for spending: Earn 6% cash back at U.S. supermarkets (on up to $6,000 spent each year) and on select streaming services. Earn 3% back at US gas stations and on transit purchases (including taxis/rideshare, parking, tolls, trains, buses and more), and 1% back elsewhere.
- Annual fee $95
U.S. Bank Altitude® Go Visa Signature® Card
Here’s another card offering a welcome bonus of 25,000 points, worth $250 in cash back and other rewards, after spending just $1,000 within 90 days of account opening. It offers you fantastic 4x rewards on takeout, food delivery and dining, and 2x points at grocery stores, grocery delivery, gas stations and on streaming services. There’s no annual fee for this card.
- Welcome bonus: 25,000 points, worth $250 in cash back and other rewards, after spending just $1,000. within 90 days of account opening.
- Rewards for spending: 4x rewards on takeout, food delivery and dining, and 2x at grocery stores, grocery delivery, gas stations and on streaming services, 1x elsewhere.
- Annual fee: $0
More From Money:
Best Cash Back Credit Cards of 2020
Is the Chase Freedom Unlimited the Best Cash Back Card out There?
Best Rewards Credit Cards of 2020
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