What Are the Best Credit Card Sign-Up Bonuses of August 2020?
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Dozens of credit cards offer lucrative sign-up bonuses, but the best ones tend to be tied to cards that offer points or miles rather than cash back. Points offer more utility than miles, as they can be redeemed for many things, including flights and hotels. Therefore, the best currency of sign-up bonus rewards are as follows: points, miles and cash back, in that order. That said, miles can be a great option if you're just interested in free or discounted flights, and cash back bonuses tend to be offered by cards that don't charge annual fees.
Best Sign-Up Bonus For Points
To receive an estimate of how much each card's sign-up bonus is worth, and whether you'll be able to meet the card's sign-up bonus spending requirements, simply click the gear symbol and input your estimated monthly expenses. The 2-year rewards value column will then reflect our estimate of how much each card can earn you through its sign-up bonus based on your expenses.
Best Sign-Up Bonus for Airline Miles
To see which credit card can get you the most airline miles through its sign-up bonus just click “edit” and enter your monthly spending estimates. The estimated value of each sign-up bonus based on your spending habits will then be located under the "Bonus Value" column.
Best Welcome Bonus for Cash Back
Click "edit" on our tool and enter your estimated monthly expenses. Then, look under the "Bonus Value" column to see our estimate for the value of each sign-up bonus. If the value says “zero,” it means that your spending won't meet the card's minimum spending threshold.
Things to know about credit card sign-up bonuses
Things to know about credit card sign-up bonuses
It's no secret that credit card sign-up bonuses can be very lucrative. In fact, it's not uncommon to see their values rise to as much as $1,000. However, there are a few things you should keep in mind before applying for a card solely based on a high sign-up bonus. We outline a few things we recommend you consider, below.
1. Be cautious of minimum spend requirements for sign-up bonuses
Most credit cards have a minimum spending requirement that you must reach before you're able to get the sign-up bonus. As an example, a card may require you to spend $4,000 in three months before it awards you with 50,000 airline miles. If you're not able to meet the $4,000 spending requirement, you won't be awarded the sign-up bonus. Therefore, as you research credit card sign-up bonus offers you'll want to note the spending requirements and the time restriction as well. The credit cards with the best sign-up bonuses typically require cardholders to spend thousands of dollars over a period of three to four months.
We don't recommend adjusting your spending to meet sign-up bonus requirements. That's because by adjusting your spending you run the risk of overspending simply to meet the requirements. This is counterintuitive, since overspending will chip away at any of the value you stand to gain from the sign-up bonus.
2. Consider the long-term value of each card
Another thing to consider is whether the card you're applying for has good long-term value. Sign-up bonuses are great, but if a card has few perks, or a low ongoing rewards rate, then you could find yourself in a scenario where you never use the card past the point of meeting minimum spend requirements. While there's nothing wrong with underutilizing a credit card, you put yourself at risk for having your card canceled for inactivity. As a result, your credit score may suffer, depending on how long you held the card before it was canceled and other factors. The easiest way to avoid these potential problems is to only apply to cards you'll actually use in the long term.
3. Be wary of annual fees
A high annual fee has the ability to offset the value of a sign-up bonus. That's because you'll earn the sign-up bonus once, but you'll be on the hook for the annual fee every year. This is yet another reason why we stress that a card should have solid perks and benefits you can see yourself using in the long-term. Furthermore, even cards without annual fees can have lucrative sign-up bonuses.
If you do have a credit card with a high annual fee that you no longer use, consider calling your credit card company and asking for a card downgrade. Often times, the credit card company will work with you and offer you a no-annual-fee replacement. As an added plus, some credit card companies will offer you retention offers to keep your existing card. For instance, you may be offered to have the fee waived for the current year or another, typically smaller, bonus.
4. Don't forget about referrals and authorized users
Aside from sign-up bonuses, many credit cards offer bonuses for referring users or for adding authorized users to a cardholder's account. These types of bonuses aren't available through all credit cards, but it's worth checking in with your card company and asking if they are offering them, since they can be an easy way to earn additional bonuses. Just keep in mind that some cards will charge fees for adding authorized users, so we only recommend you go after this type of bonus if you would actually benefit from adding another user to your account. For instance, if you recently got married, the convenience of adding your spouse an authorized user might outweigh any associated costs.
5. Consider your eligibility
For most people, this won't be an issue, but credit card companies have started putting certain restrictions in place to limit the number of sign-up bonuses people can receive. For instance, American Express will only allow you to earn a welcome bonus for a particular card once per lifetime. As a general rule, you should avoid applying for multiple credit cards in rapid succession.
6. Do mind any refunds
As you're working toward meeting the minimum spending requirement for a sign-up bonus, you'll want to be aware that any refunds count against your spending. For instance, if the spending requirement is $1,000 and you've made $1,200 in purchases, but then receive a refund of $500, then you wouldn't qualify for the bonus since your spending would only total $700.
So what if you receive a refund that put you below the spending requirement after you've already received a sign-up bonus? In this instance, your credit card company could reclaim the sign-up bonus it has awarded you. That's why we only recommend applying for cards with spending requirements that would be easy for you to clear. This leaves you with more wiggle room should you need to initiate a refund for any reason.
Joe Resendiz is a former investment banking analyst for Goldman Sachs, where he covered public sector and infrastructure financing. During his time on Wall Street, Joe worked closely with the debt capital markets team, which allowed him to gain unique insights into the credit market. Joe is currently a research analyst who covers credit cards and the payments industry. He earned a bachelor’s degree from the University of Texas at Austin, where he majored in finance.
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How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.
Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).