In late 2017, San Francisco couple Riley Adams and his wife stumbled upon the Halley’s comet of airline credit card welcome offers. For a limited time, the card was advertising a companion pass on top of a large sign-up bonus.
“We knew we had a lot of spending in one specific area coming up, and we wanted to try to shop around to get the best value for those needs,” says Adams, a certified public accountant, financial adviser and owner of the blog Young and the Invested. “If you plan for it, you can really offset those costs [with a sign-up bonus].”
If you’re considering a new credit card, the bonus-friendly season from October through December is an ideal time. Your expenses on Black Friday, holiday travel and meals, end-of-the-year charitable donations and more may easily meet a large spending requirement for a juicy sign-up bonus.
Here’s what to know about such offers.
Timing a credit card bonus
A sign-up bonus is a one-time incentive offered by rewards credit cards on top of any ongoing cash back, points or miles on purchases. Snagging a bonus typically requires spending between $500 and several thousand dollars within a certain time — often three months — after you’re approved for the card.
That level of spending may not be difficult during the holiday season. In 2023, consumers planned to spend $875, on average, on gifts, decorations, food and other key seasonal items, according to the National Retail Federation’s annual survey.
Even if your expenses aren’t entirely holiday-related, a little planning can still help you reap a windfall that you can use the following holiday season. You can earn a sign-up bonus toward travel or use it toward other expenses.
The Adamses, for example, mapped out a budget before applying for that airline credit card with the generous bonus. They met its spending requirement primarily by paying for Riley’s wife’s work-related expenses in 2017; they then put what they earned toward holiday travel the next year.
“We used it all of 2018 to visit family for holidays — Fourth of July, Thanksgiving, Christmas — plus two domestic trips for [our] own purposes, and then flying to a major hub for an international flight on our one-year anniversary,” Adams says.
Have the money on hand
It’s not worth spending money you don’t have just to chase a large bonus. If you can’t pay your credit card bill in full each month, interest charges will eat away at any rewards you accrue.
But if you’ve saved up a holiday fund, you can gift yourself a rich introductory credit card offer while you’re at it.
Other factors to keep in mind
As you size up a rewards credit card and its sign-up bonus, ask yourself these questions:
-
Can you meet the card’s credit requirements? You’ll generally need good credit (a FICO score of 690 or higher) to qualify for a rewards card with a big bonus.
-
Are you willing to pay an annual fee? The top cards — those with the highest bonuses, richest rewards and best perks — charge annual fees. If you don’t think you’ll earn enough in rewards and benefits to outweigh that fee, consider a no-annual-fee rewards card. Many of them also offer bonuses.
-
Do the card’s rewards categories match your expenses? A sign-up bonus can offer a chunk of upfront value, but the card won’t be useful long term if its ongoing rewards and perks don’t fit your habits.
-
Can you meet the spending requirement for the bonus with your current budget? If you know you can’t spend $4,000 in three months without going into debt, look for a bonus with a lower spending threshold.
-
Will you pay your bill in full every month to avoid interest? Rewards cards tend to have high ongoing APRs, meaning you don’t want to carry a balance month to month. If you’re already struggling with debt, a rewards credit card may not be ideal for you.
