Why Earning a Credit Card Sign-Up Bonus is So Critical for Points & Miles
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Why Earning a Credit Card Sign-Up Bonus is So Critical for Points & Miles

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So you’ve got travel dreams you’d love to make a reality: showering on a plane, flying to Japan, or even just making your next flight free – domestic or international.

These goals – and everything in between – are possible with credit card points and airline miles. Cheap flights are great – they’re our specialty, after all – but nothing can help you see more of the world for less than earning and using points and miles.

Of course, that’s easier said than done. If you’re earning miles just by swiping your card on everyday purchases, it’d take a lifetime to pile up enough miles for free flights.

That’s why the most important aspect of points and miles is earning a sign-up bonus. It’s the best way to leverage your spending for a big stash of points that you can quickly put towards travel.

Keep reading to see what we mean.

 

What is a Sign-Up Bonus, and What’s Minimum Spend?

A sign-up bonus, or welcome offer, is a massive amount of points a credit card company offers for spending a certain amount of money on the card – a minimum spend requirement – in the first few months of card membership.

This is the banks’ way of both recruiting new customers and encouraging new cardholders to put a substantial amount of money on the card, in hopes of making it your primary card for spending.

Many sign-up bonuses or welcome offers go like this: “Earn ____ amount of points by spending $______ in the first _______ month(s) of card membership.” For example, here’s the welcome offer for one of our favorite travel rewards cards, the Chase Sapphire Preferred card:

 

credit card sign-up bonus

 

Click Here to get more information about the Chase Sapphire Preferred Card. 

 

But just because you’re earning a big stash of points doesn’t mean you should spend money you don’t have. That’s a recipe for debt and disaster.

Instead, you should leverage the expenses you normally have to earn those points, from everyday spending to monthly bills to larger planned purchases like home renovations.

Read our full guide to getting started with points and miles.

 

Why is it So Important?

So, why are we making such a big deal about this? The sign-up bonus or welcome offer is the most important part of getting a new travel rewards card and is the fastest and easiest way to earn a large sum of points and miles.

It’s far more important, and will yield you more points than getting 5x points on airfare or using your card for big-ticket purchases. When you open a travel rewards card, hitting that minimum spend requirement to earn the sign-up bonus points should be your No. 1 priority. You only get one chance, so be sure to track your spending until you hit that required spending amount.

Thrifty Tip: Does completing a minimum spend requirement like this seem too hard? Don’t worry, there are lots of easy ways to make sure you hit that minimum spend requirement and earn those points! Read our best tips for hitting your minimum spend goal on a card without spending more than normal.

Still not convinced, or want to see the power of sign-up bonuses in action? Here are a few examples.

 

Example 1: Capital One Venture Card

Take the Capital One Venture Rewards Credit Card, for example. This is one of the cards we recommend most for travelers just getting into points and miles because Venture Miles can be redeemed on any travel-related purchases (we’re talking Airbnbs, cruises, flights, and more!).

If you spend $1,000 each month for the first three months of card membership, you’ll earn 50,000 Venture Miles. That bonus is worth at least $500 towards travel, because you can use those miles to directly erase travel purchases from your statement – each mile gets you 1 cent off.

You also earn 2x Venture Miles on every dollar you spend with this card, but the miles don’t add up nearly as fast as that sign-up bonus. Outside of the sign-up bonus offer, you would have to spend $25,000 on your Venture card to earn 50,000 miles. Spending $3,000 in your first three months of card membership can get you 50,000 after spending an eighth of that.

 

credit card sign-up bonus

 

Click Here to get more information about the Capital One Venture Rewards Credit Card. 

 

Example 2: Chase Sapphire Preferred Card

Let’s another example of a wallet staple: The Chase Sapphire Preferred Card. You can earn 60,000 of some of the most valuable points in the travel rewards world after spending $4,000 in the first three months with the card.

We love booking cheap flights with Chase Ultimate Rewards points directly through the Chase portal, especially each point is worth 1.25 cents each (so you use less miles!) This means your 60,000 Chase point sign-up bonus is actually worth $750 towards travel! And you may be able to get much more value by utilizing Chase’s transfer partners.

On this card, you earn 2x points on restaurants and travel and 1x points on all other spending. Let’s say you spent $4,000 on restaurants and travel. Outside of the sign-up bonus, this $4,000 in spend would only yield you 8,000 points.
Chase Transfer Bonus British Airways

 

Click Here to get more information about the Chase Sapphire Preferred Card. 

 

You’d have to spend a total of $30,000 on restaurants and travel to get to a total of 60,000 points. Or you could earn 60,000 points by spending $4,000 on anything … as long as you do it within the first three months of opening the card. If that doesn’t illustrate how important sign-up bonuses are, we don’t know what will.

 

Example 3: American Express Platinum Card

Last but certainly not least: the Platinum Card from American Express. This one is new to my own wallet, and though the annual fee can seem shocking, once you calculate the benefits of the card (like airport lounge access and annual credits for airline fees and Uber rides), it’s worth its weight in gold.

Not to mention, if you’re eligible for the CardMatch offer, you could earn a 100,000 point sign-up bonus after spending $5,000 in the first three months of card membership. That 100,000 point welcome offer is worth at least $1,000 towards travel – and potentially much, much more.

Besides the 5x points earned on booking flights, this card earns one point per dollar. That means you’d have to spend $100,000 on this card (or $20,000 on flights alone) to earn the same amount you can get from the welcome offer.

 

 

Click Here to learn more about the Platinum Card from American Express.

And remember that with American Express (and many of these cards), you’ll only get one chance to earn the sign-up bonus. If you get the card and don’t meet the minimum spend requirement, you won’t get another chance to earn it in your lifetime – though there’s some debate about what “lifetime” means to American Express.

All the more reason to ensure you earn that sign-up bonus!

Bottom Line

Have we convinced you of the sheer power, importance, and value of sign-up bonuses? Hopefully these examples shed light on why meeting the minimum spend in those first few months of having a new travel rewards card and earning that sign-up bonus is unbelievably valuable.

Sure, points on day-to-day spending and even 2-5x points on special categories can add up over time. But even the most lucrative bonus can’t compare to what you earn from a single welcome offer.

The next time you open a travel rewards card, make hitting that minimum spend requirement and earning the credit card sign-up bonus points your top priority.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

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