What a sign-up bonus actually is, and what it costs you
A sign-up bonus is a reward a credit card company offers you for opening an account and spending a certain amount of money within a set time frame — usually three to six months. The bonus is typically points, miles, or cash back that you can redeem for travel, statement credits, or other rewards. The highest bonuses right now range from $200 to $500 in value, though the exact amount changes based on the card, the issuer, and the current market.
The catch is real: to get the bonus, you must spend a minimum amount — often $500 to $5,000 — within that timeframe. If you cannot or do not spend that much, you do not receive the bonus. You also pay an annual fee on most cards with the largest bonuses, usually $95 to $550 per year. That fee comes due whether you use the card or not. The bonus only makes financial sense if the value you get exceeds the annual fee and the spending requirement does not force you to buy things you would not otherwise buy.
Key Takeaways
- The highest sign-up bonuses are worth $200 to $500, but they require you to spend $500 to $5,000 within three to six months to unlock them.
- Most cards with large bonuses charge an annual fee of $95 to $550, so the bonus must exceed that fee to be worth your money.
- You should only pursue a bonus if you can meet the spending requirement with purchases you were already planning to make, not by spending extra.
- Opening multiple cards in a short time can lower your credit score temporarily and may trigger fraud alerts from issuers.
- The best bonus for you depends on how you spend money — travel cards, cash-back cards, and points cards reward different purchases differently.
Where the highest bonuses are right now
The cards offering the largest sign-up bonuses change month to month, but certain categories consistently offer high rewards. Premium travel cards from American Express, Chase, and Capital One often lead with bonuses worth $300 to $500 in travel value. Business credit cards sometimes offer even higher bonuses — $500 to $750 — but require you to have a business tax ID or sole proprietorship. Cash-back cards typically offer smaller bonuses, usually $100 to $200, because the rewards structure is simpler.
You can find current offers by visiting the credit card websites directly — American Express, Chase, Capital One, Discover, and Citi all publish their current promotions on their homepage. You can also search comparison sites, though remember that those sites earn money when you click through and open a card, so they may highlight certain issuers over others. The issuer's own website is always the source of truth for the actual terms.
How to tell if a bonus is actually worth the annual fee
A $500 bonus sounds large until you subtract the annual fee. If the card charges $95 per year and the bonus is worth $500, your net gain is $405 — but only if you actually use the bonus and only in the first year. In year two, you pay the $95 fee again with no bonus, so you need to decide whether the card's ongoing rewards justify keeping it open.
The math works like this: take the bonus value, subtract the annual fee, then divide by the spending requirement. If a card offers 50,000 points (worth roughly $500 in travel value), charges $95 annually, and requires $3,000 in spending, you gain $405 on that $3,000 spend. That is a 13.5% return on your spending — which is genuinely good. But if you would not have spent that $3,000 anyway, you have not gained anything; you have just rearranged your budget.
After you receive the bonus, check the card's ongoing rewards rate. If it offers 2% cash back on all purchases and you spend $10,000 per year on the card, you earn $200 in rewards annually. That $200 must exceed the $95 fee for the card to stay worth your time. If it does not, close the card before the next annual fee hits.
Meeting the spending requirement without overspending
The spending requirement is where most people make a mistake. You should only open a card if you can meet the requirement with purchases you were already going to make — groceries, gas, insurance, utilities, rent if your landlord accepts cards. Do not buy things you do not need just to hit the threshold. That defeats the entire purpose of the bonus.
One legitimate way to meet requirements faster is to put a planned large purchase on the new card — a car repair, a home improvement project, or a medical bill you were going to pay anyway. Another is to ask family members if they want to pay you back for something they buy, then put that purchase on your card. Some people pay bills early or in advance to hit the requirement, though this only works if you have the cash on hand and are not carrying a balance.
Keep a calendar reminder for the important date. If the requirement is $3,000 in three months and you have only spent $1,500 with two weeks left, you will not make it. Missing the important date means no bonus, and you are left with an annual fee and a new card you may not need.
How opening a new card affects your credit score
When you open a credit card, two things happen to your credit score when ready. First, the issuer runs a hard inquiry — a check of your credit report — which typically lowers your score by 5 to 10 points. Second, your average account age drops because you now have a brand-new account mixed in with older ones. This can lower your score by another 10 to 20 points.
The good news is that both effects fade over time. The hard inquiry stops affecting your score after about three months and disappears from your report entirely after two years. The new account's impact on your average age shrinks as you keep the account open and as time passes. If you open one card every six to twelve months, the damage is usually minimal and temporary.
Opening three or four cards in a single month, however, can drop your score by 50 to 100 points and trigger fraud alerts from issuers. Banks see multiple new accounts in a short window as a red flag. If you want to chase multiple bonuses, space them out by at least two to three months.
Travel cards versus cash-back cards versus points cards
The type of bonus that makes sense depends on how you spend money. Travel cards give you points or miles that you redeem for flights, hotels, or other travel purchases. The bonus is often 50,000 to 100,000 miles, which sounds large but is worth less if you do not travel frequently or if you live far from major airports. Cash-back cards give you a percentage of your spending back as cash or a statement credit. The bonus is usually a flat $100 to $200 or a higher cash-back rate for the first few months. Points cards give you flexible points that you can use for travel, cash, or merchandise — they sit between the other two.
If you travel once or twice a year and book your own flights, a travel card bonus can be worth $300 to $500 in real value. If you never fly, that same bonus is worthless. If you spend most of your money on groceries and gas, a cash-back card that offers 3% back on groceries and 2% on gas will earn you more over time than a travel card you never use. Match the card type to your actual spending pattern, not to the size of the bonus.
What happens after you get the bonus
Once the bonus posts to your account — usually one to three months after you meet the spending requirement — you have a decision to make. If the card has an annual fee and the ongoing rewards do not justify keeping it, close the account or downgrade to a no-fee version of the same card if the issuer offers one. Closing the account will not hurt your credit score as much as you might think, especially if you have other accounts open.
If you keep the card, set a reminder for the annual fee date. Most issuers charge the fee on the anniversary of your account opening. If you decide you no longer want the card, call and ask to close it before that date hits. Some issuers will waive the fee if you ask, especially if you have been a customer for a while, but do not count on it.
Do not let a card sit unused just because you opened it for a bonus. Issuers can close inactive accounts after six to twelve months of no activity, and a closed account you did not request can hurt your credit score. If you want to keep the account open, use it once every few months — a small purchase is enough.
Frequently Asked Questions
Can I get a sign-up bonus if I already have a credit card from the same company?
Most issuers have rules about who can receive a bonus. Many require that you have not held a card from that issuer in the past 24 months. Some have stricter rules — American Express, for example, typically limits you to one bonus per card product per lifetime. Check the terms on the card's website before you open an account.
What if I cannot meet the spending requirement in time?
If you miss the important date, the bonus does not post. You are left with the annual fee and a card you may not need. You can close the account, but if you have already paid the annual fee, it is not refundable. This is why it is important to be realistic about the spending requirement before you open the card.
Do I have to pay interest on the bonus?
No. The bonus is a promotional offer from the issuer, not a loan. You do not owe interest on it. However, if you carry a balance on the card after the promotional period ends, you will pay interest on that balance at the card's regular rate, which is typically 18% to 25% APR.
How many sign-up bonuses can I get in a year?
There is no legal limit, but issuers have their own rules. You can typically open one card every two to three months without triggering fraud alerts. Opening more than that in a short window may cause issuers to deny your process or close your new account. Spacing applications out also gives your credit score time to recover between hard inquiries.
Should I close my old cards after I open a new one for the bonus?
No. Closing old accounts lowers your credit score by reducing your average account age and your total available credit. Keep old cards open, even if you do not use them. If you are worried about annual fees on old cards, downgrade them to no-fee versions instead of closing them.