3 Things That Don't Count Toward Credit Card Sign-Up Bonuses

by Maurie Backman | Published on Aug. 28, 2021

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Be careful when chasing sign-up bonuses. Some transactions may not count.

One of the biggest perks of using credit cards is getting to take advantage of sign-up bonuses. Sign-up bonuses can vary from card to card, and some are more generous than others. But all told, sign-up bonus credit cards work the same way. If you spend a certain amount of money on your new credit card within a preset time frame, you'll get a lump sum of cash back or rewards points in exchange.

For example, a given card may come with an offer of $200 cash back for spending $500 within three months of opening your account. Another card might offer $500 cash back for spending $3,000 within that same time period.

The great thing about sign-up bonuses is that you might manage to meet your spending threshold easily, scoring yourself extra money without breaking a sweat. In other cases, you may need to plan and spend strategically to snag a sign-up bonus.

Say you normally spend $700 a month on your credit cards but you're aiming to score a $500 bonus for spending $3,000 within three months. That's $900 more than what you'd usually spend. In that case, you may want to bundle some upcoming purchases to score that bonus rather than spreading them out. For example, buy some of your holiday gifts in advance or purchase a few furniture items at the same time rather than buying one item every few months.

But before you go chasing after that bonus, it's important to read any sign-up bonus fine print. The reason? Some transactions don't count toward the spending requirement needed to score the cash back or extra points. The following items generally do not count toward sign-up bonuses.

1. Refunded purchases

If you buy an item using a credit card and return it, that purchase won't count toward your spending minimum. Or, to put it another way, if you're thinking you'll just walk into a retailer, rack up a large tab, snag your bonus, and then return everything after your bonus comes through, you'll be out of luck. In fact, in that situation, your credit card company can take back your sign-up bonus even after it's been issued.

2. Cash advances

Some credit cards give you the option to get a cash advance when you need money. But if you're thinking that's an easy way to snag a sign-up bonus, think again. Credit card cash advances aren't considered purchases. As such, they don't count toward your spending threshold. They're also a very costly way to borrow because you might pay a higher interest rate on cash advances than you would for other purchases.

3. Balance transfers

Transferring a balance from one credit card to another could save you money if your new card comes with a lower interest rate. But just as cash advances aren't considered purchases, the same holds true for balance transfers. So if you're planning to move forward with one, you should know that it generally won't count toward your spending requirement.

Don't miss out on that bonus

Sign-up bonuses can put a lot of money in your pocket, but it's important to understand the rules involved. Before you apply for any card with the intention of snagging a sign-up bonus, find out about the requirements so there are no surprises.

And be careful when chasing sign-up bonuses in general. While they can be very rewarding, they can also tempt you to spend money you otherwise wouldn't. And that's a good way to put yourself in a worse financial situation rather than a better one.

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