3 Times You Should Pass Up a Big Credit Card Offer

If you haven't checked credit card bonuses in a while, you better hold on to the edge of your seat. Even the most basic welcome offers are averaging $200 to $300 a pop, with the more luxurious cards boasting bonuses above $1,000. Unlike bank bonuses, this money comes to you tax-free, too, helping you keep more of your earnings in your pocket.

But for all their value, credit card bonuses aren't for everyone. After all, bonuses are basically bait on a hook, designed to reel you toward a new credit card company. While they can be useful in moderation, here are three times you're better off passing up the big offer.

1. You're in credit card debt

If you're in credit card debt, it's probably best to stay away from credit cards -- both the ones you have and any new ones. The thing is, credit cards have astronomical interest rates, which can trap you in a spiral of debt that grows at a faster rate than you can pay it off.

If anything, you might want a balance transfer credit card with a 0% APR. This would reduce your interest payment to zero, thus helping you pay off your balance faster. Just be careful: Many of these cards will charge a balance transfer fee of 3% to 5% of the amount transferred. As long as the fee is cheaper than the interest you'll end up paying, the transfer would be worth it.

2. The credit card doesn't suit you

When you're picking a new credit card, bonuses are meant to be a nice addition to other features, like the card's rewards program, travel perks, and built-in insurance. But if you choose a card based on bonus alone, you might be stuck with a credit card that doesn't offer much value once the bonus is earned.

For example, some of the best welcome offers are found on travel credit cards. These cards are designed to turn your everyday spending into points or miles redeemable for travel. And while many of these cards earn a decent amount of rewards for everyday purchases, you're not going to get much value if you don't travel frequently. Instead, you might get more value by getting a cash back card that will reward you for your biggest spending category, like groceries and gas.

It's best to consider all aspects of a credit card, not just the welcome offer. After all, you'll authorize a hard inquiry on your credit report when you apply, which will stay on your report for two years. You don't want to risk hurting your credit score for a credit card you're not actually going to use.

3. You're trying to save money

Most credit card bonuses have spending criteria that must be met within a tight timeframe before they're dished out. On the lower end, you might be required to spend $500 within three months. For more luxurious bonuses, you could be asked to spend between $6,000 and $8,000 within the same period.

This might be fine if you're planning a large purchase. But if you're trying to pad your savings account, credit card bonuses can be counterproductive. This is especially true if the spending threshold is outside your normal monthly expenses. You might end up spending more than normal just to snag the bonus, which might defeat the purpose of getting the bonus in the first place.

Of course, I wouldn't say you should always avoid credit card bonuses when you're trying to save money, especially if the card will end up rewarding you for purchases you're already making. But if any of the above scenarios apply to you, you might be better off passing up the big credit card offer.