Don't Make This Credit Card Sign-Up Bonus Mistake or It Could Cost You

There are lots of good reasons to sign up for a new credit card, including finding a card offering generous rewards or cardmember perks you're excited about. However, one of the biggest benefits of getting a brand new card is that many card companies offer generous sign-up bonuses to new customers.

For example, if you sign up for the Chase Freedom Flex℠, as of mid-February 2024, you can become eligible for a $200 bonus if you spend $500 within the first 3 months of opening an account. You're eligible for the bonus as long as you aren't already a current cardmember and didn't already receive a sign-up bonus for the card in the prior two years.

Or if you sign up for the Capital One VentureOne Rewards Credit Card, you could earn 20,000 Miles after spending $500 within the first 3 months of account opening (see rates and fees).

The cardmember perks that many rewards cards offer can be pretty valuable. But if you're trying to earn a bonus, it's very important to avoid this common mistake.

Pay attention to your bonus earning deadline

When you're trying to earn a new cardmember bonus, you absolutely cannot afford to cut it too close when it comes to hitting your spending target. Basically, this means you want to avoid trying to spend exactly the desired amount, and you also don't want to wait until the very last minute before the deadline to hit your spending target.

Cutting it too close could mean that if something goes wrong, you end up forfeiting the entire bonus. Card issuers don't give you part of the money promised if you come close. If you had to spend $500 and you spent $499, you are not going to get those points, miles, or cash back that you were counting on.

Since things can happen, like charges not clearing exactly when you expect or returns processing at odd times, you don't want to take the chance of missing your target and losing out on the extra rewards. That's especially true since some card companies limit how often you can open new cards and qualify for bonuses. Plus, it's not good for your credit score to just open new cards all the time.

So if you make a mistake and lose out on an offer, it could be a while before you're able to try for another one. In the meantime, the cash, miles, or points you could have earned would just have been wasted.

Be sure to understand the rules for a sign-up bonus before you apply for the card

While you don't want to cut it too close on hitting your spending targets, you also don't want to charge purchases just for the sake of qualifying for a new cardmember bonus. After all, spending money unnecessarily to try to make some of it back makes very little sense.

That's why it's so important to understand the terms of a bonus offer before you sign up. While getting $500 back on one card instead of $200 on another may seem like a better deal, for example, that's not the case if the $500 offer requires you to spend more than you usually would during the three-month period you have to meet your target.

By carefully reading the fine print, you can decide if a bonus offer makes sense for your situation. And if it doesn't, you may want to explore other cards that offer you a bonus you can earn -- as long as those cards also offer all of the other features and benefits you were looking for when you decided to open the account in the first place.