Best Credit Card Sign-Up Bonuses

People who have good to excellent credit scores can cash in on sign-up bonuses valued at hundreds of dollars just for opening a new credit card account and using it for purchases. In a competitive card market, many of the best credit cards are paying out some of the largest sign-up bonuses in recent memory.

In this new “golden age” for credit card rewards, sign-up bonuses remain one of the best ways to get a fast start toward earning high rewards. You can think of a sign-up bonus as a way to earn elevated rewards shortly after opening a new credit card account.

Big dollar bonuses, the quality of the cards rewards program, justifiable fees, and promotional APR offers are all major ranking factors for inclusion on this list. What’s also important are both the absolute size of the bonus and the spending requirement to qualify. It’s common for no-annual-fee cards to include cash bonuses ranging from $150 to $200 when spending $500 to $1,000 within three months. Cards with annual fees should generally offer a bonus valued at $500 or higher, with most requiring $3,000 to $4,000 in spending within three months to qualify. Our picks either match or beat these ranges, while also delivering in other important categories outlined above.

A credit card sign-up bonus is a financial incentive you receive for opening a new credit card account and using it for a certain amount of spending shortly after account opening. A typical sign-up bonus might offer cardholders $150 in cash after spending at least $500 in the first 90 days after account opening.

Credit cards with the best sign-up bonus opportunities generally carry an annual fee and require more spending to qualify. For example, the best card on the market currently offers $750 in sign-up bonus travel value, though it carries an annual fee and requires $4,000 of spending in the first three months after account opening. In contrast, no-annual-fee credit cards offer sign-up bonuses worth $150 or $200 and typically require only $500 to $1,000 in spending in the first three months after account opening.

We tend to think that new cardholder bonuses can be divided into two categories. There are what we call “front-loaded bonuses,” which offer a certain amount of rewards for meeting a minimum spend, and “back-loaded bonuses,” which pay bonuses based on your spending over longer periods of time.

The financial value of a sign-up bonus may not be as obvious as it appears, particularly if the sign-up bonus is denominated in “points” or “miles” rather than cash because the value of a point or mile may vary based on the redemption method.

Chase Sapphire Preferred® Card and Capital One® Venture® Rewards Credit Card offer sign-up bonuses of 50,000 points or miles, respectively. That said, though the numbers look similar, the actual value of the sign-up bonus varies greatly when these rewards are redeemed for travel.

The largest sign-up bonuses are typically offered by credit cards that have annual fees and large minimum spending requirements to get the bonus. For example, Chase Sapphire Preferred® offers a new cardholder bonus worth $625 in travel or $500 in cash, but it carries an annual fee of $95, which is waived in the first year. In contrast, the Bank of America® Cash Rewards credit card includes a $150 cash-rewards bonus, but it doesn’t carry an annual fee.

The Chase card requires $4,000 of spending in the first three months to qualify for the sign-up bonus, whereas the Bank of America card only requires $500 in spending in the first three months.

Some higher spenders and frequent travelers may be better off with the Chase Sapphire Preferred®, but people who have lower spending needs may be better off with the Bank of America® Cash Rewards credit card because it has a lower spending requirement for the bonus and no annual fee.

If you intend to carry a card for the long haul, then it would be wise to consider the cost of the annual fee when making a decision on which card is best. We tend to think the best way to look at annual fees is to consider them as a fee you pay for an increased rewards rate on your spending.

Capital One® Venture® Rewards Credit Card offers two miles per $1 of spending, which equates to a rewards yield of 2% when miles are redeemed for travel. In contrast, Capital One® VentureOne® Rewards Credit Card offers 1.25 miles per $1 spent, equating to a rewards yield of 1.25% on all purchases when rewards are redeemed for travel.

Capital One® Venture® Rewards Credit Card is a better card if you spend more than $12,667, the point at which the increased rewards yield covers the $95 annual fee ($95 divided by 0.75% = $12,667). This is a simple calculation that can be done as you narrow your choices to two or three cards to figure out which card offers the best long-term value.