credit card sign up bonus
A reward of points, miles, or cash back earned by meeting a spending requirement after opening a new credit card.
Example
“The credit card sign up bonus of 80,000 points was worth $800 after meeting the spending requirement.”
Memory Tip
BONUS — valuable when you were already going to spend the money. Not worth debt.
Why It Matters
Credit card sign up bonuses can provide significant value when you are planning to make major purchases anyway, potentially saving you hundreds of dollars in rewards. Understanding how to maximize these bonuses helps you build wealth through strategic spending and rewards accumulation, making it an important consideration when choosing between different credit cards.
Common Misconception
Many people assume that sign up bonuses are free money with no strings attached, but they typically require you to spend a specific amount within a time frame to qualify. Spending money you would not otherwise spend just to earn the bonus can leave you with debt and interest charges that far exceed the reward value.
In Practice
You open a new credit card offering 75,000 bonus miles after spending 5,000 dollars in the first three months. If you were already planning to spend 5,000 dollars on regular purchases during that period, you earn the miles essentially for free, which could be worth 750 to 1,500 dollars in travel value depending on how you redeem them.
Etymology
Modern credit card marketing term — incentives for new cardholders.
Common Misspellings
Check your credit score free — no impact
Related Terms
More in credit
Other credit terms you should know
See Also
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