What Are Bonus Points Offers on Rewards Credit Cards?
Published on 1/3/2025
Welcome to my rewards credit card series! In this post, I'm focusing on bonus points offers—a key feature that makes many rewards credit cards so appealing. I'll explain what they are, how they work, and what to think about before applying for a card with a bonus points offer.
What Is a Bonus Points Offer?
A bonus points offer is an incentive offered by credit card providers to attract new customers. These offers usually come in the form of frequent flyer points, reward points or cashback, which you can earn by meeting specific spending requirements within the first few months of getting the card.
For example:
- Points Offer: Earn 50,000 points after spending $3,000 in the first three months.
- Cashback Offer: Receive $200 cashback for spending $1,500 in the first two months.
How Do Bonus Points Offers Work?
Here's a simple breakdown of how bonus points offers typically work:
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Meeting the Spending Requirement
To qualify for the bonus, you'll need to spend a certain amount (e.g., $3,000) within a set period (e.g., 90 days) after being approved for the card. It's important to understand your usual spending habits to ensure this is realistic without overspending. -
Receiving the Bonus
The timing of when you receive your bonus can vary significantly between credit card providers. You might:- Receive the bonus immediately after meeting the spending requirement
- See the bonus credited on your next monthly statement
- Have the bonus applied several months after qualifying
It's crucial to carefully read the specific terms of your card's bonus points offer to understand exactly when and how you'll receive your points.
-
Using the Bonus
You can redeem your bonus just like regular rewards. Popular options include flights, hotel stays, gift cards, or cashback. Some programs also let you transfer points to other loyalty programs for added flexibility.
Things to Consider Before Applying for a Bonus Points Offer
While bonus points offers can be a great way to kick-start your rewards, they're not for everyone. Here are some important factors to keep in mind:
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Spending Requirements
Make sure the spending threshold aligns with your usual budget. If you typically spend $1,000 a month, meeting a $3,000 requirement in 90 days might not be feasible without overspending. -
Annual Fees
Many cards with generous bonus points offers also have higher annual fees. Check whether the bonus and other rewards outweigh these costs. -
Interest Rates
Rewards cards often have higher interest rates. If you can't pay off your balance in full each month, the interest charges could offset the value of the bonus points offer. -
Bonus Restrictions
Read the fine print. Some cards exclude certain types of spending (e.g., utility bills or cash advances) from counting toward the bonus points offer requirement. -
Long-Term Value
While the bonus points offer is attractive, make sure the card fits your long-term spending habits. A card with ongoing rewards that match your lifestyle will offer more value over time.
Are Bonus Points Offers Worth It?
If you can meet the spending requirements without going beyond your usual budget and pay off your balance in full each month, bonus points offers can be a fantastic way to earn rewards quickly.
For example:
- Use a card with a bonus points offer for planned expenses like a holiday or large purchases.
- Combine the bonus with ongoing rewards to maximize value.
However, if the spending threshold feels like a stretch or you tend to carry a balance, the costs might outweigh the benefits.
Final Thoughts
Bonus points offers can be a great way to make the most of a new rewards credit card, but they're not the only factor to consider. Always weigh the bonus against the card's fees, interest rates, and your spending habits to decide if it's the right fit for you.
Stay tuned for the next post in this series, where I'll explore how to redeem rewards for maximum value!
