Best Credit Card Bonuses for New Cardholders of December 2024

How do credit card sign-up bonuses work?

Credit card issuers use sign-up bonuses to encourage people to apply for a card and then, once approved, get in the habit of using it. The term "sign-up bonus" is a bit of a misnomer because in most cases, you don't get a bonus simply for signing up. You earn it by putting a certain amount of spending on your card in the first few months. That's why some issuers use a term like "welcome offer" or "new cardholder offer" rather than "sign-up bonus."

With a typical sign-up bonus, the time frame for earning the bonus is usually three to six months. The clock starts when you're approved for the card. The more valuable the bonus, the more you'll usually have to spend during that time in order to earn it. For example, a cash back card might offer a bonus of $150 to $200; to earn it, you might have to spend $500 or $1,000. A travel or airline credit card might offer points or miles worth $750 or even $1,000 but will require spending of $3,000 or more. Sign-up bonuses are typically all or nothing — you either spend enough to earn the bonus, or you don't. You won't get half the bonus for spending half the required amount.

Once you hit the required spending amount, you'll get your bonus. With some cash-back cards, the bonus might immediately appear as a credit against purchases on your monthly statement. In most cases, though, the bonus shows up in your rewards balance, alongside the points, miles or cash back you earn from your spending. You can then redeem your bonus however and whenever you want.

Credit card companies usually set rules about what kind of spending counts toward earning the sign-up bonus. Purchases of goods and services will count. Balance transfers, cash advances and wire transfers will not, nor will purchases of cash equivalents like gift cards, money orders or casino chips. In other words, you can't earn a sign-up bonus by "buying money" and then paying off your balance with that money.

What credit card has the best sign-up bonus?

The "best" offer for new cardholders is a moving target for a couple of reasons.

First, bonuses are paid in different kinds of "currency" — cash, statement credits, frequent flyer miles, hotel points and more. That makes it hard to compare bonus values directly. Second, credit card issuers frequently roll out special offers. A card that usually dangles 50,000 points or miles as a bonus might kick that up to 75,000 or 100,000 for a limited time to try to entice people to apply. Targeted offers — that is, those sent out to select consumers rather than advertised to the public at large — can be even more lucrative.

That said, here are some things to keep in mind about bonus offers:

• Travel credit cards tend to offer bigger bonuses than cash back credit cards. Bonus offers on most cash back cards top out at around $200. Travel cards can have bonuses worth $500 or more. However, travel card bonuses come as points or miles that might not be as easy to redeem as $200 in cash.

• Cards with annual fees tend to offer bigger bonuses. When a card charges an annual fee, the issuer knows it needs to sweeten the offer to get you to choose that card over one that charges nothing. So annual-fee cards pay richer rewards, provide better perks — and carry bigger bonuses. For example, the popular Capital One Venture Rewards Credit Card charges a $95 annual fee (see rates and fees) and has this offer: Enjoy a one-time bonus of 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 in travel. The Capital One VentureOne Rewards Credit Card - Miles Boost, on the other hand, has a lower offer: Earn a bonus of 40,000 miles once you spend $1,000 on purchases within 3 months from account opening, equal to $400 in travel. But in exchange, it has a $0 annual fee (see rates and fees).

• Points and miles are not all created equal. A bonus of 40,000 miles on a Delta Air Lines credit card has a different value from a bonus of 40,000 miles on a Southwest Airlines card. And 50,000 Chase Ultimate Rewards® points are worth more (much more) than 50,000 Hilton Honors points. Apples-to-apples comparisons are difficult with points and miles because they aren't portable like cash — you can only use them in the ways allowed by the program that awarded them. See our page on point and mile values for more information.

At NerdWallet, we often say that there is no single "best" credit card — just the best card for you. It's the same with bonus offers. The best sign-up bonus is the one that is of greatest value to you.

How many credit card sign-up bonuses can I earn?

There's no overall limit to how many times you can earn credit card sign-up bonuses. However, individual card issuers may have rules in place to keep you from earning a bonus on a particular card or "family" of cards more than once. The idea behind such rules is to keep people from applying for the card, earning the bonus, canceling or downgrading the card, then applying anew and earning another bonus. Read the terms and conditions of any bonus offer to see what restrictions are in place.

What credit card sign-up bonuses are the easiest to get?

Generally speaking, cash back credit cards have lower spending requirements for earning their bonuses. Depending on the card, you might be able to snag a bonus of $150 or $200 by spending as little a $500.

Is a credit card bonus taxable income?

Legally speaking, credit card rewards — including bonuses — are not income. Instead, the IRS considers them a discount or rebate on purchases made with the card. Therefore, they're not taxable.

This tax treatment is an additional reason why credit card bonuses must be earned through spending, and why the required spending amount is larger than the bonus itself. If you spend $1,000 and get a bonus of $150 for doing so, you don't "come out ahead" — you've still made $850 in net purchases. You've saved some money, but you haven't made any money.

Contrast this with the bonuses you can sometimes earn for opening a checking or savings account at a particular bank. With these promotions, you do come out ahead. Follow the bank's rules (which usually involve depositing a certain amount and/or setting up direct deposit, among other things), and you get "free money." As such, it's usually taxable as interest.

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To view rates and fees of the American Express® Gold Card, see this page. To view rates and fees of the Delta SkyMiles® Gold American Express Card, see this page.