What is a credit card welcome offer?

A credit card sign-up bonus, or welcome offer, is a bonus that card issuers provide to eligible new cardholders if they meet certain requirements. The most common requirement is to spend a certain amount on your new card within the first few months of card membership.

Credit card companies offer welcome bonuses as a reward for new customers using their cards. Most welcome offers require spending to earn the bonus. For example, you might have to spend $4,000 in the first three months of opening the account to earn 60,000 points with a travel credit card.

Many cash-back credit cards have lower spending requirements and lower bonuses. For instance, you may only have to spend $500 in the first three months to earn a $200 bonus.

They’re well worth it if you can earn them on purchases you were already planning to make. That could mean buying groceries and gas or paying for utilities. It may also make sense to align signing up for a credit card with a welcome offer if you have an upcoming large purchase.

Credit card welcome bonuses likely aren’t worth it if you feel pressured to spend more money than you usually would to earn the rewards.

You can earn as many sign-up bonuses as you qualify for. Keep in mind that you typically can’t earn a second welcome bonus on a card you already have. Many card issuers also limit how often you can earn a welcome bonus on a card you’ve had in the past. It’s common to wait 24 to 48 months to be eligible for another sign-up bonus.

Consider these factors before applying for a credit card with a welcome offer:

• Minimum spending requirement: Determine how much you need to spend and see if that’s feasible with your everyday expenses.

• Timeframe: The timeframe for welcome offer spending requirements often starts once you’re approved for a card. Ensure you can finish the spending — including having your purchases post to your account — during the specified period.

• Type of reward: The reward for earning a welcome bonus typically consists of cash back, points, or miles. Consider whether you prefer earning cash back or travel rewards and how you plan to use your rewards.

• Eligibility: Different credit cards have different credit score and eligibility criteria, so it’s important to research the terms and conditions of a welcome offer before applying.

• Other offers: It doesn’t hurt to compare welcome bonus offers on different cards, including those from competing credit card issuers. If two cards have similar rewards rates and benefits, the deciding factor for which card is better for you could lie in the welcome bonus.

• Ongoing value: A new credit card offer can provide plenty of value in your first year of card membership, but it makes sense to consider other factors to determine if a card is worth keeping for the long run. These factors could include card perks and benefits, bonus points in different spending categories, annual fees, redemption options, balance transfer offers, and more.

Limited time: Limited-time welcome offers sometimes exist where new cardmembers can earn more miles or cash rewards than a typical bonus. Many major credit card companies, including Chase, Capital One, Citi, and American Express, frequently offer limited-time bonuses.

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