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How Do Credit Card Welcome Bonuses Work?

As long as you can easily meet the spending requirements, a welcome bonus can add extra value to your credit card.

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A welcome bonus, or intro offer, provides extra rewards, cash-back and other offers to new cardholders. While most welcome offers require you to spend a certain amount within a given timeframe, some offer instant bonuses upon approval, while others may offer bonus rewards on each dollar you spend. How much they need to spend and the number of months they have to do it varies by card, but welcome bonuses can be a great way to earn extra rewards.

Welcome bonuses can also be called welcome offers or sign-up bonuses. They’re a one-time offer, and just one of the potential benefits of using a credit card.

What is a welcome bonus?

A welcome bonus is an incentive offered by credit card issuers to get you to spend money using your new credit card. They’re typically earned in whichever form of rewards the card offers -- miles, points or cash back -- and can generally only be earned by reaching a specified spending threshold within the given timeframe. Not all credit cards offer welcome bonuses. For instance, balance transfer credit cards, credit-building credit cards and introductory APR credit cards may not feature any bonuses.

Most credit cards offer anywhere from three to 12 months to reach the qualifying spend requirement, while the bonuses themselves could range from $200 on a cash-back credit card to 100,000 miles on a travel card.

Travel credit cards typically offer larger welcome bonuses but require more spending, while rewards credit cards offer lower bonuses yet don’t require as much spending to reach. And while most credit cards do require a minimum spending threshold to unlock a welcome bonus, there are exceptions to the rule. 

If you do earn a welcome bonus, different credit card issuers deliver your bonus within different timeframes. For example, American Express says its welcome offers will be delivered within eight to 12 weeks after you meet the spending threshold.

How to earn a welcome bonus

While a welcome bonus is meant to incentivize you to spend with your new card, you don’t want to overspend to earn this bonus. Otherwise, you may find the bonus is overshadowed by interest. The best welcome bonuses should be easy for you to achieve through normal or strategic spending, and not by spending outside your budget. 

Follow these steps to earn your card’s welcome bonus:

1. Qualify for a credit card with a welcome bonus
2. Use the card strategically, being careful to stay within your budget
3. Pay off your balance in full
4. Redeem the welcome bonus in the most lucrative way

A good way to earn a welcome bonus on a travel card is by using the credit card to fund a planned trip. If you have a new rewards credit card, and have been planning to buy a new appliance or piece of furniture, perhaps now is a good time to do so. Some credit cards even feature introductory 0% APRs to help avoid interest.

How to get the most out of your welcome bonus

Some welcome bonuses are earned simply as a statement credit, which means the rewards you earn are automatically added to your credit card account, lowering your overall balance. But for welcome bonuses earned as points or miles, how you choose to redeem them will impact the overall value you get from the bonus. 

For example, certain credit cards offer different valuations depending on how you redeem your rewards. In general, redeeming rewards for statement credits or a direct deposit into your bank account will typically net you 1 cent per point. Redeeming rewards for gift cards or other retail incentives may be convenient, but could net you less than 1 cent per point, with some exceptions. 

Most of the time redeeming your rewards for travel -- particularly from an issuer’s travel portal -- earns you the most value for your rewards. Other cards may even offer a bonus for redeeming points in a certain way.

Welcome bonus caveats

While it can be tempting, you shouldn’t apply for a credit card simply for its welcome bonus. It’s important to consider the card’s other features too. Long-term value is always the best option over short-term gains.

Another important factor to consider is paying off the credit card balance as quickly as possible once you’ve obtained the welcome bonus. Carrying a large balance month to month will have you accumulating interest charges which could quickly eliminate any value gained from the welcome bonus. 

Also, consider the credit card’s annual fee. While a welcome bonus may help cover the first year’s annual fee, if you’re paying more for the card than you’re receiving back from it in rewards, it might not be the best card for you.

When is a welcome bonus worth it?

A welcome bonus is worth it whenever you can reach it through your normal spending. If you start to make unnecessary purchases to get to the spending threshold, it’ll cut into any value you’d get from the bonus.

If the card has an annual fee, the welcome bonus would likely be worth it if it can cover the fee for a number of years. But again, don’t rely solely on the bonus to take care of the fee. You’ll have to deal with it from your own finances eventually.

The bottom line

A credit card’s welcome bonus can be a great way to earn extra value, but it’s important not to be influenced by flashy offers. Instead, focus on finding a card that best compliments your spending habits to bring the best value to your wallet. 


Once you get your welcome bonus, review your redemption options to ensure you get the most  value out of your rewards. With travel cards that usually translates to transferring points to hotel or airline partners, or using the points to fund your travels. For rewards cards, statement credits are usually the way to go.


Remember to consider whether or not the credit card has lasting value once you earn the welcome bonus. Credit cards are better suited to longevity rather than short-term gains, and paying off the balance as soon as possible is the best way to avoid interest charges.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

Evan Zimmer has been writing about finance for years. After graduating with a journalism degree from SUNY Oswego, he wrote credit card content for Credit Card Insider (now Money Tips) before moving to ZDNET Finance to cover credit card, banking and blockchain news. He currently works with CNET Money to bring readers the most accurate and up-to-date financial information. Otherwise, you can find him reading, rock climbing, snowboarding and enjoying the outdoors.
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