Credit card sign-up bonus or SUB is the most effective tool credit card issuers have in their toolbox to acquire quality customers, defined as people with FICO scores between 690 and above.

FICO is a scoring model by the Fair Isaac Corporation. It ranges from 300 to 850.

SUB is a significant percentage of credit card companies marketing budget.  Because generous welcome bonuses and cashback drive spending, card issuers will continue to offer them.

Credit card users have plenty of options.  There were a total of 1.18 billion credit cards in circulation in 2018, according to Wallet Hub.   The average American has 4 credit cards.

Credit card sign-up bonuses and cashback are significant deciding factors for new cardholders.

Credit Card Sign-up Bonus & Cashback & Frivolous spending 

Welcome bonuses, cash and travel rewards, 0% introductory APR are the best perks credit issuers offer their cardholders.  Chiefs amongst them are welcome bonuses and cashback.

Credit card issuers know that cardholders love welcome bonuses, and they tend to spend frivolously to qualify for them.  

All rewards bonuses, cash, points, or miles, require the cardholder to spend a certain amount of money on or before a specific date to qualify for them.

For instance, American Express has two of the best credit cards that offer generous welcome bonuses right now.

The Platinum Card and Blue Cash Preferred Card offer 100,000 membership rewards points after spending $6,000 and a $300 statement credit after spending $3,000 in purchases on the new card within the first six months, respectively.

Both cards come with a very high spending threshold to get the rewards.  Nearly all credit cards with great rewards require a high spending threshold.

How to Get the Best Out SUB

To get the best out of credit card sign-up bonuses, you have to control your spending. The best way to do that is to work on a personal financial budget that will detail cash inflows and outflows.

A credit cardholder who masters her finances is in the best position to get the best out of SUB because she swipes her card for things she needs–groceries, utilities, and medical bills, and more.

Some cardholders collect cash and pay the tab when hanging out with friends and families.  They also use their card to pay for business travels and other office expenses and submit an expense report to their employer. 

Try to apply and use one credit card at a time. Since you have already spent time working on your financial budget, you should know how long it would take to meet the spending threshold to qualify for the credit card welcome rewards.

Bottom Line

The bottom line is that sign-up cash, points, and travel bonuses cost credit card issuers billions of dollars, but they still earned $176 billion in income in 2020.  

They are betting on new cardholders’ inability to control their spending.  If you want to get the best Out SUB, you have to prove the industry wrong.