What is Credit Card Bonus?
Credit card bonus is something offered by credit card companies to you if you get a new credit card from them and spend certain amount of money on the card. Credit card companies offer bonus to attract people because they want people to have and use their credit cards (And the reason they want this is because they make profit by charging a fee to merchants, and also possibly charging interest on your balance).
What is Cash Back or Points Back?
When you spend money on credit cards, credit card companies offer cash (or point) to you, as a way to stimulate you to use their card. Industry standard is 1% cash back or 1 points back for each dollar.
Types of Bonus / Points?
Different credit cards earn you different types of bonus as following:
- Cash. Easiest to understand.
- Airline Miles. Also known as frequent flyer miles, airline miles are part of a loyalty program offered by airlines and/or credit cards. Typically, you accumulate a set amount of miles based on how far you fly and/or how much you spend on your credit card. You can then use these miles to buy tickets. In most optimized scenario, each mile worths 1.3 – 1.8 cents, for most airlines.
- Hotel Rewards. Similar to airline miles, but offered by hotels, hotel rewards is accumulated by your stays at hotel and/or your spending on your credit card. They can be used to stay at hotel. Value of different types of hotel rewards varies a lot. In optimized cases, SPG worths 1.5-2 cents each point. Marriott worths 0.5-0.6 cents each point.
- Points managed by credit card company, such as AMEX Membership Rewards, Citi Thankyou Points, Chase Ultimate Rewards. They could be used to purchase merchandise, sometime to book flight directly, and to transfer to airline miles. Usually transferring to airline miles can maximize the value of the rewards. Any of the above three rewards worths at least 1.3 cents/point.
How does It Work?
- Apply for a credit card listed here. Capture screen-shot of the active offer for potential future use.
- Spend particular amount of money on the credit card in certain time, as required by the offer.
- Credit card bonus will be deposited into your account automatically. In rare case it is not, call credit card company to resolve.
There are not catches but do need you to pay attention to:
- You must have good to excellent credit score/history to get approved for credit cards
- Most bonus come with condition: you must spend certain amount of money within certain time. Spend in smart way.
- If you have taken an offer before, you can’t take exactly same offer within certain time, for example 2 years for some cards, lifetime for AMEX.