As credit card sign-up bonuses soar to new heights, at least two things are true:
- It’s easier than ever to find valuable offers.
- It’s harder than ever to earn them.
Yes, 100,000-point sign-up bonuses are out there — but you might have to spend $4,000 in three months to earn one.
“The really lucrative bonuses that make all the headlines and get all the press are generally only available to a relatively small niche of customers,” says Edward Niestat, head of the comparative analytics and data business at Novantas, a financial services advisory firm.
Meanwhile, the smaller, easy-to-earn deals that flourished in the early 2000s have disappeared thanks to the 2008 financial crisis. But with some planning, you can still take advantage of today’s larger bonuses.
Sign-up bonuses: Before and after
Before the financial crisis, sign-up bonuses tended to be relatively small and easy to earn. Consider these three from 2006:
- 1,000 bonus points with your first card purchase
- 5,000 bonus miles upon approval
- 10,000 bonus miles with first purchase and payment
Compare those with a sampling of sign-up bonuses on cards today:
- 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening
- 40,000 miles once you spend $3,000 on purchases within 3 months of approval
- $100 after you spend at least $500 on purchases in the first 90 days of account opening
The difference is hard to miss. This dramatic change took shape during the financial crisis. Massive credit losses had prompted issuers to close accounts and lower credit limits. Banks failed. Consumer credit card spending plunged.
When it was over, the credit card companies that survived focused on the same goal: persuading cardholders with good credit and high incomes to loosen their purse strings.
“Card issuers … had to create new accounts to offset their lost accounts that they themselves caused and the economy caused,” says Robert Hammer, CEO of R.K. Hammer, a bank card advisory firm.