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Thursday, April 24th 2014

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CreditCards.com survey: Sign-up bonus offers abound -- with a hitch

Card issuers still laying on the rewards, but consumers have to work for them

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If you have good credit and are in the market for a new credit card, card issuers are laying out long promotional rates and rich sign-up bonuses to reel in desired customers, according to a CreditCards.com survey. But the offers are becoming increasingly difficult to find and harder to get.

While only 20 percent of credit card offers contained sign-up bonuses in the first quarter of 2008, more than 60 percent included them by the end of 2011, according to Ipsos Loyalty's direct mail tracker Mail Monitor. However, the first quarter of 2012 saw a noticeable drop, when only 45 percent of offers contained sign-up bonuses, says Roy Persson, director of Competitive Tracking Services for Mail Monitor. "There are signs that we've kind of hit our high point," Persson says.

Though there may be fewer offers, the ones that exist continue to be generous. The Priority Club Select card from Chase recently announced that the sign-up bonus for its Visa Signature card had risen to 60,000 points (after your first purchase with the card). Another attractive offer targets jetsetters, as Southwest Airlines recently introduced a sign-up bonus of 50,000 miles for new users of its Rapid Rewards Plus card (after spending $1,000 in the first three months).  But card issuers aren't giving consumers something for nothing, as more and more offers are contingent upon consumers spending sometimes massive amounts of money on the card.

Plus, extremely generous bonus offers are subject to change at a moment's notice, and not all of them are readily advertised to the public (meaning you may have to have insider knowledge and jump through a few hoops to get the bonus).

Sign-up bonus offers still abound with a hitch

CreditCards.com survey
Out of the 102 cards CreditCards.com compared, here is what we found:

  • 53 offer a teaser rate.
  • Of those, an overwhelming majority -- 49 cards -- offer 0 percent interest rates, while the others offer promotional rates ranging from a 3.9 percent rate by JetBlue Card from American Express to a 5.9 percent rate from the Wells Fargo Cash Back College card.
  • The length of promotions is most frequently six months, with 24 cards giving cardholders a break on interest charges for that amount of time.
  • However, 13 cards offer a 12-month promotional rate, eight offer a 15-month rate and three offer between 18 months and 36 months of little or no interest.
  • 50 cards surveyed offer sign-up bonuses, with 23 of them issuing points.
  • 10,000 points is the most common bonus offer.
  • But four cards, including the Hilton HHonors Card from American Express,  Citi Hilton HHonors Visa Signature Card from Citibank, the U.S. Airways Premier World MasterCard and the United Mileage Plus Explorer card offer customers 40,000 points for their business.
  • 10 cards geared specifically toward travelers offer miles as a sign-up bonus, with most in the 20,000 to 30,000-mile range.
  • 25 cards were particularly generous, offering both promotional rates and sign-up bonuses.

Not surprisingly, annual fees appeared more on credit cards offering sign-up bonuses than promotional rates. Of the 26 cards with annual fees, only six offered promotional rates, while 17 offered sign-up bonuses. However, nine of the cards with annual fees -- several of which were secured credit cards geared toward people rebuilding credit -- offered neither promotional rates nor sign-up bonuses.

Offers come with a catch
Since card issuers made it through the recession of 2008, they've been steadily looking to rebuild their customer bases with low-risk consumers. "The most valuable customers are always the high income, high spend, high usage people," says Lisa Hronek, senior research analyst for Mintel Comperemedia.

But issuers aren't just satisfied with getting customers to sign up. Their ideal goal is to become "top of wallet," or the customer's most used credit card, Hronek says. To achieve this, many issuers are developing promotions that reward new customers after frequent use of the card during a designated period of time. For example, the Blue Cash Everyday Card from American Express offers users a $100 cashback sign-up bonus only after they've spent $1,000 within the first three months of card membership. Likewise, the Chase Business INK card offers users 10,000 bonus points after their first purchase and an additional 15,000 points if they spend $5,000 or more in the first three months. Such promotions may prevent consumers from signing on to a card to take advantage of an offer and then discarding it or failing to use it. "Issuers are making strides to not just get the consumer, but to keep the consumer," Hronek says.

Issuers are also becoming more selective about who gets such offers. One reason for the decline in sign-up bonus offers this year is that several issuers are sending fewer direct mail solicitations overall, Persson says. Another reason is the economic and political climate. "Consumers are spending less, banks are spending less and government is spending less," Persson says. Finally, as issuers move beyond the most desirable customers to target those with some credit blemishes, "there's no need to incentivize this group as much because they don't have the perfect credit score," Persson says.

Consumer beware
While promotional rates and sign-up bonuses may be tempting, "it doesn't always make sense to switch cards because of a fun little offer," says Katie Ross, education and development manager for American Consumer Credit Counseling. Whenever you apply for or open a new credit card, it can cause your credit score to drop slightly. Plus, if you're not disciplined enough to pay off your entire balance each month, the interest you pay will quickly eat into any promotional value.

Also determine whether the promotion or sign-up bonus will improve your overall financial life. For example, when Simone Griffin, an executive with homeownership development organization HomeFree-USA in Hyattsville, Md., was working to pay off credit card debt, she accepted promotional offers of 0 percent interest from three different cards. "I didn't purchase anything and strategically worked to pay each off before the promotional offer expired," she says.

If you do come across a sign-up bonus that's too good to pass up, make sure you do your homework and compare it to other offers before making a commitment. "Read the terms and conditions carefully before signing on the dotted line," says Ross.  

Card (full name) Intro rate (%) Intro period (m Rate after intro Signup bonus Conditions to earn bonus Annual Fee
Blue Cash Everyday from American Express 0% Intro Purchase 12 months 17.24-22.24% $100 cash back after spending $1,000 within first 3 months of card membership $0.00
Blue for Business from American Express 0% Intro Purchases 6 to 12 months 11.24-19.24% 10,000 bonus points After first purchase $0.00
Blue from American Express 0% Intro Purchase 12 months 15.24-20.24% 10,000 bonus points Charge $1,000 in first three months $0.00
Blue Sky from American Express 0% Intro Purchase 12 months 17.24-22.24% $100 statement credit Charge $1,000 in first three months $0.00
First National Bank of Omaha Graphite American E 0% Intro Purchase 12 months 13.99-19.99% $100 cash back bonus After spending $1000 in first 3 billing cycles after account is ope $99.00
Gold Delta SkyMiles  Credit Card from American Ex N/A N/A 15.24-19.24% 30,000 bonus miles Must spend $500 in first 3 months $95.00
Hilton HHonors Card from American Express N/A N/A 15.24% 40,000 bonus points  Spend $750 within first 90 days  $0.00
JetBlue Card from American Express 3.9% Balance Trans 6 months 15.24% 10,000 points toward award travel with first purchase $40.00
Platinum Delta Skymiles Credit Card from America N/A N/A 15.24-19.24% 20,000 miles (5,000 of which will be Medallio After first purchase, MQM count only in the first year $150.00
Starwood Preferred Guest Credit Card from Ameri N/A N/A 15.24-19.24% Earn up to 25,000 Starpoints Receive 10,000 points after first purchase and 15,000 if you spen $65.00
TrueEarnings card from Costco and American Expr 0% Intro Puchase 6 months 15.24% N/A $0.00
Alaska Airlines Visa Signature card N/A N/A 14.24% 25,000 bonus miles $75.00
Bank Americard Cash Rewards Visa Signature Card 0% Intro Purchase 12 months 12.99-20.99% $100 cash back bonus Make $500 in purchases in first 90 days $0.00
Bank of America Accelerated Rewards card 0% Intro Purchase 12 months 12.99-20.99% $50 statement credit Spend $500 within 90 days of account opening $0.00
Bank of America Platinum Plus for Business Maste 0% Intro Purchase 6 months 9.24-20.24% N/A $0.00
Bank of America Platinum Visa Business Credit Car 0% Intro Purchase 6 months 9.24-20.24% N/A $0.00
Bank of America Student Platinum Plus Visa Credit N/A N/A 14.24% $0.00
BankAmericard Cash Rewards from Bank of Americ 0% Intro Purchase 12 months 12.99-20.99% $100 cash back bonus After you spend $500 in purchases within first 90 days of accoun $0.00
BankAmericard Power Rewards Visa Signature Car 0% Intro Purchase 12 months 12.99-20.99% Triple points on gas, grocery and drugstore fo $50 statement credit after spending $500 in first 90 days $0.00
BankAmericard Secured card from Bank of America N/A N/A 20.24% N/A $39.00
BankAmericard Visa Credit Card 0% Intro Purchase 15 months 10.99%-19.99% N/A $0.00
MLB Extra Bases MasterCard by Bank of America None N/A 12.99-20.99% 10,000 bonus points If you spend at least $250 within 90 days of account opening $0.00  
Apple Barclays Financing Visa N/A N/A 22.99% None   $0.00  
Carnival World MasterCard from Barclays 0% Balance Transf 15 months 13.99-20.99% 5,000 bonus "fun points" when you use your card for the first time; 5,000
bonus fun points toward your next cruise when you transfer a balance of
$5,000 or more within the first 30 days of account opening.
  $0.00  
L.L.Bean Visa 0% Balance Transf 6 months 13.99-19.99% N/A $0.00
NFL Extra Points Barclay Visa Signature Card 0% Balance Transf 15 months 13.74-22.74% 10,000 bonus points on initial purchase $0.00
US Airways Premier World Mastercard from Barcla 0% Balance Transf 6 months 15.99-24.99% Up to 40,000 bonus miles 15,000 with first use, 15,000 miles after spending $750 in first 90 $89.00
Visa Black Card 0% Balance Transf 15 months 14.99% N/A $495.00
Wyndham Barclay Visa Signature Card (No annual f 0% Balance Transf 6 months 13.24-19.24% 12,000 bonus points After first use of the card for purchase or balance transfer $0.00
BestBuy rewardzone platinum MasterCard N/A N/A 21.74% N/A $0.00
Capital One Cash Rewards for Newcomers card N/A N/A 24.90% N/A $0.00
Capital One No Hassle Cash Rewards (average cred 0% Intro Purchase 9 months 19.80% N/A   $39.00  
Capital One No Hassle Cash Rewards (Excellent Cr 0% Intro Purchase 12 months 12.90-20.90% $100 bonus once you spend $500 in first 3 months $0.00
Capital One Secured Mastercard N/A N/A 22.90% N/A $29.00
Capital One Standard Platinum Credit Card (with a N/A N/A 24.90% N/A $19.00
Capital One Venture Rewards Card (Excellent cred N/A N/A 13.90-20.90% 10,000 bonus miles After you spend $1,000 in first 3 months $59.00
Journey Student Rewards from Capital one N/A N/A 19.80% N/A $0.00
SonyCard Visa from Capital One 0% Intro Purchase 12 months 13.90-24.90% 5,000 bonus points after first purchase Must make purchase within 90 days of account opening, must b $0.00
Spark Classic from Capital One N/A N/A 22.90% N/A $0.00
Spark Miles Select by Capital One 0% intro purchase  6 months 14.90-19.90% N/A $0.00
Amazon Rewards Visa Signature Card from Chase N/A N/A 13.24% $30 Amazon.com gift card Must be redeemed on amazon.com or affiliated websites $0.00
BP Visa N/A N/A 19.24% 25 cents in rebates for every $100 in purchase First 60 days, BP gas stations only $0.00
Chase Business INK 0% Intro Purchase 6 months 13.24% Up to 25,000 bonus points 10,000 after first purchase, and additional 15,000 points if you sp $0.00  
Chase Freedom Credit Card 0% Intro Purchase 15 months 12.99-22.99% $100 (which is 10,000 bonus points) after spending $500 or more during first 3 months of account opening $0.00
Chase INK Cash for Business (Cash Back) 0% Intro Purchase 6 months 13.24.24% Up to $250 cash back bonus Get $100 after first purchase, additional $150 after you spend $5, $0.00  
Chase Sapphire N/A N/A 15.24% 10,000 bonus points Spend $500 in first 3 months $0.00
Disney Rewards Visa Card from Chase 0% Intro Purchase 6 months 14.24% $50 Disney gift card for first-time cardmembers only after first purchase $0.00
Hess Visa Platinum Card N/A N/A 19.24% 10% rebate on purchases for 60 days Maximum of $40, or purchases up to $400 -- 60 days $0.00
Marriott Rewards Visa Signature Card from Chase N/A N/A 14.24% 30,000 bonus points after first purchase $45.00
Slate from Chase 0% Intro Purchase 15 months 11.99-21.99% N/A $0.00
The Priority Club Select Visa Signature card from C N/A N/A 15.24% 60,000 bonus points Points received after first use of card, can be used for 4 free nig $49.00
United Mileage Plus Explorer card from Chase N/A N/A 15.24% Up to 40,000 bonus miles 25,000 miles after first use, 5,000 extra after first purchase if you $95.00
University of Florida credit card from Chase N/A N/A 19.24% N/A $0.00
Southwest Airlines Rapid Rewards Plus Credit Car N/A N/A 15.24% 50,000 bonus points after spending $1,000 in first 3 months $69.00
Citi Diamond Preferred Rewards Card Mastercard 0% Intro Purchase 18 months 11.99-21.99% N/A $0.00
Citi Dividend Platinum Select Visa for College Stud 0% Intro Purchase 7 months 12.99-20.99% N/A $0.00
Citi Forward 0% Intro Purchase 12 months 12.99-22.99% Up to 10,000 ThankYou Points Make $650 in purchases and sign up for Paperless Statements wi $0.00
Citi Gold Aadvantage Visa Signature Card N/A N/A 15.24% 25,000 American Airlines Aadvantage bonus After $750 in purchases in first 4 months $50.00
Citi Platinum Select Visa 0% Intro Purchase 18 months 11.99-21.99% N/A $0.00
CitiBusiness Aadvantage MasterCard N/A N/A 15.24% 30,000 bonus miles Spend $750 in purchases within first 4 months $75.00
CitiBusiness World MasterCard 0% Intro Purchase 6 months 14.24% 10,000 bonus points Make $300 in purchases in first 3 months  $0.00
The Citi Hilton HHonors Visa Signature Card from C N/A N/A 14.24% 40,000 bonus points After making $1,000 in purchases within 4 months of opening ac $0.00
ExxonMobil Platinum MasterCard N/A N/A 19.99% N/A $0.00
Shell Platinum MasterCard N/A N/A 23.99% N/A $0.00
Comerica Visa Platinum 0% Intro Purchase 12 months 9.99-20.99% N/A $0.00
Credit One Visa Platinum N/A N/A 23.90% N/A $99.00
Discover Business Credit Card 0% Intro Purchase 6 months 12.99-19.99% N/A $0.00
Discover Escape Card 0% Intro Purchase 6 months 10.99-19.99% 25,000 bonus miles 1,000 each month you  make a purchase in first 25 months $60.00
Discover More Card 0% Intro Purchase 15 months 10.99-19.99% N/A $0.00
Discover Motiva credit card 0% Intro Purchase 15 months 10.99-19.99% N/A $0.00
Discover Open Road 0% Intro Purchase 15 months 10.99-19.99% N/A $0.00
Discover Student More Card 0% Intro Purchase 9 months 12.99-18.99% N/A $0.00
Miles by Discover Card 0% Intro Purchase 6 months 10.99-19.99% 12,000 bonus miles 1,000 each month you make a purchase in first 12 months $0.00
First Premier Bank Gold MasterCard N/A N/A 36.00% N/A $75.00
First PREMIER Bank Secured Mastercard N/A N/A 19.90% N/A $50.00
eBay MasterCard N/A N/A 19.99-23.99% 20% off (up to $30 back on) first purchase wit Valid through Aug. 31, 2012 $0.00
Meijer Platinum MasterCard N/A N/A 19.99-23.99% N/A $0.00
Texaco Visa N/A N/A 23.99% Earn 20 cents per gallon in fuel credits for 60 Only accounts approved 4/1/12 to 6/30/12  $0.00
Walmart Discover Card by GE Money N/A N/A 22.90% N/A $0.00
HSBC MasterCard BusinessCard Card 0% Intro Purchase 6 months 13.24% 2,500 bonus points just for enrolling $0.00
Navy Federal Credit Union cashRewards Visa N/A N/A 9.65-18.00% N/A $0.00
Navy Federal Credit Union Platinum MasterCard N/A N/A 7.99-18.00% N/A $0.00
Nordstrom Visa Signature N/A N/A 10.90-22.9% N/A $0.00
Golf Magazine Rewards Visa Card (PartnersFirst Ba 0% Balance Transf 6 months 12.24-22.24% 1 dozen personalized Titleist Pro V1 golf balls After spending $300 $0.00
PenFed Visa Platinum Cashback Rewards 4.99% Balance Tran 24 months 9.99% N/A $0.00
Pentagon Federal Credit Union Promise Visa 7.49% Intro Purcha 36 months for In 9.99% N/A $0.00
Plains Commerce Bank Visa Gold N/A N/A 12.00% N/A $0.00
PNC Points Visa 0% Intro Purchase 6 months intro 11.99-19.99% N/A $0.00
State Farm Visa Student Credit Card N/A N/A 11.24-18.24% N/A $0.00
USAA World MasterCard N/A N/A 9.90-25.90% 2,500 rewards bonus points After first purchase $0.00
U.S. Bank Business Platinum Card 0% Intro Purchase 6 to 9 months 9.99-17.99% N/A $0.00
U.S. Bank College Visa Credit Card None None 11.99-20.99% N/A   $0.00  
U.S. Bank FlexPerks Business Cash Rewards Visa C 0% Intro Purchase 6 months 11.99-17.99% N/A $0.00
U.S. Bank FlexPerks Travel Rewards Visa Signature N/A N/A 13.99-23.99% 15,000 bonus points When you spend $900 in first 90 days $49.00
Harley Davidson Signature Visa from US Bank N/A N/A 13.99-22.99% N/A $0.00
U.S. Bank Secured Visa N/A N/A 20.99% N/A $35.00
U.S. Bank Visa Platinum Credit Card 0% Intro Purchase 12 months 9.99-23.99% n/a $0.00
Wells Fargo Cash Back Card 0% Intro Purchase 6 months 12.15-25.99% N/A $0.00
Wells Fargo Cash Back College Card 5.9-13.9% Intro pur 6 months 11.15-21.99% N/A   $0.00  
Wells Fargo Rewards Card 0% Intro Purchase 6 months 12.12-25.99% N/A $0.00
Wells Fargo Secured Card N/A N/A 18.99% $25 $25.00
Cabelas Club Visa (World's Foremost Bank) N/A N/A 9.99-18.23% $20 in CLUB points, $10 after 5 purchases $20 must be used the day of signup, $10 received after 5 outside $0.00

See related: 3 trends shaping today's reward credit cards, Credit card bonuses playing hard to get

Published: July 30, 2012


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Credit Card Rate Report

Updated: 04-24-2014

National Average 15.00%
Low Interest 10.37%
Balance Transfer 12.64%
Business 12.80%
Student 13.27%
Cash Back 14.84%
Reward 14.96%
Airline 15.30%
Bad Credit 22.73%
Instant Approval 28.00%

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