9 rewards card sign-up bonus mistakes


Avoid these 9 sign-up bonus mistakes Juan Rodriguez/


Avoid these 9 sign-up bonus mistakes Juan Rodriguez/


Rewards card issuers dangle shiny sign-up bonuses to convince you to apply for new plastic, but simple mistakes can rip those bonus points out of your grasp and dash your plans for a dream vacation.

Many rewards cards offer sign-up bonuses, which may award you cash back, miles, points or free hotel nights for opening a new card. These bonuses have been increasing in value in recent years, with the average points or miles bonus reaching 40,000 at the end of 2015, according to a report from Andrew Davidson, a senior vice president with market research firm Mintel Comperemedia. By the spring of 2016, 50,000 points or miles had become “the new norm,” according to Davidson.

But, there’s a big catch: You typically must spend a certain amount on the card within a set time period after opening the account to snag the bonus.

In general, the bigger the bonus, the higher the spending requirement, says Gary Leff, who writes about frequent travel at View from the Wing. Minimum spending requirements can range from less than $1,000 to $5,000 or more. It’s fairly common to see offers in which you must spend $3,000 in three months, he says.

That sounds straightforward, but glitches can trip you up along the way. Here are nine sign-up bonus mistakes and how to avoid each one:

  1. Failing to add up your spending first. Don’t just assume you’ll be able to complete the minimum spending required to get the bonus, says Jeremy Tarr, spokesman for Before you apply for a card, look at your budget and add up regular expenses you can easily put on a card. That might include clothing, entertainment, groceries, gas, car insurance and eating out at restaurants, but not your mortgage. Multiply that total by the number of months you have to earn your bonus. If your total hits the required minimum spending, earning the bonus likely won’t be a problem. Generally, if you spend $1,000 to $1,500 a month on items you’d normally pay for with cash, credit or debit, most sign-up bonuses should be within reach for you, Tarr says. Once you get your new card, track your spending and spend a little more than you’re required to just to be on the safe side, Tarr says. “It’s better to go over than under,” he says.
  2. You don’t want to have an opportunity to get 40, 50, or 60,000 points and miss it by $25.

    — Tiffany Funk
  3. Forking over fees to pay with a card. It’s a mistake to automatically use your new card to pay for products or service that charge you a fee to use plastic. For example, some utility companies and providers such as contractors or plumbers may charge you a convenience fee of 2, 3 or 4 percent fee to pay by card. And while you can pay your mortgage with Plastiq, a service that will take payment by card and write a check to your bank or landlord, it will cost you up to 2.5 percent of the total, Leff says. See if you can meet the minimum spending requirement without paying fees, says Tiffany Funk of PointsPros, a company that helps consumers maximize their miles and points. For example, consider paying your next several months' worth of car insurance in advance or buying some gas and grocery store gift cards to use later, Funk says. Retail gift cards generally don’t have fees, according to Shelley Hunter, aka, “Gift Card Girlfriend” at If you can’t meet the minimum spend any other way, then weigh the dollar amount of the fee you’ll pay to use plastic against the dollar value of the sign-up bonus. “If paying $25 to make a $1,000 rent payment [with a card] will put you over the top to earn 50,000 points, it’s worth it to pay the fee,” Leff says.
  4. Not knowing what counts toward minimum spend. Some cardholders wrongly assume that every cent put on the new card counts toward the spending requirement, Leff says. “People may think ‘Oh, I’ve spent this much money on the card,’ but they haven’t,” he says. If you read the sign-up bonus terms and conditions, you’ll likely find that the annual fee, balance transfers made to the card, and the purchase of travelers checks or other "cash-like" items, don’t count toward your minimum spending total. Banks will clearly spell out what spending does and doesn’t count, so read the fine print, Leff says. 
  5. Signing up for too many cards at once. If you aim to build up a big stash of points and miles, you may be tempted to apply for multiple cards at once, but that can make it harder to meet minimum spending requirements and easier to get mixed up. “It’s more information to juggle,” Leff says. Instead, try signing up for one card and completing the minimum spend before applying for another card. Or, if you do apply for multiple cards, consider creating a color-coded digital calendar just for sign-up bonuses, Funk recommends, adding that she uses Google Calendar. Make a note on the date you apply for a card, and also on the date by which you need to finish the minimum spending, she says. Also add a reminder on a later date to verify that your points posted, she says. “That works well for me,” she says.
  6. Making a return that costs you a bonus. It’s easy to buy an item on your card, return the merchandise and forget to subtract that amount from the total spending you’ve done, Funk says. “Maybe you decide to return a pair of jeans to Macy’s and you don’t even think about it,” she says, adding that she’s made this mistake. Remember that sign-up bonuses are based on your net spend, she says. “You don’t want to have an opportunity to get 40, 50, or 60,000 points and miss it by $25,” Funk says. On the upside, you can call your card issuer any time or go online to check the tally of your net spending, she says.
  7. Getting the spending deadline wrong. It’s very common to make an incorrect mental note of the date by which you must complete your minimum spend. In that scenario, you might do most of your spending but fall short and lose the bonus because you thought you had more time, Funk says. For most card issuers, the minimum spend clock starts ticking at the date of approval, not the date you get the card, she says. “I’ve had people say, ‘The card came in mail, and I didn’t activate it for six weeks,’” she says, adding that some consumers sometimes incorrectly assume the time window to earn the bonus starts the day they call the toll-free number on the back of the new card. So, verify the exact date by which you must finish your spending and aim to finish early, Funk says. 
  8. Getting sucked into debt. It’s easy to rationalize buying that cool bracelet you’ve been eyeing because the purchase counts toward your spending total. But don’t use a sign-up bonus as an excuse to overspend or buy stuff you can’t afford to pay for in full at the end of the month, Tarr says. In fact, if you have a credit score below 700 or you’ve had any issues with debt in the recent past, wait until you’ve got a better handle on your finances before getting into credit card rewards, he says. Otherwise, you could you get saddled with debt and have to pay the high interest that rewards cards generally charge, which will cancel out your rewards. “No number of points is worth getting into debt,” Funk says.
  9. Going after a bonus you can’t earn. If you’ve already received a bonus from an issuer once before, you may not be eligible to earn it again, Leff says. If that’s the case, you don’t want to find out after you apply for the card and complete your spending, he says, adding that he once interviewed a banker who made that very mistake. For example, American Express generally allows you to earn a bonus one time per card type, Leff says. If you’ve had a certain card before, call the issuer to verify your eligibility before you apply again.
  10. Not allowing enough time to get your bonus. If you’re applying for a card today so you can attend a storytelling festival in Ireland next month, you’ll likely end up with as a sad tale of your own. Some consumers don’t budget enough time between the date they apply for the card and the day they want to use their bonus, Funk says. If you’re planning a big purchase and know you can complete your minimum spending right away, allow yourself at least six weeks before the points post to your account. And if you plan to take several months to meet the spending requirement, allow a buffer of at least four or five months before the date by which you need to make travel arrangements, Funk says. If you’re in a time crunch, check with your issuer to see when points will post, she says.

If you read the terms, keep good records and stay on top of the process, you should be able to avoid the pitfalls that can derail your plans to earn a sign-up bonus. “It’s not hard if you’re organized,” Funk says.

See related: Will paying my utility bill on credit earn me points?, 8 creative ways to build credit rewards points quickly

Published: July 7, 2016

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Updated: 10-24-2016

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