6 ways to get the most from cash back card sign-up bonuses
You can give a boost to your cash back earnings by treating them as rewards points
Get a new points or travel credit card, and it seems like there are a dozen different hacks to amplify that sign-up bonus. With a cash back card? Not so much.
But there are a handful of things you can do to harvest a bigger bonus in exchange for putting that cash back credit card into your wallet.
Here are six tricks for getting the most cash back from your new card:
Tips for boosting your cash back sign-up bonus
- Shop for the right sign-up bonus.
- Opt for a card that offers an extra cash back reward.
- Trade bucks for points or miles.
- Shop with card partners.
- Be careful how you receive your cash.
- Cash in on bank loyalty.
1. Shop for the right sign-up bonus
Don't just choose a card for the sign-up bonus. Features like no annual fees and a low interest rate should top the list when selecting a card, says Dan Arita, credit card products manager for BECU (formerly the Boeing Employees Credit Union).
“With the average cash back card, what we see typically is a bonus of $75 to $200 to sign up,” says Arita.
2. Opt for a card that offers an extra cash back reward
Several cash back cards are set up to amp up your cash back if you do a little effort.
- The Citi Double Cash Card, for example, gives you 1 percent cash back when purchase something with the card. Then, when you pay your bill on time, you get another 1 percent.
- The American Express Cash MagnetTM Card offers a $150 introductory bonus for spending $1,000 in the first three months. But if you spend an additional $6,500 within the first year, you’ll also receive a $100 statement credit.
- The Discover it® Cash Back Card, matches all the cash back you’ve earned within the first 12 months.
3. Trade bucks for points or miles
When is a dollar worth more than a dollar? When someone will give you $1.25 for it.
And sometimes you can achieve that with your cash back bucks.
If you have the right combination of cards, you can transfer that cash back award into points, says Sarah Silbert, points and miles editor for The Points Guy. And even though $1 will get you 1 point, those points are often worth more than $1.
Her pick: Chase Ultimate Rewards points. One dollar will get you about 100 points, which her site values at about $2, says Silbert. “It’s fair to say you’ll get more bang for the buck.”
Cash back and rewards cards you can combine to increase the value of your cash back by transferring into points include Chase Freedom, Chase Freedom Unlimited, Chase Sapphire Preferred Card and Chase Sapphire Reserve.
See related: Best Chase Ultimate Rewards cards: Which ones to get
4. Shop with card partners
Some cards will boost your cash back rate if you shop with their retail partners or even specific merchants.
For instance, when online shopping with a Citi card, start with Citi’s Bonus Cash Center, and you’ll earn an extra bonus – 5 percent cash back on average – from more than 400 participating retailers.
5. Be careful how you receive your cash
With some cards, you can get a check, gift cards or a statement credit. More often than not, a statement credit is the way to go, says Arita.
The reason: Cash is cash. But a statement credit immediately reduces the balance and frees up your available credit, he says. Not only does it make bill-paying less painful, but it’s good for your credit rating, too.
On the other hand, you also want to read the fine print because that statement credit isn’t always the best bet, such as with Citi’s Double Cash card.
With Citi Double Cash, if you use a statement credit to pay the balance on the card, you won’t earn that second 1 percent cash back bonus, says Arita.
So if you want to earn the biggest cashback rewards with that card, take the cash instead in the form of a check or a credit to your bank account, he recommends.
Tip: If you want to use a cash back sign-up bonus to make a big-item purchase – such as a new TV set or a trip – you’ll want to charge it on your credit card and pay it off with a credit statement instead of using a gift card. Why? Because gift cards don’t offer the same purchase and travel protections than credit cards.
6. Cash in on bank loyalty
A lot of financial institutions today “are offering some kind of relationship-based package,” says Arita, “if you tend to keep all of your accounts at one institution or a handful of institutions.”
Some cards may offer you a higher rate of rewards in exchange for having a specific type of account or a certain amount of assets with the institution.
“That’s a good example of maximizing your rewards,” says Arita.
If you have the Bank of America Cash Rewards credit card, for example, and you claim your cash back through a Bank of America account, you'll get a 10 percent bonus. Meanwhile, Preferred Rewards cardholders with a substantial bank balance are eligible to earn an even steeper bonus – in some cases as high as 25 to 75 percent.
And if you keep assets with the bank, Merrill Edge or Merrill Lynch, you could get more than 10 percent. If those combined assets total from $20,000 to $100,000, you can earn a bonus of 25 to 75 percent, says Betty Riess, spokeswoman for Bank of America.
You probably don’t want to start moving tens of thousands of dollars or upending your investment or saving strategies to get extra rewards when you use a credit card, says Silbert. But if you already have sufficient assets with an institution, she says, “it can be a no-brainer.”
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