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Wealth and Wants

Tiered sign-up bonuses on the rise

Issuers are offering handsome rewards for loyal cardholders

Summary

Issuers are using new tools to keep customers using certain cards. One of these strategies in particular has caught my eye: the tiered sign-up bonus.

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Card issuers are getting increasingly annoyed with churners – people who sign up for a new credit card to earn the sign-up bonus, but stop using the card shortly thereafter.

Issuers want to establish longstanding, valuable relationships with their customers. That’s a rather obvious bit of business 101, but what’s interesting is that a new toolbox of strategies is emerging to keep customers using certain cards.

These range from experiences to enhanced category rewards to discounts and more. In this column, I’d like to go in-depth on a new perk that has caught my eye: the tiered sign-up bonus.

See related:  New Chase Freedom bonus categories: Back in the game

Tiered bonuses tend to come from travel cards

For example, the Wells Fargo Propel American Express® Card recently began offering a tiered sign-up bonus. New cardholders who spend $3,000 in the first three months will receive 30,000 bonus points worth $300 in cash. And if they spend an additional $12,000 for a total of $15,000 in the first year, they’ll get 20,000 more bonus points worth another $200 in cash. (This offer has now expired.)

That’s $500 for $15,000 in spending, a return of 3.3 percent on top of whatever you earn on your purchases (the best bets with this card are dining and travel, which earn 3 percent cash back). That’s a grand total of 6.3 percent back on $15,000 in dining and travel spending!

(By the way, I signed up for this card last fall when the sign-up bonus was just 30,000 points for spending $3,000 in the first three months. I called Wells Fargo last week to ask if I could also get in on the extra 20,000 points for spending $15,000 in the first year, but they said no.)

Tiered sign-up bonuses are most common among airline and hotel co-branded cards. Here are a couple other currently available offers:

  • World of Hyatt Credit Card: Earn up to 50,000 bonus points (25,000 for spending $3,000 in the first three months, then another 25,000 if you hit $6,000 in purchases within the first six months).
  • IHG Rewards Club Premier Credit Card: Earn up to 120,000 bonus points (80,000 for spending $2,000 in the first three months, then another 40,000 if you hit $5,000 in purchases within the first six months. This offer has now expired).
  • Earlier this year, the United Explorer Card experimented with a tiered sign-up bonus (40,000 miles for spending $2,000 in the first three months, then another 25,000 if you hit $10,000 in purchases within the first six months).
  • Another recently concluded tiered sign-up bonus came from the Capital One Spark Miles for Business card (50,000 miles for spending $5,000 in the first three months, then another 150,000 miles if you hit $50,000 in purchases within the first six months). This one was a real whopper – keep in mind that this is a business card and the lofty spending threshold is much more attainable for a business than a household.

See related: 7 ways to attract targeted credit card offers

Non-tiered cards that reward big spending

Finally, these last three examples are a little different, but relate to the same theme of “the more you spend, the more you get”:

The Chase Freedom Unlimited recently started giving new cardholders 3 percent cash back in their first year (capped at $20,000 in spending). This promotion is only available to those who sign up in a Chase branch. It’s in lieu of a traditional sign-up bonus (this card used to offer $150), but by doubling the normal 1.5 percent cash back payout, consumers who spend more than $10,000 in that first year will come out ahead. If you spend $20,000, you’ll get $600 cash back, an increase of $150 over the old offer (which would have paid $300 cash back plus a $150 sign-up bonus).

The Jetblue Plus card gives Mosaic (elite status) benefits after cardholders spend $50,000 in a year. Perks include free checked bags, waived change and cancellation fees, expedited security screening and early boarding. Without the Jetblue Plus card, the traditional ways to qualify for Mosaic are to accumulate 15,000 flight points (essentially spending $5,000 on Jetblue tickets in a calendar year) or to fly 30 segments and rack up 12,000 flight points.

The Marriott Bonvoy Boundless Credit Card gives Gold Elite status if you spend $35,000 in a year. Perks include enhanced room upgrades, 2 p.m. late checkout and free high-speed internet access. Normally, customers must spend 25 nights at Marriott properties in a calendar year to qualify for Gold Elite status.

New offers like these – whether or not they have tiered sign-up bonuses – can help you boost your earnings just by doing a lot of spending with one go-to card.

What’s up next?

In Wealth and Wants

The Chase Freedom Unlimited credit card offers a sign up bonus up to $300 cash back

If you are you looking for an inexpensive way to get a large influx of Ultimate Rewards points, the Chase Freedom and Freedom Unlimited cards offer large bonuses with low spending thresholds.

Published: April 5, 2019

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Credit Card Rate Report Updated: June 12th, 2019
Business
15.61%
Airline
17.54%
Cash Back
17.68%
Reward
17.57%
Student
17.79%

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