Credit card applications and restrictions: Sign-up bonus rules you should know – before applying

Getting an introductory welcome offer can be a sweet incentive to open a new credit card – if you understand the rules. Credit card issuers often have written and unwritten guidelines restricting how often you can land a welcome offer to keep people from taking advantage unfairly.

“The restrictions are there to keep people from ‘churning’ cards. This refers to someone opening a card, getting the sign-up bonus, then closing the card once the bonus is awarded,” says Brandon Neth, credit cards and rewards travel expert at FinanceBuzz.

Neth says churning might be a way to accumulate points but it won’t make your card issuer very happy and could put your relationship with your credit card company at risk.

This guide explains how the restrictions work for different cards and some advice for getting approved for sign-up bonuses.

See related: Best credit card sign-up bonuses

Credit card welcome offer rules by card issuer

No two card issuers are exactly alike in how they restrict welcome offers. This table highlights how the rules compare at eight top card issuers and what you can expect when applying for a new account that features a bonus.

Weigh your approval odds and be selective

When trying to take advantage of a welcome offer, take your time. Evaluate the rules for specific card offers and how likely you are to be approved, based on previous account history and credit history.

And don’t waste time on mediocre offers, says Kevin Panitch, founder of finance site Just Start Investing. “Every time you open a new card, it takes a small hit to your credit score so you want to make sure you’re doing it for the right reasons and the biggest bonuses.”

Remember, usually the more premium the card, the better the welcome offer, says Neth. But, know that not all points are created equally and factor that into your decision when applying for a new card.

Observe the rules for leaving sufficient time between card applications and bonus offer eligibility. When there are no set guidelines, such as with Discover or Barclays, consider imposing one of your own.

“To improve your odds of getting approved, I’d wait at least 90 days between applications,” says Chane Steiner, CEO of finance site Crediful.

This can minimize the appearance that you’re attempting to churn bonuses. He does offer a tip for potentially applying for two cards at the same time.

“If you want… to apply for two cards back to back, make sure one is a charge card and the other is a credit card,” says Steiner.

See related: Card APRs are at a record high. Is a sign-up bonus still worth the risk?

Consider a business card instead

Jonathan Huang, founder of personal finance site Mr. Centsible, says a lot of people could consider getting a business credit card.

“Business credit cards from these banks may count as different products,” says Huang. “So, for example, you can get the bonus for The Platinum Card® from American Express, but also get the bonus for The Business Platinum Card® from American Express card separately.”

Chase follows a similar rule.

“Business credit cards do not count toward the five-credit card limit in Chase’s 5/24 rule,” says Huang. The reason? “They don’t show up on your personal credit report.”

This is only a good idea, however, if you own a business or plan to start one, or you’re self-employed.

While you can technically get a business credit card if you haven’t launched yet, your account could be subject to scrutiny if it becomes clear that you’re charging personal spending, rather than business expenses.

In that case, your card issuer might convert you to a personal account and take back any bonus rewards earned.

See related: What is the Chase 5/24 rule and how it works

Stay up to date on welcome offer trends

New rules for welcome offers may fly under the radar, so pay attention.

“Educate yourself and be familiar with what the sign-up bonus for a certain card has traditionally been,” says Huang. “Banks change the sign-up bonuses once in a while and sometimes increase the bonus for a limited time.”

But don’t open a card without vetting how easily you’ll be able to meet the minimum spending requirement and how useful it may be for the long-term.

“If you don’t normally spend $1,000+ per month, you shouldn’t spend more just to get a bonus,” says Panitch.