3 tips to maximize signup bonuses
Here’s how to make signup bonuses work for you.
There are many great reasons to use credit cards. It is convenient to slip a piece of plastic instead of constantly hitting ATMs. And the ability to store your card details on your phone or laptop for easy payment. But maybe the best part about using credit cards is when you get rewards for the purchases you already intended to make – and for opening the card in the first place.
In fact, many credit cards today offer generous sign-up bonuses. You will get a certain amount of cash back or points if you reach a certain spending threshold within a short period of time after opening your account. For example, you may be eligible for a signup bonus that gives you $ 500 if you spend $ 3000 within three months of signing up for the card. If the idea of earning a signup bonus sounds sweet to you, here are three tips to use.
1. Ask for the right offer
You may see a credit card with a generous amount of cash back as part of the signup bonus, but you’ll have to spend more than you normally do to qualify. These are not the cards for you. The best way to take advantage of signup bonuses is to apply for ones that are easily achievable given your spending habits. For example, let’s say you normally charge $ 1,000 per month on an existing card. It’s worth looking for an offer that requires you to spend $ 3,000 within three months. But it’s not worth asking for a card whose sign-up bonus requires you to spend $ 5,000 within three months. At least not unless you have a specific big purchase coming up that doesn’t match your normal spending.
2. Apply at the right time
Sign-up bonuses are easier to obtain if you are already planning on making large purchases. Time your apps around these purchases and it will be easier than you think to get that extra cash. Suppose you want to buy new sinks and vanities for your bathrooms and plan to spend around $ 2000. You’ve got your eye on a credit card with a signup bonus for spending $ 3,000. If you are planning on making these purchases and getting the job done in April, March would be a good time to apply.
3. Increase your credit score to qualify
To qualify for great credit card offers, you’ll need a credit score – the one that shows issuers that you will pay your bills on time. Each credit card company sets their own criteria, but in general, you’ll be good to go if your credit score is over 700, and you’ll be especially fit once your score hits the mid-700s. You’re not there yet, work on increasing your credit score so that you are more likely to get the signup bonus offer you want. You can increase your credit score by paying all incoming bills on time, paying off some existing credit card balances, and correcting errors on your credit reports.
Signup bonuses are a great way to pocket free money, but make sure you approach them strategically. There is little sense in applying for a credit card for the express purpose of acquiring a bonus, but to miss it because you are not spending enough. Worse yet, it certainly isn’t profitable to overspend on things you can’t afford just for the purpose of getting a signup bonus. A little planning on your part, however, could help maximize signup bonuses this year and enjoy a bundle of extra cash.