- Timing a new credit card application with holiday shopping allows you to put your holiday purchases toward the minimum spending requirement to earn a credit card sign-up bonus.
- For example, if you apply for the Chase Sapphire Preferred Card and spend $US4,000 in the first three months, you’ll earn 60,000 Ultimate Rewards points.
- Those 60,000 Chase points are worth $US600 in statement credits to cancel out your purchases, or $US750 toward travel if you redeem them through the Chase Ultimate Rewards travel portal.
- American Express cards like the American Express® Green Card offer instant card numbers, so you could apply today and use your new card to score Cyber Monday deals.
- Read more personal finance coverage.
Just one credit card welcome offer can make a substantial impact on your holiday shopping budget. That’s because when you sign up for most rewards credit cards, you can earn a welcome bonus of points or cash back after meeting a minimum spending requirement in the first few months after opening the new account.
While you’ll usually get the most value out of credit card rewards by redeeming them for travel, you also have the option of using points to “erase” purchases from your credit card statement – and if saving money is your main goal this holiday season, this is an option worth considering. Keep reading for some of our top picks if you’re looking to open a new credit card to maximise your spending.
Keep in mind that we’re focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It’s important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.
Maximise credit card welcome offers
In the US, most of the banks and credit card issuers are in hot competition to get new users, and many cards offer serious incentives to sign up for new cards. It’s not uncommon to see welcome offers worth $US500 or more for being approved for a new card and meeting the minimum spending requirement (generally $US2,000 to $US4,000) in the first three months or so of having the card.
The overwhelming first question I get from people when I start talking about signing up for new cards is, “But won’t that ruin my credit?” The short answer is no; opening new credit cards won’t negatively affect your credit score if you’re doing it responsibly. That means not paying off your balances in full each month and not spending more than you can afford.
Top credit card welcome bonuses to consider
Here are a few of the best current credit card welcome offers:
- Chase Sapphire Preferred Card –Earn 60,000 Chase points after you spend $US4,000 in the first three months. 60,000 Ultimate Rewards can be redeemed for $US600 as a statement credit, or they’re worth $US750 if you redeem for travel through the Ultimate Rewards travel portal. The Sapphire Preferred card has a $US95 annual fee.
- Capital One® Venture® Rewards Credit Card– Earn 50,000 miles when you spend $US3,000 in the first three months. 50,000 miles are worth $US500 as a statement credit, or you can transfer your miles to more than 10 airline loyalty programs. The Venture card has a $US95 annual fee that’s waived the first year.
- Capital One® Spark® Miles for Business– Earn 50,000 miles when you spend $US5,000 in the first three months and 150,000 miles when you spend $US50,000 in the first six months. If your business can comfortably spend $US50,000 in six months, you’ll get 200,000 miles, worth $US2,000 in statement credits. The Spark Miles has a $US95 annual fee that’s waived the first year.
- Capital One® Spark® Cash for Business– Earn $US500 cash bonus when you spend $US5,000 in the first three months, and $US1,500 when you spend $US50,000 in the first six months. This is another card with a tiered bonus for significant spending – if your business already spends a lot, this is a good opportunity to earn a lot of cash back. The Spark Cash has a $US95 annual fee that’s waived the first year.
- Ink Business Preferred Credit Card– Earn 80,000 Ultimate Rewards points after you spend $US5,000 in the first three months. Just like with the Sapphire Preferred, Ultimate Rewards points can be redeemed for 1 cent per point (so $US800) as cash or 1.25 cents ($US1,000) toward travel booked directly through Chase. The Ink Business Preferred has a $US95 annual fee.
- Wells Fargo Propel American Express® card– Earn 30,000 bonus points after you spend $US3,000 in the first three months. Those 30,000 points are worth $US300 cash back.
Some of these credit card offers give cash back or a statement credit, though many of them also can be used for travel. For more options, check out our list of the best current credit card offers.
There’s till time to take advantage of Cyber Monday deals, so you may want to consider applying for a card that offers an instant number once you’re approved. American Express cards offer instant numbers, so cards like the Amex Green card could be a good choice.
What to know before applying for new cards
If this all sounds too good to be true, there are a few things that you’ll want to keep in mind before applying for new cards.
Most importantly, you’ll want to make sure that you have the financial ability and discipline to pay off your credit cards in full every month. If you’re carrying a balance on any credit cards right now, my recommendation would be to focus on paying that down first before trying to open up a new card for any welcome offer or benefits. The interest (and/or late fees) that you pay on credit card balances will quickly eat up the rewards you get from credit card welcome offers.
Be smart about your credit card applications
Don’t sign up for a credit card just because some guy on the internet said you should!
My wife and I have signed up for many credit cards over the past several years, and because we are diligent in ensuring that they are paid off in full each month, our credit scores are still in the high 700s.
There are a few reasons that you’ll want to take it slow when applying for new cards. Many banks and credit card issuers are clamping down on people who apply for new cards too frequently and cancel them regularly. Chase is well known for having a 5/24 rule. This rule prevents you from being approved for a Chase card if you’ve opened five cards (from any issuer) in the past 24 months. Other banks have similar but less-defined rules, so it makes a lot of sense to take things slow when it comes to credit card applications.
The welcome offer from signing up for even just one new card this holiday season can make a big impact on your holiday shopping budget. Just make sure you’re not spending more than you can comfortably afford in order to earn the sign-up bonus. Good luck, and happy holidays!
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