Should I Wait for a Larger Credit Card Bonus?

Today, many credit card companies offer generous bonuses when customers sign up for a new credit card.

These bonuses could range from cold hard cash, like $500 for signing up for a card, to many extra points or miles when you become a new customer.

The sign-up bonus can be travel rewards like what’s available with the AAdvantage program or a variety of other options depending on the specific rewards credit card. For example, some membership rewards programs might provide you with discounts that can be used at grocery stores or gas stations, or maybe you can earn points to shop Amazon with.

Credit cards with the best sign-up bonuses and membership rewards programs include the Chase Freedom card, the World Elite Mastercard, and the Chase Sapphire Preferred Card, among many others. The Chase Ultimate Rewards program is also one that’s popular among cardholders.

Since credit card bonuses can be valuable, it often makes sense to sign up for new cards periodically to get free money, miles for trips, or extra rewards points. But, you don’t want to sign up for too many new cards, as that could hurt your credit score—and most creditors restrict how often you can claim bonuses.

>> Read More: How Long Should I Wait to Apply for Another Credit Card?

Of course, you also don’t want to put yourself in a position where you’re using up to your available credit limits on multiple cards, which can also hurt your credit score.

Because you can’t sign up for every single card that comes along and offers a bonus, you want to be smart about the credit cards you do apply for in order to get sign-up bonuses. This leads to one big question: should you wait for a larger credit card bonus or sign up for a bonus that the credit card company is currently offering?

What to Know About Credit Card Rewards Programs

Credit card rewards programs are offered by all different credit card companies, including big companies such as Chase, Amex, Citi, and Capital One.

Sign-up bonuses vary by the cardholder and by type of card. Cards that charge an annual fee may offer a higher sign-up bonus to try to entice you to become a customer in hopes that you’ll continue paying the fee. However, many no annual fee cards also offer extra credit card miles, bonus points, extra cash back, or other benefits if you become a new customer.

The problem is that since these programs aim to capture customers that don’t already have cards with the card issuer, you’re limited in how often you can earn a sign-up bonus.

Not only do credit card companies typically refuse to give you the bonus if you already have the exact card that’s offering it, but many also restrict you from getting a bonus if you have a similar card they offer. For example, Chase typically won’t approve you for a new card with a sign-up bonus if you’ve opened five or more revolving accounts in the past 24 months.

While restrictions on claiming too many sign-up bonuses make it seem tempting to wait to sign up until the bonus is as high as possible, the problem is that there’s no way to predict when, or if, a credit card bonus will increase or not.

Credit card companies will offer better bonuses whenever they decide they need to in order to capture more customers—and that may not happen for months or even years. Card companies don’t publish any kind of schedule as to when new bonus offers come out, and bonuses are increased and decreased at seemingly random intervals. This makes it all but impossible to try to pick the optimal time to maximize your signup bonus.

Deciding Which Card is Right for You

When you’re considering whether to sign up for a credit card, the bonus rewards for signing up are just one of many factors worth thinking about. And, it may not be the most important consideration, depending upon your situation.

Some of the other factors to consider when choosing which card is right for you include:

The Card’s Interest Rate

The average interest rate on new credit cards in 2018 hit 16.46%, while even the most generous rewards cards typically cap out at around 5% cash back.

If you are going to carry a balance, the interest charges you’ll pay will far exceed any rewards you earn. That’s why those who carry a balance are better off looking for a card offering a 0% promotional APR for as long as possible. If you can find a card that charges no interest, even if you don’t earn rewards or a sign-up bonus, you may be better off.

Rewards Points

While a sign-up bonus is a nice one-time benefit for getting a card, you’ll have the opportunity to earn credit card rewards points, cash back, or miles for the entire time you have the card.

It makes sense to sign up for a card where you earn the most points on the things you tend to buy frequently. If you never travel, there’s no reason to sign up for a card that gives you bonus rewards for hotel and flight purchases—even if you get a good sign-up bonus—when you could instead pick a card offering extra points at grocery stores or dining out if you tend to splurge on food.

Annual Fees

Some cards charge very costly annual fees. Unless you get lots of extra perks and rewards for the card, it probably isn’t worth paying.

Other Cardholder Benefits

Credit cards offer all different kinds of rewards, ranging from access to exclusive airline lounges to cash back for using Uber. Pay attention to these perks and look for a card that offers benefits you’ll actually use.

So, Should You Wait for a Larger Credit Card Bonus?

Deciding to wait for a larger credit card bonus often makes no sense because it may be months or years until a bigger bonus is offered, and chances are just as good that the card company will cut the bonus instead of raising it.

Instead of trying to get lucky by landing a bigger bonus, comparison shop among credit cards to find the best sign-up rewards available right now. Also think about the overall best credit cards, whether you’re searching for something specific like travel credit cards, or you have a different objective.

That way, you can find a card offering generous rewards you’re happy with and can get signed up today.

Get the Card That’s Right for You

Signing up for a credit card and the account opening process is a big decision with lots of factors to consider. Think about whether you’ll carry a balance and what your buying habits are to decide what features to look for. Then shop around for a card and credit card issuer that meets your needs and that offers a sign-up bonus you’re happy with right now.

If you can find that, there’s no need to wait for a potentially bigger bonus that may never come.