A welcome bonus is a promotional reward offered by credit card issuers to attract new customers. It usually comes in the form of points, miles, cash back, or statement credits after meeting certain spending requirements within a set time frame.
How It Works
For example, a credit card might offer 30,000 reward points if you spend $3,000 in the first three months. The bonus is added to your account once the requirement is met and can be redeemed according to the card’s rewards program.
Benefits
- Boosts rewards: Gives cardholders a large amount of points, miles, or cash back upfront.
- Incentive to apply: Encourages customers to choose one card over another.
Considerations
Welcome bonuses often come with spending requirements and may require annual fees. If the spending target is not met, the bonus is forfeited. Cardholders should also avoid overspending just to earn the bonus.
Final Thoughts
A welcome bonus can add great value to a credit card, especially when paired with strong ongoing rewards. However, it’s important to meet the requirements responsibly and weigh the long-term benefits of the card.