There are few things as rewarding as a generous sign-up bonus. Credit card issuers offering you hundreds of dollars worth of points, miles, or just plain cash back can seem irresistible. But at the same time, earning these bonuses may not be as easy as it appears. There’s plenty of room for error along the way. (See also: Best Credit Cards That Offer Cash Bonuses)
The next time you are looking to score big on a credit card bonus, be careful to avoid these six mistakes.
1. Failing to Reach the Minimum Spending Amount
When it comes to sign-up bonuses, credit card issuers advertise the rewards in big bold print, but describe the minimum spending requirements in tiny type. Most credit cards require you to spend a certain amount within 90 days of account opening in order to earn the bonus. Calculate how much you’ll need to spend each billing period and whether you are confident that your regular budget and spending can accommodate it. You’ll have to plan ahead and make a list of all the places you’ll need to change your payment method (recurring subscriptions and other payment accounts). Do it as soon as possible so you don’t miss a charge.
2. Missing the Minimum Spending Deadline
When credit card issuers offer bonuses that must be earned within 90 days, it’s easy to misunderstand when the clock starts on the offer. The 90 days is based on when the account was opened, which is when your application was approved. Considering that it can take up to a week from issuing you a card to actually getting it in the mail, you may already be down 10 days by the time you have the card in hand. To be extra careful, you can ask your card issuer to confirm your account opening date as well as the last date that you can make a purchase toward the minimum spending qualification for the sign-up bonus. (See also: 5 Steps to Getting a Free Vacation With Credit Card Bonuses)
3. Overspending to Earn a Bonus
It’s tempting to use the large bonus to justify some extra purchases. You might even see it as a discount, since you’re getting rewards for it. But it’s never a good idea to go into debt to earn rewards, no matter how big the offer. Paying off your balance every month is the number one rule of using rewards cards. If you find yourself consciously or subconsciously overspending to earn rewards, then you should probably take a break from reward credit cards and focus on sticking to a budget. You’ll never come out ahead if you’re paying a drop of interest on those purchases.
4. Making Returns That Affect the Spending Amount
Part of the fine print of any bonus offer is that you must make a certain amount of net purchases in order to earn the rewards. Net purchases means the total amount of purchases you make, minus any returns. This prevents people from buying and returning a big-ticket item in order to get around the minimum spending requirement.
That’s not to say you shouldn’t return an item you’re unsatisfied with. But if you do happen to return an expensive purchase such as an appliance or a new television while qualifying for a bonus, then you have to realize that it won’t count toward your card’s minimum spending requirements.
5. Not Reading the Exclusions for Past Cardholders
In recent years, credit card issuers have been cracking down on customers who repeatedly apply for the same cards in order to earn multiple sign-up bonuses. As a result, some credit card applications now have language that excludes bonuses for applicants who have received a bonus for that card within the last 24 months. What’s more, some issuers will deny bonuses to anyone who has ever had the same card in the past. Look at your records to make sure you haven’t had the card before, and if it’s been a long time, you can call the issuer to check if you’d still qualify for their new offer.
6. Trying to Pool Offers That Don’t Mix
Let’s say you’re trying to pool together a large amount of points to get a free trip for your family. If you have good credit, you might be able to get approved for multiple offers within a short period of time. But this isn’t as easy as just adding points from one card to the points of another card. You need to understand how each card allows points to be redeemed. (See also: How Travel Rewards Credit Cards Really Work)
Some points are only redeemed as a statement credit toward travel purchases. Others allow you to purchase travel with points but only through their exclusive portal. And others allow you to transfer points to travel partner programs. For example, both Chase and American Express allow you to transfer points to Singapore, Virgin Atlantic, and Air France/KLM. In any case, you have to know what your travel plans are to ensure that you won’t waste bonus points because you weren’t able to use them all together effectively.