In addition to ongoing rewards that give you cash back as a percentage of the money you spend with your card on purchases, many cash back rewards programs also offer introductory sign on cash bonuses when you meet a specific spending threshold in a set time frame.
The focus with cash back cards is typically on the ongoing cash back rewards, so typically, these sign on bonuses are lower than the huge points or miles offered by the other types of credit card rewards programs. Normally, the most cash you can earn with an introductory cash back bonus is $100, and you will usually need to spend about $500 in the first 90 days to earn it. The vast majority only offer a $25 introductory bonus.
Continuing cash back can be earned at a rate of 6% for grocery purchases and 3% for gas and department store purchases in the U.S. Once you have spent $6,000 within a year on these categories, the earn rate drops to 1% on these and all other purchases.
Ongoing rewards earnings aren’t too shabby. You receive 2% cash back on groceries and 3% at gas stations. Eligible purchases in these categories are capped at $1,500 each quarter. Other purchases earn at a 1% rate.If you are a Bank of America banking account customer, you can earn additional rewards by redeeming your cash back into your BOA savings or checking account. This gets you 10% on your deposit.
After your 3 months have passed, you continue earning cash back on purchases at a slightly higher than average earn rate of 1.5%. However, there are no additional incentives or special high cash back rates for any purchasing categories.
Ongoing cash back rewards are 5% cash back on qualifying purchase categories that change every 3 months. They max out after you spend $1,500 on these select categories during each quarter. You will continue earning 1% on additional purchases in all categories.
On occasion, Chase Freedom offers a time-limited $200 sign-up bonus. Qualifying purchases remain the same – $500 in purchases within the first three months you have your account. You should take advantage of this rarity when you see it, especially with the high ongoing earn rates available to you through the cards rotating categories and the absences of an annual fee. Moreover, you don’t need excellent credit to qualify for this card, so it’s well suited if you’re just building a credit history. Most recently, the doubled signing bonus ran during the month of June 2014.
Points/Miles rewards cards typically offer far more impressive introductory signing bonuses than cash back cards. Travel cards offer the highest introductory cash back bonuses. As you can see below, with some of these cards, you can also redeem points for cash back, though the points are devalued when you choose this option. Still, if you’re not a traveler, the cash back amounts are very respectable and higher than those normally offered by top cash back rewards cards.
The following are just a few points/miles cards that give you a better than average introductory bonus.
Cash rewards credit cards don’t offer very impressive introductory bonuses. Most are in the $25 range, and a few offer $100 to $150. If you’re lucky, and your timing is right, you may be able to cash in with a higher time-limited offer, like Chase Freedom’s $200 deal. However, normally your cash back rewards are going to be more dependent upon your ongoing spending. In contrast, rewards cards offering points/miles often give you quite notable sign on bonuses for heavy card use in the first three months. And as you can see above, some of these even allow you to redeem your points/miles for cash at a lower valuation. If you are set on a cash back card, consider also applying for a good points/miles rewards card to use in tandem with your cash back card, thus earning the maximize amount of rewards for all of your normal spending, especially if you travel.
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