We often talk about welcome bonus offers at Clark.com. That’s because they are a great way to cash in on some “free money” from the credit card companies. Some are worth more than $500! (Clark readers are talking about the best bonus offer they’ve ever received here.)
This is an “easy win” if you’re planning to sign up for a new credit card, provided that you know you’ll hit the spending requirement for the bonus and also know that you’ll be able to pay the balance in full without incurring any interest charges.
But what if you’re NOT in the market for a new credit card?
Is it worth signing up for a credit card just to claim the bonus?
That’s the question I’m hoping the Clark community can answer today.
A prime example for this discussion: Recently I wrote about a new bonus offer from Chase’s IHG co-branded credit card. It’s a $99 annual fee credit card that is offering a great welcome bonus of 5 free nights if you meet their spending requirement.
With the cost of hotels these days, I imagine a lot of people could really get some great value out of what is essentially a week vacation’s worth of free rooms!
But if you’re like me, you may have no particular loyalty to the IHG hotel chain. So the short-term gain would be tremendous, but does the card have any long-term value in my wallet?
Clark generally advises against “bonus chasing” on a credit card that you wouldn’t otherwise have a use for in your life. This is especially true if the card carries an annual fee.
Some reasons it could be problematic:
- Annual fees can add up over time
- You will endure a ding on your credit to apply for the card
- Card issuers generally limit the amount of welcome bonus offers you can qualify for during a certain amount of time, so you may miss out on something you’d prefer instead
Of course, you may also benefit from the perks of the card and the boost an open line of credit could give the credit utilization portion of your credit score.
So, what do you think Clark.com community? Is it worth applying for a card just for its bonus? And, if so, what is your threshold for determining which bonuses are worth it?
I’d love to hear about your “bonus chasing” strategies. It always helps me shape the way I view our credit card content.
Nick