Methodology: US News reviewed hundreds of credit cards to identify the card with the best annual bonus or credit. Each card has its strengths and drawbacks, so there is no card that is ideal for every cardholder. Selections reflect the best cards in each category that may suit your needs.
What is the difference between a sign-up bonus and an annual bonus?
A sign-up bonus is usually given when you get a new rewards credit card, which provides a faster way to earn points, airline miles, or cash back. However, as their name implies, the sign-up bonus only happens once – every time you sign up for a new credit card. If you want to take advantage of the year-to-year sign-up bonus, then you have to get a new card annually.
Signing up for a credit card, earning their sign-up bonus and then canceling the card is a potentially lucrative practice known as churning, but it is not for everyone. This can be risky, especially if you fail to pay your balance in each statement period or struggle to manage multiple credit card accounts. And opening and closing accounts can negatively impact your credit rating.
Churn can also be a problem for issuers. “The sign-up bonus is not sustainable,” says Richard Kerr, founder of Rewards Travel 101, a Facebook community that helps members maximize rewards programs. “This costs a lot in customer acquisition.”
On the other hand, annual bonuses reward loyalty for cardholders who retain the card for two years or longer. A card with an annual bonus may continue to offer a bonus prize value after the first year, which is not true for those cards that offer only sign-up bonuses. Annual bonus cards can be particularly rewarding if they offer a healthy sign-up bonus or the cardholder can benefit from the rates you use, or the rewards rates.
Sometimes the annual bonus can be more valuable than a sign-up bonus. “An example of how an annual bonus can be more than a sign-up bonus is British Airways Travel Together tickets”, a website that helps maximize advanced credit card rewards, is a website called UpgradedPoints. says the CEO and founder of com. This ticket is available with the British Airways Visa Signature Card when you spend $ 30,000 a year. It is good for two years and gives you a companion seat on the same flight, in the same cabin when you book a qualifying British Airways flight with prizes and paying taxes, fees and freight charges on both tickets. Huh.
How can you earn an annual bonus?
Annual bonuses may be awarded in the form of bonus points or airline miles as well as loyalty certificates. A certificate of loyalty may be offered for a free hotel stay or a companion airline ticket. Some cards require spending to earn an annual bonus, or a bonus may be offered to maintain your account and pay an annual fee.
You can earn 6,000 bonus points after your cardholder’s anniversary Southwest Rapid Rewards Premier Credit Card. However, the annual fee for this card is $ 99 which will be applicable on your anniversary along with the bonus.
With the Alaska Airlines Visa Signature Card, cardholders can claim a discounted partner each year. Partner fares are as low as $ 121 – $ 99, $ 22 in taxes and fees.
What should you know about earning an annual bonus?
Earning an annual bonus can create some strategy, so if you want to make the most of the available bonuses, you will need to pay attention to the details and plan ahead.
Cardholder year vs. calendar year. When you plan for annual bonuses, note whether you can earn them in the calendar year or cardholder year. Although both calendars calculate the same time, they are not necessarily counting the same period. A calendar year is from 1 January to 31 December, while a cardholder year is from the date when you sign up for the card the next day of the same year.
This difference matters because if you sign up for a new card, say, in November and plan to earn an annual bonus by meeting a calendar-year spending requirement, you have to do so. There may not be much time. For example, if you sign up for the Hilton Honors American Express Surpass Card, which earns a free weekend night each calendar year after spending $ 15,000, then you have the opportunity to meet that goal and get the first bonus. The year will be just a few months to achieve.
Annual expenditure planning. Joining multiple sign-up bonuses can be quite simple. You can direct your regular spending to a new card to earn a bonus, then move on to the next one. If you prefer, you can stop using the card and close the account if it is no longer valued for rewards or does not help your credit rating with the age of the account or the available credit. But if you are trying to earn an annual bonus that requires spending, you must continue to use the card each year until you receive the bonus.
Miller says that your spending strategy will depend on your goals, but he prefers to direct his spending to a special credit card, until he reaches an elite credit or loyalty position.
Kerr agrees that you should spend enough to meet your goals each year using the card with an annual bonus.
What are the annual credits?
Some credit cards offer annual benefits, usually in the form of travel or airline fee credits. These benefits are renewed each year and can provide hundreds of dollars for cardholders who continue to maintain their accounts.
for example, Platinum card from American Express Provides a $ 200 airline fee credit each year with a qualifying airline. You will get a statement credit for goods and other contingency fees up to $ 200 annually. The card offers up to $ 200 in US Uber Ride credits – $ 15 each month, and a $ 20 bonus in December.
Chase Sapphire Reserve There is a $ 300 annual travel credit, which is automatically applied as a reimbursement for any travel purchases charged to your account. It can be used to cover travel booking, payment of contingency fees or any other purchase coded as a trip.
Annual credits usually do not roll over until the following year, so if you do not use them, you will lose them. Consider whether you will be able to fully take advantage of the card’s annual credit. For example, a card with an attractive annual travel credit can be valuable over the years when you plan a trip but not useful if you have decided to return from a trip.
Is an annual bonus worth it?
Annual bonuses are designed to provide value to the cardholder that continues through the second year of the card and beyond. Bonuses can compensate for the annual fee in whole or in part, but you must do the math for each card to determine whether they will provide enough value for you to maintain a credit card account.
Generally, annual bonuses will not fully compensate for your annual fee, but they can bring you much closer. Other features of the card can create the remaining value you need to keep each year. For example, your points earned from purchases or cardholder benefits such as extended warranty coverage or auto rental collision damage rebates may give you extra value.
These are some examples of how you can compare your card’s annual bonus to the annual fee:
The Hilton Honors American Express Surpass Card, which has a $ 95 annual fee, earns a weekend night reward each calendar year when you spend $ 15,000. The daily rate for Hilton hotels is usually over $ 100, so this reward can compensate for your annual fee. However, you must earn this award for $ 15,000 with annual expenses – $ 1,250 per month – which may be more than your budget allows.
With platinum cards from American Express and Chase Sapphire Reserve, annual credits do not fully cover the cost of the annual fee. American Express’s Platinum Card offset $ 400 of the $ 550 annual fee with annual credit, and the Chez Neelam Reserve offset $ 300 of the $ 550 annual fee with annual credit. Both still give up a portion of the annual fee to create value. However, you can do so with each card’s prize income and benefits each year, including airport lounge access and hotel loyalty status or complimentary complimentary upgrades.