Credit Card sign up bonuses can be great because if you are planning on a big spend (think furniture, computer, home repairs) you can get a decent amount back to help with that purchase. If you have a big purchase in mind then it may be worth taking out a new credit card for the sign up bonus and making the most out of this. However, there are some things to be mindful of before you take out a credit card.
The first thing to consider to make the most out of a sign up bonus is if you have a big purchase in mind. Typically you can expect anywhere from $100 to $200 back when spending $500 to $2,000 within the first three months. If you are in the market for something that will cost the required spend, then getting a card with a sign up bonus may be the best option. If you don’t plan on spending this much in that short amount of time then it’s not worth getting a credit card right now. Spending money just to hit the sign up bonus will cause you to spend money on things you probably don’t need.
If you do have a big purchase in mind, make sure to take out the credit card at least a month before you need the purchase. Credit Cards can take up to 3 weeks to mail out so you want to make sure you have plenty of time to get the card in time for your purchase. You will need to plan ahead of time if you choose to take out a credit card for the sign up bonus.
Make sure to consider your credit score as well and any major life events. If you are working on building your score because you want to buy a house soon, it may not be the right move to take out another credit card. This could lower your score slightly and could impact your mortgage approval. Always think of your long-term goals before you decide you want to save $150 for taking out a credit card. It may not be worth it if it impacts any long-term goals.