Thursday, August 25, 2016

Archived Post - Credit Card Signup Bonus $200- Worth opening?

I wanted to repost this post as I now have many more followers and wanted to get your thoughts on this as I have continued to use this strategy to earn some extra cash.

Credit cards can be dangerous!  However, they often seem to offer excellent rewards or cash back offers.  I recently received an offer to earn $200 cash back plus 2% on all dining purchases and 1% on all other eligible purchases.  In order to get the bonus all I would have to do is spend $500 within 90 days.

Obviously, I would not use this as a way to buy something like a new iPhone or Apple Watch. It can really be a dangerous road if you see this as a way to buy things you really want but do not NEED. Instead, I would use this card to pay for an expense related to education.  It is an expense I have every month no matter what and there is no credit card fee to pay this.  So wouldn't it be simple to open this card and essentially make $200 with no effort.  It seems like a simple decision for me.  I have excellent credit and I do not see this affecting my score much at all.  It is definitely something to keep in mind as repeating this too much could lead to a drop in your credit score especially if you end up closing credit cards. But in this case there is no annual fee so I would just leave it open and build the length of time cards have been open overall as well.  I use to track my credit scores and any activity, which helps me understand factors going into the credit score.

Having said that, I went ahead and opened the credit card.  I will write an update post once I figure out more information about the card/earn my bonus.

Short and simple post, but can you give me your thoughts on this?  Have you opened credit cards for a cash back bonus?

I'm not an investment professional or a licensed financial advisor. This blog represents my personal views and decisions, which may not be appropriate for other investors. Please use common sense or consult with an investment professional before investing your money. I am not responsible for the outcomes of your decisions, nor am I responsible for the comments posted by readers or the contents of any linked websites. This blog should viewed for educational or entertainment purposes only.


  1. Hi TDM,
    Nothing really wrong with this as long as it was $500 that you planned to spend anyway as you point out. I think the main hit to your credit score comes from the reduction in the average length of accounts & time since most recent account opening. But that'll improve again with time. It might be worth finding a small annual charge to put on that card just so it shows some activity.

    I've read a lot about credit card churning for introductory offers; typically for bonus miles / points
    that can be quite lucrative. I think I earned 50,000 miles or so when I first opened my Amex card which was worth $500 or a free flight or something, and I also got a free hotel stay from a Marriot related card at Chase.

    Finally I opened an online savings account for a $200 bonus at Chase. They declared the $200 on the 1099 interest form too though so I ended up paying taxes on it. I still get similar offers in the mail but decided it's not worth the hassle to open more savings accounts and move money around.

    Best wishes,

    1. DL,

      Thank you for stopping by and commenting! Yup - for me I have been using this plan as I have a expense that I must pay every month. I completely agree though that the length of time of my cards will be hit and I should try to charge something each year on them.

      I definitely find them lucrative and as a rough estimate want to say I have earned back over $600 this year using this strategy, but I'll have to check that and maybe write some more posts on the other cards. Thats great you got the free Marriott rooms those can be quite expensive =(.

      I believe income from savings account would hit the 1099; however, credit card bonuses would not which is a plus. I guess I will find out come tax time =p. I do agree that bank accounts aren't worth the time and hassle especially since some require minimum balance. I have found that CC's on the other hand can be a great source of extra income! Especially if it is only for purchases you will be making regardless.


  2. As you say, credit cards are dangerous. The companies issuing them rely on the fact that most users are ill-disciplined. They run up balances, don't pay their full CC bill every months, and start paying lots of interest to the issuer.

    For responsible users, offers like the one you're talking about is great! As long as you don't change your disciplined ways, I think you should be fine. And it sounds like you're well aware of your credit scores and how they're impacted by the actions you take. Not many folks are!

    FerdiS, DivGro

    1. FerdiS,

      You are right, they essentially want some people to not pay their balance. I have actually opened many cards this year, but because of expenses that were necessary. Once I am done paying this off, I probably will not be opening any new ones. I tried to learn as much as I could about credit score and what impacts it from CreditKarma and Capital One's Creditwise. By no means would I call myself an expert as I am learning new things everyday, but definitely important to understand the consequences and areas that are taken into account when calculating your score. Thanks for stopping by and commenting =). Means a lot!


  3. Credit cards are dangerous for some. They shouldn't take advantage of an offer like this. I would do this deal. I pay every bill I can with credit cards and pay them off each month. My wife and I get a lot of points and cash back each year.

    1. IH,

      You are right. I like how you put it - "CC are dangerous for SOME." If you have a plan and stick to it I think it is a great idea to earn points and earn cash back. If you are not a disciplined spender, don't even try- could lead down to a very ugly road as these card companies charge crazy rates.