Expert guides on welcome bonuses – a factor to consider when picking a credit card
Welcome bonuses are often worth hundreds of dollars and so can play a significant role in deciding which credit card to choose. However, when the Big Guide to Travel Cards was released, bonuses had no weighting in the ratings.
We intentionally excluded welcome offers because they are constantly changing. Focusing on the value of points spent on flights, redemption flexibility, travel-related perks, and insurance made more sense.
That said, since welcome bonuses will always be a consideration, there are certain things to look out for.
The big bonus
Any card offering a huge welcome bonus should be attractive, but it comes down to the details. For example, the American Express Platinum Card currently has a welcome bonus of 140,000 points – the highest it’s ever been. You get 100,000 points when spending $10,000 in the first three months and an additional 40,000 points when making any purchases in months 14 and 17.
$10,000 is a lot of money, so it only makes sense to get the card if you plan to spend that amount anyway. Additionally, since you get the second part of the bonus after your anniversary, you must pay the yearly fee of $799 twice.
That may not seem like a great deal at face value, but it’s incredible when you factor in the card’s additional benefits. You get an annual $200 dining and a yearly $200 travel credit. That effectively lowers your annual fee to $399. 140,000 points have a minimum value of $1,400. However, if you use the American Express Fixed Points Travel Program or transfer your points to Aeroplan, you could double the value of your points.
Had the current welcome bonus, which ends on Jan. 28, 2025, and extra perks been considered, the Amex Platinum Card likely would have been the top overall card on our travel list.
The structured offer
The structured welcome bonus has become increasingly common. This type of offer is divided into parts and involves multiple spending requirements to receive the complete bonus.
For example, the CIBC Aeroplan Visa Infinite Card recently offered 40,000 points. It awarded 10,000 points after your first purchase, another 10,000 points when spending $5,000 in the first four months, and 20,000 points when spending $10,000 in the first 12 months. The annual fee of $139 was rebated for the first year.
There’s also the Scotiabank Gold American Express Card, which offered 25,000 bonus Scene+ points when spending at least $1,000 in the first three months and another 20,000 points when spending $7,500 in the first year. The card’s annual fee of $120 was also rebated for the first year.
Since both cards have a similar offer and minimum spending requirement, choosing one over the other comes down to the loyalty program and card benefits. Aeroplan points are worth 1.5 to 2 cents each, so the CIBC bonus is better in dollar value and you get Air Canada benefits. However, those who travel abroad a lot may be interested in the Scotiabank card since it has no foreign transaction fees.
The no-brainer
Minimum spending requirements have consistently increased, but occasionally, some offers are so good that you should consider applying immediately.
The RBC Avion Visa Infinite Card is a good example. It consistently has a bonus of 35,000 Avion points upon approval. Those points have a base value of $350, but they can be worth as much as $750 if you use RBC’s Air Travel Redemption Schedule. No spending is required to get the points, but the card has an annual fee of $120.
There’s also the TD First Class Travel Visa Infinite Card, which recently offered 20,000 TD Rewards points after your first purchase and another 115,000 points when spending $5,000 in the first 180 days. That’s a total of 135,000 points – a value of $675. Plus, the annual fee of $139 is rebated for the first year.
Both offers are excellent and similar to a degree. In this scenario, you’d want to look further into what benefits each card offers and how flexible the respective rewards programs are. In the end, you want a card that gives you great perks and be part of a program that you find valuable.
Welcome offers didn’t play a part the in Big Guide to Credit Cards, but they’re certainly a major consideration for anyone applying for a credit card. If you see one that aligns with your spending and travel goals, sign up immediately, as there’s no guarantee that things will improve.
This article was first reported by The Globe and Mail
