Should You Ever Get a Credit Card Just for the Welcome Bonus?

There are some generous welcome offers in the credit card industry right now. It's not difficult to find offers for, say, $300 cash back or $500 (or more) in travel points after meeting spending thresholds. 

Let's be clear. Credit card issuers create these offers to entice you to become a customer, not just to take advantage of the bonus. However, these welcome offers can tempt you to apply for credit cards you otherwise wouldn't want, simply to take advantage of their introductory bonuses. That's especially true if you're a disciplined consumer who will use the card responsibly. 

With that in mind, is it ever a good idea to apply for a credit card just to take advantage of the card's welcome bonus?

A complicated question

Unfortunately, there isn't a simple yes or no answer to this question. There's a solid case to be made that it can indeed be a smart idea to open a new credit card account for no other reason than to take advantage of a generous welcome offer, but only in certain situations. In other cases, it only makes sense to get a credit card if it has a solid welcome offer and is generally a good fit for your life and spending habits. 

With that in mind, here are some factors to consider before applying for a credit card just to get a welcome bonus. 

Does the card have an annual fee?

With a no annual fee credit card, you can theoretically open the card, spend enough to get the bonus, and simply not use it anymore if you don't want to. 

If a card has an annual fee, you first need to consider the value of the bonus beyond the fee (assuming it can't be waived the first year). In other words, if a card has a welcome bonus worth $500 but has a $199 annual fee, it makes a difference. Plus, an annual fee means you'll need to either close the account before it renews, or pay the fee again.

Will you actually use the card's benefits?

This is most important for cards with annual fees. As an extreme example, I've written about The Platinum Card® from American Express several times, which has a $695 annual fee (see rates and fees). However, I can conservatively show that I get more than twice this amount in value from the benefits. Even if you plan to only keep the card for the first year, an annual fee is much easier to justify if you get a great welcome bonus and perks you'll use.

Is there an intro APR offer?

Some excellent credit cards have generous welcome offers as well as 0% intro APR offers on purchases and/or balance transfers. If you can get a welcome bonus and use a balance transfer offer to help get rid of your existing credit card debt, it can make the offer more tempting.

What are the card issuer's rules about getting a welcome bonus?

Card issuers generally only allow you to get a bonus offer once every few years, and in some cases, you can only get it once in a lifetime. As one example, if you apply for the Chase Sapphire Preferred® Card, you can only get a welcome offer if you haven't received a bonus from any Sapphire card within the last 48 months. If you make it a habit to capitalize on welcome offers, these rules are important to know. 

Will you be able to pay your charges before interest starts to accumulate?

This should go without saying, but credit card bonus offers, perks, and rewards generally only make good financial sense if you don't carry a balance and pay interest. Some of the more lucrative welcome offers have high spending requirements -- such as $8,000 or $10,000 for some higher-end credit cards. So, be sure not to charge items you wouldn't ordinarily buy just to get a welcome bonus. 

Consider the credit score implications

Finally, it's also worth noting that opening new credit cards to get welcome offers and then closing them can impact your credit score. New accounts can impact the "length of credit history" category and the "new credit" category, which combine to make up 25% of your FICO® Score. To be sure, the impact isn't likely to be huge, but keep in mind that opening and closing cards regularly can have a negative impact. 

The bottom line

As I said earlier, the question of whether it's worth getting a credit card just for the welcome offer is a complex one, and there isn't a clear yes or no answer. It depends on the fees and other details of the card itself, the issuer's welcome bonus rules, and other factors.