The value of one credit card signup bonus can be enormous. Credit card signup bonuses are the points or miles that a bank is willing to give you when you sign up for their credit card and meet an initial spending level that they designate. A typical credit card signup bonus could be 50,000 points or miles for signing up for a particular credit card and spending $3000 on that card within the first 3 months of applying.
Best Credit Card for new Travel Hackers
The card that I refer to first time travel hackers more often than any is the Chase Sapphire Preferred card. It typically offers 50,000 Chase Ultimate Rewards points after spending $4,000 within the first three months of having the card. The offer changes occasionally in how many points are offered or how much the initial minimum spend is.
Whenever someone asks me what credit card is best to get first, I always ask them what they want to achieve with the points. Usually the person asking has no idea, they just know that they want to travel more. In this situation the Chase Sapphire Preferred card is one of the best offers around due to its versatility. It allows the customer to either spend their Chase Ultimate Rewards points directly with Chase or transfer to an array of airlines and hotels. The transferring of the points will typically give a more valuable redemption of points. For these reasons, I will show you what the points from signing up for this one card, the Chase Sapphire Preferred, can achieve for you through a real life experience. My sister in law, Amber, and her fiance, recently took advantage of this offer to book part of their honeymoon!
Terms of the bonus
As mentioned above, the current terms of the Chase Sapphire Preferred deal is to receive 50,000 Chase Ultimate Rewards points after spending $4,000 in the first 3 months of having the card. They also mention that this bonus is worth $625 worth of travel. I’m going to show you that it can be worth quite a bit more. How much more? You’ll see… it’s pretty crazy!
Meeting the Minimum Spend
After applying for the card you’ll need to meet the initial minimum spend so that your bonus points will be released into your account. Amber had her regular spending plus some wedding expenses that needed to be paid so she was easily able to meet the initial minimum spend. If you already spend $4,000 per three months, great! You’ll meet your spend just with that. If you don’t typically spend that much, you can manufacture spending in a variety of ways. A few of these ways to manufacture spending are to purchase Visa or American Express gift cards for later spend, asking a friend or relative if you can use you card on their spending and have them pay you back, or making a big purchase that you have been planning on. There are many ways to manufacture some spend to meet the bonus. A good reference for manufactured spending is on Frequent Miler blog.
They spent about $9,000 in the initial three months of having the card which earned them the following:
50,000 pts – signup bonus
9,000 pts – regular spend points
5,000 pts – authorized user bonus points (another bonus for adding a second card for her fiance)
=64,000 Chase Ultimate Rewards points
Where to travel?
They decided that they wanted to travel to the beautiful islands of Hawaii for their honeymoon! They’ve been to Oahu so wanted to experience something new… Or somethings! They ended up finding flights that were available through Alaska and Hawaiian Airlines to travel from the San Francisco Bay area to Kauai, then to Maui, and back home to the bay area.
OAK to LIH = 25,000 miles + $11.20 taxes/fees (booked using British Airways miles)
LIH to OGG = 14,000 miles + $11.20 taxes/fees (booked using United Airways miles)
OGG to SFO = 25,000 miles + $11.20 taxes/fees (booked using British Airways miles)
Total amount saved on these flights combined: $1,345.40 (I’d call that a win)
Points and the value of them
Overall this was a great travel rewards redemption, which got excellent value out of their points. Their flights to/from Hawaii ended up with a value of 2.3 cents per point, and their inter-island flight earned a value of 1.4 cents per point, coming out to a total of 2.1 cents per point. 64,000 points spent and $1,345.40 saved.
The value of one credit card signup bonus
This is just one example of how one credit card signup bonus can make an enormous impact on your travel and give extraordinary value. Amber ended up saving over $1,300 dollars on their honeymoon, which is pretty incredible. I’d say that’s quite a bit better than the $625 value that Chase puts on the signup bonus!