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Glossary term

Signup Bonus

What a credit card signup bonus is, how to meet the spending requirement, how points and cash are valued, and how taxes work.

What is a signup bonus?

A signup bonus (also called a welcome offer or intro bonus) is a one-time reward that a credit card issuer gives you for opening a new card and spending a minimum amount within a set time window, usually the first 3 months.

Example: "Earn 60,000 points after spending $4,000 in the first 3 months." Spend $4,000 on eligible purchases in months 1 to 3 and you receive 60,000 points deposited into your rewards account.

How the spending requirement works

The spending threshold is usually $3,000 to $6,000 for travel cards and $500 to $2,000 for cash back cards. The timer starts the day your account is approved, not the day you activate the card.

Important: balance transfers, cash advances, and certain fees generally do not count toward the spending requirement. Only purchases count.

If you already have predictable large expenses coming up (annual insurance, business supplies, rent via a service that accepts credit cards), timing your application around those expenses is a practical way to hit the threshold without overspending.

How to value a signup bonus

For cash back cards, the value is straightforward. A $200 statement credit is worth $200.

For points and miles, the value depends on how you redeem:

  • Transferred to airline or hotel partners: often 1.5 to 2.5 cents per point
  • Redeemed for cash back or statement credits: often 1 cent per point
  • Redeemed for travel through the issuer portal: often 1.25 to 1.5 cents per point

A 60,000-point bonus worth 1.5 cents per point is $900 in value. At 1 cent per point it is $600.

Do you owe taxes on a signup bonus?

Generally no. The IRS treats credit card rewards (including signup bonuses) as a rebate on spending rather than income, so you do not receive a 1099 for them and they are not taxable. The exception is when you receive a bonus without any spending requirement attached, for example a $100 reward just for opening an account. That small category may be taxable.

For typical spend-based signup bonuses on personal cards, you owe nothing to the IRS.

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