Are Credit Card Sign-up Bonuses on the Decline?
Update: Some offers mentioned below are no longer available. View the current offers here.
If you read many other frequent flyer blogs, I'm sure you've heard that Chase recently inserted "Limited Time Offer" into their marketing copy for the Chase Sapphire Preferred® Card. While this isn't completely newsworthy - I mean all of these credit card offers are technically "limited time offers," it was weird that they randomly added it out of the blue. I did some digging with my contacts at Chase and apparently no decision has been made when the 50,000 point sign-up bonus will end, but their best guess is "sometime in March." Take that for what it's worth - it could come sooner or later, but nothing is guaranteed. The 50,000 point sign-up bonus has been running since May 15, 2011 and as with all amazing deals, they must come to an end.
Amex, Citi and Capital One have also drastically reduced many of their key card sign-up bonuses over the past couple months, so it got me thinking: are the days of monster credit card bonuses over for the time being? Or are the card companies simply taking a breather before launching a new, even more competitive round of bonuses? I certainly hope for the latter, but looking at the trend of the key card issuers, I'm not too sure:
American Express used to have huge sign-up bonuses in the first half of 2011, but things have since cooled down:
Platinum Card: Went from a 50,000 point bonus from January through April, 2011 and then to 25,000. There have been targeted offers since, but no standard 50,000 sign-up. FYI there is a new Mercedes-Benz Platinum card, with a $475 annual fee, that is offering a 50,000 point sign-up bonus.
Premier Rewards Gold Card from American Express: 15,000, but used to be limited time offers of 25,000-30,000 and the targeted bump bonus of 75,000 last summer (which ended September 6, 2011).
Citi is known for running rogue offers that they don't promote (and probably don't even know about)
American Airlines Visa and Amex cards: Went from 100,000 to 75,000 to 50,000 in October of 2011, where it has remained.
Citi Premier went from 20,000 to 50,000 with an annual fee to 20,000 to 50,000 without an annual fee, which is their current offer (update: the bonus has been decreased to 30,000 points). End date TBD, but it’s the best we’ve seen with the $125 annual fee waived for the first year (so essentially $633 in free travel - I will be applying for this card in my next round of applications).
Capital One has always been the most conservative of the issuers (I mean they pull all three credit bureaus for each application!), but they shocked us all in 2011 with a 100,000 point offer:
The Venture card went from 100,000 in April/May to 25,000 in May and then to 10,000 in December 2011. There have been rumors of a 100,000 point return, but I’m not holding my breath.
Chase: The leader in the miles and points game has had the least amount of deductions in sign-up bonuses.
Chase Sapphire Preferred® Card: Which is my favorite card and in my opinion, currently the best all around deal on the market. 50,000 points after spending $3,000 spend within 3 months and a yearly 7% bonus on all points earned, essentially making the standard earning 1.07 points per dollar spent. You earn double points on all travel (airfare, hotel, cruises, taxis, subway, parking etc) and dining so those spend categories earn 2.14 points per dollar. Points can be transferred to United, British Airways, Korean, Southwest, Hyatt, Marriott, Priority Club and Amtrak.
Historical sign-up bonus: 20,000 raised to 50,000 in May 2011 and Chase just updated the language to say, “Limited Time Offer” this week. End date: Unknown, but potentially March 2012.
Ink Bold: 50,000 points after $5,000 spend within the first 3 months- $95 annual fee waived for the first year. Lots of changes with this card- it went from 25,000 to 50,000, then they discontinued the card and launched a new 50,000 point offer. Now that the equivalent Amex (Business Rewards Gold) has a 0 point sign-up bonus, I wouldn’t be surprised to see this card drop to 20,000- 25,000.
Note: You can get a Chase Sapphire Preferred® Card and Ink Bold on the same day for a total of 100,000 points, but you will have to call the Chase reconsideration line to get either or both of them approved (the system will auto-reject more than 1 application every month, but since one is business and one personal many TPG readers have been able to get both. See this post for getting approved for Sapphire and this one for my experience getting Bold- however, I did not do them on the same day).
British Airways: 100,000 in December 2009 and April/ May 2011... down to 50,000. No movement since.
Southwest Premier: 20,000 to 50,000 with a $99 annual fee to 25,000 to 50,000 with a $69 annual fee.
I’m not trying to be alarmist with this post, but more take a minute to analyze where we stand so we can all evaluate our strategies going forward in 2012. As much as I’d like to hope “what goes down, must come up,” I’m not 100% sure that’s the direction credit card sign-up bonuses will be taking in the short term. (Check out this post to see my lineup of future card applications to take advantage of the best deals available).
However, I don't have a doom and gloom view on the long-term prospects of earning miles and points via credit cards. As the economy continues to pick up, I think the card companies will compete even harder to gain creditworthy borrowers. I also think the decrease in bonuses towards the end of 2011 reflected the fact that many of the marketing budgets had been exhausted, so I hope to see some robust new offers in 2012 as new plans and budgets are put into place.
Remember, the airlines are selling billions of dollars in miles and the card companies are making even more billions on transaction fees, interest rates and annual fees. Until something fundamentally changes with the way our credit system works and how merchants are charged for transactions, I don’t see the credit card mileage game changing.
Disclaimer: Many of these links are my affiliate links, which means I get a commission if you apply and get approved - which is what keeps this site running and my bills paid as a full-time blogger. However, my goal is to provide the best deals and will use an external link when a better deal exists. If you know of a better deal, please feel free to comment or email me and I'll update the post.