The Ultimate Guide to Credit Cards
Tuesday, October 20, 2020
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2020's Best Credit Cards for Excellent Credit

Below are our staff picks for 2020's best credit cards for those with an excellent credit rating, which is generally considered a credit score of 750 or higher.

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Review Breakdown: Cards for Excellent Credit

Still looking for your ideal credit card? If you have an excellent credit history, you have a variety of options when it comes to choosing your next card. Below is a simple summary of the top cards for excellent credit. Simply click on the card's name to visit the issuer's official application.

Here are 2020's best credit cards for excellent credit:

Best Credit Cards Excellent Credit
RankCard NameFeatureRegular APRExpert Rating
1Chase Freedom Unlimited®1.5% cash back14.99% - 23.74% Variable ★★★★★ 5.0
2Capital One® Venture® Rewards Credit CardExcellent Credit17.24% - 24.49% (Variable) ★★★★★ 5.0
3Chase Sapphire Reserve®50,000 bonus points16.99%-23.99% Variable ★★★★★ 4.9
4Blue Cash Preferred® CardExcellent Credit13.99% - 23.99% Variable ★★★★★ 4.9
5Chase Freedom Flex℠Excellent Credit14.99% - 23.74% Variable ★★★★★ 4.9
6Capital One® VentureOne® Rewards Credit CardExcellent Credit15.49% - 25.49% (Variable) ★★★★★ 4.8
7Capital One® Quicksilver® Cash Rewards Credit Card1.5% cash back15.49% - 25.49% (Variable) ★★★★★ 4.8
8Chase Sapphire Preferred® CardExcellent Credit15.99% - 22.99% Variable ★★★★★ 4.8
9Citi® Double Cash CardExcellent Credit13.99% - 23.99% Variable ★★★★★ 4.8
10Ink Business Unlimited℠ Credit Card1.5% cash back13.24% - 19.24% Variable ★★★★★ 4.8
11Capital One® SavorOne® Cash Rewards Credit CardExcellent Credit15.49% - 25.49% (Variable) ★★★★★ 4.8
12Ink Business Cash℠ Credit CardExcellent Credit13.24% - 19.24% Variable ★★★★★ 4.8
13American Express® Gold CardExcellent Credit15.99% - 22.99% Variable ★★★★★ 4.8
14American Express® Business Gold CardExcellent Credit14.24% - 22.24% Variable ★★★★★ 4.8
15The Business Platinum Card®Excellent CreditN/A (Charge Card) ★★★★★ 4.8
16The Platinum Card®Excellent CreditN/A (Charge Card) ★★★★★ 4.8
17Citi Prestige® Credit Card50,000 bonus points16.99% - 23.99% Variable ★★★★★ 4.8
18Wells Fargo Propel American Express® Card20,000 bonus points14.49% - 24.99% Variable ★★★★★ 4.8
19Bank of America® Cash Rewards Credit CardExcellent Credit13.99% - 23.99% Variable ★★★★★ 4.7
20Bank of America® Travel Rewards Credit CardExcellent Credit14.99% - 22.99% Variable ★★★★★ 4.7

12 FAQs About Credit Cards for Excellent Credit

Brittney Mayer
By: Brittney Mayer
Credit Analyst
Updated:
12 FAQs About Credit Cards for Excellent Credit
CardRates.com Guide: Excellent Credit

The best credit cards for excellent credit should have all of the bells and whistles that you deserve. After all, obtaining a credit score in the 800s is no easy feat.

Instead of just swiping or inserting your card to make a purchase, a credit card for excellent credit should offer exceptional rewards and act as a key to exclusive events, lounges, and other areas that make adding the card to your portfolio worth your while.

The cards listed above aren’t just credit cards, they are a way to leverage your hard work to live the life you want — with fewer hurdles, fees, and other obstacles to get in your way from that goal.

1. What is an Excellent Credit Score?

Many lenders rely on your FICO score to make credit and lending decisions. While FICO has a multitude of scoring models for different needs, most of the scoring tiers remain the same.

You actually have 16 different FICO scores each with specific scoring models for auto, mortgage, and other specialty lenders. Each scoring model ranges between 300 and 850 and contains a tier that categorizes each potential score.

An excellent credit score is anything at or above 800. From 740 to 799 is very good. Between 670 and 739 is good. A score of 580 to 669 is fair and anything at or below 580 is considered bad credit.

FICO Score® Ranges

Several factors come into play when determining the credit score that each credit bureau lists on your credit report. The most important are your current debt load and payment history. Also included are your account ages, credit mix, and the number of new credit applications you submit (fewer is better).

You must master all of these categories to achieve an excellent credit score. That means you have to keep your balances low, make your payments on time, maintain a good mix of different credit accounts, and otherwise have a long history of positive financial behavior.

A general rule of thumb is that you should have at least seven years of history built up with your various lenders, so excellent credit takes time and patience to build. The history alone will take approximately seven years if you are starting from scratch. You have to maintain discipline and stay focused during that time.

But if you can reach that goal, you won’t just have access to better credit cards. An excellent credit history opens up all kinds of doors to great financial products and opportunities that include:

  • Better Auto Loans: This is where you get to take advantage of those zero-zero-zero auto-financing deals. Only the most attractive credit scores get invited to this party. In fact, have a copy of your excellent credit score with you when you walk into the dealership and ask what kind of deals they have. You may be quite impressed.
  • Lower Insurance Rates: What does my credit history have to do with how good a driver I am, you ask? The truth is absolutely nothing. But if you have a good driving record and an excellent credit score, you are more likely to receive the preferred rates on car insurance.
  • Better Mortgage and Refinancing Rates: When it comes time to buy a home or to refinance the home you’re in, the banks will fall over themselves to make you the best deal possible when you have excellent credit. That’s because they get graded on the average credit rating of their borrowers.

With excellent credit ratings being scarce, you can bet the banks want your business.

There are other benefits to having an excellent credit rating. Any personal or signature loans you need also will have the lowest rates assigned. In fact, as more parties use credit scores to gauge your level of responsibility, nearly everything gets better when you have excellent credit.

2. What Kind of Credit Card Can I Get with Excellent Credit?

When you have a top credit score, banks open their doors to you. You pose very little risk of default and just about every credit card issuer wants your business.

While you may think that this means you can get any credit you want, there may be a few exceptions that make it hard to qualify for certain cards.

For example, Capital One only allows consumers to have two of its credit cards in their name. Once you reach that limit, the automated underwriting system will reject your application — no matter how excellent your credit is.

Chase has a rather mysterious and unpublicized rule that it enforces strictly. The 5/24 rule states that if you have five or more new bank card accounts (credit or charge cards) opened within the last 24 months, you’ll most likely be rejected for a new Chase credit card even if you otherwise qualify.

A handful of other credit cards are so exclusive that they can only be acquired through a personal invitation from the issuer. This includes the renowned American Express Centurion® Card (a.k.a the Black Card).

This card is so mysterious that American Express doesn’t even mention it on its website. In other words, it’s one of those “don’t call us, we’ll call you” sort of deals.

What is known of this card is that it has a $7,000 or more activation fee and a $2,000 monthly fee. Rumors state that you must spend at least $250,000 with the card each year to maintain your account.

But you can certainly find tremendous credit options that offer you great perks and rewards for a lot less money. The options listed above range from cards that charge no annual fee to the Chase Sapphire Reserve®, which, for a hefty annual fee, offers a wide array of perks that are worth several hundred — or thousands of dollars each year — depending on how you use it.

To decide which card works best for you, map out your financial goals and spending. While you may flinch at an annual fee, you can often turn that upfront cost into some serious savings throughout the year.

If you’re into travel, many of the Chase branded cards (the Chase Sapphire Preferred, Sapphire Reserve, and Chase Freedom lines especially), make it easy to earn valuable rewards toward your next trip.

3. What Kinds of Rewards Are Offered on Cards for Excellent Credit?

The best credit cards for excellent credit have all of the basic rewards covered — you will have no problem finding high cash back rates, major point possibilities, or massive miles earnings. Whichever option best suits you will depend on your needs and goals.

Cash Back

This works as you’d expect. Each credit card offers a percentage of cash back that it gives to cardholders for every qualifying purchase.

This is similar to a rebate in which you receive your money back into your account and can redeem it whenever you like through the card issuer’s website or mobile application. Cash rewards can work as either a flat rate on all purchases or through a category based program where you earn more cash back for certain purchases — typically gas stations, restaurants, and grocery stores.

Types of Cash Back Credit Cards

You aren’t limited in how much cash back you can earn, and you can redeem your rewards for cash deposited directly into a linked checking account, a paper check, or a statement credit.

Points

Bonus points work on a similar percentage scale as cash back, in which you earn a set number of points for each dollar you charge to your card. The major difference between points and cash back is the flexibility you get with the former.

You can redeem your accrued bonus points for a wide range of rewards that include merchandise, travel discounts, gift cards, and even cash back. Each redemption option requires a different number of points, so it’s important to research your options to stretch your points as far as you can.

Air Miles

These are very similar to points. You earn a set number of miles for every dollar you charge to your card and you can redeem the rewards for a host of travel discounts — including free or reduced hotel stays or upgrades, flights, cabin upgrades, and free checked bags, rental cars, or ride-sharing services.

The travel discounts are typically much deeper with a travel rewards credit card, as these cards partner with providers to offer the lowest possible rates to cardholders who obviously travel a lot.

Aside from those basic rewards, you can expect a credit card for excellent credit to come with several other perks and rewards options — and not just a lower interest rate and fee structure.

Some cards, such as the Capital One® Venture® Rewards Credit Card, offer statement credits that refund the cost for Global Entry or TSA Pre✔®

Several of the Chase cards will offer hundreds of dollars in annual travel credits and a very large welcome bonus that can provide a massive Ultimate Rewards point haul. You may also find cards that offer a different signup bonus, including cash back, when you reach certain spending thresholds within the fist 60 to 90 days with your account.

Other perks you may find with your new credit card include fraud protection with $0 liability, rental car insurance when you pay for your rental using your card, identity theft protection, and credit score access. Your card may also offer price matching and cellphone insurance when you pay your monthly bill using your card.

While you will certainly find rewards attached to a card that has no annual fee, you will likely see a higher reward rate when you pay for membership. You can still recuperate the charge if you leverage your rewards and spend enough (while avoiding interest charges) to maximize your earnings.

4. How Do I Choose the Best Rewards Program?

As we learned above, there are three main types of credit card rewards: cash back, points, and miles. There are positives and negatives with each, depending on what you want from a credit card.

For example, you can earn very steep travel discounts and freebies through a miles credit card — but that will have very little impact on you if you aren’t a frequent traveler. You can’t go wrong with cash back, but that option is typically the least lucrative of the bunch. After all, banks aren’t big fans of giving away money.

Points have the most flexibility, but they can often require a little research when it comes time to redeem them. That’s because every option will value your points differently. For example, your points won’t earn you as much cash back as they will travel rewards or merchandise discounts.

Chart Comparing Values of Common Credit Card Rewards Points

If you are a frequent traveler — whether for pleasure or business — or if you just want to travel more, you should consider a good travel rewards credit card. The benefits will save you money, earn you upgrades, and make your trips far more memorable or enjoyable.

If you don’t mind a little leg work, or if you enjoy research, you can’t go wrong with points. With your savings, you can choose from dozens of rewards options that make your life easier. You can even transfer your points to many popular loyalty programs or donate them to charitable causes.

If you want to keep things simple, cash back is king. This can save you money on your everyday purchases and help you save for a rainy day.

And since many of the best credit cards for excellent credit offer cash back rates as high as 6% on some categories, you can save money substantially faster than you would through a traditional 1.5% or 2% cash back credit card.

Just be wary of annual fees when making your decision. These fees can quickly negate the benefits of some rewards if you aren’t a regular card user.

A basic 2% cash back credit card that charges a $99 annual fee will require $5,000 in purchases throughout the year to break even. If you use your card a lot, this may not be an issue. If you are the type who only uses your card in an emergency, you will be paying for rewards you don’t use.

Required Spend to Make Up Annual Fee with 1% Rate Differential

The same goes for interest. While someone with excellent credit will likely qualify for a low APR, maybe a variable rate of around 12%, that is still much higher than the rewards rate. If you carry a balance from month to month and accrue interest charges, those fees will eat away at any rewards you can earn — be it cash back, miles, or points.

But if you pay off your balance during your grace period, you should have no problem maximizing your choice of rewards. Enjoy the selection process. You earned it.

5. Are Cash Back or Travel Rewards Better?

If you are a frequent traveler, then a travel rewards credit card will give you far greater value than a cash back rewards credit card. On the flip side, a homebody or infrequent traveler will benefit more from cash back they can use for any purpose — including a far-away planned trip.

Just about every credit card company partners with various travel and accommodations providers to offer very low rates and valuable redemption options to cardholders. With your excellent credit score, you will receive the most prime offers available.

If that makes your heart race and your mind starts thinking of the next trip you can take, then the choice is obvious.

Keep in mind that some travel rewards don’t allow you to redeem your miles for upcoming trips. Two major examples are the Capital One® Venture® Rewards Credit Card and Discover it® Miles card, which allow you to rack up miles for every dollar you charge to your card and later redeem them for credit toward previous travel-related purchases.

This essentially erases past charges for travel within a specified period. So you can charge your upcoming airfare to the card, earn miles for that and other past purchases, and then use the miles to wipe away part of the debt.

While this may sound like a less impactful reward, it can have its benefits.

Some travel credit cards restrict your rewards redemptions to specific partnered hotels, airlines, rental car agencies, or other accommodations providers. Others may provide blackout dates during which you cannot travel — which typically fall during peak travel times.

With a card that lets you redeem your miles to erase past purchases, you can book with any company you prefer and get the same rewards rate and redemption possibilities. This is especially handy if your favorite hotel or airline is not partnered with a travel rewards card.

Most banks allow you to browse their redemption options before you apply for their card. You can do this if you want to be certain your favorite brands partner with the card you are considering.

6. What are Some of the Best Credit Cards for Excellent Credit?

The best part about having excellent credit is that you are not limited in which cards — or card issuers — you can choose from. You will be eligible for most cards from most issuers.

Some of the top issuers have tremendous card options for consumers who have good credit. Those options get even better when you have excellent credit.

  • Chase is always a top option for rewards credit cards. The bank’s Ultimate Rewards program is among the best in the industry and offers the most flexible and valuable redemption options. The Chase Sapphire, Chase Freedom, and Chase Freedom Unlimited offer points and cash back potential that are nearly unrivaled in the credit card industry. You can also regularly earn extra rewards via a signup bonus when you meet certain spending thresholds in your first few months as a cardholder.
  • American Express has always been synonymous with luxury credit card options, and that reputation still holds true today. The issuer’s Blue Cash Preferred® Card offers among the highest cash back rates in the financial sector. If you want to go the cash back route, you cannot go wrong with this card.
  • Capital One has overcome its early reputation as an everyday consumer card by offering some great rewards cards for consumers who have top-shelf credit. The bank’s Venture® line of travel rewards credit cards is among the most favored among travelers who don’t want to deal with blackout dates or other restrictions.
  • Citi is a fast-rising star in the credit card game thanks to its Citi Double Cash line of cards that offer a two-pronged approach to cash back. These cards pay a set percentage in rewards when you make your purchase, and then pay the same amount again when you pay the purchase off.
  • Discover offers a Cash Back Match program on its cash back and miles credit cards that match the total amount of rewards you earn during your first year with the card. You can earn an unlimited amount of matched rewards in one lump sum shortly after your first anniversary with the card.

Each card issuer has a large portfolio of cards it offers to consumers. While some may target applicants who have bad credit, fair credit, or good credit, the absolute best cards are reserved for those who have excellent credit.

These cards offer the highest rewards, lowest interest rates, and most benefits. Most issuers only offer one or two premium cards in this category, aside from American Express, which mostly caters to well-heeled consumers.

If you have a favorite bank or card issuer you prefer to do business with, you can narrow your choice down quickly. If you aren’t tied to a specific financial institution, you can whittle down your search by finding the best rewards structure for you and going from there.

7. What Are the Best Balance Transfer Offers for Excellent Credit?

The average American household carries more than $16,000 in credit card debt. With that in mind, there’s no wonder why credit card companies have pushed balance transfer deals as a way of bringing new customers into their business.

With a balance transfer, you can move debt from one existing credit card to your new credit card while enjoying a period of interest-free financing in which you can eliminate the debt.

And since you have excellent credit, you will have access to the best balance transfer offers on the market. Keep in mind that these offers change and evolve every month as competition increases. What may be the best offer right now may not be the greatest deal next month.

Chart of Potential Balance Transfer Savings

Most credit card issuers have some sort of balance transfer offer. In many cases, the 0% APR promotional period will apply to both balance transfers and new purchases. By law, a credit card issuer must extend an interest-free promotion for no fewer than six months. The top cards maintain this financing deal for 18 months or longer.

While these deals will change over time, the Citi® Double Cash Card traditionally offers a great balance transfer offer with a long period of 0% APR on balance transfers and new purchases.

There are a few things to remember when considering a balance transfer. Although you may not pay any interest during your promotional period, you will likely have other fees to consider. And if you do not pay your entire transferred debt during your interest-free window, you could have a good bit more to pay.

Balance transfer fees apply to nearly every credit card balance transfer offer. These fees typically charge 3% to 5% of your total transferred balance.

While you can sometimes find offers that provide interest-free financing and no balance transfer fees, the combination is rare. Still, the fee is not a game-changer if you are paying a high interest rate on your current credit card.

For example, if you’re paying the typical 17% APR on a $5,000 balance, you’ll need to pay $330 per month to eliminate that credit card debt in 18 months — which includes $668.47 in interest charges during that time. With a 0% APR deal, you could pay between $150 and $250 in balance transfer fees, but have that debt settled with only $287 in monthly payments.

In this scenario, the balance transfer fee is a fraction of the amount you would pay in interest — and a no-brainer if you want to knock your debt out faster.

Interest charges after your promotional period will vary by the type of card. With excellent credit, you will likely face a standard interest charge that will bill you for whatever portion of the balance you have not paid off. So if you still have $1,000 of that $5,000 you transferred over sitting on your balance, you will start paying your standard interest rate on that $1,000 as soon as your promotion expires.

In some cases, though, you may find a balance transfer deal that charges deferred interest. Avoid these offers if you think you won’t pay the balance before the promotional period is over.

Deferred interest is applied to the entire amount you transferred, no matter how much you paid off during the promotion. So even if you owe only 50 cents of that original $5,000 you transferred over, the bank will tack on interest for the entire $5,000 as soon as your promotion expires.

Balance transfers are one of the most popular tools in every financial toolbox. These deals can help you eliminate debt without wasting hundreds — or even thousands — on finance charges.

These offers are a great way to lower your debt, but remember that many offers that give you long periods without interest will still limit the time frame in which you can initiate the transfer. For example, a card may give you 18 months without interest for balance transfers initiated within your first three months after card activation. Any balance transfer after those first three months may not qualify for the 0% interest rate.

The trick to maximizing these offers is to create a plan on how you will satisfy the debt before the promotion expires. This way, you won’t have to worry about added interest or other charges down the road.

8. Which is the Most Difficult Credit Card to Get?

In some ways, credit cards aren’t much different than high school. The credit score on your credit report can determine how “cool” you are to lenders, and the type of plastic in your wallet determines your status among the class.

While all of the cards on our list above can get you into the best parties and experiences — while saving you a substantial amount of money (hey, we are still adults after all), some cards are reserved for only the most elite consumers — or the coolest kids at school.

American Express® Centurion® CardAt the top of the list is the American Express Centurion Card — otherwise known as “The Black Card.”

This card is so mysterious that American Express doesn’t even mention it on its website. You can’t apply or ask for the Black Card. The only way to qualify for it is through an invitation extended by American Express.

Even the details of this card are shrouded in mystery. The one thing that is clear is that the card doesn’t come cheap.

For starters, the minimum annual membership fee (it varies by invitation type) reportedly sits around $7,500. As if that weren’t enough, the card also requires a $2,500 monthly fee. And the only way you can reportedly keep your card active is if you charge a minimum of $250,000 in purchases each year.

So what do you get for all of that? The details aren’t totally clear. American Express won’t list them and current cardholders tend to remain tight-lipped. Some that are known include:

  • Hotel loyalty elite status perks
  • Delta Elite status
  • Airport lounge access around the world
  • Up to $1,000 in annual Saks Fifth Avenue credit
  • 24/7 dedicated concierge service
  • International arrival service at most airports
  • Unlimited credit limit
  • No foreign transaction fee

While those definitely seem like some nice perks, several similar benefits come with the cards listed above. What’s better? You won’t be saddled with $37,500 in annual and monthly combined fees to access them.

9. How Many Credit Cards Should You Have for Excellent Credit?

The beauty of having excellent credit is that you have a nearly unlimited selection of credit cards at your disposal. The downside of having excellent credit is that — well — you have a nearly unlimited selection of credit cards at your disposal.

While options are good, they can also be overwhelming. It’s why we often pile our plates full of food at a buffet but find ourselves full after eating less than half of what we chose.

It isn’t the number of credit cards you have that impacts your credit score. In fact, the more available credit you have at your disposal, the more it helps your score. But maintaining a wallet full of credit cards can get costly if you’re paying annual fees on each of them.

We prefer to have the full range of rewards options available to us. That means a good cash back rewards card, a good points credit card, and a good travel rewards credit card.

By utilizing all three cards, you can maximize your rewards based on your purchases. For example, a card that offers bonus cash back in certain categories (say grocery stores, gas stations, and restaurants) would be great to use on those purchases.

Many travel-based credit cards provide complimentary rental car insurance when you pay for your car using the card. Plus, you can earn miles to pay for that rental or erase part of its cost from your balance.

A points credit card is the Swiss Army Knife in your wallet. You can bank your points and eventually redeem them for a plethora of options — including merchandise, gift cards, travel discounts, experiences, and even cash rewards.

We enjoy using points cards for our everyday purchases because of the flexibility they offer and the value that you can extract from them when you stretch your points to the max.

Of course, this requires a little research to decide which redemption options have the most value. If that sounds like too much work for you, one of the best cash back cards should be your main option.

The only downfall with cash back is that it tends to provide lower rewards rates than the other options. If you are okay with that, then there’s nothing wrong with choosing the card with the highest cash back rate and letting it be the only card in your wallet.

But if variety is the spice of life, why not leverage your excellent credit score to add some options to your spice rack? With each of the three major rewards options, you can do just that.

10. What Fees are Associated with Cards for Excellent Credit?

Fees are an inevitable part of the credit card business. But thanks to your credit score, you can avoid most of them if you choose to.

But not all fees are bad. While some credit cards may charge an annual fee for membership, you may find that the perks included with the card help you make much more money than you spend on fees.

Some of the fees that you can expect to see include:

  • Interest Charges: Every credit card charges interest, but not every credit card holder pays interest. While your card may charge you an APR of 17% or more, you can avoid paying this charge if you pay your entire balance before the due date. Every credit card comes with a grace period, which is a window (typically around 20 days) in which you can pay off a recent charge without it incurring an interest charge. If you pay your balances off during that time frame, you will never pay a financing charge.
  • Annual Fee: Not every credit card charges an annual fee, but the ones that do typically have some pretty nice benefits attached. If you play your cards right, you can turn those benefits into profits or perks that exceed the amount you spend. If you prefer to keep things simple, you can still find plenty of options with great cash back or points rewards that will not charge you an annual fee.
  • Balance Transfer Fee: This one is fairly unavoidable unless you sign up for a new card that offers a free balance transfer offer. Even then, your window to initiate the transfer typically lasts only a few months after you activate your card. This fee typically amounts to around between 3% and 5% of the total amount of money you transfer from an existing card to your new card. You can expect a balance transfer of $5,000 to cost you between $150 and $250, but it can save you hundreds more than that in interest charges.
  • Cash Advance Fee: A cash advance is never advisable, but you do have access to this financial tool if you’re in a pinch. With a cash advance, you can withdraw cash from an ATM or bank teller window using your credit account. These transactions are not covered under a grace period and will begin accruing interest — typically at a higher rate than normal — the second you receive your funds.

While you can’t avoid some credit card fees, you can often control which ones you pay — and how much you pay — by choosing your credit card wisely and maintaining the same responsible financial behaviors that earned you an excellent credit score.

But don’t feel that you need to avoid fees altogether. Some annual fees aren’t as bad as they seem and can come with perks that will outweigh the cost of membership.

11. How Can I Earn a Signup Bonus?

A signup bonus is a promotional tool that credit card issuers use to attract new customers to a personal or business credit card offering — and it often works.

Not every credit card offers a signup bonus, and the amount of bonus you can earn will vary based on the credit card that you choose to add to your wallet. Be sure to research a card thoroughly before applying to make sure it has an offer that interests you.

How to Earn a Signup BonusA typical signup bonus will offer extra rewards that add on to the current rewards structure — that means cash back, bonus points, or extra miles. You earn the bonus by meeting certain spending thresholds within your first few months with the card.

So, for example, you may get $500 in bonus cash back if you charge $3,000 or more to your card within your first three months after activation. Depending on your rewards structure, that same spending could earn you a 10,000-mile or 50,000-point bonus.

Others may have a longer time horizon for payouts. The popular Discover Cashback Match program adds up all of the cash back or miles that you earn in your first year with the card and matches that amount in one lump sum shortly after your first anniversary with the card.

Credit card issuers constantly change their signup bonus offers to remain competitive. Some can provide incredibly lucrative returns in exchange for your business. But while these bonuses are very tempting, they can also be costly.

The temptation to spend more than you normally would to achieve your signup bonus can lead to extra credit card debt. That debt will add interest charges to your account. And those charges can exceed the amount of your bonus if you’re not careful.

Banks hope that consumers fall into this trap, that is how a credit card company makes money and keeps its business booming.

But if you can keep your spending under control, the signup bonus is a great way to bank some extra cash, points, or miles and keep your stash of rewards growing. With some travel cards, the welcome bonus is large enough to pay for round trip airfare or hotel accommodations for an entire vacation.

That’s not a bad reward for your everyday purchases. Just by charging your monthly bills to your card and paying them off each month you can reach most spending thresholds on your cards.

Other creative ways that you can meet your spending threshold and reap your signup bonus include:

  • Donate to charity: Most charitable causes are more than happy to accept online donations via credit card. You can pay these donations off as soon as they post — and use them as a tax write-off.
  • Pay your taxes: The government wants your money, so why not make a little money off your annual or quarterly tax payments? Just make sure that any processing fees the charges may add on don’t make the transaction too costly.
  • Purchase points or miles: Most rewards credit cards allow you to purchase additional miles or points that you can add to your current collection. Using this method, you can buy rewards and use the purchase to earn a signup bonus of more rewards. That’s a double score.
  • Pay your tuition: This is similar to paying taxes in that it is a necessary expense, but one that could come with a processing charge that gets costly. But, considering the high cost of tuition and books, you can likely meet your signup bonus goal with a single charge on a student credit card or another unsecured credit card. And if you have grants or scholarships, you can use that money to pay the debt and keep the bonus for yourself.
  • Make a down payment for a new car or other large purchase: This is especially handy if you already have the money saved up to make the payment. Instead of paying with cash or check, charge the expense and then pay it off immediately. That should get you to your signup bonus almost instantly.

If you have one of these large expenses in your near future, it’s almost worthwhile to sign up for a card with a good welcome bonus so that you can earn a large sum of rewards for a purchase that you would make either way. Just be sure that you have the money ready to pay the charge during your grace period. Otherwise, the interest charges could make your signup bonus less rewarding.

12. Is it Better to Cancel Unused Credit Cards or Keep Them?

You should always keep your credit card accounts open unless you are paying a high annual fee for a card that you never use. Even then, it may be worth the cost of membership to maintain your excellent credit score.

Approximately 30% of your FICO credit score relies on your current debt load — which you can calculate as your credit utilization ratio. You can calculate your credit utilization by dividing your overall credit card debt by the total amount of credit extended to you by all of your cards.

For example, if you have $10,000 in available credit and have $2,000 in credit card debt, you have a 20% credit utilization ratio. In other words, you are using 20% of your available credit.

Lenders like to see low utilization. A high utilization means you’re taking on too much debt and slowly going underwater. A low utilization shows that you are responsible and have your spending under control.

When you carry a balance and cancel a credit card account, you instantly increase your credit utilization.

Consider the example above, with $10,000 in available credit and a $2,000 balance. If this person canceled a credit card account with a $2,000 spending limit and no balance, the amount of available credit would drop to $8,000 and the credit utilization would jump to 25%. That can cause a dip in the cardholder’s credit score.

Your best bet is to keep your accounts open. This may still require you to make a small purchase using the card every year to keep the account active. Although that may seem like a bit of an inconvenience, it’s worth it to maintain your credit score and keep you eligible for the best credit cards for excellent credit.

Editorial Note: Opinions expressed here are author's alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

The information on this page was reviewed for accuracy on .

About the Author

Brittney Mayer Brittney Mayer Credit Analyst

Brittney is a Credit Strategist and Finance Expert who has spent years honing her knowledge of the credit industry both personally and professionally. Brittney applies her more than a decade of research experience to crafting in-depth consumer guides designed to help CardRates readers make better, more informed financial decisions.

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