Rewards credit cards with high initial bonuses are now more popular than ever. Credit card companies are offering potential customers hundreds of dollars, free flights and complimentary hotel stays simply for opening a particular card or charging a certain, easily attainable amount during the first couple months of card membership. Most don’t even have annual fees, at least not in the first year—more than enough time to garner your goodies. But why are issuers being so generous?
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We all know how tough the Great Recession was and what kind of damage it did to consumer credit in the United States. The number of Americans with “bad credit” (FICO scores below 620) increased from 15 percent to 25 percent during this financial malaise and both unemployment and charge-off rates skyrocketed.
What you might not realize is the effect these trends have had on competition between credit card companies for the consumers who maintained excellent credit during the downturn. Issuers are lining up for their business, and like rule-breaking college coaches, are throwing money at their recruits. So, I’m sure you’re wondering by now which credit cards have the most lucrative initial bonuses. After examining roughly 340 offers with initial rewards bonuses, Card Hub deemed the following cards to be the best credit card deals:
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Each has its own rewards earning structure, whereby users garner additional perks with each dollar they spend. Still, many of you might be concerned about adding another credit card to your wallet or affecting your credit score. While your credit score does dip slightly for about six months every time you apply for a credit card, this won’t actually affect you unless you need the best credit score possible during that time frame.
Your credit score is inextricably linked to the loan terms you receive. It also has bearing in whether you can lease a car or rent an apartment as well as how much you pay on your car insurance. So be cognizant of that when considering one of the aforementioned offers, but don’t let it scare you unnecessarily and thereby ruin an opportunity for a great deal.
The above offers can also serve as motivation for people with less-than-excellent credit to stay committed to credit building. Having excellent credit truly does have its perks so spend responsibly and you’ll soon be able to grab some free money as well.
Odysseas Papadimitriou is chief executive of CardHub.com, one of the nation’s leading credit card comparison websites.