How to Prioritize and Maximize Credit Card Sign Up Bonuses

Posted by Madison on January 9, 2013

At any given point in time, I’m juggling about a dozen new credit cards from various credit card application sprees each with their own spending requirement to earn the sign up bonus.

Mix in the quarterly 5% Rotating Cash Rewards Credit Cards and it’s easy to stare at the cards and not know where to start.

Here’s how I manage the spending on each card and prioritize the cards to meet the spending requirements and maximize the cash back. It’s also a helpful way to make sure nothing slips through the cracks when I cross check my bonus points to each offer.

How to Prioritize Credit Card Sign Up Bonuses

  1. Convert the sign up bonuses to a base cash back %.

    For example, the Chase Sapphire $400+ Sign Up Bonus requires $3,000 in spending to earn 40,000 bonus points (which is the equivalent of $400 in cash). $400/$3,000 = 13.3% cash back.

    When you do this for all of your cards, you’ll see that some of the cards with the smaller sign up bonuses are actually a better return on your spending! Be sure to subtract any annual fee you might have to pay to get an accurate final number.

    The Citi Forward Card $100 Sign Up Bonus has a $100 bonus, which doesn’t appear as desirable as the Chase Sapphire. However, when you calculate the base cash back on the $650 spending requirement you’ll see a higher cash back. $100/$650 = 15.4% cash back.

  2. Add on bonus cash back.

    After calculating the base cash back, add on any bonus cash back for bonus categories that you use. Taking the Citi Forward one step further, you can add on the 5% for restaurants. 15.4% + 5% = 20.4% cash back at restaurants.

  3. Merge the list with current cards.

    I keep an updated list of the best card for each category that rotates quarterly. After I’ve calculated the base percent plus additional categories, I mix the lists together, which gives me a prioritized list for each category.

Sign Up Bonuses Converted to Cash Back

After converting the sign up bonuses to cash back and adding the bonus categories, you can prioritize based on the highest percentage. Here’s a sample of a list I put together to prioritize purchases this month using the current free money sign up bonuses:

Card Base Cash Back Additional Cash Back
Chase Freedom $100 Sign Up Bonus $100/$500 = 20% Gas Stations, Drugstores, Starbucks + 5% = 25%
Citi Dividend $100 Sign Up Bonus $100/$500 = 20% Fitness clubs, drug stores + 5% = 25%
Capital One $100 Sign Up Bonus $100/$500 = 20% All purchases + 1% = 21%
Citi Forward Card $100 Sign Up Bonus $100/$650 = 15.4% Restaurants + 5% = 20.4%
Citi Thank You Preferred $150 Sign Up Bonus $150/$1000 = 15% All purchases + 1% = 16%
Chase Ink $500+ Sign Up Bonus $500/$5000 = 10% Wireless and Office Supplies + 5% cash back = 15%
Chase Sapphire $400+ Sign Up Bonus $400/$3000 = 13.3% Travel and Dining + 2% = 15.3%
American Express $250 Sign Up Bonus $250/$2000 = 12.5% Gas + 2% = 14.5%
American Express Blue Cash Preferred $150 Sign Up Bonus $150-$75/$1000 = 7.5% Grocery Stores + 6% cash back = 13.5%
Blue Cash Everyday Card from American Express $100 Sign Up Bonus $100/$1000 = 10% Groceries + 3% = 13%
US Bank FlexPerks $175 Sign Up Bonus $175/$2500 = 7% Cellular + 2% = 9%

Putting it Together

Once you know where you are earning the most cash back for each category, you can make your purchases. For example, my normal gas station purchases go on my Pen Fed Platinum VISA card for 5% cash back. However, while I’m meeting sign up bonuses, it would be much better to put those purchases on a new Chase Freedom card to earn 25% cash back.

It also works for cards that don’t have any bonus categories. For example, when I shop at Target, I use the Target credit card for a 5% discount. However when I’m trying to meet spending requirements, I’d use any card in the above table to earn between 7% – 20% as a base cash back.

Keep Track of your Spending

The above method works great to prioritize your spending… just make sure you keep track of the spending requirements to get the bonus. Once you meet each spending requirement, cross it off the list and use what is left to prioritize your purchases. In addition, keep track of the timeframe you have to meet each offer!

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