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Credit Cards

The welcome bonus is the top reason why people shop for new credit cards—here are 3 not to miss

JD Power's new study finds people say the reason they shop for a new credit card is to get a better rewards program and collect a welcome bonus.

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While the pandemic upended consumers' spending habits — with people more hesitant to shop in-person or to enjoy a dinner out — it didn't significantly change credit card usage. According to a new 2021 JD Power study looking at the experiences of Americans who applied for, or were thinking about applying for, credit cards in the past year, people were as likely to sign-up for travel credit cards in 2020 as they have been in years past.

The results of the study showed that travel credit card acquisition and satisfaction remained steady, says John Cabell, director of banking and payments intelligence at JD Power. He notes that credit card issuers have responded to consumers' changing spending behavior by adapting and changing their rewards programs.

"It will be interesting to see as consumer behavior continues to evolve how these programs will continue to adapt, and whether [credit card] issuers will continue to offer as much flexibility as they have in the last few months with different sorts of rewards programs," Cabell says. "There's definitely a competition right now with promotional offers and bonus offers."

The study found people were more likely to sign up for a new card in order to get a better rewards program, collect a sign-up bonus and/or receive better credit card terms.

There are no shortage of tempting welcome bonus offers at the moment, with cards like Chase Freedom Flex℠, Chase Sapphire Preferred® Card and the Capital One SavorOne Cash Rewards Credit Card all offering new cardholders a good reason to sign up.

Below, Select breaks down some of the best bonuses you won't want to miss.

The Chase Freedom Flex

The Chase Freedom Flex℠ offers new cardholders a bonus of $200 if you spend $500 within three months of opening the account. With this card, there's no annual fee, and you can get 5% cash back on up to $1,500 worth of purchases each quarter in rotating categories (activation is required — read more about the Chase 5% cash-back calendar). 

Chase Freedom Flex℠

On Chase's secure site
  • Rewards

    5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%), 5% cash back on travel booked through the Chase Ultimate Rewards®, 3% on drugstore purchases and on dining (including takeout and eligible delivery services), 1% cash back on all other purchases

  • Welcome bonus

    $200 cash back after you spend $500 on purchases in your first three months from account opening

  • Annual fee

    $0

  • Intro APR

    0% for the first 15 months from account opening on purchases and balance transfers

  • Regular APR

    15.74% to 24.49% variable

  • Balance transfer fee

    Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.

  • Foreign transaction fee

    3%

  • Credit needed

    Excellent/Good

Terms apply.

The Chase Sapphire Preferred Card

New cardholders signing up for a Chase Sapphire Preferred Card can earn 60,000 points after they spend $4,000 on eligible purchases within the first three months of account opening.

The bonus is worth $600 if redeemed for cash back, but if you use the Pay Yourself Back tool or you book travel through the Chase Ultimate Rewards® portal, point redemptions are worth 25% more, so the bonus is worth $750. The Pay Yourself Back tool allows cardholders to use their points as a statement credit on eligible purchases. The Sapphire Preferred also gives cardholders a $50 annual Ultimate Rewards Hotel Credit, plus 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining and 2X points on all other travel purchases.

This card does have a $95 annual fee, but the welcome bonus covers the cost of the annual fee many times over. There are no foreign transaction fee, making it a great option for international travelers.

Chase Sapphire Preferred® Card

On Chase’s secure site
  • Rewards

    $50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining, 2X points on all other travel purchases, and 1X points on all other purchases

  • Welcome bonus

    Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Ultimate Rewards®.

  • Annual fee

    $95

  • Intro APR

    None

  • Regular APR

    16.74% - 23.74% variable on purchases and balance transfers

  • Balance transfer fee

    Either $5 or 5% of the amount of each transfer, whichever is greater

  • Foreign transaction fee

    None

  • Credit needed

    Excellent/Good

Terms apply.

 

The Capital One SavorOne Cash Rewards Credit Card

The Capital One SavorOne Cash Rewards Credit Card gives cardholders $200 if they spend $500 within the first three months of opening the account. Beyond that, there's no annual fee or foreign transaction fees, and the card offers 3% cash back on dining and entertainment, 3% on eligible streaming services, 3% at grocery stores (excluding superstores like Walmart® and Target®) and 1% on all other purchases. It's great for people who anticipate dining out or attending concerts more in the near future.

Capital One SavorOne Cash Rewards Credit Card

On Capital One's secure site
  • Rewards

    3% cash back on dining and entertainment, 3% on eligible streaming services, 3% at grocery stores (excluding superstores like Walmart® and Target®) and 1% on all other purchases

  • Welcome bonus

    Earn a one-time $200 cash bonus after you spend $500 on purchases within the first 3 months from account opening

  • Annual fee

    $0

  • Intro APR

    0% intro APR on purchases and balance transfers for 15 months

  • Regular APR

    16.49% - 26.49% variable 

  • Balance transfer fee

    3% fee on the amounts transferred within the first 15 months

  • Foreign transaction fee

    None

  • Credit needed

    Excellent/Good

Terms apply.

Bottom line

Regardless of whether you're searching for a credit card to get a big bonus or to reap more rewards or cash back on your purchases, there are a multitude of different cards available that offer you both.

It's important to remember that you should avoid overspending in order to get a credit card welcome bonus, as you'll pay more in interest charges if you carry a balance than you'll make up in points or cash back.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.