Sign-up offers on credit cards

There are quite a few credit card companies that offer card holders free gifts or special discounts for opening new accounts, and there are a number of ways this can be done.

The reason these sign-up offers are made available is that they tend to be cheaper than advertising the product and gaining extra customers through marketing. By offering sign-up bonuses for new accounts, the credit card providers locate good credit card users for a fraction of the price of an advertising campaign. This means the sign-up bonuses may be focussed only on certain credit cards that the provider wishes to expand.

Introductory offers are not the same as sign-up offers, although they have the same goal of attracting new clients. Introductory offers allow for either a lower interest rate on borrowing, or an accelerated reward scheme, by (for example) giving 5% rather than 1% cash back on a credit card for the first three months. Sign-up bonuses do not tend to rely on continued usage of a card, although the sign-up bonus may only be given if the card is actually used once rather than applied for and then set aside or cancelled.

There are a number of different kinds of sign-up bonuses. The most common type is some expanded form of the credit card’s rewards scheme. A very common example of this is a store card, which is often offered to a shopper at the time of a transaction. The shopper is told he or she can receive an instant discount on the transaction in return for signing up for the store-issued credit card.

Discounts on a purchase made at the time of application are becoming a more common sign-up bonus. This can apply to cards issued by airlines, allowing for a discount on a ticket, or more commonly a companion ticket with the first one purchased or an upgrade to a better class.

Vouchers can also be common as a sign-up bonus, and some credit cards will credit the account with a small amount of cash. There are also credit cards that give pizzas and tee shirts as sign-up bonuses; these tend to be offered to students and young adults.