Points Guy: How To Tell A Great Sign-Up Bonus From A Lousy One

Brian Kelly, also known as The Points Guy, explains how to tell which credit cards offer worthwhile sign-up bonuses. Anything less than 50,000 points is "generally a snooze fest," while 75,000 is "generally good," he says.

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When it comes to maximizing credit card rewards, Brian Kelly, also known as The Points Guy, has cracked the code: Thanks to all the points and frequent-flyer miles he's managed to accumulate, he jets around the world for next to nothing.

If you want to rack up a ton of credit card points too, Kelly says a good first step is to identify cards that offer big sign-up bonuses, which can be a quick way to earn hundreds or even thousands of dollars' worth of rewards when you start using a new credit card.

If you do your research, "it's not rare to get $1,000 in value from a sign-up bonus. It's so lucrative in the U.S. that the credit card companies are all battling each other," he explains. "There are 10 or so major credit card companies that want your business today."

As a result, the bonuses keep getting sweeter.

So how do you tell a great bonus from a lousy one? There are typically three ways companies offer rewards: points, cash back and miles. For cards that pay out in points, Kelly says that you want to aim to find a card that offers at least 50,000 bonus points. Anything less, he says, is "a snooze fest."

That applies to personal credit cards with bank points, such as those from American Express, Chase, Citi or Capital One.

A bonus that offers 75,000 points "is generally really good," Kelly says, while 100,000 points is "an amazing offer." Note that business credit cards are different: There, for example, you may see 200,000-point bonuses.

To earn the bonus points, you typically have to spend a specific amount of money within a certain time frame. And "that clock starts ticking when you're approved for the card — not when you activate it," Kelly notes, "so be careful." If you don't spend enough, credit card companies won't make any exceptions, he warns. That said, don't make unnecessary purchases or spend beyond your means just to meet the minimum spending requirement.

When it comes to cashing in on the most lucrative welcome bonuses, timing matters. For example, the best bonus offer for consumers Kelly has ever seen was when Chase launched its Sapphire Reserve card in August 2016. It offered 100,000 points, which is worth $1,500 in travel, but "it only lasted for about five months."

"That's the thing with credit card deals," he says. "When you see an amazing offer, you should generally get in on it, because you never know when they're going to come back."

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Here’s how you can tell an amazing sign-up bonus from a lousy one, says credit card expert | CNBC Make It.