The ins and outs of credit card welcome bonuses—from an expert who made $2,000 per year

The best welcome bonus for you is the one that aligns most with your spending habits.

For Harrison and her husband, that meant targeting credit cards that offered at least $500 in introductory rewards and that either did not have an annual fee or had one that was waived for the first year. 

“In order to get the introductory reward, we would have to spend anywhere from $1,000 to $5,000 in the first several months of opening the card,” Harrison says. “Although this sounds like a large amount to hit in just a few short months, it was actually fairly easy, as we had several periods in our life with large expenses.”

Two of the first occasions that helped Harrison and her husband meet their minimum spend were when they bought their wedding rings in 2014 and paid for their small wedding the following year. With the cash back they earned, they were able to nearly offset the cost of their honeymoon with welcome bonuses.

When traveling, Harrison and her husband have also used the points they received from a welcome bonus for upgrading to first class on an airline and redeeming other card perks, such as free baggage.

When Harrison and her husband had their first child, they charged daycare onto a credit card from 2017 to 2018. “With the cost of childcare, hitting several thousand dollars in a short period of time, it was an easy task,” she says.

Many businesses and vendors charge processing fees when you pay by credit card, so it’s important to note how quickly these extra fees can add up before routinely using your credit card as a payment method for things, such as on college tuition or rent.

Harrison estimates that for about four years, she and her husband were able to pull in approximately $2,000 per year in points, miles and cash back  — all of which were excluded from taxable income since credit card rewards are seen as rebates and are not required to be reported to the IRS. 

Today’s economic climate makes it harder to capitalize on new credit card sign-up offers as issuers tighten their approval requirements for even those with good credit, and some issuers have rules on how many cards you can open. For example, Chase’s 5/24 rule prevents you from being approved for most Chase cards if you’ve opened five or more personal credit cards (from any card issuer) within the past 24 months.