Ask an Expert: Best Cash-Back Bonus Offer for a Moderate Budget?


What's Hot


2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

It doesn't make sense to apply for a card with a huge initial bonus if you can't meet the spending requirements to get the reward.

This post comes from Jason Bushey, a credit card and personal finance expert with Creditnet.com.

I recently received this question from a Money Talks News reader:

I’m looking for a cash-back bonus credit card. I have good credit and my budget (for credit card payments) is around $200 a month. What’s the best bonus offer available for that kind of money? Thanks. — Don D.

My response

Don’s question is a good one because a lot of us get excited about the excellent bonus offers we find online or on TV, only to read the fine print and realize that you need to spend an exorbitant amount in the first three months just to qualify for the bonus advertised.

The fact of the matter is that you shouldn’t apply for a credit card whose bonus offer is outside your monthly budget or spending habits. Opening such a card could mean missing out on the bonus completely, or living outside your means for a few months to earn a bonus that’s unlikely to make up for the fact that you now have a pretty serious balance to pay back.

If you have a moderate monthly budget (one close to the budget that Don describes above), there are still some excellent cash-back bonus offers available to you if you have a good to excellent credit score. But when choosing the best bonus offer for you, there are a few things to consider.

Immediate satisfaction

Some credit cards are so generous with the bonus offer that they’ll compensate you just for making your first purchase. Obviously, these cards work out great for consumers with a moderate to average budget since the minimum required to receive the bonus is essentially $1.

One example of such a card is the Barclaycard Rewards MasterCard for Excellent Credit, which rewards cardholders with 5,000 bonus points (equal to a $50 statement credit) after they make their first purchase or balance transfer. Another Barclaycard, the NFL Extra Points Credit Card, goes one step further and offers 10,000 bonus points (equal to a $100 cash-back statement credit) after your first swipe.

If you’re looking for immediate satisfaction from your new card and you have excellent credit, those are two bonus offers to consider.

Spending requirements

The next tier of bonus cash-back cards requires $500 or more in purchases on your new card within the first three months of opening your account. These cards fit squarely with Don’s budget, since $200 per month is more than enough to qualify. There are a handful of cash-back credit cards offering this kind of bonus, so consumers can look to other card features when considering which offer is right for them.

For example, the Chase Freedom card offers a $100 cash-back bonus plus a 5 percent bonus cash-back program on up to $1,500 in purchases that rotate each quarter. The ongoing bonus cash back offered by this card might be more lucrative for you than that of the Capital One Cash Rewards Card with a $100 cash-back bonus. It offers 1 percent cash back on all purchases and a 50 percent anniversary bonus on the cash back you earn each year, which basically amounts to 1.5 percent cash back on everything, always.

Maybe you don’t want to be bothered with enrolling each quarter and like to keep your cash-back options simple and low-maintenance. It’s important to consider not just the initial bonus offer, but how the card functions and the long-term cash-back prospects of a card when determining which card works best for you.

Bonus categories

It’s not only important to determine how much you spend each month, but also what you’re spending your money on when choosing the best cash-back bonus offer for your moderate budget.

For example, if you’re racking up the miles on your car and paying for it severely at the pump, it wouldn’t hurt to earn some bonus cash back for gas purchases. The Blue Cash Preferred Card from American Express has an initial bonus offer that might be out of your league (150 Reward Dollars after $1,000 in purchases in the first three months), but the long-term bonus categories include 3 percent cash back at U.S. gas stations and 6 percent cash back (up to $6,000 annually) on purchases made at U.S. grocery stores.

There’s an annual fee of $75, and while you might be sacrificing some short-term cash back initially, maybe a card that rewards you substantially for your more common purchases is a better investment in the long run.

So getting back to Don’s original question, the answer to the best cash-back bonus offer for a moderate budget can really depend on an individual’s spending practices. Like anything in life, there’s more than one thing to consider. Look beyond the initial bonus to the long-term bonus opportunities available, and ask yourself whether or not a card will fit your budget rather than the other way around.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: Considering a Fixer-Upper? 15 Ways to Avoid a Money Pit

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,981 more deals!