topic Re: Why do signup bonuses have the same requirements? in Credit Cards

Why do signup bonuses have the same requirements?

Anonymous — Sat, 10 Feb 2018 15:06:23 GMT

With banks trying harder and harder to avoid churners, why do they still have signup bonuses that are so easy to churn. They are pretty much all "spend this much in 90 days to get this". That makes it very easy to use the card heavily when you first get it and then sock drawer or forget about it once the bonus is met. Wouldn't it make more sense to offer a bonus that's the same money, but spread over say 6 months or a year? At the end it's the same amount of money, but it might force people to keep the card in their wallet more. Just a thought.

Re: Why do signup bonuses have the same requirements?

simplynoir — Sat, 10 Feb 2018 15:59:29 GMT

Because they're trying to gain new cardholders with enticing SUBs and the market dictates what it will take to stay competitive even if they have to take a loss because of smaller-than-you-think churner community. The average consumer more than likely doesn't see credit cards the way we do; sure they may be more informed today than years past but I still think we are the exception to the rule as a credit card community.

Re: Why do signup bonuses have the same requirements?

fuzzle — Sat, 10 Feb 2018 16:07:46 GMT

some do have extra cashback incentives for a few months, and many offer 0% APR for a while, but ultimately churners are going to churn

Re: Why do signup bonuses have the same requirements?

MrDisco99 — Sat, 10 Feb 2018 16:19:19 GMT

I remember Amex tried something like that (get $XX every month for 6 months with $XXX minimum spend) with the BCE I think it was last year. It didn't last long.

Bonuses are all about getting new sign ups who might have gone for a different card otherwise. Most people these days when they sign up for a new card they are picking from a long list of possibilities on creditkarma or wherever. You're not going to get those clicks with a crappy offer.

Re: Why do signup bonuses have the same requirements?

simplynoir — Sat, 10 Feb 2018 16:26:55 GMT

wrote:
I remember Amex tried something like that (get $XX every month for 6 months with $XXX minimum spend) with the BCE I think it was last year. It didn't last long.

Bonuses are all about getting new sign ups who might have gone for a different card otherwise. Most people these days when they sign up for a new card they are picking from a long list of possibilities on creditkarma or wherever. You're not going to get those clicks with a crappy offer.

Yep, in fact the last one I can think of recently was the Marriott 120k SUB offer and I don't know anyone aside from the actual "I have money to throw at this" churners that even got that card because when the math was done the deal is actually not that good at all. I imagine if any creditor tried this with their main card lineups that they would lost potential customers unless the offer was as close to equal as the 3 month SUB.

Re: Why do signup bonuses have the same requirements?

happypill — Sat, 10 Feb 2018 16:57:14 GMT

wrote:
With banks trying harder and harder to avoid churners, why do they still have signup bonuses that are so easy to churn. They are pretty much all "spend this much in 90 days to get this". That makes it very easy to use the card heavily when you first get it and then sock drawer or forget about it once the bonus is met. Wouldn't it make more sense to offer a bonus that's the same money, but spread over say 6 months or a year? At the end it's the same amount of money, but it might force people to keep the card in their wallet more. Just a thought.

I think a lot of the bonus structures are the same because the CC companies are competing with each other. Just like the toothpaste business or whatever. If someone offers whitening or breath freshening and it pumps up sales, then competitors will be doing the same thing in an instant.

I did have one card with the type of thinking that you suggested. It was a US Bank Business Cash card. The bonus was $500 for $4.5k spend in the first 3 months, then an additional $250 for $3k spend in the next 3 months. The total bonus was $750, I might be forgetting the exact spend limits because they were just normal spend for me so I didn't think about it. But, what it did was encouraged me to keep using the card after the initial bonus, and it was good for me because I didn't have to apply for another card.

Re: Why do signup bonuses have the same requirements?

wasCB14 — Sat, 10 Feb 2018 17:19:44 GMT

wrote:
wrote:
With banks trying harder and harder to avoid churners, why do they still have signup bonuses that are so easy to churn. They are pretty much all "spend this much in 90 days to get this". That makes it very easy to use the card heavily when you first get it and then sock drawer or forget about it once the bonus is met. Wouldn't it make more sense to offer a bonus that's the same money, but spread over say 6 months or a year? At the end it's the same amount of money, but it might force people to keep the card in their wallet more. Just a thought.
I think a lot of the bonus structures are the same because the CC companies are competing with each other. Just like the toothpaste business or whatever. If someone offers whitening or breath freshening and it pumps up sales, then competitors will be doing the same thing in an instant.

I did have one card with the type of thinking that you suggested. It was a US Bank Business Cash card. The bonus was $500 for $4.5k spend in the first 3 months, then an additional $250 for $3k spend in the next 3 months. The total bonus was $750, I might be forgetting the exact spend limits because they were just normal spend for me so I didn't think about it. But, what it did was encouraged me to keep using the card after the initial bonus, and it was good for me because I didn't have to apply for another card.

PRG and some other cards have sometimes offered a bonus that had the second part take effect after some minimum spend in year 2.

SPG had at least one offer for spending IIRC $3k in months 1-3 and another $2k in months 1-6.

Discover does the cash back match for a year.

Three months is still the most common, though. Maybe three months gets a customer into the habit of using a card. Giving more time for the same spend may fail to encourage the customer to use it. Or it may encourage lower income/spend customers to get the card vs. the bigger spenders many banks want.

Three months gives the customer a little flexibility, and still doesn't make the customer wait too long for the bonus. Many people are impatient. Some people get airline and hotel cards when making plans for a vacation. Getting a card in February for a June trip isn't very helpful if you won't meet the minimum spend until July. So maybe that's why $3k/3 months is more common than $6k/6 months

Re: Why do signup bonuses have the same requirements?

simplynoir — Sat, 10 Feb 2018 17:26:12 GMT

wrote:
wrote:
wrote:
With banks trying harder and harder to avoid churners, why do they still have signup bonuses that are so easy to churn. They are pretty much all "spend this much in 90 days to get this". That makes it very easy to use the card heavily when you first get it and then sock drawer or forget about it once the bonus is met. Wouldn't it make more sense to offer a bonus that's the same money, but spread over say 6 months or a year? At the end it's the same amount of money, but it might force people to keep the card in their wallet more. Just a thought.
I think a lot of the bonus structures are the same because the CC companies are competing with each other. Just like the toothpaste business or whatever. If someone offers whitening or breath freshening and it pumps up sales, then competitors will be doing the same thing in an instant.

I did have one card with the type of thinking that you suggested. It was a US Bank Business Cash card. The bonus was $500 for $4.5k spend in the first 3 months, then an additional $250 for $3k spend in the next 3 months. The total bonus was $750, I might be forgetting the exact spend limits because they were just normal spend for me so I didn't think about it. But, what it did was encouraged me to keep using the card after the initial bonus, and it was good for me because I didn't have to apply for another card.
PRG and some other cards have sometimes offered a bonus that had the second part take effect after some minimum spend in year 2.

SPG had at least one offer for spending IIRC $3k in months 1-3 and another $2k in months 1-6.

Discover does the cash back match for a year.

Three months is still the most common, though. Maybe three months gets a customer into the habit of using a card. Giving more time for the same spend may fail to encourage the customer to use it. Or it may encourage lower income/spend customers to get the card vs. the bigger spenders many banks want.

Three months gives the customer a little flexibility, and still doesn't make the customer wait too long for the bonus. Many people are impatient. Some people get airline and hotel cards when making plans for a vacation. Getting a card in February for a June trip isn't very helpful if you won't meet the minimum spend until July. So maybe that's why $3k/3 months is more common than $6k/6 months

Very rare to see the additional SUB for additional spend after the intial bonus. The SPG 35k offer comes to mind and all the main AMEX business cards as well.

Re: Why do signup bonuses have the same requirements?

Anonymous — Sun, 11 Feb 2018 01:15:31 GMT

wrote:
Very rare to see the additional SUB for additional spend after the intial bonus. The SPG 35k offer comes to mind and all the main AMEX business cards as well.

Didn't Citi do that, second year bonus on maybe Premier at some point?

[Checks the web. Yes, in 2015.]

the sign-up bonus was 20,000 points after $2,000 in purchases within the first three months of account opening, and then an additional 30,000 points after another $3,000 in purchases within the first three months of your second year of being a cardmember.

Re: Why do signup bonuses have the same requirements?

Anonymous — Sun, 11 Feb 2018 01:47:01 GMT

Howdy!! Well, a lot of people would be upset if they did that. LOL, but there are certain bonus offers that are for extended periods of time. For example, the new Hilton Honors Ascend AMEX. The 100K sign up bonus is given out over the course of 6 months. You’ll get a large amount in the first 3 months and then the rest after spending some in the first 6 months.

I’m sure more will pop up later.

Re: Why do signup bonuses have the same requirements?

Anonymous — Sun, 11 Feb 2018 02:40:07 GMT

I think that those that target SUBs and then SD the card are an extremely small percentage to the whole that apply for any given card. As members of this forum, we all share quite a different perspective than the norm. Us chasing SUBs is not "normal" activity relative to those that don't. CCCs are simply trying to entice new customers to apply, or existing customers to try a different product. Sure they "lose" when it comes to people like us that grab the SUB and ditch the card, but that type of behavior is expected from a small percentage and no doubt built into their P&L.

Re: Why do signup bonuses have the same requirements?

Anonymous — Sun, 11 Feb 2018 05:10:31 GMT

wrote:
wrote:
Very rare to see the additional SUB for additional spend after the intial bonus. The SPG 35k offer comes to mind and all the main AMEX business cards as well.
Didn't Citi do that, second year bonus on maybe Premier at some point?

[Checks the web. Yes, in 2015.]

the sign-up bonus was 20,000 points after $2,000 in purchases within the first three months of account opening, and then an additional 30,000 points after another $3,000 in purchases within the first three months of your second year of being a cardmember.

Has anyone else noticed Citi's sign up bonuses always stink.

I mean really, they offered 70,000 ThankYou Points for spending $7,500 in three months with the Prestige at one point. At the moment, I believe they aren't offering a sign up bonus at all. Citi usually has a low point prize with a higher spend requirement than their competitors.

Re: Why do signup bonuses have the same requirements?

arkane — Sun, 11 Feb 2018 06:16:31 GMT

Yep none of Citi's cards come with a SUB at this point, hence they're of zero interest to me.

Really if you do the math, unless a card offers 10% CB, a measly 1% or even 2% extra gained from cash back is very easily wiped out by a decent SUB.

Re: Why do signup bonuses have the same requirements?

Anonymous — Sun, 11 Feb 2018 18:40:52 GMT

wrote:
Yep none of Citi's cards come with a SUB at this point, hence they're of zero interest to me.

Really if you do the math, unless a card offers 10% CB, a measly 1% or even 2% extra gained from cash back is very easily wiped out by a decent SUB.

On their site, it looks like several do. Premier, all the American cards, expedia and AT&T

Re: Why do signup bonuses have the same requirements?

arkane — Sun, 11 Feb 2018 20:46:38 GMT

My bad, I was only thinking about Citi's no AF card. But I forgot about the AT&T access card which does have a SUB and has no AF.

Re: Why do signup bonuses have the same requirements?

iced — Mon, 12 Feb 2018 22:17:21 GMT

wrote:
With banks trying harder and harder to avoid churners, why do they still have signup bonuses that are so easy to churn. They are pretty much all "spend this much in 90 days to get this". That makes it very easy to use the card heavily when you first get it and then sock drawer or forget about it once the bonus is met. Wouldn't it make more sense to offer a bonus that's the same money, but spread over say 6 months or a year? At the end it's the same amount of money, but it might force people to keep the card in their wallet more. Just a thought.

I've wondered that myself. I'm all for the spreading of the payment period, but I think the amount should also increase to compensate, or tier the bonus. For example, sign up for CSR and spend $4k in 3 months for 10k bonus, $8k (counting the previous $4k) in 6 months for another 20k, and $15k (counting the previous $8k) in 12 months for another 30k (60k points total). It's a win-win: the churners will take their 10k and move on and the people who actually want to keep the card a while get a decent bonus. With 12 months, you can also likely lock the user into a second year of AF (not a problem for the people who want it, but will even further discourage churners).

Re: Why do signup bonuses have the same requirements?

wasCB14 — Mon, 12 Feb 2018 22:23:34 GMT

wrote:
wrote:
Yep none of Citi's cards come with a SUB at this point, hence they're of zero interest to me.

Really if you do the math, unless a card offers 10% CB, a measly 1% or even 2% extra gained from cash back is very easily wiped out by a decent SUB.
?

On their site, it looks like several do. Premier, all the American cards, expedia and AT&T

For much of the last few months, Premier had no bonus. 30k/$3k now is not a great sign for the future of the TY program.

Re: Why do signup bonuses have the same requirements?

Anonymous — Mon, 12 Feb 2018 23:19:40 GMT

wrote:
wrote:
wrote:
Yep none of Citi's cards come with a SUB at this point, hence they're of zero interest to me.

Really if you do the math, unless a card offers 10% CB, a measly 1% or even 2% extra gained from cash back is very easily wiped out by a decent SUB.
?

On their site, it looks like several do. Premier, all the American cards, expedia and AT&T
For much of the last few months, Premier had no bonus. 30k/$3k now is not a great sign for the future of the TY program.

Yeah I'm not sure what Citi is doing.

There's either no sign up bonus, or the bonus isn't as good as competitors.

Let's look at the CSP for example, 50000 UR's for $4k in spend. Citi's points are not only not worth as much as UR's, but there's 20,000 less of them being offered at the same time.

A bank the size of Citi doesn't have an excuse to cut back on it's flagship rewards system as much as they have.

Re: Why do signup bonuses have the same requirements?

happypill — Tue, 13 Feb 2018 00:00:05 GMT

wrote:
wrote:
wrote:
Very rare to see the additional SUB for additional spend after the intial bonus. The SPG 35k offer comes to mind and all the main AMEX business cards as well.
Didn't Citi do that, second year bonus on maybe Premier at some point?

[Checks the web. Yes, in 2015.]

the sign-up bonus was 20,000 points after $2,000 in purchases within the first three months of account opening, and then an additional 30,000 points after another $3,000 in purchases within the first three months of your second year of being a cardmember.
Has anyone else noticed Citi's sign up bonuses always stink.

I mean really, they offered 70,000 ThankYou Points for spending $7,500 in three months with the Prestige at one point. At the moment, I believe they aren't offering a sign up bonus at all. Citi usually has a low point prize with a higher spend requirement than their competitors.

I got 50k points on the Premier last year, that's not bad. They currently offer 60k AA points on the $95 AF card. Nothing else that interests me at the moment.