Credit Card welcome bonus and its benefits

Are you looking for ways to maximize your Credit Card's benefits? Welcome bonuses are an excellent way to get started. Usually, Credit Card issuers will offer welcome bonuses as incentives to attract new customers or to reward loyal customers. Welcome bonuses can range from cash back to points, miles, or even gift cards. While the terms and conditions of each bonus will vary, understanding what they mean and how to use them can help you maximize your credit card benefits.

In this blog, we’ll explore the different types of credit card welcome bonuses, what they mean, and how you can use them to your advantage. So, if you're looking to maximize your Credit Card benefits and make the most of your welcome bonus, keep reading.

Credit Card benefits: What is a Credit Card sign up bonus

New card holders are offered a welcome bonus or sign-up bonus as a way to encourage them to apply for the Credit Card. Occasionally, banks charge a joining fee for their Credit Cards. To compensate the new cardholder for paying the joining fee, the bank may offer the Credit Card sign up bonus as a Credit Card benefit. It may be equal, higher, or less than the joining fee.

Different ways of offering a Credit Card sign up bonus
 

Sign up bonuses are provided by different banks for different cards in different ways. Credit Card sign up bonuses may take the following forms:

1) Reward points
 

A bank may offer a certain number of reward points as a Credit Card sign up bonus. In most cases, reward points are offered to compensate the cardholder for the joining fee. The reward points sign up bonus may come with no spending requirement from some banks. Before you can qualify for the reward points sign up bonus, some banks may require you to spend a certain amount on your credit card. You can check the Credit Card specifications to understand the amount better. 

2) Cashback

Cashback is offered by some banks after a certain number of days following card issuance.

For example, the IDFC FIRST Classic Credit Card offers 5% cashback up to Rs. 1,000 on the first EMI transaction done within first 30 days of card generation.

For example, when you do an EMI transaction of Rs 10,000, you will get Rs 500 (5% of Rs 10,000) as cashback. The offer can be maxed out with an EMI transaction of Rs 20,000.

3) Gift vouchers

Some banks offer a welcome gift voucher for spending a specified amount within a specified number of days of card generation.

For example, the IDFC FIRST Classic Credit Card offers a welcome gift voucher worth Rs 500 on spending Rs 5,000 or more within 30 days of card generation.

4) Free flight ticket

Among other Credit Card benefits, some Credit Cards, especially co-branded travel cards, offer you free flights as a joining benefit. On payment of the joining fee within the specified days, a free flight ticket voucher is sent by co-branded bank Credit Cards that have ties with airlines.

Cardholders may also receive gift vouchers from an online travel agency (OTA), which allows them to book any airline ticket

5) Memberships

Some Credit Cards offer memberships of specific programs as a joining benefit. These programs can include:

1. Amazon Prime Membership or OTT subscriptions such as Disney+Hotstar or Sony LIV

2. Membership to a hotel loyalty programme such as Club Marriott or a frequent flyer program (FFP) of an airline such as Vistara

3. Membership of food delivery apps such as Zomato, Swiggy, etc.

4. BookMyShow vouchers for movies

5. Other memberships such as MMT Black, Times Prime, etc.

Some of the above are even offered as annual memberships.

While you may get them initially as a joining fee benefit, annual memberships may also get renewed when you pay the Credit Card’s annual membership fee. That way, some of the Credit Card benefits continue beyond the initial Credit Card sign up bonus. However, the continuation may depend on the payment of the Credit Card annual fees.

What to look for when selecting a Credit Card with a welcome bonus?

When selecting a Credit Card with a sign up bonus, you need to consider whether the sign up bonus and the other credit card benefits are useful to you. Even if the Credit Card sign-up bonus is useful, you must look beyond it and evaluate the other Credit Card benefits.

While evaluating the Credit Card benefits, you should consider the following:

1. Fees: 
 

Is the Credit Card free for life? If not, will the annual fee be waived on spending a certain amount?

2. Discount and cashback offers: 
 

Does the card provide regular discounts and cashback offers on various categories?

3. Earning reward points: 
 

What is the base reward rate structure, and is there an opportunity to earn accelerated reward points?

4. Validity of reward points: 
 

With some cards, reward points are valid for 24 to 36 months. Some cards, such as with IDFC FIRST Bank Credit Cards, they never expire.

5. Redeeming reward points: 
 

Some banks allow you to pay for your online transactions with reward points. You also have the option to redeem reward points for gift vouchers from various brands like Amazon, BigBasket, etc.

6. Credit Card interest rates: 
 

Many banks charge 36% to 45% p.a. on the outstanding amount carried forward. Check if the bank has a dynamic system that reduces the interest rate based on a certain parameter.

7. Conversion of outstanding to easy EMIs: 
 

Most banks allow you to convert certain high-value transactions or the entire outstanding into easy EMIs. Check if your Credit Card has this provision.

IDFC FIRST Bank offers various credit cards with best-in-class features. Some of these include:

1. All Credit Cards are lifetime free. No joining and annual fees

2. Opportunity to earn accelerated reward points on online and offline purchases, barring a few specified categories, which will be mentioned under the reward points section

3. Reward points never expire. You can use them to pay for online transactions or redeem them against gift vouchers for various brands

4. The interest rate on outstanding ranging from 9% to 42% p.a.

5. Easy conversion of transactions above Rs 2,500 into EMIs

Besides these, IDFC FIRST Bank offers many other Credit Card benefits. You can choose the best Credit Card from various variants based on your requirement.

How to receive the joining bonus?

Some IDFC FIRST Bank Credit Cards offer you joining benefits such as:

1. Welcome voucher of Rs 500 on spending Rs 5,000 or more within 30 days of card generation

2.  5% cash back (up to Rs. 1,000) on the first EMI transaction done within first 30 days of card generation

Achieving the spending required to get the above joining offers is easy.

You may start with your utility bill payments to complete the Rs 5,000 spend target. Post that, you may use the Credit Card for purchasing groceries and other daily use household products. Both these spend categories will help you achieve the Rs 5,000 spend target. Once you receive the Rs 500 welcome vouchers, you can redeem them for a gift voucher of your favourite brand, such as Amazon and use it further.

You can put any big-ticket spending such as your child’s education fees, insurance premium payment, or purchase of a consumer durable on the Credit Card. You can opt for the EMI transaction and qualify for the 5% cashback offer.

To sum up
 

Choose a Credit Card that meets your needs as a whole. Different Credit Cards will offer you different joining benefits. However, you shouldn't just select one based on the joining benefits alone. Make sure you evaluate the overall benefits of the Credit Card and match them with what you need in your life. Get your IDFC FIRST Bank Credit Card and take advantage of exciting benefits if you need an outstanding Credit Card. 

Note: The welcome bonus/joining benefits listed here are for credit cards issued after 9th October 2023. For cards issued earlier, please visit https://www.idfcfirstbank.com/credit-card

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.