Credit Card Applications Earn Larger Cash Bonuses

Credit card companies are offering greater cash bonuses and other rewards than at any other time in recent history, according to a new Mintel Comperemedia study. The study reported that cash rewards have risen by 23% from the 1% average they were in 2007.

Andrew Davidson, senior vice president of Mintel Comperemedia, said that more types of credit cards are offering cash incentives than ever before. “An additional cash incentive offered while applying for credit cards and usually triggered upon first purchase or once a cardholder spends a specific amount on the card, has been popular in the competitive cash back card segment. However, we are now seeing cash used as an additional incentive for some mileage cards, as well as cards without rewards,” Davidson said.

In the first quarter of this year, close to 60% of the bonus miles, points and cash incentives being offered by credit card companies were intended to entice people to merely apply for their credit cards. Davidson said, "Some of the incentives are so attractive, they might as well apply for the card."

Some observers of the credit card industry are skeptical regarding how positively these rewards will be on the credit card companies’ bottom lines. They are concerned that many credit card applicants will simply apply for the cards and use them only until they get the most out of the rewards before cancelling the cards, leading to the companies losing money.

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