How to Size Up the Value of a Travel Credit Card’s Welcome Bonus

Know the value of the points themselves to make an informed decision between cards with high sign-up bonuses.
Feb 4, 2022

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Most of us probably start out with travel credit cards in the same way: We’re looking for ways to save money on travel, stumble across a website or two talking about the joys of travel rewards points and hesitantly sign up for our first card.

Depending on which cards you’ve been looking at, you may have seen some bogglingly large offers of points in welcome bonuses. But what does that really mean, and how much are those points really worth? Let’s take a look as we explore how to shop travel credit card welcome bonuses, sometimes known as sign-up bonuses.

What is a welcome bonus on a travel credit card?

The realm of travel credit cards is competitive, and issuers will do almost anything to stand out. Often this means cards will come with varying benefits designed to make your life easier, such as statement credits, hotel elite status and airport lounge access. But one big — and fairly surefire — way to grab your attention is by offering a welcome bonus.

Welcome bonuses are a lump sum of points that you earn by spending money on your credit card. The number of points you’ll earn and the amount of money you’ll need to spend will vary by credit card, but you’ll usually need to meet a minimum spending requirement within a set timespan.

The variance in these bonuses can be huge. For example, take the welcome bonus offered with the AAdvantage® Aviator® Red World Elite Mastercard®: Earn 50,000 AAdvantage® bonus miles after making your first purchase and paying the $99 annual fee in full, both within the first 90 days. This card's points come from American Airlines.

On the other hand, with The Business Platinum Card® from American Express, this is the current welcome offer: Earn 120,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Platinum Card within the first 3 months of Card Membership. Terms Apply.

At a quick glance, you can see that you could earn bonus points with the co-branded AAdvantage card by simply paying the annual fee and making a purchase for as little as 99 cents. That offer makes the AmEx bonus, which has a much higher spending requirement, seem like a pretty unfair deal in comparison.

However, the number of points isn't the only thing to consider. You also have to think about the value of those points.

Which credit cards offer welcome bonuses?

We mentioned above that welcome bonuses are a method of attracting customers, which means that plenty of different cards are going to offer them. Generally speaking, you’ll find a welcome bonus on nearly all travel credit cards with an annual fee. The type of bonus you’ll receive will depend on your card.

If you’re looking to get a co-branded Hilton credit card, your bonus will come in the form of Hilton Honors points.

If you’d like a little more flexibility with your points, you may instead opt for a Chase card that earns Chase Ultimate Rewards®. These points can be transferred to many different hotel and airline partners for reward redemptions.

Nerdy tip: Each transferable point currency has its own list of transfer partners, though you’ll find some overlap between different programs.

You’ll usually find the largest welcome bonus on newly launched credit cards — which makes sense, as card issuers want a lot of attention when they debut a product.

Card issuers tend to follow a cycle of launching limited-time offers, which means if you time your credit card application correctly, you can score even more points on your welcome bonus.

No annual fee credit cards can also come with welcome bonuses, though they tend to be smaller than those offered by credit cards with annual fees.

The $0-annual-fee Hilton Honors American Express Card is one example of this. Earn 80,000 Hilton Honors Bonus Points after you spend $1,000 in purchases on the Card in the first 3 months of Card Membership. Terms Apply.

The Hilton Honors American Express Surpass® Card, however, which charges a $95 annual fee, comes with a higher point welcome bonus: Earn 130,000 Hilton Honors Bonus Points after you spend $2,000 in purchases on the Card in the first 3 months of Card Membership. Terms Apply.

How much are welcome bonuses worth?

So what is the travel credit card with the biggest sign up bonus? Calculating the value of a card’s welcome bonus depends heavily on the worth of the points it offers.

Every reward point has a different value. These values are calculated based on many different factors, including ease of use and how many points you’ll need for an award redemption.

Hotel and airline point values

After extensive analysis of reward bookings across 15 airlines, seven hotel programs and nine credit card rewards programs, these are the actual per-point values we determined after comparing cash and award bookings across many dates and cities.

Looking closer

Let’s consider the welcome bonus opportunity with the AAdvantage® Aviator® Red World Elite Mastercard®. You’ll need to make at least one purchase in the first three months to earn it.

NerdWallet values AAdvantage points at 1.2 cents each. In order to calculate the value of the welcome bonus, you’ll need to multiply the total of the bonus (60,000 points) to the value of the points (0.012) — making the value of the bonus $720.

Let’s compare this to the welcome bonus offer mentioned above from The Business Platinum Card® from American Express, which is currently 120,000 points. Terms apply.

NerdWallet values AmEx points as high as 2 cents each when you take advantage of transfer partners. In order to calculate the value of this welcome bonus, you’ll need to multiply the total of the bonus (120,000 points) to the value of the points (0.02) — resulting in a $2,400 value.

Nerdy tip: Although the Hilton bonus appears to be more valuable because it’s offering more points, the differing values of each point means that the AmEx bonus is actually worth more than twice as much as the Hilton bonus.

Not paying attention to these valuations can cost you dearly when trying to find the best welcome bonus on a credit card.

Finally, always make sure that you can meet the minimum spend goal for your card without going into debt. Not earning the welcome bonus is preferable to carrying a balance with expensive interest rates.

If you’re shopping for a new travel credit card

There are plenty of reasons to acquire a travel credit card, but perhaps the most enticing is the card’s welcome bonus. Understanding how to size up the value of a welcome bonus is more than just a direct comparison, however. You’ll need to calculate the worth of one point against the number of points you’ll receive in order to figure out the true value of the travel credit card’s welcome bonus.

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How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2022, including those best for:

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