It’s been a few years since Chase made a credit card go viral with its 2016 Sapphire Reserve offering that came with a 100,000-point signup bonus worth over $1,000.
The lucrative bonus attracted millennials, which helped drive signups when it came out, and according to a new report from CreditCards.com, signup bonuses are still the most important thing millennials look for when searching for a card.
In a survey of millennials ages 23 to 38, signup bonuses of at least $500 in cash or $1,200 in travel credit are considered the most attractive feature for a credit card. This is a change compared to older generations who prefer debt relief, like 0% interest offers on balance transfers or new purchases.
One theory that may explain the preference for travel signup bonuses is that 57% of millennials polled said they have flown or stayed in a hotel every year, compared to 48% of older generations.
Another possibility: The rise of churning, when people constantly obtain credit cards, reap the signup bonus, and move on to the next one, while making sure to stay just conservative enough so that the banks don’t deny their applications from too many credit cards too fast.
According to CreditCards.com analyst Ted Rossman, it’s important to make sure you’re matched with the appropriate card. Thinking about how a person spends their money can help optimize the rewards, as long as the balance — which may be subject to higher interest than cards with fewer perks — is paid off every month in full.
One highlight — or lowlight — in the report: four out of five people who have credit card debt miss what would be the best deal for them. Instead of going with a credit card with a zero-percent interest balance transfer — which would give them a reprieve from hefty interest payments — they are instead more likely to pursue flashy displays of points.
“You should eliminate your credit card debt before chasing rewards, so a zero-percent balance transfer card would be a much better choice if you’re in debt,” Rossman says.