• Wed. Jul 28th, 2021

Reason Why People Sign Up for a Credit Card: JD Power study

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While the pandemic upended consumers’ spending habits — with people more hesitant to shop in-person or to enjoy a dinner out — it didn’t significantly change credit card usage. According to a new 2021 JD Power study looking at the experiences of Americans who applied for, or were thinking about applying for, credit cards in the past year, people were as likely to sign-up for travel credit cards in 2020 as they have been in years past.

The results of the study showed that travel credit card acquisition and satisfaction remained steady, says John Cabell, director of banking and payments intelligence at JD Power. He notes that credit card issuers have responded to consumers’ changing spending behavior by adapting and changing their rewards programs.

“It will be interesting to see as consumer behavior continues to evolve how these programs will continue to adapt, and whether [credit card] issuers will continue to offer as much flexibility as they have in the last few months with different sorts of rewards programs.” Cabell said. “There’s definitely a competition right now with promotional offers and bonus offers.”

The study found people were more likely to sign up for a new card in order to get a better rewards program, collect a sign-up bonus and/or receive better credit card terms.

There are no shortage of tempting welcome bonus offers at the moment, with cards like Chase Freedom Flex℠, Chase Sapphire Preferred® Card and the Capital One® SavorOne® Cash Rewards Credit Card all offering new cardholders a good reason to sign up.

Below, Select breaks down some of the best bonuses you won’t want to miss.

The Chase Freedom Flex

The Chase Freedom Flex℠ offers new cardholders a bonus of $200 if you spend $500 within three months of opening the account. With this card, there’s no annual fee, and you can get 5% cash back on up to $1,500 worth of purchases each quarter in rotating categories (activation is required — read more about the Chase 5% cash-back calendar). 

The Freedom Flex also recently rolled out a grocery benefit that gives new cardholders 5% cash back on up to $12,000 in grocery purchases within the first year. This means you could earn $800 in cash back from the grocery benefit and welcome bonus in the first year alone.

Chase Freedom Flex℠

  • Rewards

    Earn 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year, 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%), 5% cash back on travel booked through the Chase Ultimate Rewards®, 3% cash back on dining and at drug stores, 1% cash back on all other purchases

  • Welcome bonus

    $200 cash back after you spend $500 on purchases in your first three months from account opening

  • Annual fee

  • Intro APR

    0% for the first 15 months on purchases

  • Regular APR

    14.99% to 23.74% variable

  • Balance transfer fee

    Either $5 or 5% of the amount of each transfer, whichever is greater

  • Foreign transaction fee

  • Credit needed

The Chase Sapphire Preferred Card

The Chase Sapphire Preferred Card has offered generous welcome bonuses in the past but none as large as the 100,000-point bonus they rolled out in June. New cardholders can earn 100,000 points after they spend $4,000 on eligible purchases within the first three months of account opening.

The bonus is worth $1,000 if redeemed for cash back, but if you use the Pay Yourself Back tool or you book travel through the Chase Ultimate Rewards® portal, point redemptions are worth 25% more. The Pay Yourself Back tool allows cardholders to use their points as a statement credit on grocery, dining and home improvement purchases. The Sapphire Preferred also gives cardholders 2X points on dining and travel and 1X on all other purchases. 

This card does have a $95 annual fee, but the welcome bonus covers the cost of the annual fee many times over. There are no foreign transaction fee, making it a great option for international travelers.

Chase Sapphire Preferred® Card

  • Rewards

    5X points on Lyft rides through March 2022, 2X points on travel and dining worldwide, 1X points on all other purchases

  • Welcome bonus

    Earn 100,000 bonus points after spending $4,000 on purchases in the first 3 months from account opening

  • Annual fee

  • Intro APR

  • Regular APR

    15.99% to 22.99% variable on purchases and balance transfers

  • Balance transfer fee

    Either $5 or 5% of the amount of each transfer, whichever is greater

  • Foreign transaction fee

  • Credit needed

The Capital One SavorOne Cash Rewards Credit Card

Capital One® SavorOne® Cash Rewards Credit Card

Information about the Capital One® SavorOne® Cash Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

  • Rewards

    3% cash back on dining and entertainment, 3% on eligible streaming services, 3% at grocery stores and 1% on all other purchases

  • Welcome bonus

    Earn a one-time $200 cash bonus after you spend $500 on purchases within 3 months from account opening

  • Annual fee

  • Intro APR

    0% introductory APR for the first 15 months that your account is open

  • Regular APR

    15.49% to 25.49% variable

  • Balance transfer fee

    3% for promotional APR offers; none for balances transferred at regular APR

  • Foreign transaction fee

  • Credit needed

Bottom line

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.