5 unconventional ways to use your credit card signup bonus

By Lindsay Konsko/ NerdWallet

Admit it: If a credit card offers a huge signup bonus, you’re going to pay attention. Don’t be ashamed if you only apply for credit cards that offer a hefty points or miles boost to get you started — this certainly isn’t a terrible way to pick out plastic.

SEE ALSO: 3 ways to avoid paying interest on your credit card balance

But booking a nice vacation or stocking up on gift cards isn’t the only way to use a credit card signup bonus. Take a look at the five unconventional ideas below for the next time you score a boatload of extra points:

1. Bank the points for an emergency

Personal emergencies often involve last-minute travel, which can be expensive and stressful. So instead of using your credit card signup bonus for leisure travel, why not hold onto your points in case an emergency pops up? Of course, this shouldn’t be considered a replacement for your emergency fund, but having a little extra something set aside in the event of a crisis is always helpful.

2. If your credit card offers the option, donate your points to charity

You might be surprised to learn that some credit card issuers allow you to redeem your points in the form of a donation to a charity of your choice. If you’ve been meaning to make a big contribution to a cause you believe in, but haven’t been able to scrape together the cash, a signup bonus might be just the ticket.

One word of caution, though: Be sure that you’re getting a good value per point when you cash in your rewards for a charitable donation. In some cases, redeeming for “cash equivalents” can cut into what your points are worth — do a little math beforehand to make sure this is a smart move.

3. Buy someone else a plane ticket

Using a credit card signup bonus to buy yourself a plane ticket or hotel stay isn’t a bad idea, and you’ve probably already done this once or twice. But using it to book the trip of a lifetime for a loved one is a generous way to think outside the box. If a friend or family member has a big birthday or anniversary coming up, your signup bonus could go a long way toward making it really special.

Another, related idea: If you have an adult child who lives far away, using your points to pay for his next trip home will probably be much appreciated. Nothing cures a bout of homesickness like a free visit to mom and dad!

4. If your credit card offers the option, transfer the points as a gift

If you like the idea of using your signup bonus to give someone a gift, but don’t want the recipient to be locked into a trip you’ve chosen, transferring your points to her rewards account is another possibility. This way, she can use them for whatever she wants.

Be aware that not all credit card issuers allow you to transfer points to another cardholder’s account, and some that do charge a fee. Again, it pays to investigate this option a bit before moving forward.

5. Save it

Although not every cash-back credit card comes with a signup bonus, some do. If there’s nothing pressing you need to use the funds for right away, think about just dropping your bonus into your savings account. It could help pump up your emergency fund or get you a little closer to a specific savings goal. It never hurts to have a little extra cash in the bank!

SEE ALSO: How to pay off your credit cards

Lindsay Konsko writes about credit, credit cards, and other personal finance topics for NerdWallet. Our tools and resources empower consumers to make informed financial decisions.

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