Wednesday, December 04, 2013

Credit Card Companies Invite us to Refer Friends...for Inferior Signup Bonuses? (and how to work around the situation)

Chase and American Express offer some of the best credit cards available in the market today. They've got generous sign-up bonuses and reward ongoing spend. They like to get more people to sign-up and use their cards because many of them carry an annual fee and they all generate swipe fees.

In order to encourage more people to sign up for their cards, banks offer affiliate links to websites which meet their criteria. You need to have a lot of traffic, and a professional website aimed at their target market. Family blogs like this don't qualify. Even high quality travel websites don't always qualify - you've got to have sufficient traffic for them to want to maintain a relationship with you. This is different than the Amazon model where almost any website can become an affiliate - they just pay at a higher percentage for sites that refer more revenue-producing traffic.

If you're like me and you talk to a lot of family and friends about which credit card sign-up bonuses are best there's another option besides affiliate links and that's Refer a Friend programs. Both Chase and American Express offer these options but there's one a catch:

The signup bonuses are almost always inferior to the best available option.

What kind of friend would refer a friend for a bad offer? This is a terrible way to run a referral business. You want to refer a friend for a great product with a great signup bonus.

I wish the credit card companies provided ways for referrals of the best offers. I'm sure this is a common complaint of affiliates as well: "Give us the best links if you want us to promote your products."

There's nothing I can do to change this, but I can offer up an assessment of the current referral offers available for some of the best credit cards out there along with suggestions of how to work around the problem to get the best signup bonuses -and- a referral bonus as well.

Chase Sapphire Preferred

Chase offers a referral option for some of their cards, for certain cardholders. If you have this card you can check whether you're eligible to refer friends here:

Chase invites you to refer your friends -
for an inferior signup bonus!
Refer a Friend Offer: 40k Ultimate Rewards (this is my referral link)
Better Offer: 40k + 5k for adding an authorized user, $95 annual fee (this is the standard link)

Workaround: None. If you refer a friend for the 40k offer the best you can do (with a lot of persistence) is get Chase to match the 5k authorized user bonus.

Guidance: If you're averse to arguing about signup bonuses go for the 40k + 5k authorized user bonus. You can probably go through a referral link and then request a match on the 5k authorized user bonus, effectively getting both the referral bonus and the 5k authorized user bonus. There was a 50k offer with a $125 annual fee for this card for a while there but it seems to be gone now unless you call in.

American Express Premier Rewards Gold

American Express offers a referral option by logging into then Rewards - Refer a Friend. If you're eligible you should see this:

AmEx's referral program also has inferior offers
sent through emails you can't customize
The way AmEx does referrals is a little quirky. You have to send an email to your friend which includes a personal link. Since it's new to me I'm unsure if the resulting link in the email can be used by multiple people. But since the referral links for the best available offer for the Platinum and Gold cards I wouldn't recommend using them anyway.

All three of these cards are terrific - but only if you catch a peak signup bonus. Even then you may want to consider which cards to apply for concurrently because AmEx blocks signup bonuses for products from the same family. For example, if you currently hold a gold card you can't get the signup bonus for a platinum card. More on strategies related to this in a future post. (subscribe for updates)

Refer a Friend Offer: 25k
Better Offer: Card Match or Targeted 50k

Workaround: None. In my experience AmEx is not friendly about matching better bonuses. I even had to fight with them to get the standard 25k bonus on the AmEx SPG I signed up for this year.

Guidance: Check and/or log into in an incognito browser window then go to Cards - Learn About Charge & Credit Cards - Your Special Card Offers

American Express Starwood Preferred Guest

25k might seem like a weak signup bonus compared to the big numbers other cards offer. But it's because Starwood points are very valuable. I'd estimate their worth a $0.02 a piece so even a 25k signup bonus isn't bad. Starwood points can be redeemed at their properties at favorable rates and - perhaps strangely for a hotel loyalty program - they can be transferred to a ton of airlines at a 20k to 25k ratio. Then, for example, you can redeem those points on Lufthansa for 34k roundtrip domestic flights within the US on United. Crazy, right?

Refer a Friend Offer: 25k (my referral link)
Better Offer: None right now. Best signup I've seen lately for this was 30k this past fall.

Workaround: Sadly, this is the only card of the bunch where the referral signup bonus is on par with the current best offer. If you're in the market for this card now, 25k isn't a bad signup bonus. I'm not sure whether use of a referral link (that I generated by emailing the offer to myself) will make me eligible for a referral fee. But it's worth a shot.

This is a really strange way to design a referral program (email only? what about Facebook and Twitter?). If you'd really like to make sure I get the referral bonus (5k) drop me an email and I'll send you one.

Chase Freedom

As I mentioned in this post this is a great card with no annual fee.

Refer a Friend Offer: 10k Ultimate Rewards
Better Offer: 20k Ultimate Rewards (expired)

Workaround: Apply through the refer a friend link. Then when you're activating the card (or shortly after via secure message) ask them to match the 20k offer. Chase is good about this in a case like this where the signup bonus has increased and the offer is otherwise identical.

American Express Platinum

I wouldn't apply for this card for less than a 50k signup bonus. For even semi-frequent travelers the $450 annual fee is easily justified by lounge access, $200 in airline incidentals (or gift cards twice a year), Global Entry (worth $100, good for 5 years and includes TSA PreCheck), and its Starwood/Hilton/National status (which can be matched to Hertz Five Star).

Refer a Friend Offer: 25k Membership Rewards
Better Offer: Targeted 100k (but hard to come by)

Workaround: None.

Guidance: Check and/or log into in an incognito browser window then go to Cards - Learn About Charge & Credit Cards - Your Special Card Offers


I understand that banks have to abide by regulations in place to avoid consumers getting duped by unscrupulous characters. But I wish they'd learn from how Amazon sets up its affiliates program. Almost anyone with a website is eligible to participate in the program. The more products you sell, the more your referral percentage goes up.

This seems like a bright way to run an affiliate program because as small sites grow they're already familiar with your program. And with social media we're all potentially affiliates aren't we?

I hope this is helpful in navigating your way to the best sign-up bonuses while, in some cases, maintaining your referral bonus as well.

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