A credit card referral bonus is a great way to boost your rewards balance. You can earn hundreds of dollars in potential value through referral bonuses, and help your friends and family score great welcome offers on a new card.
Before you start referring, here’s what to know about how these bonuses work and what you can actually earn.
Read more: Best credit card sign-up bonuses
How do credit card referral bonuses work?
Referring a friend to your credit card company is simple. If your issuer offers a referral program, you’ll have a unique link you can send to friends who want to apply for a new card. When they use this specific referral link to submit their application, you can earn bonus rewards.
Look for your link within your online card account or after logging in through your issuer’s “Refer a Friend” webpage.
Applying is the first step, but your friend must also be approved for the card. Your referral doesn’t affect approval; any new card approval is determined by application information like credit score, income, credit history, and more.
Once your friend is approved, you can expect your bonus rewards points or cash to show up in your account automatically, though it may take a few weeks after a successful referral.
The best thing about referral bonuses? Unlike a credit card welcome bonus, you can earn them multiple times. Your issuer will likely cap the number of referral bonuses you get each year, but you can continue to refer friends and earn rewards over the lifetime of your account.
Related: Best rewards credit cards
Referral bonus limitations
Make sure you read the terms of your referral offers. Some credit card issuers only allow you to refer friends for a card you hold, while others may allow referrals to any card they offer. You’ll generally also need to be the primary cardholder to earn a referral bonus. Authorized users may not be able to refer friends at all, or the bonus may go directly to the primary cardholder’s account.
Finally, look for information about the maximum amount you can earn from referrals. Issuers often cap the number of referral bonuses you can earn in a year. For example, you may earn 20,000 bonus miles per referral with a cap of 100,000 miles earned from referrals annually.
Current credit card referral bonuses
Here’s a look at how you can earn referral bonuses from top credit card issuers right now:
American Express
You can find your personal referral link through your American Express account. Share the link via email on Amex’s site or copy your link to share with friends directly. You can earn a referral bonus no matter which Amex card your friend chooses.
The referral bonus amount depends on which Amex card you have, and there are annual restrictions. For Amex cards that earn Membership Rewards, like the American Express® Gold Card or the American Express Platinum Card®, you can earn up to 100,000 points per calendar year. The same cap applies to Delta SkyMiles and Marriott Bonvoy co-branded credit cards. With a Hilton Honors card, you can get up to 140,000 points from referrals per year, and cash-back cardholders can earn up to $1,000 in referral statement credits per year.
Read more: Best American Express credit cards
Capital One
When you sign into your Capital One credit card account, you can find your personalized referral link to send to family and friends as long as you’re a current cardholder in good standing.
Capital One referral bonuses depend on which card you have, and total referral bonus earnings are capped each year. Capital One says you can typically earn $500 in a calendar year through referral bonuses, but this varies. For example, you can get up to 100,000 points each year by referring friends to the Capital One Venture X Rewards Credit Card.
Log in to your account online to see exactly how much you can get per referral and any annual limits that apply for your card.
Chase
Through your Chase card account, you can find a unique URL to send to friends and family who want to apply for a credit card. Exact referral offers and annual limits depend on the card.
For example, if you have a Chase Sapphire card, you can earn 15,000 bonus points per friend who signs up for either the Chase Sapphire Preferred® Card or Chase Sapphire Reserve®, up to 100,000 bonus points each year. On the other hand, you’ll get $50 per friend who signs up for either the Chase Freedom Unlimited® or Chase Freedom Flex®, up to $500 cash back per year.
Read more: Best Chase credit cards
Discover
Send your friends your personalized link from your Discover account, which they can use to apply for a Discover card. Not only will they need to sign up and get approved, but your friend must also make a purchase within the first three months of account opening for you to earn your referral bonus. Plus, they can also get a statement credit.
Your referral bonuses from Discover are capped at $500 per calendar year.
Referral bonuses and taxes
Before you start racking up referral bonus rewards, you should also be aware of the tax implications. Most credit card bonuses — including most new cardmember sign-up bonuses — are not considered taxable income. However, credit card referral bonuses are different.
When you get a credit card referral bonus, you may owe taxes on the amount you earn. And while a single referral bonus each year won’t add much to your tax bill, multiple referrals can add up.
Referral bonuses are considered taxable because you don’t need to spend any money to earn them. Regular credit card rewards, on the other hand, are considered a type of rebate — since you must spend money to earn them. With referrals, you don’t have to make any purchases.
Whenever you make a referral, look for a 1099-MISC tax form from your issuer during the following tax season. If you’re unsure of your tax obligation, speak with a professional before you file.
Read more: Are credit card rewards taxable?
Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. All opinions belong solely to the Yahoo Finance and are not those of any other entity. The details on financial products, including card rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the bank’s website for the most current information. This site doesn’t include all currently available offers. Credit score alone does not guarantee or imply approval for any financial product.
Leave a Reply