How to use sign-up bonuses to earn quick cash in Canada

From cash, rewards, subscriptions, and more, big companies have realized that offering free stuff upfront is a great way to gain a loyal customer. If used correctly, savvy consumers can use these sign-up bonuses to their advantage to save money and earn quick cash.

With the cost of living, groceries, and other everyday necessities rising, a dollar saved truly is a dollar earned.

However, that doesn’t mean you should sign up for every sign-up bonus you’re presented with.

Below, I’ll explain how sign-up bonuses work, outline some of the most popular ones, and share some tips on making the most of them.

How do sign-up bonuses work?

Credit card companies, banks, streaming apps, coupon apps, and even gig economy apps like Uber and Lyft all have one problem in common — competition is stiff, and they all need more customers.

Netflix is competing for Amazon Prime Video customers, Royal Bank of Canada (RBC) is competing with TD Bank, and Uber is competing with Lyft. With so many options available to consumers, the one edge that these companies can get over one another is by increasing their value proposition to the customer.

What’s the easiest way to give instant value to customers? By offering upfront value (aka sign-up bonuses).

Here are some examples that you may have already seen:

• Get free money when you sign up for a new chequing account
• Get 50% off a brand-new phone when you change phone plans
• Get three free months when you subscribe to a streaming service
• Get a free stock when you sign up for a trading app
• Get 5,000 free air miles when you sign up for a travel rewards credit card

The more significant the sign-up bonus, the more likely you are to take a second look and reconsider. On the surface, it’s free value. On a deeper level, it’s intuitive marketing.

The key is learning how to work the system and get the most free value while avoiding common pitfalls.

Popular sign-up bonuses

Here are some of the most popular sign-up bonuses you’ll come across in Canada:

• Bank sign-up bonuses: Many banks offer free money or gifts when you open a chequing or savings account with them.
• Credit card sign-up bonuses: Credit cards may offer a cash reward or rewards points when you spend a certain amount of money within a given time period.
• Coupon app sign-up bonuses: Coupon apps like Rakuten or Swagbucks may offer high-value coupons upfront to first-time customers.
• Investing app sign-up bonuses: Investment apps like Wealthsimple Trade or Questrade may offer a sign-up bonus when you sign up for their service.
• Streaming sign-up bonuses: Audio and video streaming services may offer your first month for free or at a discounted rate when you sign up for a year-long subscription.
• Cell phone company sign-up bonuses: Cell phone companies like Rogers or Bell often offer special deals on service plans, brand-new phones, and trade-in phones for customers who switch from a competing phone service.
• Gig economy sign-up bonuses: Gig apps like Uber, Lyft, and DoorDash often offer a free ride or a free meal delivery to new customers. Alternatively, drivers may receive special cash bonuses if they complete a certain number of rides or deliveries during their first month.

How to maximize your sign-up bonuses

You can find sign-up deals and bonuses everywhere. Social media, the internet, highway billboards, and TV commercials constantly promote the latest deals in an effort to win over new customers.

With so much free stuff being offered, it can be easy to fall into the companies’ traps. Here are some tips to help you maximize your sign-up bonuses.

Pick the right bonuses for your lifestyle

Firstly, you should only pick sign-up bonuses you need and plan on using.

For example, if you were already considering opening a new credit card, take a look and compare/contrast offers by multiple credit card companies. Don’t just sign up for the first credit card that offers a bonus.

If you’re happy with your existing phone service plan, switching to a new company may come with an unwanted hassle and slower service.

Carefully pick the bonuses that best fit your needs, make a list, and do your due diligence researching the company.

Manage your timeline

Sign-up bonuses often come with a very strict deadline.

If you don’t accomplish a certain task or fail to cancel your “free” 30-day subscription by the deadline, then you could void your reward or be charged for a full-price subscription.

For example, a credit card may offer a $500 cashback bonus if you spend $4,000 within the first three months of having the card. If you fail to spend that amount, you won’t receive the reward, and you’ll be stuck with just another credit card that you may not have needed in the first place.

That being said, it’s always a good idea to set reminders on your phone calendar to accomplish the sign-up tasks or cancel a temporary free subscription so that you can make the most of them.

Read the fine print

Sign-up bonuses often aren’t completely honest. Sometimes, there are rules and regulations hidden in the fine print. If you fail to ask about these (or read them for yourself), you could inadvertently void the sign-up bonus and waste your time.

When are sign-up bonuses worth it?

If you’re organized and have a plan to take advantage of them, sign-up bonuses are a great way to save money and even put extra money in your pocket. However, they can just as easily trap you into unwanted subscriptions or memberships that can cost you money in the long run.

To ensure that a sign-up bonus is worth it, I recommend sticking with sign-up bonuses offered by companies and services you already plan to use.

Written for Daily Hive by Christopher Liew, a CFA Charterholder, former financial advisor, and the creator of Wealth Awesome.