How Do Credit Card Referral Bonuses Work?

Quick Answer

Some credit card issuers will give you bonus rewards if you refer new cardholders. To earn the bonus, the other person will need to use your unique referral link when they apply, and you’ll both need to meet the eligibility requirements.

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If you have a favorite credit card, you might get rewarded for spreading the news about it. Credit card issuers incentivize their current cardholders to refer friends with potentially lucrative bonuses for successful signups. Referral bonuses aren't always available, but if your card is part of a referral program, this can be an easy way to quickly earn lots of rewards.

How Do Credit Card Referral Bonuses Work?

Credit card referral bonuses are bonus rewards that you can earn by recommending your credit card to someone else. These bonuses can be sizable, and the person you refer may qualify for an intro bonus as well.

To track and receive a referral bonus, you may need to share a unique application link that's tied to your credit card account. If the other person uses the link to apply, qualifies for the card and meets the requirements—and you're both eligible—you'll get the bonus.

How to Earn a Credit Card Referral Bonus

Earning a referral bonus isn't difficult, but you'll want to make sure you read the fine print. Make sure you send the correct referral link, that the person uses the link to submit their application and that you're both eligible for the bonus. The exact requirements can vary depending on the card issuer, but you can use this simple three-step process to see if you can earn a referral bonus.

1. Check Your Referral Offers

You generally have to log in to your account or share a few details about yourself and your card to review your card's referral offer. If you can't find a referral link for your card, it's possible that the card issuer doesn't offer referral bonuses. Or that there aren't any referral bonuses for your specific card right now.

2. Review the Terms and Conditions

You'll want to make sure you're eligible to receive the referral bonus and that the person you refer meets the eligibility and program requirements. Some of the details you may want to look for include:

  • The maximum rewards: There may be a cap on the amount of bonus rewards you can earn from referring others to the card.
  • Who you can refer: Generally, you can refer friends and family, but it might be against the program's rules to post your link in general forums or to refer people you don't know. If you try to refer strangers, or try to refer yourself, the card issuer might not give you bonus rewards or might take them back after initially awarding you the bonus.
  • Eligibility requirements: You might need to keep your account in good standing—in other words, keep making your payments on time—to qualify for referral bonuses. The person you refer generally can't already have the card.

3. Send Your Referral Link

Copy the link from your card issuer's website and then send it in an email or text. Or, many card issuers let you quickly send referral emails after typing in the person's name and email address. Although the second option may be easier, if the recipient opted out of emails or credit card offers from the card issuer, they might not receive your referral email and link.

Card issuers won't necessarily tell you that the person you referred got the card. If they do, you may receive the bonus rewards within one to two billing cycles. However, if the person you refer clicks on a different referral link before applying, including a link from a credit card review, you might not receive the referral bonus.

Are Credit Card Referral Bonuses Taxable Income?

The rewards you earn from referral bonuses could be considered taxable income, and you may need to report the income on your next tax return. In contrast, the rewards you earn from making purchases with your card aren't considered taxable income because the rewards are more like a rebate or discount. However, you aren't making a purchase when you refer a friend.

Card issuers may also be required to send you a tax form 1099-MISC if you receive over $600 in value from the referral bonuses in a year. And they can choose to send you the form even if you earned less.

If you get a cash back referral bonus, the bonus's value is clear. But if you received bonus miles or points, the card issuer may determine how much each mile or point is worth. For example, points in the card issuer's rewards program might be worth 1 cent each, but some hotel points might be worth less. You might not know this amount until you receive Form 1099-MISC.

Check Your Credit and Other Intro Offers

Your credit score can impact whether you can qualify for a new credit card. Get your FICO® Score for free from Experian before applying to understand where your credit is at and what you can do to improve your score.

Also, referral links will sometimes have different intro bonuses than other offers. When you're referring someone to a card, you might suggest they check the intro offers from several sources, such as your referral link, the card issuer directly and Experian CardMatch™. If your referral offer is best, there's no harm in asking them to use your link to apply.