Maximizing Credit Card Referral Points: A Complete Guide

Credit card referral bonus points can be an excellent way to add more points to your inventory. Whether you’re a frequent traveler or you enjoy earning cashback on everyday purchases, there is a referral bonus that everyone will love.

Unlocking Rewards from Credit Card Referral Bonuses

I am sure it’s obvious that I love to encourage people to adopt the points and miles hobby so they can enjoy the same travel benefits as me.  Another perk is that I often can send them my credit card referral link and end up with a few extra bonus points or miles.  We both win!

Now that you are on this points and miles journey, you will eventually have friends and family asking how in the world you are taking all these vacations. This is your opportunity to 1) tell them about my site and 2) offer them your referral links. At a minimum, you should be able to make referrals to your spouse, Player 2 (P2), and keep those points in the family!

Understanding Credit Card Referral Bonuses

Credit card referral bonuses can provide significant rewards for introducing friends or family to specific credit cards. It is important to know how these bonuses work and the eligibility criteria to ensure you can maximize your benefits.

How Referral Bonuses Work

When you refer someone to a credit card, and they are approved, both you and the new cardholder typically receive a bonus. This bonus can come as points, miles, or cash back.

Most of your cards will allow you to refer multiple people each year meaning you could add a nice stack of points or miles to your inventory. The amount of a referral bonus does vary depending on the card and the promotion at the time of the referral. Typically, a bonus is at around 20,000 points but there are certainly times when you can receive a higher bonus.

To initiate a referral, you usually need to access your account online or via an app. The referral links are hidden in different locations for each bank. Treasure maps for the major banks are below.

Chase: log into your account then paste this link.  You will be taken to a dashboard with a drop-down of your cards.  Select the one you want to refer to.

Amex: log into your account, scroll to the bottom of the page, and select Refer A Friend.

Capital One: log into your account, and select a card you want to refer.  Select the “I Want To” button and then Refer a Friend.

After sharing the unique referral link, you cross your fingers and toes and hope the friend or family remembers to use the link when they apply for the card.  If they receive approval for the card you should see the points in your account within 4-6 weeks. 

Eligibility Criteria

To qualify for credit card referral bonuses, you often need to be an existing cardholder with an active account. Amex is one of my favorite banks for referrals because the referral works for any card application.  I can send someone the link from my Amex Gold card and they can end up applying to the Amex Platinum card I will still get the bonus. 

Your referral must apply through your unique link and meet the card issuer’s application requirements. This means they must be approved for the card.  You don’t get points if they don’t get approved.

Each bank also has a limit on how many referral bonuses you can earn each year. If you have maxed out your bonus earnings, I recommend sharing the wealth and finding someone else with the card who can provide a referral and earn points.

Other Types of Referral Bonuses

While getting a lump sum of points is awesome, there have also been other types of referral bonuses. In 2021 Amex offered +4x on all eligible purchases for up to 3 months on up to $25K in purchases when you referred someone and they were approved.  That’s potentially 100,000 points! Remember, Amex Gold offers 4x on grocery spend, with this bonus I earned 8x for groceries.  That was a time when I was more than happy to have a high grocery bill.

The Taxes

I hope I have made you super excited about referral bonuses because you should be.  Now for the not-so-fabulous news, but not bad news, about referral bonuses.  If you receive bonus points from a referral you will likely receive a 1099 in the mail from the bank. The equivalent value of the points as calculated by the bank is seen as “other income” by the good ol’ tax man. 

I want to be very clear that you will not receive a 1099 for the points you earn on everyday spending.  I am only talking about the bonus points you earn when you someone gets approved for a card using your referral link. 

In case you are wondering if the taxes are worth the referral bonus, the answer is 100%, yes. Time for some math.

Let’s say you get 40,000 AMEX points and the 1099 values those points at $400.  The average tax percentage paid in the US is 14.5% so we will pretend you owe $58 dollars in taxes for those 40,000 Amex points. 

I have turned 40,000 Amex membership reward points into as much as a $4500 Air France business class seat to/from Europe. I’ve also redeemed 40,000 Amex Membership Reward points (by transferring them to Air Canada) for flights to Denver for four people worth ~$1000.  I know paying taxes can suck but $58 is much less than $4500 and it’s less than $1000. My point is, with points you’re coming out on top.

If you want to avoid paying the taxes, feel free to reach out to me I will be more than happy to give you my referral link so I can earn the bonus points. 

More Points Means More Travel

There are so many ways to earn points and some take more “work” than others.  Referral bonus points are some of the easiest because a link can be sent in under 1 minute. Take a few minutes to log into your credit card website and make sure you know how to find the referral links.  Always good to be prepared to help when you have a friend or family in “need”.

Thanks for reading, Friends.  Happy Travels