Forget Credit Card Sign-Up Bonuses. Here's a Less Risky Way to Score $300

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Not long ago, I opened my email to find an offer for a new credit card for the business I own. The sign-up bonus was tempting. All I had to do was spend $3,000 within three months of opening my account, and I'd get a free $300.

You've probably come across similar offers yourself. They may not all be for a $300 bonus. But in a nutshell, it's common for credit card companies to try to lure customers in by tempting them with welcome offers that put extra cash in their pockets.

The problem with credit card sign-up bonuses , though, is that they can lead to extra spending. That can make them dangerous. So if you're eager to score a few hundred dollars in cash, there's a much safer way to go about it.

Don't chase that sign-up bonus

In some cases, it can make sense to pursue a credit card's sign-up bonus. Let's say you're about to book a big vacation that's going to cost $3,000 between airfare, lodging, and meals. It could pay to open a new card, spend the $3,000 you've already saved for your trip, and then score a free $300 or whatever the welcome offer is.

The danger in chasing sign-up bonuses lies in offers you jump on without thinking things through. And it's not your fault! Those offers are so tempting.

But here's what might happen next. You get a credit card that's going to pay you $300 if you spend $3,000 in three months. But your normal credit card spending might only amount to $2,400 in three months. So if you then intentionally spend an extra $600 to get your sign-up bonus, you won't be doing your finances any favors. It's only when you have a planned expense that going after one of these bonuses makes sense.

A better way to get your hands on free money

Generally, the only way to snag a credit card sign-up bonus is to spend some of your money. But if you open a CD, you can earn interest by keeping your money in the bank. You won't have to spend a dime.

Because CD rates are up these days, it's not so hard to find a 12-month term with a 5.00% APY. And if you have $6,000 on hand, that'll earn you $300 in the course of a year.

Of course, you may not have $6,000 at your disposal. But even if you deposit a smaller amount into a CD, you might earn a nice amount of cash back in interest form.

A $3,000, 12-month CD with a 5.00% APY will pay you $150 after a year. That's comparable to some of the sign-up bonus offers you'll see.

Credit card companies do a great job of enticing customers to spend money. But if you'd rather get free cash without having to do that, open a CD while rates remain high -- instead of chasing the next credit card offer that comes your way.

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