Credit Card Second-Year Bonuses: Are They Worth It?

Whether you’re applying for a new premium credit card, or looking to add another Visa Infinite card to your wallet, something you’ve probably noticed lately is the trend of financial institutions offering segmented welcome bonuses, with a portion of the bonus only being awarded if you commit to holding your credit card a second year, and thus requiring the cardholder to pay a second annual fee.

But does that mean that the extra bonus points are worth it? Are you being provided enough value to continue holding the card? Why are lenders insisting on this new type of welcome bonus structure?

Today, we set out to answer these questions and more, and ultimately determine if credit card second-year bonuses are worth it.

What Is a Credit Card Second-Year Bonus?

Second-year bonuses are a recent introduction to credit card welcome offers in Canada, only having become prevalent later in 2023 and then particularly in 2024 and beyond.

This structures your shiny new credit card’s welcome bonus into several parts: a pile of points up front, usually awarded after a purchase or minimum spending requirement is met, followed by a second tranche of points that are only awarded after your card’s 12-month anniversary, typically during cardholder months 14 to 17. 

The introduction of the second-year portion of the bonus is carefully designed to prevent gaming by trying to ensure that cardholders pay their second annual fee and thus hold the credit card for a longer period.

While such bonus structures are mostly found on high-end cards with even bigger bonuses, such as the American Express Platinum card, they’re starting to appear on midrange cards like the CIBC Aeroplan Visa Infinite card, both of which require reaching a second-year card anniversary to get the full welcome bonus. 

These midrange cards usually have more reasonable annual fees and often come bundled with a first-year free benefit as part of the welcome offer to sweeten the deal, so it might not be as painful an idea to keep the card year after year.

Are Second-Year Bonuses Worth It? Crunch the Numbers

These second-year bonuses are rarely generous enough to exceed the card’s annual fee. Instead, they’re typically calibrated to come close, giving you just enough value to hesitate before cancelling.

While I’ve always been an advocate of doing the hard math on whether renewing your credit card is in your best interest, I want to quickly look at some examples to see what we’re observing on the premium end of the Canadian credit market, as well as in the mushier middle.

Let’s take two real Canadian examples, citing welcome offers that are current as of July 4, 2025:

• American Express Platinum Card: Receive 30,000 Membership Rewards points (worth a minimum of $300 in statement credits, though much more if transferred to a frequent flyer program) if you make a purchase between months 14 to 17 of card membership.
  • Even with the $200 restaurant credit and $200 travel credit, the $799 annual fee is a pretty spicy meatball to be swallowing for only 30,000 Membership Rewards points. 
  • The points themselves, therefore, probably aren’t as big of an attraction as other features of the card, such as airport lounge access.
    
• WestJet RBC World Elite Mastercard: Recently included 10,000 WestJet Points (equal to $100) as a second-year bonus.
  • The annual fee is $139, so the bonus comes just shy of making you whole. 
  • Again, your main focus on this card would be the WestJet Companion Voucher, the free checked luggage benefit on WestJet flights, or the ability to spend your way to WestJet Rewards status, assuming you have to fly a lot of WestJet flights.

This structure is intentional. The second-year bonus softens the renewal cost, making it much more palatable, but doesn’t erase it. Financial institutions want you to pay and keep the credit card for the long term after all.

I think it’s pretty rare that the second-year bonus makes it worth your time to keep the card, because we can see that the math tends to be under the cost of the annual fee, but they do behave as a “sweetener” for keeping cards which had other benefits or perks you may have already been interested in. Of course, this all changes if you don’t have to pay annual fees at all….

Premium Bank Accounts Can Tip the Scale In Your Favor

Here’s where things get a bit more interesting: all major banks in Canada have premium bank accounts that waive or reduce credit card fees, and you can even avoid paying a monthly bank account fee on many of them if you maintain a minimum balance at all times. 

While American Express has no such products, leaving you with no way to “bank account” your way out of the $599 annual fee for an American Express Aeroplan Reserve card, this does give you an excellent way to collect the second-year bonus while dodging the annual fees of many midrange credit cards.

For example, I mentioned the CIBC Aeroplan Visa Infinite card in this article’s introduction. Normally, that carries a $139 annual fee, but by also having a CIBC Smart Plus account, that fee is history. This makes the second tranche of 10,000 Aeroplan points as part of the second-year bonus a lot more palatable.

Note: these bank accounts have maximum values on their fee waivers, thus meaning they can only give a partial rebate for products from the ultra-premium Visa Infinite Privilege category. While it’s nice to knock $139 off the $599 annual fee that comes with the CIBC Aeroplan Visa Infinite Privilege card, it may not make the second-year bonus worth sniffing at.

OK, But Should I Keep my Credit Card For A Second-Year Bonus?

The second-year bonus is just one piece of the puzzle. There are a few questions you should ask yourself

First of all: What’s the net value? Calculating the [Bonus Value] – [Annual Fee] = will give you your starting point. If your bank waives the fee, even better, as you now have a big fat $0 in the annual fee column… the second-year bonus is now all gravy.

Secondly: Do you use the perks? Airport lounge access, travel insurance, free checked bags, or hotel status may offer year-round value. For example, if the Amex Platinum’s $400 in annual credits plus lounge access are elevating your travel experience consistently, there’s no point ditching the card.

Finally: Does the card align with your travel plans? If you’re booking WestJet flights this year, 10,000 WestJet points plus a companion voucher might be more useful than a new signup bonus elsewhere.

If you can get two out of the above three criteria to be mostly positive, I’d argue it’s in your best interest to keep your card for the second-year bonus and go from there.

Conclusion

Second-year bonuses are rarely game-changers on their own. They typically don’t exceed the value of the annual fee, but can help justify renewal if paired with useful perks or a bank account fee waiver.

But don’t get hung up on the numerical amount of the second-year bonus. Consider instead whether you’re extracting value from the credit card’s other benefits, as they may only be worth it with that bonus, or may give your card enough value to keep even without it.

As always, weigh the real value of your credit card. Points are great, but only if they actually move you closer to your next trip.