We are bombarded daily with offers suggesting we apply for credit cards from different card issuers. The offers come in our mailboxes and email inboxes unsolicited and without warning. It may seem flattering that somebody wants to grant you credit. But are they really the right offer for you? And have you really been offered a credit card line of credit?

Credit card offers come from numerous sources. Some are generated from purchased email lists and some from past relationships you have had with banks, retail stores of travel related companies. Some of them even suggest you have been preapproved. That is not really the case.

As far as pre-approval is concerned, that is only half true. You may have seemed to be eligible to the offering firm at the time they generated the mailing list, but be assured they will check your credit again if you apply. Every time your credit is checked by a credit-card issuer, a hard inquiry is done and reported on your credit report. It can negatively affect your credit score 2-5 points and will remain on your credit report for two years. Don't indiscriminately be applying for offers you really don't want.

I look for offers that provide:

1. Clear and printed information on the terms and conditions of the offer. As a travel freak, I want to know up front how many miles or points I'm going to earn. If I can't print the terms; I don't believe the terms.
2. I'm looking in particular for the size of the sign up bonus, and what I must do to earn the bonus. If a card offers me 100,000 airline miles if I complete $10,000 of spending on the credit card in 30 days, I'm not going to take that offer. I'm not sure I can meet those terms and conditions in such a short time period. I am more apt to apply for cards that have bonuses awarded on "first purchase" or a more reasonable minimum spend with a reasonable time frame, say 90 or 120 days. Remember, you must be able to prove you met the sign up bonus requirements if something goes wrong on the issuer's end of the deal.
3. I want to be absolutely sure the sign up bonus is worth considerably more than the annual fee charged. A one night free hotel stay doesn't really excite me as a sign up bonus, particularly if there is an annual fee for the card. Not much of an incentive in my mind. I typically look for a minimum value of $500 or more in sign up bonus before I'll apply for a credit card. I value airline miles at 1.5 to 2 cents each and hotel points at roughly 1 penny each except SPG points which I value at 2.5 cents each. It takes a sign up offer of 25,000 airline miles or more before I consider the offer worthwhile.

Keep in mind that your credit is one of your most important assets that each application negatively affects your credit score and you want to get the biggest bang for your application.

And if you are not paying off your card balances in full each and every month, applying for credit cards is not for you. The interest expense and possibility of late fees will eat up any potential gain in a hurry.

For the right individual, applying for credit cards for their sign up bonuses can have its financial benefits, but you must be aware of the pitfalls as well. Discipline and a plan of attack are musts for successful card churning.