Citi has recently started offering referral bonuses on credit cards, one weird requirement is that the primary cardholder doing the referring needs to spend $500 before they are eligible to earn any referral bonuses. We’ve recently seen Chase, American Express & Discover issue 1099 forms for referrals. I don’t know for certain, but my gut feeling is that Citi added a spending requirement so that these referrals are being treated as a rebate (as normal credit card bonuses are) and aren’t taxable. Citi also limits you to $500/50,000 points per card, which is below the $600 threshold as well.
If that is indeed the case then I wonder if we will see spend requirements added for the existing cardholders for Chase, American Express & Discover referral bonuses to help avoid taxes.
