In the great contest for the customer’s attention – and wallet – credit card providers have a number of tools to entice eager buyers to their particular product. One of these instruments is the allure of special introductory offers for credit cards.
If not examined with a critical eye, introductory offers could lead you into making the wrong credit card choice. But approached the right way, you can take advantage of introductory offer credit cards to give yourself a leg up.
What is a credit card introductory offer?
Credit card introductory offers are exclusive deals promised to card applicants on the condition that they take out a particular product.
Such introductory offers act as a point of difference to set one credit card apart from the rest, as well as to lure new customers to one provider and product.
These introductory offers can come in many forms, including:
- A low- or no-purchase-rate promotion for a specific number of months
- Bonus rewards points for cardholders, often linked to the card’s first transaction or the first time a particular spend total is reached
- No, or discounted, annual fee for a certain period of time
- Balance transfer rate deals, which give cardholders an extremely low – or non-existent – interest rate on any existing credit card balances they’ve carried over, for a limited period of time
Some cards might only present one of these introductory credit card offers, while others will provide a combination. These promotions typically only last for a limited duration, and are meant to serve as an incentive for buyers to either take out a card for the first time, or switch from one product to another.
How can credit card introductory offers benefit me?
The most obvious benefit of credit card introductory offers is that you can take advantage to both pare down your debt and prevent yourself from getting deeper in it.
If your existing card has a large build-up of debt and a high interest rate that means you’re always playing catch-up; switching to a low introductory balance transfer rate credit card could give you the breathing room you need to pay down what you owe.
At the same time, if the card also offers a low introductory purchase interest rate, you can continue to use the card as normal knowing that you’ll be racking up less in interest costs. Just be aware that this tactic may not work for those who will need a long time to eliminate their balance transfers. Such credit card introductory offers last for only a relatively short period.
In addition to this, cardholders looking to make a big purchase could benefit from both introductory fee credit card offers and low-rate deals. After all, some expenses can’t be avoided, whether it’s a car repair, a major reno or maybe even an emergency trip overseas. Making use of a card with a 0 per cent introductory purchase rate and no fees can help you avoid getting deeper into the red, and focus all your spending on what really matters.
Finally, the savvy buyer, who is always chasing freebies, could profit from choosing a card with a good rewards point introductory offer. If you find the right card with great rewards and a generous rewards point offer, you could end up receiving the royal treatment just by switching to another provider.
What should I keep in mind about credit card introductory offers?
To the inexperienced buyer, credit card introductory offers can sound like a bonanza. While there’s plenty to make you smile, all prospective customers have to be smart about the way they approach these deals:
- Keep track of your offer period. If your rates are going to rise, you want to be prepared.
- Always check what the revert rate is on the card – so that when the introductory period is over, you know what you’ll be getting charged in interest if you have any outstanding debt.
- Always read the fine print. You don’t want to get caught out by an offer that sounds too good to be true, and ends up being so.
- Avoid being seduced by credit card introductory offers to the point that you ignore everything else. Introductory offers are just one element of many that should be compared across credit cards, as some cards might saddle you with high rates and fees in exchange for a generous introductory deal.
- Don’t hang on to a credit card that doesn’t work for you if the introductory offer has ended or you’ve already made use of it. The card should be working for you, not the other way around.
Keep all of these points in mind when perusing the host of different credit card introductory offers in front of you. Happy hunting!