What is a credit card introductory offer?
Credit card introductory offers are deals promised to card applicants, acting as points of difference to set individual credit cards apart from the rest. Credit card offers can serve as an incentive for new borrowers to take out a credit card for the first time, or for existing borrowers to switch from their current credit card to another deal.
Credit card offers in Australia can come in many forms, including:
- A low-interest or no-interest purchase rate promotion
- Bonus reward points and/or frequent flyer points for cardholders
- No annual fees or discounted annual fees
- Balance transfer rate deals, which charge extremely low interest, or even no interest, on any existing balance a cardholder carries over from another credit card
- Cash back offers, which may be for a percentage of each purchase, or a fixed amount
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 may require you to fulfil certain terms and conditions, such as spending a minimum amount in eligible transactions per month or per year.
The best credit card deals with rewards are the credit card offers that suit your household budget and spending style. It’s important to consider different credit card offers and to calculate which credit card may be right for you before making your choice.
How can credit card introductory offers benefit me?
Making smart use of introductory offers may allow you to quickly clear your credit card balance, limit the growth of your credit card debt, or enjoy additional value from your credit card’s features.
Fee-free credit card offers can help to limit your credit card’s costs, so you can enjoy greater value. Some credit card offers only discount or waive fees for a limited time, or for as long as you maintain a minimum spend, so be mindful of the terms and conditions involved.
If your current credit card already has a large balance owing, as well as a high interest rate that means you’re always playing catch-up on your interest charges. Switching to a credit card offering no interest charges or a low interest rate on balance transfers could give you the breathing room you need to pay down what you owe during the card’s introductory period, before the interest returns to the card’s revert rate.
If your new credit card offers a low introductory interest rate on purchases, you can use the card to shop with confidence, knowing that you’ll be racking up fewer interest charges over the introductory period. A card with a 0 per cent introductory purchase rate and no fees can help you avoid getting too deeply into the red, so you can focus all your spending on what really matters. Just be aware that once the introductory period expires, you’ll need to pay interest on your purchases based on the card’s revert rate.
Savvy shoppers who are always chasing freebies could benefit from a credit card with a good reward point introductory offer. If you find a credit card offering great rewards and a generous reward point offer, you could end up receiving the royal treatment just by switching to the card.
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, prospective customers have to be smart about the way they approach these deals.
- Keep track of your introductory offer period: If your rates are going to rise, or a credit card bonus offer is going to expire, you’ll want to be prepared.
- Always check your credit card’s revert rate: When the introductory period is over, it’s important to know what you’ll be charged in interest if you have any outstanding debt.
- Always read the fine print: You don’t want to get caught out by a credit card offer that sounds too good to be true, and ends up being so.
- Look beyond just the special offers: Introductory offers are just one factor that’s worth comparing when it comes to credit cards, as some cards might saddle you with high rates and fees along with that generous introductory deal.
- Don’t hang on to a credit card that doesn’t work for you: If an introductory offer has ended or you’ve already made use of it, and you’re no longer getting an acceptable level of value out of your credit card, you may want to investigate whether other options are available. The card should be working for you, not the other way around.