Ask Finder: Should I apply for a credit card just to get an introductory offer?

Posted: 22 May 2019 10:42 am

Is it worth getting a new credit card just because it offers bonus points or a 0% p.a. introductory interest rate?

Dear Finder,
Lately I've been seeing a lot of ads for credit cards offering 50,000 bonus points, 0% interest rates, etc. I already have a credit card I'm pretty happy with but wonder if I'm missing out on more value when I see these deals. So is it worth applying for one of them?
FOMO Fiend

Even when you're happy with your existing card, bonus points and introductory interest rates can be tempting – but that doesn't always make it worth applying for a new credit card.

Beyond the promise of sweet, sweet bonus points or 0% interest savings lies the fine print for these offers. With bonus points offers, for instance, you usually need to spend a set amount of money in a fixed period of time – such as $5,000 in the first 3 months you have the new card, while with 0% p.a. purchase rate offers, you need to check what transactions are eligible for the interest-free offer.

Regardless of the type of offer, you also need to apply during the offer's promotional period. On top of the offer details and requirements, there are also ongoing features to think about – including the annual fee and interest rates.

For example, some rewards cards (and other premium credit cards) charge hundreds of dollars each year in the form of an annual fee. And most 0% p.a. balance transfer offers revert to the card's purchase or cash advance rate, which usually ranges between 12% p.a. and 21% p.a. or more. If you're still paying off debt at the end of the introductory period, charges from the card's revert rate could quickly add up.

So before you decide whether or not to switch cards because of an introductory offer, take a look at whether or not you're getting enough value from your current card.

This could be as simple as asking yourself the following questions:

  • How much is your current annual fee?
  • What do you pay in interest charges each month?
  • Does your card have any extras or perks, such as rewards points or travel insurance? If so, do you use them?

If you're happy with the answers to these questions, you might decide to stick with your current card.

But if something isn't quite right – for example, the annual fee or the perks you're getting – you can compare your card to other options and see if you can get a better deal. Just remember to look at both introductory offers and ongoing features.

Ask Finder is a regular column where Finder's expert writers answer your questions. All rates and fees are correct at the time of publication and we only give general advice.

Do you have a question? Reach out in the comments or speak to someone from our 24/7 customer service team.

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