Get bonus points, 0% interest rates or reduced annual fees when you sign up for a credit card with an introductory offer. Learn more and compare your options here.
Introductory offers are designed to attract new customers by providing added value to a credit card, such as lower interest rates or bonus rewards. However, these special promotions only last for a limited time and usually come with terms and conditions. As such, you shouldn’t let the introductory offer overshadow the ongoing features and costs of a credit card during the comparison process.
Use this guide for everything you need to know about introductory offers, including the types of deals available and how to compare them, so that you can get a credit card that offers immediate and ongoing benefits for you.
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Table of contents: Full Guide to introductory rate credit cards
How do introductory offers work?
Introductory offers are usually exclusively available to new customers who apply and are approved for a specific credit card. These deals can provide savings in the form of low or 0% interest rates, waived annual fees and bonus points.
The benefits of introductory offers only last for a limited time, though, with any promotional interest rates or fee discounts reverting to standard features after the honeymoon period. You may also have to meet specific requirements to be eligible for the benefits on offer, including the following:
- New customers. You must be a new credit card customer, with no existing credit cards issued by the company you’re applying with. For example, if you have a credit card issued by American Express, you won’t be eligible for Amex introductory offers.
- Credit card approval. You must apply and be approved for the credit card in order to take advantage of the introductory offer.
- Application dates. Some promotional offers may only be available to applicants who apply and are approved by a set date.
- Spend requirements. When there is a bonus points offer available, often you’ll be required to meet a spend requirement by a set date to receive the points.
Before you apply for a card with an introductory offer, make sure you fully understand these terms and conditions to ensure you can get the full value from the offer.
Types of introductory offers
There is a wide range of different introductory offers available depending on what you want from a credit card. Some of the most popular options include:
Balance transfer offers give you a promotional low or 0% interest rate for debt you move from an existing credit card (or cards) to a new card. Usually, balance transfer credit cards require you to include details of your existing debt and account when you apply for the new card, and are processed once your application is approved and your new card is activated. At the end of the introductory period, the interest rate reverts to a higher standard rate that applies to any balance remaining.
The lower introductory interest rates provided by balance transfer offers can help you save money on credit card charges and pay down your debt faster. It’s important to clear the balance in full before the end of the honeymoon period to get the most value out of these introductory offers.
Purchase rate promotions
Purchase rate offers give you a low or 0% interest rate for new purchases made during the honeymoon period, allowing new customers to save money on interest charges. At the end of the introductory period, the promotional rate reverts to a standard interest rate that applies to any balance carried from these purchases.
Purchase rate offers can be useful if you have a lot of planned expenses coming up and want a flexible and affordable way to pay them off over time. To get the most out of low or 0% purchase rate deals, you should aim to pay off the new charges before the end of the introductory period.
No annual fee
This type of introductory offer waives the annual fee of the credit card for a promotional period, such as 12 months. Depending on the credit card, no annual fee promotions can save you tens, hundreds or thousands of dollars.
After the introductory period, the standard annual fee will be applied to the account and could cost you anywhere from $30 to $500 or more every year. That makes it important to also consider the ongoing annual fee when you’re looking at credit cards with introductory offers.
Reduced annual fee
Instead of waiving the annual fee completely, some credit card offers simply halve or reduce it for the first year. While these cards may not waive the full annual fee, they still offer some savings when you first own the card.
The key benefit from this type of credit card offer is that it allows you to get used to a credit card before you have to pay the full cost of the annual fee. Occasionally, some credit card companies also offer a reduced annual fee for the life of the card, but it’s more common to see this deal offered for the first year only.
Bonus rewards points promotions
A wide range of reward credit cards offer bonus points to new customers when they apply and are approved. These deals usually require you to spend a certain amount of money in the first few months you have the card in order to get the extra points. With some credit cards offering 50,000 bonus points or more, this type of introductory offer may allow you to redeem rewards almost as soon as you get a new card.
Bonus frequent flyer points promotions
Similar to bonus reward point promotions, this type of introductory offer can provide you with thousands of frequent flyer points when you sign up. You might need to meet a spend requirement within a set time period, though, so make sure you know what these terms and conditions to make sure they align with your spending habits.
These offers are suited to existing or new frequent flyer members who want to get more value out of the program by using a credit card. But it’s also important to consider the ongoing features of a frequent flyer credit card to make sure that the benefits will continue to outweigh the potential costs once the introductory offer ends.
Cash back offers
This type of introductory offer provides new credit card customers with cash back. Like bonus point promotions, most cash back offers require you to spend a specific amount of money in the first few months you have a card. For example, an offer might give you $200 cash back if you spend $500 in the first 3 months you have the card.
Some cash back offers also require you to spend the minimum amount in a specific way, such as on phone screen insurance or by making contactless payments. This type of offer can give you extra value if you have planned purchases you want to make on your credit card, but may not be worth it otherwise.
Other introductory offers
As well as the major introductory offers outlined above, some credit card companies may offer other, more unique deals for new customers. These introductory offers could include:
- Gift cards. Some credit cards offer complimentary gift cards to new customers, usually for an affiliated store or brand. To be eligible, you usually have to apply during the promotional period, and may need to enter a promotional code online.
- Discounted purchases. Some credit cards may offer you a discount on specific transactions. For example, a frequent flyer credit card could offer 10% off flight bookings made with the affiliated airline during the promotional period.
Depending on the credit card, you may be able to take advantage of more than one of these offers at a time. For example, a card that offers a 0% balance transfer rate could also have a discounted annual fee for the first year, while a card with bonus points may also offer 0% interest on purchases during the honeymoon period.
How to compare credit card introductory offers
While introductory offers can sweeten the deal when you sign up for a credit card, it’s essential to consider the ongoing features of the card as well. Considering the following factors will help you find an introductory offer that suits your needs in the short-term and a credit card that fits your circumstances in the long-term.
- The balance transfer interest rate. Introductory balance transfer interest rates range from 0% to 9.99%. The lower this rate and the longer the offer, the more money you’ll save when paying off your credit card debt.
- The promotional purchase rate. Depending on the card, the promotional offer may have a low or 0% interest rate. Consider the purchases you have in mind, the purchase rate and your ability to repay the entire balance before the promotional period ends when you’re comparing.
- The length of the introductory period. With low purchase rate or balance transfer rate offers, it’s important that you calculate how much you’ll need to pay each month to repay the entire balance before the promotional period ends. Otherwise, any remaining balance will collect the standard interest and begin to counteract your savings.
- The promotional offer end date. These offers are only available for a limited time, so you will need to apply before the end date to take advantage of them. Check the terms and conditions to make sure any offers you want are still available before you apply.
- The standard interest rates. If you have a card with a low or 0% purchase or balance transfer deal, the standard interest rates will apply to any balances remaining at the end of the introductory period. These rates are generally much higher than those of the introductory offer, so considering them before you apply will help you avoid any nasty surprises when the promotion ends.
- Standard annual fees. If you get a reduced or waived annual fee offer, make sure you check standard annual fee so that you know how much you will have to pay after the first 12 months. If you only intend to use the card while the waived annual fee is in place, make sure you know when the standard annual fee will apply to avoid paying extra.
- Other fees and charges. Credit cards come with a wide range of other fees and charges that are applied in different circumstances, such as balance transfer processing fees, international transaction fees and late payment charges. Check these details before you apply so that you know when you might have to pay more for the card that you choose.
- Interest charges. If your introductory offer requires you to spend a certain amount of money, you could be charged interest on the purchases. Make sure you budget for this cost before you apply or, better yet, pay off the card as soon as you make the required purchases so that you can avoid paying interest altogether.
Rewards and extras
- Spending requirements. Some cash back and bonus point offers require you to spend a minimum amount in the first few months (the introductory period). It could be as little as $100 or as much as $10,000 depending on the card, so it’s important to check before you apply to make sure you can afford to take advantage of the offer.
- Standard rewards points. As well as the bonus points, make sure the regular rewards program (including the earn rate and how you can redeem your rewards) suits your spending behaviours and rewards goals.
- Complimentary extras. Additional, ongoing perks such as international travel insurance, extended warranties and concierge services can bring more value to the card that you choose, but only if you use them.
Mistakes to avoid
There are a number of potential pitfalls people face with introductory credit card offers and in some cases it can mean the card costs more than the benefits. Here are some of the key mistakes and how you can avoid them:
- Not reading the terms and conditions of the offer. Introductory offers have specific eligibility requirements you have to meet, so make sure you understand the fine print before you apply.
- Wasting the promotional offer time period. With a balance transfer or purchase rate offer, the promotional period (such as 12 months) will begin as soon as you apply for the card, rather than when you make the transfer or your first purchase. To avoid wasting the valuable offer, make sure you start consolidating your debt or paying off your purchases as soon as possible to take advantage of the full offer.
- Not looking at the ongoing features of the card. While introductory offers can give you short-term benefits, the standard features of a credit card determine its ongoing value. Always check these features before you apply for a credit card to decide if it’s worth it for you.
- Not checking the end date of the offer. To get a specific credit card offer, you must apply before the end of the promotional period. Regularly comparing credit cards can help you stay up-to-date with all the offers available when you’re considering a new card.
- Not using the card after the introductory period. If you decide you don’t want the card you applied for after getting an introductory offer, you could end up paying more credit card fees and adding to your debt. Make sure you consider this before you apply, choose an appropriate card, or cancel the account if you no longer want to use it.
Introductory offers have the potential to provide you with more value when you get a new credit card. While almost anyone can benefit from these deals, the value they provide really depends on your individual circumstances.
It’s also important to remember that these benefits only last for a set amount of time before reverting to the standard features of the card. So being aware of how credit card offers work and considering both the introductory offer and the ongoing card features means you can choose a card that offers you value now and in the future.