Credit card bonuses means this Christmas really is the season to be jolly. Discover how you can compare credit card deals and avoid traps over the holidays.
In the lead up to Christmas, credit card providers have started offering new customers a variety of deals to encourage signups and spending. With credit card expenditure expected to increase by $648 million compared to last December, it’s no wonder why Aussie providers are jumping on the opportunity to entice new cardholders.
What types of seasonal deals are on offer
As cardholders are more likely to use their card for purchases over Christmas than any other shopping season, it’s no shock that over a handful of cards are currently offering no interest on purchases. If you’re planning on splurging with your credit card this Christmas, a credit card with 0% on purchases could result in big savings.
Compare Card Offers with 0% Purchase Rates
Rates last updated September 23rd, 2016.
- NAB flybuys Rewards Card
0% balance transfer and purchase rate offers have been extended until 2 October 2016.
August 9th, 2016
- NAB Velocity Rewards Premium Card
20,000 bonus points, purchases and balance transfers offers have been extended until 2 October 2016.
August 9th, 2016
- Virgin Australia Velocity Flyer Card - 0% Interest Offer
0% purchase and balance transfer offers extended until 30 September 2016.
August 25th, 2016
How much difference? $2,000 spent on Christmas gifts on a card with an interest rate of 17% will attract $144 in interest if you take 12 months to pay it off. If you use a 0% card, you’ll save that $144.
While there has been a dramatic increase in providers offering 0% interest deals, buyers need to be cautious about their budget and set a realistic repayment schedule if they plan to put their Christmas list on their credit card.
A new survey conducted by creditcardfinder.com.au shows 26% of Australians do their Christmas shopping in the first half of December, while 17% said they will hit the shops two weeks before Christmas. If you’re a Christmas procrastinator, you and 12% of Aussie cardholders are likely to leave your Christmas shopping to the last week of Christmas. If you’re a super-last-minute shopper, you and 3% of Aussies will leave your gift-buying until Christmas Eve.
While you may receive immediate online approval for your card, you don’t necessarily want to leave applying for a card and taking advantage of the deals on offer until the last minute, as it can take up to two weeks for you to receive it.
Remember: From those cards above there is the option to compare 0% Purchase Credit Cards that offer no interest purchases for a period of time – these cards focus more on the offers over low purchase rate offers.
How can I compare credit card deals?
- Promotional period. If your card comes with a bonus offer, look into the details of the promotional period. For example, if the card comes with 0% on purchases, check how long the promotional period is and when the revert rate will kick in.
- Terms and conditions. If your card offers 0% on purchases, make sure you know what purchases are considered eligible before applying for the card. Otherwise, you might find that you’ve splurged on purchases that won’t be included in the 0% offer.
- Annual fee. If your annual fee is high but you’re not using your card every day, it might be wise to look around the market for more viable options. Your annual fee should offset your total yearly purchase amount, so make sure you’re getting the best deal. If it’s just no annual fee credits cards you’re after, you’ll will at least be able to save immediately from the cost of owning a credit card.
- Points value. If your card offers bonus rewards points on signup, see how much the points are worth and whether the amounts you’ll earn through the bonus and as you spend will outweigh the costs of the card.
- Points redemption. Different rewards credit cards will have different schemes for redemption, so check if you would prefer cash back, frequent flyer point accrual or free merchandise before signing up.
- Expiration date. Reward schemes often cap points to a monthly or yearly limit. Check the fine print to make sure your points don’t expire and that you will be able to cash them in when needed.
Traps to avoid
Credit cards with bonus offers can be more enticing than your regular card, but it’s important to make sure these deals aren’t too good to be true. Some mistakes you should steer clear of include:
- Temptation to spend. Just because your card offers 0% on purchases, this isn’t an excuse to make unnecessary purchases. Remember that you’ll have to pay off every purchase you put on the card in full.
- Failing to pay off your purchases before the end of the promotional period. If you have any remaining purchases on your card at the end of the promotional period, the revert rate (which will be the standard interest rate) will kick in and begin adding on to your existing balance. Before you apply for the card, set a Christmas budget and calculate whether you can repay it at 0% before the promotional period ends to determine whether it will work for you.
- Ignoring the terms and conditions. 0% on purchases may only refer to certain ‘eligible’ purchases. Check the terms and conditions to confirm what is covered under the promotional offer to ensure that you’re not making purchases that will accrue the standard interest rate.
- Other fees. While the 0% interest rate on purchases may save you money over Christmas, you’ll want to compare the other rates and fees that come with the card to see whether you can afford it before applying. Look at the balance transfer fee, cash advance fee and any other costs that could impact the value of the card.
Credit card deals and bonuses are often more appealing this time of year, especially if you’re planning to put your Christmas gifts on plastic. However, it’s important to compare the deals on the market with your spending habits, financial situation and holiday budget to determine whether the card is right for you.