Sign Up Bonus Credit Card

Sign up bonuses are used by the credit card providers, in their quest to acquire new customers. These sign up bonuses or introductory offers include discounts on interest rates (0% purchase rates and 0% p.a. balance transfers), reduced annual fees and bonus rewards points.

The introductory credit card offers which feature discounted interest rates offer highly competitive rates which are applied to your account for a fixed term, post which the rate will revert back to the cards “usual” rates, which will generally be either the purchase or cash advance rate.

Sign up bonuses where reward points are offered are generally tied to some spend thresholds, which if met, within a specific timeframe, release the sign up rewards points to your account. Reduced Annual card fees and Frequent Flyer membership fees are also offered as introductory offers, where the fees for these services are discounted either for the 1st year, or for all subsequent years, subject to the credit card being used each year.

Guide to Sign Up Bonus Credit Cards


Sign-Up Bonus Credit Cards can deliver real value through reduced interest rates, reduced fees and bonus rewards points, though generally these bonuses are focused on delivering a benefit in the short term which needs to be balanced carefully with how you intend to use the credit card in the medium to long term. In this guide will consider the pros and cons of each type of sign up bonus, and assess how they may impact credit cards in the medium to long term. 


No annual fee sign up bonus

The majority of credit cards attract an annual credit card fee which is payable on the anniversary date of owning the credit card. This credit card fee is levied regardless of whether the card is used and can range from $50 p.a. to $500 p.a. with the fee level determined by the range of benefits which come packaged with the credit card. A popular sign up bonus that is widely offered by credit card providers, is a discounted annual fee, with 100% discount not uncommon, leading to a $0 annual credit card fee.

When accessing these discounted annual fee sign up bonuses it is important to understand the length of time for which the discount on the fee lasts for. Two of the most common approaches are:

  1. Discounted annual fee for the first 12 months, after which the credit card fee reverts back to the standard card fee
  2. Discounted annual for the life of the card, subject to meeting some annual minimum spending criteria


Rewards Points sign up bonus credit cards

This is one of the most popular sign up bonuses, where the credit card providers award the new card holder with a number of rewards points, with sign up bonus point levels ranging from 5,000 to 50,000 reward points.

Increasingly the award of these sign up bonus points is linked to card usage with the points being released to the cardholder once they make a purchase or purchases of a certain value, over a stipulated time frame. This linking of the sign up bonus to card usage is designed by the credit card provider to prompt early usage of the credit card, which you should ensure you are able to repay in full to avoid incurring any interest charges on these purchases. A typical example of an introductory offer linked to short term spend criteria would be the Qantas American Express Discover Credit Card where the introductory offer conditions state that the 7,500 Introductory Offer Qantas Points will be awarded in 2 transches, with 5,000 extra Qantas Points awarded when you spend $300 on purchases within the first 3 months of becoming a Card Member and a further 2,500 Qantas Points awarded after your first credit card spend in Australia, on selected Qantas products and services.


Sign up bonus reward point credit cards are frequently offered with Qantas PointsVelocity Frequent Flyer PointsCiti RewardsWestpac Altitude Rewards and American Express Membership Rewards. When comparing the sign up bonuses on offer be mindful that adding points to an existing reward account may deliver better value than opening a new reward program as having a number of reward programs means you will be spreading your reward points across multiple accounts which will make it harder to achieve the higher value rewards on offer.


Rewards credit cards generally include an annual credit card fee and a purchase rates at the higher end of the range so access these costs carefully against the benefit of applying for a new card with a reward point sign up bonus.


No interest on Purchases sign up bonus

An interest free credit card is a relatively new sign up bonus being made by the credit card providers where they are offering 0% on any purchases made with your new credit card for a fixed period of time, which is generally between 3 and 12 months.

The 0% interest free sign up bonus comes with a raft of stringent terms and conditions, which if breached can lead to the sign up bonus being withdrawn or cancelled by the credit card provider.

Not making the minimum monthly payment on 0% interest credit cards is the condition that is most commonly breached. When considering a credit card with a 0% interest sign up bonus be sure to establish that you will be able to make these monthly payments as not doing so will in effect make the sign up bonus worthless as the credit card will simply revert back to the standard purchase rate with no 0% interest benefits.

The second common breach of card providers terms and conditions is over spending during the 0% interest free sign up bonus period beyond the approved credit limit. The penalty for breaching the credit card providers terms and conditions can be severe and expensive with some withdrawing the 0% Interest Free sign up bonus rate.

To gain the greatest value from a 0% interest rate sign up bonus it is important to be aware that not all types of purchases made with the credit card will benefit from the 0% sign up bonus interest rate. Each credit card provider defines “purchases” which are valid for the bonus rate in their terms and conditions. Generally the types of purchases that are excluded from the sign up bonus 0% interest rate are cash advances, utility bill payments, ATM withdrawals, and purchasing foreign currency.

At the end of the sign up bonus period any balance outstanding on the credit card will incur interest at the revert rate, this rate tends to be either the cards purchase or cash advance rate, so when accessing these sign up bonuses it is important to understand what the revert rate is, and how competitive it is.


How to compare 0% Interest sign up bonus Credit Cards

Credit Card Comparison focuses on assessing the features and benefits of credit cards relative to your personnel and financial circumstances. Credit cards with a 0% interest sign up bonus can deliver real interest savings if managed and used carefully, when comparing the card options these features should be on your list:


Duration of the 0% Interest Period - this is often referred to as the 0% sign up bonus period or introductory offer period, and is the fixed period of time over which eligible purchases will not incur any interest charges. Sign up bonus periods of between 3 and 12 months are regularly available though, all are subject to some stringent conditions, which if not met can see the 0% interest rate withdrawn from the card.

Revert Rate of interest - The day after the expiry of the sign up bonus any purchases you make with the credit card will incur interest at the revert rate. This revert rate will also be applied to any balance which you fail to repay within the sign up bonus period. If your plan is to retain the credit card post the expiry date of the sign up bonus period assessment of the revert rate will be a major consideration, as this is the rate at which any future purchases made with the credit card will incur interest at.

Annual credit card fee - Credit cards offering a 0% Interest sign up bonus generally charge an annual credit card fee that is usually added to the balance of your card on the 1st day of the sign up bonus period. Higher annual fees generally mean a deeper range of card benefits, assessment of the value of any benefits to you, relative to the annual fee charge should be part of your credit card comparison, as a high annual fee can quickly negate any savings made from the 0% interest deal.

Making the most of a 0% interest sign up bonus - Credit cards with interest free sign up bonus periods can deliver great value where you are planning on making a large purchase, or perhaps a number of purchases, that they know you can't afford to pay off in one lump sum in the short term. For these purchases 0% Interest Credit Cards enable you to buy now and pay later, and only pay the original cost of the item(s), so long as you pay the minimum monthly repayment amount each month, and clear the total balance before the end of the promotional period.