With that in mind then, let’s look at the four main types of introductory offers you can choose from here in New Zealand, including how they work – and how to make them work for you.

0% Purchase Offers

How It Works: With a 0% purchase offer, you pay 0% p.a. on all purchases throughout the introductory period. At the end of the offer period, any balance left remaining will revert to the card’s standard purchase rate.

Why Choose This Offer: This type of offer works well for cardholders with a large purchase in mind – or anyone who simply wants to save on interest day-to-day. You may want to choose a 0% purchase offer if you are thinking of buying a big ticket item such as white goods for your home, or a holiday.

How To Make It Work For You

• Try to choose an offer with an introductory period that will allow you to pay off your spending. Most 0% purchase offers available right now are offered over 6 months, however, there may be some offers that pop up over time that have a longer introductory period.
• Before you start spending, work out how much you can afford to pay back each month to clear your debt before the introductory period ends. Use this information to create a budget for your spending, and a repayment plan that you will stick to over the coming months.

Balance Transfer Offers

How It Works: With a balance transfer offer, you will pay a lower rate of interest on balances transferred from other credit cards over an introductory period. In some cases, you may also be able to transfer a balance from store cards, hire purchases and personal loans. At the end of the introductory period, any balance left unpaid reverts to the card’s purchase rate or cash advance rate.

Why Choose This Offer: If you have a credit card balance you want to pay down, a balance transfer could help you save on interest, to allow you to pay down your debt faster.

How To Make It Work For You

• Use a balance transfer calculator to compare balance transfer offers, and from there, choose the offer that allows you to save the most in interest, while giving you the time you need to pay down your debt.
• Make a repayment plan and set up automatic repayments.
• Be aware of what your transferred balance will revert to if you don’t pay it off before the end of the introductory period.
• Avoid spending on the card until you’ve paid off the transferred balance.

Annual Fee Offers

How It Works: With an annual fee offer, you will pay a reduced account fee – or no account fee – over an introductory period, usually for the first year from card approval.

Why Choose This Offer: Using this offer, you can test drive the card to see if it works well for you. Paying a much lower account fee, you can also enjoy more value from the card in the first year, which can work especially well on rewards cards and cards with lots of features.

How To Make It Work For You

• Use the introductory period to make the most of the card, testing out its features to see if the card is right for you. Before the card’s first account fee is due, think about how much value the card will offer at full cost, and cancel if you decide it’s not right for you.
• Especially on higher end cards, make sure you are eligible for the card before you apply.

Bonus Points Offers

How It Works: With a bonus points offer, you will be credited with a chunk of rewards points as a ‘sign-up bonus’. You will usually have to spend a certain amount on the card within a certain period of time in order to be eligible for those bonus points. Rarely will you see ‘free’ bonus points any more.

Why Choose This Offer: If you want to bank some extra rewards points to boost your balance, a bonus points offer could make that happen. You could redeem the bonus points straight away if you have a reward in mind, or keep them for later as you continue to add to them day-to-day.

How To Make It Work For You

• Check the minimum spend, and make sure you can afford to spend that amount – and repay it within the month to avoid interest accruing.
• Find out if the bonus points expire, and make sure you have enough time to build your balance to get the reward you want before that expiry date.
• Think about how much the card will cost in account fees, and make sure the bonus points provided still offer value. Typically, premium cards with higher account fees offer more bonus points, but you will need to make sure paying that higher cost is worth it – while also making sure you meet the card’s eligibility requirements.