Are bank sign up bonuses a good idea? How can you use them to your advantage?
Banks and other institutions often offer sign up bonuses to lure customers in. Those who are savvy with their finances can use them to make some money, however, there is a lot more to it than simply signing up and walking away with the cash.
What you need to know
Banks are in business to make money, not give it away. $1,000 is the approximate cost of a company to secure a new client so giving away $300 to you is less than the $1,000 they’d otherwise spend on a lot of marketing. An incentive of $300 is likely to be shared more by you and thus be more effective than a TV ad would be.
The majority of people who sign up for a new credit card for the points or cash tend to keep it and spend more than the bonus they get from the bank over the amount of time they have the card. Annual fees, interest and other fees are where the bank makes money.
When considering a sign-up bonus, check the terms and conditions then ask yourself if it will work for you and your circumstances. Opening a bank account for cash such as the ING offer below is quite different to signing up for a credit card.
A bank account isn’t going to put you into debt, whereas statistics show most people who get a credit card overspend and end up in debt.
If you do sign up for a credit card, check the minimum spend and what else you need to do to get the cash. The higher the reward, the more requirements there are.
Make the money
Options such as $100 from ING can be beneficial to give you a $100 boost plus a great account. Look around for offers on products or services you would use anyway or had been thinking of changing too. Don’t spend too much time comparing and switching between accounts trying to chase cash back offers.
With credit cards, sign up, do what you need to get the bonus then cancel it so you don’t continue to spend. By doing this you usually avoid an annual fee, get a cash bonus, spend within your budget and do not carry the debt.
To get $100 cash until February 28th, 2018 when you sign up for a new ING everyday banking account and deposit $1000 (such as your wage or Centrelink payments) in the first month. Use the code CNW116 when signing up.
ING often has bonus sign up money from $50 to $100. The code CNW116 works for each promotion they have.
You need to do the following to be eligible:
1.) Open a new Orange Everyday account at ing.com.au/everyday and in the promo box at the end of the online form enter the code CNW116.
2.) Deposit $1,000+ into your new account within any calendar month by 28 Feb 2018.
3.) Open a Savings Maximiser by Feb 28th.
4.) Use your Orange Everyday card to make 5+ purchases by Feb 28, 2018.
This is more steps than normal, but $100 is also more than they normally offer too.
How to take advantage of sign up bonuses
Do research and find the right ones for you. To find sign up bonuses for banks you can:
– Go to the individual websites and search
– Sign up to email lists to be updated about bonuses
– Check the offers section when you log into your own accounts
– Follow financial institutions on Facebook
– Keep an eye out in Facebook groups such as ours here
-We have a huge list of Aussie freebies, discounts and signup bonuses from banks, food businesses, stationery, travel and more!
Once you have found offers which suit your lifestyle, apply for it but make sure you stick to a budget and don’t overspend. It’s the same as anything when it comes to money, prepare a plan/budget and stick to it!
Cash bonuses can be a great boost, but not if they cost more in the long run!
Free cash sounds great but nothing in life is free. If you aren’t disciplined with your money or you are starting out on your “Barefoot Investor” or “Dave Ramsey’s The Total Money Makeover” plan, cash offers from banks can sound enticing but they confuse things. If you plan to use ING as your main bank for setting up your accounts (as recommended by Scott Pape in The Barefoot Investor), it’s great. Otherwise, you might be better off simply sticking to the plan.
Credit card offers are a different story. Moving your money around, chasing cash offers and juggling your finances can be a headache and actually set you back. Also, chances are if you are paying off large amounts of debt, then you are not disciplined with your finances and should not have another credit card.
Applying for cards, debt and other financial matters goes on your credit history and can impact your credit score. If you are planning on buying a property in the near future, do not apply for a bunch of credit cards to get sign up bonuses. Lenders will see the slew of applications and assume you either have a lot of debt (which means they will lower how much you can borrow) or they will assume you are not a good bet and will deny the home loan.