The Ultimate Guide to Credit Cards

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"NOT SO FAST! At this point it is crucial that you read the fine print and understand the terms of those special offers, like when they expire."

The two most common types of special offers are sign-up bonuses and promotional financing.

Sign-Up Bonuses

First, many reward cards offer sign-up bonuses that are contingent on spending a certain amount within a limited time. For example, the Chase Freedom card offers a $100 sign-up bonus after new cardholders make $500 on purchases in the first three months from account opening. Cardholders should keep in mind that the clock starts ticking when the account is approved, not when the card is received, activated, or used for the first time.

Promotional Financing

Many cards also feature promotional financing on new purchases and/or balance transfers. These promotional financing periods are limited, but typically last a minimum of six months, and up to 18 months. This time period is calculated from the day that the application is approved and the account is opened, not when the card is activated. The most common offers include 0 percent APR and no annual fee.

It’s also important to understand how you can lose these sign up bonuses or promotional rates. For example, you could lose 0% APR before the promotional period is up if your card falls into bad standing by not making payments on time or failing to pay your bill. Or, you may not be eligible to receive a sign-up bonus if you already have an account with that bank.

Additionally, if you do not meet the requirements for the sign-up bonus within the specified time constraints, then the cardholder essentially waives their right to collect on the offer. This is why it is crucial for you to review the terms and conditions associated with each card before biting at the first offer you come across.