The best sign-up bonuses on offer
Sign-up bonuses galore, but beware the hidden catches
In the lead up to the holiday season, lenders are upping the ante to win your business with incentives such as cash backs, flights and reward points.
For the prudent borrower, who already intends to switch providers, specials can be a nice little sweetener.
They should never be your sole driver, given they frequently have an expiry date, come with a hefty fee, require you to bundle products or are recouped by the lender via a higher interest rate.
What's on offer at the moment
At the more generous end of the scale, Defence Bank is offering new home loan borrowers $1600 cash back into a Defence Bank account if they first deposit $1500 themselves and borrow more than $250,000 (existing borrowers can claim the offer too if they lift their borrowing limit). Similarly, Bank of Melbourne, Bank SA and St. George are giving refinancers $1500 if they move to the lenders' Advantage Package.
Cash back offers are less common in the credit card space, which more often sees providers trying to lure new customers by waiving fees or offering points or gift cards. But at the moment, CBA and ANZ are competing for customers with $250 cash back on their respective low rate cards. CBA also waives the annual fee in the first year, while ANZ promises 0% on purchases in the first six months. Suncorp also has a cash back offer for 5% of retail purchases over three months, but only up to a cash back limit of $250.
As usual, customers are also being offered travel-related bonuses for signing up to premium travel cards. NAB is giving its new customers 75,000 in Qantas Frequent Flyer points if they spend $1500 or more in 90 days, while ANZ is giving its Rewards Travel Adventures Card customers a return domestic flight and single-use lounge passes with Virgin if they spend more than $500 in their first three months.
The danger of being lured by incentives
Of course, no incentive comes without a cost. A number of the top offers that cross our radar come with a higher interest rate or annual fee. What that means is the initial windfall is sometimes cancelled out within a few months because of the interest costs, when compared to lower cost loans.
Something else to be wary of is underestimating the costs associated with bundling products. For example, you may get cash back, but only if you take out the same lender's credit card and that credit card may come with a high annual fee or higher interest rate than competitor products.
Borrowers who do their due diligence may be able to find a product that suits their needs, while giving them a bonus for their business. The critical part though is doing a cost analysis first.
Selection of home loans with cash back of more than $1000
| Loan | Cash back | In brief |
|---|---|---|
| Bank of Melbourne / Bank SA/ St. George Advantage Package Home Loan (>$250k) | $1500 for refinancers | Applicants who refinance to the Advantage Package on or before December 31, and settle before February 28, 2017. |
| Defence Bank home loans (>$250k) | $1600 cash back | New home loan applicants and existing borrowers who wish to increase their borrowings above $250k are eligible for $1600 cash back to a Defence Bank account if they deposit at least $1500 to the account themselves. Applications by December 31. |
| NAB home loans (>$250k) (excluding LOC/portfolio facilities and refinances for UBank/Advantedge) | 250,000 Velocity points or $1500 cash back | Applicants with loans above $250,000, who apply before December 31 and draw down by March 31, 2017, are eligible for either cash back or Velocity points, provided they set up an eligible transaction account or NAB Velocity Rewards Credit Card. |
| Northern Inland CU refinancer home loan (>$150k) | $1000 cash back | Refinancers with loans above $150k can get $1000 deposited into a nominated NCU account. |
| Police Bank refinance home loans (>$50k) | $1000 cash back | Approved owner-occupier applicants will have $1000 credited to their Police Bank savings account upon settlement. |
| Queenslanders Credit Union refinance home loan | $1000 cash back | Approved applicants will get the $1000 payment upon settlement of the loan. |
Selection of credit cards specials
| Card | Special | In brief |
|---|---|---|
| ANZ Rewards Travel Adventures Card | A return domestic flight and 2 single entry lounge passes. | Cardholders must spend $500 or more in the first three months to be eligible for the offer. |
| ANZ Low Rate Platinum Credit Card | $250 back, plus 0% on purchases in the first six months. | For an annual fee of $99, cardholders are charged no interest on purchases for the first six months, then the standard rate (currently 13.49%). |
| CBA Low Rate or Low Rate Gold Credit Card | $250 back and annual fee waived in first year. | CBA will waive the annual fee of $59 and give $250 cash back to cardholders who spend $500 on eligible purchases by March 31, 2017. |
| Suncorp Platinum Card | 5% cashback on all retail purchases for the first three months. | Suncorp gives it Platinum cardholders 5% of what they spend on retail purchases back - up to a limit of $250 back. |
| NAB Qantas Rewards Premium Card | 75,000 Qantas points for new cardholders. | New cardholders must spend $1500 on everyday purchases within 90 days. |
Transaction accounts
| Account | Special | In brief |
|---|---|---|
| ING Direct Orange Everyday | $75 cash back if you sign up and deposit your salary before December 25. | The first 10,000 customers to sign up with the promotional code and deposit their salary of more than $1000 receive $75 cash back. |
All offers subject to change and eligibility criteria.
Kate Cowling is a personal finance expert at RateCity.com.au
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