Card giveaways may not be a Christmas gift

SHOPPERS are being offered gift cards, cash back, Uber vouchers and supermarket discounts if they sign on the dotted line for enticing credit card deals.

Lenders are not silly about the timing of these offers – it’s perfect as we edge closer to Christmas and consumers hit the shops to tick off their present lists.

October is usually one of the busiest times of the year for lenders to dangle a carrot in front of customers and entice them into getting a new credit card. RateCity analysis shows the number of card deals on offer is up by 20 per cent compared with June this year.

The offers available include $100 off a single Coles supermarket shop if consumers sign up to any of the supermarket giant’s credit cards and $100 cash back on ANZ’s low rate card if they spend at least $500 in 60 days.

But RateCity’s spokeswoman Sally Tindall warns that “there’s no such thing as a free lunch” and any deal needs to be examined closely before customers rush in to sign up.

“Don’t get lured into an enticing giveaway and find yourself with the wrong card. Do your homework and find out what card best suits your spending habits,” she said.

“People should also look out for the annual fee and the interest rate if they are planning on making lots of purchases on their new card in the lead-up to Christmas.

“If you don’t have the funds to pay it off in full, you will get stung.”

Ms Tindall said if you are able to pay off your card in full every month, these deals “aren’t all bad, you are able to reap the rewards”.

Coles’s general manager of financial services, Paul Askew, said the retailer had continued to see a significant climb in card usage and spending growing by 15 per cent year on year.

But card customers should certainly not be proud of the debts they have racked up on plastic. The latest Reserve Bank of Australia data shows the nation has a whopping $51.3 billion in plastic debt and $31.4 billion is accruing interest.

Certified financial planner Patrick Canion said consumers should be warned that card providers don’t offer these deals for nothing.

“The credit card people make money when you do transactions and when you don’t pay back on time,” he said.

“Look at the annual fee and if there’s an interest-free period for repayments and know the card’s interest rate.” Many card rates today attract interest rates higher than 20 per cent and customers will pay these charges on the total balance owing for the month if they have failed to wipe the entire balance in full.