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Introductory interest rates explained

Credit cards might offer ‘introductory’ or ‘promotional’ interest rates.

What can I use them for?

These could include 0% or lower than average interest rates for a set period of time, but there are usually terms and conditions you need to follow.

Introductory interest rates might be offered for any or all of these transaction types:

  • Card purchases.
  • Balance transfers.
  • Money transfers.

Introductory interest rates in action

The figures we’ve used are just for illustration.
 

New card arrives

It offers 0% interest on new balance transfers for 12 months from account opening. Keep in mind that a transfer handling fee might apply.

Step one – transfer a balance

To use this introductory rate, you need to complete your transfers within the first 90 days. After that, the standard interest rates apply.

Step two – make payments

You could lose your introductory rate if you don’t make at least the minimum payment on time each month.

Step three – check the expiry date

When introductory rates expire, the standard interest rates will apply to any balances you haven’t repaid, increasing your borrowing costs. Your rates and any expiry dates are usually reflected on your PDF or paper credit card statement in the breakdown of balance section on the transaction pages.

Step four - check where your payments are going

The balances on your latest statement with the highest interest rate will be paid off first. This includes any introductory or promotional interest rates. For any balances with a promotional or introductory offer on the same interest rate – we’ll use your payments towards the offer ending first. Find out more about balances and what your payments go towards.

Things to think about when choosing a credit card

  • Why do you need a card?
    We offer different types of credit card depending on why you want one, and how you want to use it. For example, everyday spending, cashback, large purchases, or balance and money transfers. Find out more about the types of credit card we offer
  • Introductory rates
    Some of our credit cards will come with a promotional rate for a fixed period of time, and will often include a 0% rate, or a lower than your standard interest rate. The lowest and longest-lasting introductory interest rates are usually offered on one transaction type, for example card purchases. So again, think about the main reason you need a credit card.
  • What’s the long-term plan?
    Will you be able to repay your balance within an introductory offer period? If not, a lower rate credit card, without an introductory rate, might be more cost-effective over a longer period of time. Introductory rates usually have higher rates of interest applied once the promotional period runs out.
  • Are there any other costs?
    Remember to consider the cost of any other fees. For example, transfer fees - which will increase the overall cost of borrowing.

Understanding the costs

A representative example is provided to show the typical costs if you borrowed £1,200 over a year, based on the standard interest rate for card purchases. It’s useful to know this example doesn’t include any introductory interest rates. Your actual interest costs could vary, depending on how you use, manage and make payments on your credit card, especially while introductory offers apply.

Think through your options

  • Does this credit card suit my borrowing needs, or should I consider a different one?
  • Will I be able to make repayments, even if my circumstances change?
  • If the card has an introductory rate, do I know when it will finish, and what my interest rate will be afterwards? 
  • Do I understand how my credit card balance will be paid off?

Other borrowing options

If you’ve already got a Halifax credit card and your needs have changed, you could apply to swap your existing card, or apply for a second card (excludes Student Credit Card customers).


Keep track of interest rates

Different rates of interest could apply to different parts of your balance. These rates vary based on the balance type, and whether the standard rate or a promotional rate applies. 

You can keep track by checking:
 

  • Your monthly statement includes a breakdown of the interest rates that apply to your balance, along with any expiry dates. You can also check your recent transactions using Online Banking or the Mobile Banking app.
  • Your account terms and conditions include details of the rates we agreed when your application was approved. We’ll issue new versions of these documents if your account terms and conditions change. So, make sure you check the latest version.

Have you been charged correctly?

If there’s a fee or charge on your Halifax credit card statement that you wouldn’t expect, call us.

Manage your account carefully

You need to make at least the minimum payment each month, by the due date shown on your latest statement. If you miss a payment, you could:

  • Pay extra fees and charges. Such as late fees and higher interest charges.
  • Lose any introductory or promotional interest rates. If that happens, your standard account interest rates and fees will apply.
  • Damage your credit score. Having a lower credit score doesn’t just impact your eligibility for borrowing and lending. They’re also used as part of the approval process for mobile phone contracts, TV subscriptions, and other household bills.

Frequently asked questions on introductory rates

  • When introductory or promotional interest rates expire, the standard interest rates at that time will apply to any remaining balance. To keep any interest costs to a minimum, repay as much as you can before the expiry date.

    Making the monthly minimum payment probably won’t be enough to clear your balance before any offers expiry date, especially if you’ve used your card for other things, so it’s a good idea to pay more whenever you can.

    A number of interest rates might apply to portions of your outstanding balance.

    To keep your interest costs to a minimum, payments you make are allocated to balances with the highest interest rates first, and to those which appear on your monthly statement, before those which will feature on future statements. That’s still the case, even if an introductory interest rate is expiring soon.

    It’s useful to understand the way payments are allocated so you can work out how much of your balance will switch to a standard interest rate when any introductory interest rates expire.

  • On the transactions pages of your PDF or paper statement there is a of breakdown your balance and the interest rates that apply.  If any of your balance has a promotional or introductory interest rate the expiry dates will also be shown here. 

  • When you’re looking for a credit card, you might notice that some introductory interest rates are advertised as being available for ‘up to’ a certain number of months. That basically means you could be offered the advertised rate, but you could also be offered a shorter duration instead, based on an assessment of your personal circumstances.

    Similarly, where a low interest rate is offered as standard with no fixed expiry date, the interest rate itself could vary.

    When you apply for a credit card, lenders make decisions about the interest rate and credit limit to offer, based on a number of factors, including:
     

    Your credit record

    Credit reference agencies hold information about you and your financial past, issuing you with a credit score. Lenders use this information to inform their decisions on credit applications.

    Affordability

    Lenders also consider what you can reasonably afford to repay for the foreseeable future, based on things like your income and the total amount of credit that’s already available to you.

    Current and past accounts

    Lenders usually keep records about accounts you’ve held with them in the past, including information about how well they’ve been managed.

    The better your financial position and credit score, the more likely it is that you’ll be offered a lower introductory or promotional interest rate.

    Checking your eligibility

    Many lenders, including Halifax, now provide an eligibility checker to help you to find and compare cards you’re likely to be accepted for, without impacting your credit rating.

  • Although you could be offered an introductory or promotional interest rate lasting for months into the future, it might only be valid on transactions made early on.

    Balance and money transfers

    You might have a number of days to make qualifying transactions, usually between 60 and 90 days from account opening, or within a specified date range. After that, the standard interest rates will apply to new transactions.

    At Halifax, you can request a balance transfer as part of your application. For money transfers you’ll need to wait until your account is set up and you’ve received your new credit card.

    Card purchases

    You might have a number of days to make qualifying transactions, usually around 60 days from account opening, or within a specified date range. After that, the standard interest rates will apply to new transactions.

    However, on some cards, you may be able to make qualifying purchases for the duration of the introductory offer.

    You’ll need your credit card details to make online purchases. You’ll also need your PIN before you can make in-store purchases.

    Low standard interest rates

    Some credit cards offer lower than average standard interest rates, rather than 0% introductory interest rates which expire after a period of time.

    Although you’ll be paying interest from the start, there usually aren’t limits on when you make transactions, and the interest rates and costs might be easier to keep track of. You might prefer this if, for example, you use your card for everyday purchases and pay off most, if not all, of your statement balance every month.


    Offer conditions might vary between cards and transaction types, so when you’re comparing benefits, make sure you check over the details carefully.

    More on applying for a credit card

  • If you manage your credit card account well, by keeping up with payments and staying within your credit limit, you might be offered other promotional interest rates in future.

    We usually get in touch by email or post when promotional rates are available, but you might also see them advertised when you sign into Online Banking or the Mobile Banking app.

    Terms and conditions will apply, so make sure you read the offer details carefully.

    You can manage your contact preferences online, or call us to make changes. If you’ve told us you don’t want to receive marketing communications, we may still contact you with updates about your account, including when new rates are available, just so you don’t miss out.

    If you need communications in other formats, such as large print, Braille or audio CD, please call us.

A summary of introductory rates

These often include 0% or lower than average interest rates, which last for a fixed period.

 

  • Interest rates may vary based on an assessment of your personal circumstances.
  • Make sure you meet any conditions, for example completing transfers within 90 days of account opening.
  • If you pay late or miss a payment, you may have to pay fees, lose any promotional offers you have, and it could damage your credit score.
  • When any promotional rates comes to an end, the standard interest rate at that time will apply to the remaining balance.

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