Introductory interest rates explained
Credit cards might offer ‘introductory’ or ‘promotional’ interest rates.
Introductory interest rates in action
The figures we’ve used are just for illustration.
- Why do you need a card?
The lowest and longest lasting introductory interest rates are usually offered on one transaction type, e.g. for card purchases, so think about the main reason you need a credit card.
- What are you using it for?
You can use a purchase credit card to make transfers and other types of transaction, but higher interest rates might apply to those transactions.
- What’s the long-term plan?
Will you be able to repay your balance within an introductory offer period? If not, a low rate credit card might be more cost-effective over a longer period of time.
- Are there any other costs?
Account for any fees which will increase the overall cost of borrowing, e.g. transfer fees.
Keep track of interest rates
A number of interest rates might apply to portions of your outstanding balance, varying based on transaction type, and whether a standard or introductory interest rate applies.
You can keep track by checking:
- Your monthly statement – the transaction pages include a breakdown of the interest rates which apply to your balance, as well as any expiry dates.
- Your account terms and conditions – these are issued after your application is approved, or if the terms of your account have changed, so make sure you check the latest version.
If there’s an account fee or charge on your Halifax credit card statement that you wouldn’t expect, please contact us on 0345 944 4555. Speak to an adviser 7am-11pm, 7 days a week.
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.
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.
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.
Offer conditions might vary between cards and transaction types, so when you’re comparing benefits, make sure you check over the details carefully.
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 contact 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, just contact us.
A summary on 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, e.g. completing transfers within 60 days of account opening.
- To keep promotional/introductory rates, make payment on time and stay within your credit limit.
- Your standard interest rates will apply when promotional/introductory rates expire.
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Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 169628.