By Money Team
Perform a legal smash and grab raid on a credit card company right now. There are tonnes of freebies available: flights around Europe, £100 gift vouchers and more.
Credit cards offer free gifts to new cardholders. Sign up for the card, spend what's needed, pay off in full, grab the freebie, and forget it!
Best buys: Top freebies
The six golden rules
Credit cards are so lucrative, companies are often willing to pay £40-£80 to acquire a new customer: small potatoes compared to their potential profit from debts. This money materialises in a variety of ways: heavy advertising spends, introductory 0% offers, and free gifts or inducements to sign up for the card.
Before you get a freebie credit card, there are six things you need to know. Get this wrong and it can cost you large, so please read the following (even if you only have time to read and remember the headlines it should help protect your pocket).
Check it's worth grabbing the freebie
These cards are only for you if you're not in debt, will repay in full every month and are super savvy with your credit.
If you're happy with your current stock of cards, or never borrow, then there's no harm going for additional freebies. If you need new credit, then choosing a freebie card that also offers decent borrowing terms is sensible and easily doable. There's a simple rule of thumb to follow here:
If I'm only going to be allowed a limited number of credit cards, is what I'm applying for important enough to use a card up for?
If you don't want a freebie and instead want to be rewarded every time you spend, some cards pay up to 5% cashback on all spending on them. Pay them off in full each month so you're not charged interest, and you can make serious money. See the Cashback Cards guide.
Spend as little as possible to trigger the freebie
While cards offer freebies to newcomers, the gifts aren't actually doled out on application or acceptance. To trigger the freebie, most providers require you to spend on the card - for these just do enough of your normal spending on the card to meet the minimum requirement.
Some cards don't set a minimum spend trigger. With these you can get the freebie provided ANY amount is spent on the card, though others specify a trigger amount. The challenge is to spend as little as possible.
Happily, most supermarkets allow credit card payments for any amount. So buy chewing gum, chocolate or (for health-conscious MoneySavers) an apple, and hey presto - the freebie's yours.
Always repay the card in full otherwise the costs rocket
With the vast majority of credit cards (including all these below), if you pay off the balance in full at the end of the month, you don't pay any interest. So for the freebie to be totally free, make sure you do this.
For this reason, even if the card has a higher minimum spend freebie trigger, the same principle applies. Just do some of your normal spending on the card, ensure you repay in full at the end of the month, and you won't pay interest.
Space out credit card applications so you don't harm your credit score
Each time you apply for a card, a search is added to your credit file. Lots of these in a short space of time will shoot down your credit score; the overall number of applications is less important than the frequency.
Therefore if you're grabbing multiple freebies, after the first couple of applications, spread others out every few months. Other factors that count include total debts, repayment history and income.
Every time you apply for credit it has an impact on your credit score – and thus your ability to get further new credit (see the boost your Credit Score guide). Yet if you've a good credit history there's no need to be unduly worried.
Here's what Martin says about the impact of freebie cards on your credit:
I wouldn't worry unduly about the credit score impact, providing you pick applications wisely and never bag a freebie just before needing credit elsewhere. This includes applying for a new mobile phone contract and car or home insurance, as well as loans, mortgages or credit cards for borrowing.
There are no hard and fast rules, but many have successfully applied for 10 cards without a problem.
Cancel the card if you don't want to continue using it after you've got the freebie so it doesn't affect your credit score
Once you've decided you're not going to use a card any more, cancel it. That means actually calling the card company and requesting the account is closed, not just cutting the card up. This is because having high available credit can affect your credit score, not just the amount of outstanding debt.
To protect your credit file, check you'll get the card before you apply
The only way to know if you'll be accepted is to apply, but each application marks your credit file. Some cards let you do a pre-application check to work out whether to go ahead, or you can use our credit card eligibility calculator, which shows your odds of getting almost every top card so you can hone your choice to minimise applications.
How does the eligibility calculator work?
It uses a 'soft search', which is one you will see on your credit file but lenders don't, to give us an indication of your credit score. We then match this against lenders' criteria for acceptance so we can show you the odds of getting each card.
Once you have this knowledge, it will allow you to make a smarter application, going for cards you have a higher chance of being accepted for. Therefore, you're less likely to be rejected and less likely to need to apply elsewhere, which would add another mark on your credit file.
Will credit scoring affect the deal I get and my credit limit?
When you apply for any credit card, it checks you to match you up against its wish list for what is a profitable customer (for full info on this and how to boost your chances, see our credit scoring guide). Yet this doesn't just dictate what products you'll be accepted for, but also how good the ones you actually get are.
Unfortunately there's no system that can predict card firms' attitudes to you for these variables. But, as a rough rule of thumb, the higher the chance the eligibility calculator gives you, the closer to the rep APR and higher credit limit you should get.
Our top picks for cards which give you travel related freebies, including flights and air miles:
Big spending trigger, but two free short-haul BA flights
Get the Amex Preferred Rewards Gold* card and you'll get 20,000 free Rewards points when you spend £2,000 in the first 3 months. That's enough for two short-haul flights with BA. But watch out as after the first year there's a huge annual fee, so make sure you cancel the card to avoid paying this.
- You must spend £2,000 in the first three months to get the 20,000 reward points.
- The first year is free, but in the second year there's a £140 annual fee.
- This is a charge card not a credit card, so you must repay it in full at the end of each month. If you don't you'll be charged £12.
- Representative variable rate: N/A (Charge card - fail to fully repay and get £12 fee)
- Min spend trigger: £2,000 in first 3 months
- Taxes included? No
- Freebie: 20,000 Rewards points
- Annual fee: £140 (waived in year 1)
- Min household income: £20,000
What can 20,000 pts get you? A short BA return flight, including trips to Paris, Milan and Berlin (you pay c.£35/person taxes) or one way for a longer journey, including Istanbul. Alternatively, £100 in gift cards for M&S, Homebase, House of Fraser, PC World and more (though vouchers sometimes sell out, so check what's available).
Alternatively, just add the points to your current stash. They can be converted into 13 frequent flyer programmes (including British Airways and Virgin Atlantic), or three hotel reward schemes, among other things.
Amex says you'll get the points as soon as you hit the spending trigger, but they can take up to a month to arrive in your Card member account.
How do CHARGE cards work? Charge cards allow you to spend on them, but require you to pay off in full at the end of EVERY month - set up a direct debit to ensure you don't forget. There's no interest charged, but there's a £12 fee - and a default on your credit file - if you fail to fully repay within 10 days of getting your statement.
You will need an income of £20,000+ to be considered for this product, and you will be credit scored. The charge card is accepted in all retailers that take Amex (see our Who takes Amex? forum discussion). One supplementary card (for a partner/friend) is provided free, though any more will cost £45.
Smaller spending trigger, for free European flight
Grab Flybe's credit card and once you've spent £250 in the first six months, you'll be sent a voucher for a return flight, which can be used on most of its UK & European routes. But we've heard it's hard finding flights to book with these vouchers due to poor availability so you'll need to be quite flexible with your destination and dates.
- You can't use the free flight to fly to Spain or Portugal.
- Taxes aren't included, so you'll have to pay these.
- Make sure you repay IN FULL every month or you'll pay 18.9% rep APR interest.
Best Buys Vouchers, discounts and reward points
Some of the top freebies are on reward cards, which give you points everytime you spend that you can then convert into vouchers:
Bonus 20,000 Nectar points, worth £100
Spend £2,000 on the Amex Nectar* card in the first three months, and you'll get 20,000 points. These are worth around £100 and can be spent on anything in the Nectar catalogue.
- There's an annual £25 fee, but it's waived in the first year. Diarise when the year is up and cancel the card.
- This is an American Express card, and is not as widely accepted compared to Mastercard or Visa - so bear this in mind when doing your spending.
- You'll earn 2 Nectar points per £1 spent on the card, and 4 points per £1 spent in Nectar partner shops (Sainsbury's BP & more).
- Some retailers give 1p per point, making this freebie worth £200 at theme parks Legoland, Alton Towers, Thorpe Park etc. (read Loyalty Schemes for ways to max these).
- Make sure you repay IN FULL every month or you'll pay 19.9% interest.
Find out when new freebies are available
Some of the other freebies available are mostly through bonus reward scheme points given on application. If you spot any more top freebies, discuss them.
In the past Caribbean flights, MP3 players and £50 shopping vouchers have been briefly offered, among other things. Yet they come and go quickly. To ensure you don't miss them, sign up to my free weekly Martin's Money Tips email, which includes all top MoneySaving freebies.
For other types of credit card benefits, including free extended warranties and ID fraud protection, see the Credit Card Perks guide.
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Credit Card Freebies Q&A
Can you grab cashback on top?
It's sometimes possible to grab extra cashback on top when you apply for credit cards. Whether you'll be able to combine this with other freebies varies per card.
To get it, you must sign up via a specialist cashback website. These use affiliate links to generate revenue, and if they get paid when you get it, they give some or all of it to you.
Yet always first check that it's an identical product, clear any cookies if you've already clicked through. Remember as the cashback isn't coming from the product provider, it's never 100% guaranteed.
Sometimes special promotions and cashback can't be combined. You're playing the system to an extent, and there can be problems.
For more information, pros and cons, and to find which cashback providers pay most for any product, see the Top Cashback Sites guide.
If I open a card just for the freebie and cancel it will it harm my credit score?
There's no definitive answer to this one, as lenders look for different things when deciding whether to give you credit. In general, it might be better to cancel it if you're not using it, as having open cards that aren't being used can be considered a fraud risk. Make sure you pay off, or transfer, the balance of the card before closing. For more information on cancelling your cards read the Old Credit Cards guide.
What if I don't get the freebie after I got the card?
First of all make sure you've met any requirements for getting the freebie - most cards have a minimum spend trigger before they'll give you the gift. If you think you have met these requirements then contact the credit card company to see why you haven't received anything.
What if I want to transfer a balance onto the card?
Cards which offer a sign-up freebie do not tend to give cheap balance transfer deals - by far the best thing to do is use separate cards for spending and balance transfers. See the Balance Transfers guide for an overview of the best cards out there currently.
Should I get PPI with the card?
Payment protection insurance is commonly sold with credit cards - the idea is it'll make some payments for you, usually for a year, if you are unable to (eg, if you lose your job).
But in many cases it has been mis-sold. Borrowers didn't realise they were signing up for it, or it was totally unsuitable for them, and some big lenders have been fined.
The protection isn't always bad, though policies sold with cards are often overpriced (you pay a monthly amount depending on the size of your balance). If you want it, compare the lender's cover with standalone providers such as Paymentcare or Best Insurance.
Always be vigilant to check you aren't getting more than you bargained for when you fill in the application, then check your statement each month to check you aren't inadvertently paying for extras if you didn't ask for them.
Where credit cards or loans use a representative APR, this means that 51% of successful applicants will be given the stated interest rate.
With credit cards, the rate for purchases (as opposed to balance transfers or cash withdrawals) is used as the main rate to advertise the card.
So if that is described as 19.9% representative APR, then 51% of people accepted will get 19.9% APR, but 49% will get a different rate (likely to be higher).
Loans are slightly simpler as they only have one rate. So if a loan is advertised as being 7.5% representative APR, this means 51% of accepted applicants will get 7.5%, and 49% will get a different rate (likely to be higher).
Of course, some people will be rejected outright for the card or loan too.