Incentives on mediocre credit cards are a waste of time

You can get a free night away by opening these cards. The trouble is, they aren’t very good.

I absolutely love to get something for nothing.

It has even affected my love life: when it’s anniversary time or Valentine’s Day and I want to get my wife some flowers, I make sure I use a florist that will pay me cashback by going via TopCashback.

Who says romance is dead?

It’s people like me that First Direct is targeting with its new offers on its credit card deals, with applicants offered the chance of a free night for two at a “boutique getaway” on top of the interest-free periods you get on a night away.

On the face of it, something like this should tick all of my boxes.

So why doesn’t it?

Great freebie, mediocre products

Look, I will never moan about a free night away, whether it’s at a “boutique getaway” or a Travelodge with a decent Wetherspoons next door.

But a freebie loses its lustre if, in order to get it, you have to put up with something a bit substandard.

And the First Direct credit cards really aren’t anything to shout about.

Take the balance transfer card. It offers an interest-free period of 27 months, so you have more than two years in which to clear the balance before paying interest on your outstanding debt.

However, there’s a transfer fee of 2.29% to take into account. That’s pretty mediocre as far as balance transfer deals go.

The Barclaycard Platinum, for example, offers a longer 0% period of 33 months, and a lower transfer fee of 1.95% to boot.

Or there's the M&S Transfer Plus card, which offers one month less (32) but the fee is just 0.99%.

An extra five or six months in order to pay off your debt plus a huge saving on the transfer fee is likely to save you enough cash for two nights at a boutique hotel, never mind one.

It’s a similar story with First Direct’s purchase card, which offers no interest on your spending for 17 months.

That’s a full year less than you can get from Sainsbury’s Bank, for example.

Making the card work for you

Now, it might be that you don’t need to go for the longest deals around in order to clear your debt.

Perhaps you are buying a new boiler and you are confident you can clear the balance in 17 months – you don’t need almost two and a half years to pay it off.

Similarly, with the balance transfer deal, you might have a debt that you’re comfortable clearing in 27 months – those extra six months from the market-leading card are unnecessary.

In these instances, you can essentially make these middle-of-the-road cards work for you, bagging that freebie and still finding a card that does what you need it to.

Compare more balance transfer cards here

Card features first, freebies second

When it comes to financial products, whether it’s a credit card, a bank account or an ISA, you need to focus first on whether that product is going to meet your needs rather than any added extras that might come with it.

There is absolutely no point signing up to a balance transfer card that doesn’t give you the interest-free period you need just for the sake of a freebie, if you are then going to end up being charged interest on your leftover debt, or have to find another 0% card to move it onto, incurring another transfer fee as you go.

Find the deal that hits the spot for you, and then if there are freebies to go with it, great. But if there aren’t any freebies or added bonuses, that really shouldn't matter.

I can point to a personal example here. I have had the same, let’s be honest, naff Smile bank account for years now.

There have been plenty of occasions when I’ve been tempted to head off to a different account that pays cashback on my bills or a £100 signing bonus or whatever else they are flogging this month.

But I have stayed for two simple reasons.

The first is that the account offers me a sizeable overdraft, which has come in more than handy since going freelance when certain clients take an age to pay up.

If I moved somewhere else, I may not have that at my disposal.

The more important selling point is that keeping my account has meant I’ve been able to dodge paying an arrangement fee for my mortgage, which is with Smile’s parent company Britannia.

That has saved me more than £1,000.

Not quite as glamorous as a night away in a boutique hideaway, I’ll grant you, but ultimately it’s left me far better off because it ticked the boxes of what I needed from the account, rather than some shiny freebie tacked on.

Compare more balance transfer cards here

Do you look for perks when applying for financial products? Share your thoughts in the comments sections below.