Ask the Readers – When is a Promo Deal Worth the Hassle?

by David Ning · 17 comments

“There’s basically $500 sitting on my desk, but I can’t decide whether I should grab it or not.”

Put the situation this way — and you probably think I’m crazy. But what if I told you it’s not actually cash staring me in the face?

These are the two offers sitting on my desk:

  • A promotional deal for $200 from Nationwide Bank for its e-checking account
  • A similar offer from Citibank for another $300

The Nationwide offer doesn’t seem to have any strings attached, as long as I enter a personal promo code and keep the bank account open. The Citibank deal is a bit more cumbersome, because I’ll have to qualify for Citigold — essentially, I’ll have to transfer a portion of retirement funds and/or taxable investments to a Citibank account. Otherwise, I’ll only get $125.

So aside from the minor hassle of opening accounts and transferring assets (just paperwork), it’s a pretty painless way to earn $500.

Would you make the effort to get the free money?

Typing my thoughts out to this point makes the offers sound like no-brainers, but I’m still hesitating to pull the trigger. Is it the hassle? Or is it the lingering doubts of missing a costly detail?

I mean, similar financial gains could be had with those 0% balance transfer credit cards we’ve talked about here for years, but I’ve never leveraged myself to the tilt to grab the spread either.

In fact, I always urge my wife not to fall for those small discounts the retail cashier dangles in front of her just to get a credit card application started. If you absolutely have to grab a sign-up promotion, at least go for the bonuses worth hundreds of dollars.

A year ago, however, I remember thinking I should start taking advantage of all the sign-up bonuses the financial world offers. With no plans to move, and mortgage rates unlikely to be so low that a refinance makes sense, there’s not much worry I’ll be putting my ability to borrow at risk with too many financial accounts.

So this is my chance. I don’t even have to research the options, because the offers are right in front of me. Should I just pull the trigger? What would you do?

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{ read the comments below or add one }

  • John says:

    David
    Since the merchant pays about 3 percent it’s a win-win for the credit card issuer. I made a fast $200 from Chase after using the card for three months

  • Jenny says:

    What did you decide? I have the same offer from Nationwide and I’m trying to decide if it is worth it. I’m wondering if you read the fine print 🙂

  • Ruth Cooke says:

    I’d open the $200 one, especially if it has no stipulations as seems to be implied at this point in time, and check out the Citibank pros and cons more thoroghly. How do the interest rates, etc. compare with what you’re getting now, and what fees would be involved in transfers? The $125 seems to be clear money, though, so at least you could get that.

    • David Ning says:

      Oh yes. I forgot about the ACAT fees. Thanks for the reminder!

      The more I think about it, the more the $200 sounds tempting. Maybe I should really try and grab the bonus.

  • Tim says:

    Offers like this are of interest only if I was already shopping for a new bank. I qualified to be a USAA member some 30 years ago. Every new thing offered by any bank has already been used by USAA for several years by then. Credit Card offers are only of interest if I’m disgruntled with my cards, otherwise I end up swapping all the time just for the promised bonus. Sure I may miss out on some offers, but the offer has to be really great to get me over inertia. (and so far I’ve only seen one close to what USAA offers- but I resisted and remain happy.

    • David Ning says:

      Your loyalty is awesome for USAA, but what if you were to keep your card and/or account and just open another one to get the bonus? There’s no rule that says you need to actually move everything over.

  • Simple: Nothing is free. The only thing that is free in the entire world is the cheese in the mousetrap.

    You do not think that banks are giving away money right? They want to make money from you, so you will have to pay for this offer in some way in the near future.

    • David Ning says:

      While the bank is obviously trying to profit from new customers, I don’t think they have a mandate to be profitable on every customer. Some customers like myself will be a lost leader for them, while others will open an account and use their services to make up for the bonus they’ve given to everybody.

      It’s the same with credit cards too right? The companies offer so much cash back that they won’t be making money on every customer that pays the card off every month, but many will pay interests, and that makes up for the loss of the few customers who do pay in full.

      • John says:

        David
        Since the merchant pays about 3 percent , it’s a win win for the credit card bank including the reasons you cited.
        John

  • debs says:

    The $200 Nationwide does not look too bad. You can use it as a separate savings account for a specific goal, but I suspect you’ll get no interest on that money. Is there a minimum balance and a minimum length of time you need to keep it open?

    The $300 Citibank looks like it’s too much hassle and maybe some risk since you need to transfer investments. Can the investments be transferred “in kind”? You don’t want anything to have to be liquidated and rebought due to fees (unless you wanted to sell one investment and buy another, this might be an opportune time to do it and capitalize on this offer).

    The $125 Citibank might be worth it, depends again on other stipulations as in first option.

    Remember the adage – “nothing in life is free”. There’s always a hiccup. Or, “You get what you pay for”, meaning the money you get may be offset with hassles to negate the benefit.

    I do the low rate balance transfers though. I do the ones with no balance transfer fee and only 0.99% interest. Since I’m paying the debt off gradually and before the rate increases, then my interest continues to trend down. This is more lucrative than 1% transfer fee and 0% interest. I do prepayments on my mortgage this way.

    But I agree, if you’re going to do something, make it big enough to be worthwhile.

    • David Ning says:

      The Nationwide deal actually doesn’t say much about the requirements up front. The link provided just goes straight to the standard signup page, so I might have to go through the app in order to see the details. It’s for a checking account, so I can’t imagine the minimum balance being too high though.

      To qualify for the Citi deal, I would be transferring assets “in-kind” to avoid capital gains since every major brokerage supports ACAT transfers these days. It’s a hassle but it shouldn’t be a huge problem.

      I didn’t know low rate balance transfers were that awesome. 1% with no upfront fee is awesome. I should look into it as another source of capital. Care to share how much of a credit line they are willing to give good creditors such as yourself?

  • We don’t usually go for offers like that, but it’s primarily because our banking situation is already complicated by the fact that we have several business bank accounts and for the sake of simplicity, we have all the accounts at one bank. If we started opening up accounts at other places it would make things even more complicated. But if we didn’t have the business accounts it would be easier to make the switch and we might take advantage of more offers like that.

    • David Ning says:

      I have business accounts too, so I understand what you mean Dee. This would be purely a move to get the cash, so I’m treating these account openings as a separate task. I may end up liking the service so much that I decide to switch everything over, but that’s not in the plans right now.

  • steve_81 says:

    Go for it. Even if you don’t get the free money, you’ve just wasted about an hour of your time. What have you got to lose?

    • David Ning says:

      Good point Steve. It’s really just an hour of my time and if I don’t get the cash, I can always just use another half an hour or so to close the account.

  • Sandra Rimerson says:

    Offers like these show up in the mail all the time and they usually go straight to the trash can. I ignore them because I tend to miss the tiny details and then I end up wasting a bunch of effort and get nothing.

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