How to “switch-and-save” on credit agreements

You may have heard about a “switch-and-save” deal on your home or car insurance. However, did you know that you can do the same with your credit agreements?

We have a look at what these kinds of deals offer, and we consider the circumstances under which you should make use of them.  

Tip: In need of credit? Consider a credit facility or loan option.

What do switch-and-save deals entail?

Ayanda Ndimande, business development manager of Retail Credit at Sanlam, says that switch-and-save deals are used by credit providers to attract consumers to switch from another provider.

“The deal may include anything, such as a point system, further discounts, third party affiliations, ease of use, extra savings, or money back,” says Ndimande.

These advantages are set in place to lure you into a different credit deal – and sometimes this is for the better. Your new credit provider will benefit by lending to you, and you can benefit by receiving access to the rewards they offer for making this change.

If you’re interested in doing this, do your research and find out whether any of the creditors you’re interested in offer these kinds of deals.

Should you opt for these deals?

The perks of switching and saving can be very enticing. One of the main selling points that creditors frequently offer is an interest-free period after you’ve switched. 

Another important reason to transfer your debt to a new credit provider is to consolidate your debt. This is a responsible way of combining all of your outstanding debt into a single monthly payment, which is usually less than your current monthly payments combined.

Ndimande explains that, in spite of all the perks, it’s important that you carefully scrutinise whether a switch is worth it.

“Not all deals are ideal for everyone, so it’s important to check if the new benefits align with your own goals,” says Ndimande.

You should make sure that you don’t change your credit card too often, since every application you make will count as a hard enquiry on your credit report, which may decrease your credit score.

If you decide to go ahead with the deal, you should try to make the most of the interest-free period by paying off as much of your outstanding debt as possible.

Tip: If you haven’t seen your credit score in a while, join CreditSav to access it for free.