What is a sign-up bonus, and how it can bite you later

You know the deal: $79 a month for the first six months. $200 off when you switch. First month free. Sign-up bonuses are everywhere, internet, mobile, energy, streaming, the lot.

They're not a scam. Used well, they're genuinely good value. But they're built on one quiet assumption: that you'll forget.

How the bonus works

A provider offers a sharp price to get you in the door. They know most people sign up, set the direct debit, and never think about it again. So the bonus does its job, you join, and then the calendar does the rest.

Six or twelve months later the intro price ends. Your bill jumps to the "ongoing" rate, which is rarely competitive. No alarm goes off. No letter marked URGENT. Just a slightly bigger number on a bill you probably don't read closely. That's the bite.

Providers aren't doing anything sneaky, the end date is in the fine print you got at sign-up. They're just betting you won't act on it. Most of us don't. That's the whole business model.

The three ways it bites

1. The quiet price rise

The classic. Intro price ends, bill goes up 20 or 30 bucks a month, life goes on. Over a year or two, that "great deal" cost you more than the boring full-price plan you passed on.

2. The comparison trap

You compare plans, pick the cheapest intro offer, feel clever. But you compared month one, not year one. A plan that's $10 dearer upfront but cheaper ongoing often wins over two years. Always do the maths on the full year, intro months plus ongoing months.

3. The set-and-forget direct debit

The bonus trained you to stop looking. By the time you notice the price rise, you've paid it three times.

How to take the bonus without the bite

1. Say yes to good intro deals. Genuinely. A cheap six months is a cheap six months.
2. The day you sign up, set a reminder for a few weeks before the bonus ends. This is the whole trick. One calendar entry.
3. When the reminder fires, compare again. Switch, or call and ask for a retention offer. Either way you're back on a good price.
4. Repeat. Welcome to being the customer providers wish didn't exist.

The lazy version

You get the sign-up bonus. We remember the end date. Your bills, sorted.

keep reading

When an intro price ends, ask for a better deal. Here's what a retention offer is and how to ask for one. Small subscriptions bite too: read how Matt saved $96 a year on YouTube Premium.