The credit card companies like these sorts of offers, because it encourages people to get into the habit of using the credit. It also gives people an excuse to buy things they might otherwise think twice about - the standard “up to 55 days interest free” terms are the same idea. Most people end up spending a bit more than they can pay off straight away ocassionally, and a few get into the habit of only paying minimum payments, and they make plenty of money from those people.
In regards to credit rating, in Australia there is no reporting of how much you actually use your card or what your balance is - the report only lists the credit limit and whether you are on time or behind with the minimum payments. In USA where they do report on your card usage it would help to keep the balance high as long as you keep making payments. The credit rating also matters a lot more in USA, here it doesn’t make much difference to anything except your ability to get another credit card or personal loan easily.
The credit card companies like these sorts of offers, because it encourages people to get into the habit of using the credit. It also gives people an excuse to buy things they might otherwise think twice about - the standard “up to 55 days interest free” terms are the same idea. Most people end up spending a bit more than they can pay off straight away ocassionally, and a few get into the habit of only paying minimum payments, and they make plenty of money from those people.
In regards to credit rating, in Australia there is no reporting of how much you actually use your card or what your balance is - the report only lists the credit limit and whether you are on time or behind with the minimum payments. In USA where they do report on your card usage it would help to keep the balance high as long as you keep making payments. The credit rating also matters a lot more in USA, here it doesn’t make much difference to anything except your ability to get another credit card or personal loan easily.