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Interest rates & fees checked on
19 May 2013
19 May 2013
Low Interest Credit Cards
Compare 31 low interest credit cards from 15 banks today.
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Consumers with frequent outstanding debt can benefit from lower interest rate cards.
Paying off your credit card’s balance in full at the end of the month means reaping all the benefits and paying none of the costs – especially since the interest charged on balances can be so staggeringly high, averaging about 17% per annum in Australia. For those that have trouble paying off their cards on the due date, and for those that have recently made a large purchase, a low interest rate card could be the answer to climb back out of debt and keep it manageable in the future.
Be aware that the low interest rate advertised for a card usually refers to the purchase rate, while the cash advance rate will typically be much higher. The low interest rate is not necessarily the same between new purchases and balance transfers. In some cases, if you carry a balance, a low interest balance transfer could save you more money than a low rate on new purchases. You can quickly see several cards’ rates and features offered by balance transfer cards compared to low rate cards using the Smart Search tool.
Banks often lure new customers with a low introductory rate, or even a 0% rate, during a period from 6 to 24 months, after which the card will go to a rate closer to the national average. The introductory low rates often apply to both new spending and balance transfers. Again, if you plan to carry a balance, the post-introductory rate should be scrutinised before applying for the card.
| Credit Card Offer | Purchase Rate | Balance Transfer | Annual Fee (p.a.) | popularity rating | info | ||||
|---|---|---|---|---|---|---|---|---|---|
| rate | duration | rate | duration | ||||||
| Credit Card Offer | Purchase Rate | Balance Transfer | Annual Fee (p.a.) | popularity rating | info | ||||
|---|---|---|---|---|---|---|---|---|---|
| rate | duration | rate | duration | ||||||
 | |||||||||
 | Westpac Low Rate Credit Card Low 3.99% p.a. for 6 months on balance transfers. Choose either MasterCard® PayPass or Visa payWave technology for fast purchasing. 60 second online approval. Apply by 1 July 2013. | 0% for 6 monthsthen 13.49% | 3.99% for 6 monthsthen 13.49% | $45 |  | ||||
| Citibank Clear Platinum Credit Card Low rate card with platinum level benefits. 0% for 6 months on balance transfers. Free international travel insurance, concierge service, purchase and extended warranty cover. | 0% for 6 monthsthen 11.99% | 0% for 6 monthsthen 21.74% | $49 1st year | | ||||
| Bankwest Breeze MasterCard Low ongoing interest rate of 11.99% p.a. on this credit card & cheap $59 p.a. annual fee. 0% p.a. on purchases for 4 months. | 0% for 4 monthsthen 11.99% | 0% for 6 monthsthen 11.99% | $59 | | ||||
| Bank of Melbourne Vertigo MasterCard Low 2.99% p.a. balance transfer rate for 6 months! Low interest rate on spending. No annual fee for the first year. Get an additional card holder at no extra cost. Apply today! | 13.24% | 2.99% for 6 monthsthen 13.24% | $0 1st year | | ||||
| BankSA Vertigo Credit Card Low interest rates on balance transfers & purchases. Low minimum credit limit & no annual fee. Apply today! | 13.24% | 2.99% for 6 monthsthen 13.24% | $0 1st year | | ||||
| Citibank Ready Credit Recharge your finances. Two year balance transfer period at 5.9%. No annual fee ($69 establishment fee). No early repayment fee, no cheque or ATM fees. | 5.9% for 24 monthsthen 18.99% | 5.9% for 24 monthsthen 18.99% | $0 | | ||||
| American Express Platinum Edge Credit Card 10,000 Membership Rewards points. Complimentary Virgin Australia domestic return flight every year. Free overseas medical and travel insurance for you and your family. Apply by 30 June 2013. | 20.74% | - | $195 | | ||||
| Bankwest Zero Platinum MasterCard No annual fee! Built in international travel insurance and no foreign exchange fees! | 17.99% | 0% for 6 monthsthen 17.99% | $0 | | ||||
| NAB Low Fee Credit Card Low balance transfer rate for 12 months. Fast 60 second approval. Low annual fee. Free linking to your flyby’s account. | 19.49% | 4.99% for 6 monthsthen 19.49% | $30 | | ||||
| NAB Low Rate Credit Card Very cheap purchase rate & cheap balance transfers for 12 months. Fast 60 second instant approval card. Additional card holder free. Visa PayWave contactless payment technology. | 13.99% | 4.99% for 6 monthsthen 13.99% | $59 | | ||||
Types of Low Rate Card Offers
- 0% on purchases – pay nothing on purchases for up to 55 days
- Cheap interest rates – find a cheaper deal with lower interest rates on purchases, balance transfers and annual fees
Low Interest Rate Credit Cards: Frequently Asked Questions
Q: Who should apply for a low rate credit card? A: People who don’t pay off their balance in full every month and want the security of a low rate in the future. If you have a large credit card balance already, you can better benefit from the typically lower balance transfer rates on a balance transfer credit card
Q: On low interest rate cards, what does the low rate refer to? A: The interest rate that banks use to advertise their credit cards is generally the purchase rate – the interest that is applied to the part of your balance that is for normal purchases and payments. Other transactions, such as cash advances and balance transfers, attract a different rate.
The rate is shown as an annual percentage rate (APR), which is the amount of interest the balance would theoretically attract over the course of a year. The interest is actually calculated on a daily basis with a daily percentage rate, and applied once a month on your credit card statement. You can calculate the daily percentage rate as APR% / 365.
The interest rate starts to come into effect when you have an ongoing balance on your account after the interest-free days have ended.
Q: What are other types of interest that are charged? A: A different rate, usually higher, is applied to cash advances, including ATM withdrawals, buying foreign currency, gambling payments and transferring funds from your credit card to a different bank account.
Many banks offer new customers a special interest rate as an introductory offer. This can include a low purchase rate or balance transfer rate, or a combination of the two. These promotions last for a fixed period, usually several months, and when the offer ends the interest reverts to a higher rate, typically the purchase rate or cash advance rate. When you are comparing and selecting a low rate credit card it is important to decide whether you want to take advantage of an introductory offer, or would prefer an ongoing low interest rate.
Q: What features should I look for? A: Initially, the bank may offer a very low interest rate or even 0% for an introductory period. This period will usually last from 3 to 12 months, depending on the bank. After that point, the interest rate will revert to the higher ongoing interest rate. Make sure you understand how long your low interest rate will last and just how high it will go after that point. You should also be aware of any potential late fees or fees for spending more than your credit limit, both of which can add up very quickly and negatively affect your credit rating.
You can also find many low rate credit cards that provide access to loyalty schemes, meaning you can earn points while you spend and redeem them for rewards. Make sure such a card provides the opportunity to earn points in the way you like to spend, and offers rewards you would like to use.
Q: Do low rate cards have an annual fee? A: Because the ongoing interest rate is low, you can expect to pay an annual fee. The annual fee is a mechanism that the banks use to offset the low rate and make some money. But having said that, you can still find credit cards with low ongoing interest rates and no annual fees for life, or at least for the first year.
Today’s Credit Card Stats
- 306credit cards are ready for comparison on this website
- 16.84%is the average interest rate on purchases
- $90is the average annual fee you can expect to pay
- 2.01%is the average balance transfer rate available