Credit Card Interest Rates

Credit Card Interest Rates will dictate exactly how much you need to pay on your credit card repayments. Comparing credit cards and monitoring interest rates is an important strategy to ensure you are on the best credit card offer for your financial situation.

Featured Low Interest Rate Credit Card

Whether you choose to put your credit card debts in order through low rates on balance transfer, incur lower interest rates on purchases, or get low interest on both balance transfers and purchases, the Bankwest Breeze MasterCard is one to consider.

• $69 annual fee
• 10.99% p.a. on purchases
• 4.99% p.a. for 12 months on balance transfers
• Cash Advance Rate of 21.99% p.a.
• 55 days interest free
• Minimum Income Requirement of $20,000 p.a.

Read the Bankwest Breeze MasterCard terms and conditions.

Low Interest Rate Credit Cards

			Interest Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Cash Advance Rate (p.a.)
	Bankwest Breeze MasterCard	Australia's lowest interest Mastercard purchase rate. A low stress, guaranteed low interest credit card.	10.99%	4.99% for 12 months	$69	21.99%
	American Express Platinum Edge Credit Card	Receive 20,000 Membership Rewards Bonus Points - enough for $200 worth of Travel Agency Gift Vouchers. Also receive a complimentary Virgin Blue domestic economy return flight every year.	0% for 6 months (reverts to 20.74% )		$149
	Virgin Flyer Credit Card	Earn 1 Velocity Point per $1 spent up to $1,500 per month and then 1 Velocity Point for every $2. Plus an introductory balance transfer offer.	20.99%	1.9% for 9 months	$99	20.99%
	Citibank Clear Platinum Card	Low rate Visa Platinum credit card offer with a low rate on balance transfers.	11.99%	2.9% for 12 months	$99	21.74%
	Westpac Low Rate Card	A simple low interest rate card with a low ongoing rate on purchases, 55 days interest free and a low annual fee.	0% for 6 months (reverts to 13.49% )	0% for 6 months	$45	21.49%
	NAB Low Rate Visa Card	12 month introductory purchase rate offer. Reverts to a low ongoing rate. Apply by 14 December 2011.	2.99% for 12 months (reverts to 13.24% )	4.99% for 6 months	$59	21.74%
	ANZ Low Rate MasterCard - Balance Transfer	Low interest rate credit card, with a low annual fee.	0% for 3 months (reverts to 13.24% )	0% for 3 months	$58	21.49%
	St George Vertigo	Low ongoing rate on purchases plus a low balance transfer offer.	13.24%	0.99% for 12 months	$55	21.49%

Credit card interest rates can differ tremendously. So much so that some consumers pay interest at around 10 per cent, while others pay in excess of 23 per cent. Each credit card is charged a rate - the interest - for allowing you to spend someone else's money to buy things. Since each card's interest rate varies, you need to read the provider's terms and conditions statement to fully understand how much you will need to pay.

What is interest?

Although there are slight differences between the credit card interest rate and the APR (Annual Percentage Rate), it would only confuse matters to go into detail here. Essentially, interest is charged by any lender for providing you with credit. The way your specific credit card provider works out your interest will be shown in their Terms and Conditions.

The annual percentage rate differs depending on the type of product you are using, and according to the type of transactions being carried out. For example, you will be charged a different credit card interest rate for purchase than you are for cash advances. You may also be offered a special discounted rate for any balance transfer you make to a credit card. All of these applicable rates are pulled together and applied to whatever balance remains unpaid at the end of the monthly statement period.

How credit card interest is calculated:

Credit card interest rates are calculated at the end of each statement cycle. The bank will then charge you the rate to your account on the last day of each cycle - statement period. A ADB (average daily balance) will be calculated by your bank and then divided by the days in your statement cycle. The daily rate is then calculated by dividing the APR by 365.

Example: Daily Rate = APR x 365. For example 18.15% APR x 365= 0.04973% daily rate.

The bank then multiplies the ADB by the daily rate. Finally, this number is then multiplied by the number of days in the statement period.

The many faces of credit card interest rates:

Interest rates are charged according to four major categories. These are:

1. Cash interest rate: If you transfer funds between accounts via telephone and Internet banking, withdraw cash from an ATM or pay your bills over the counter you are up for this type of interest charge.
2. Interest rate on the interest: Outstanding accounts attract more costs as time goes by and you should be careful to avoid these under any circumstances.
3. Special interest: This interest is charged on things like a balance transfer between different credit card accounts and banks.
4. Interest on purchase: If you use your card to purchase goods and services you pay interest based on the amount you spend.

Interest-free cards:

Interest-free credit cards are offered to clients who are prepared to pay off their card in full each month. A commonly used schedule is a 55-day interest-free period. You won't pay any interest at all, if you can pay the card in full on the due date of the credit card statement.

If you fail to pay off the card in due time then your next statement will show interest charges for the portion of the outstanding balance and all new transactions made since the date of the last statement.

You will be charged interest on any new transactions you make until you pay the card off in full.

For cards that are paid of in full a few days late there will be a late payment fee charge and a loss of the interest-free benefit for that particular cycle.

When exactly is the interest charged?

If you get an interest charge, it will be debited from you on the last day of your statement cycle. You can find out more about credit card interest rates by speaking with your lender.

To help you keep on top of the best Credit Card Interest Rates and managing your credit cards to make the most of the best interest rate offers available, we have written a number of guides and articles with tips to reduce your credit card balance and make the most of your credit card:

A basic summary of interest rates for credit cards

As a consumer searching for a new credit card you need to be vigilant in educating yourself to the interest rates that you could end up being responsible for paying. The interest rates that you would be paying for the items that you are buying can end up varying greatly depending on what you happen to be buying. All consumers will quickly discover that credit card companies will go to great lengths to promote a fantastic introductory interest rate however if you want to discover all the information that you need to know about a credit card company's interest rates you will need to thoroughly examine the disclosure page.

The World Wide Web is a plethora of information when you want to learn more about the interest rates of credit cards. You can easily compare the interest rates charged by several credit card companies just by visiting one website. Keep an eye out for the link to the disclosure page when you are in the process of applying for a credit card. When it comes to the disclosure page of a credit card you will be able to find out all of the fees that the credit card company will charge you, including the interest rate.

Consumers will likely see that the interest rates on there credit card statement will be different depending on what they happen to be doing with their credit card. For example, you could take out a cash advance one day and be charged one interest rate and then make a purchase at the local mall the next week and be charged a completely different interest rate.

The smallest interest rates that credit card companies will charge are generally tied in with purchases. The best possible thing that you can do as a consumer is educate yourself about everything that is involved with credit cards and interest rates. Many credit card holders need to know that their credit score will help to determine what kind of interest rates that you will end up paying. Something else that all consumers should know is what interest rates you will be charged if you are unable to pay off your entire monthly balance.

Interested in applying for a low interest rate credit card? See our low interest rate credit card offers to compare more low interest options.

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Popular Credit Card Offers

			Interest Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Cash Advance Rate (p.a.)
	Westpac Low Rate Card - 0% Offer	A credit card with a low rate offer on both balance transfers and purchases, plus a low annual fee.	0% for 6 months (reverts to 13.49% )	0% for 6 months	$45	21.49%
	Citibank Clear Platinum Card	Competitive interest rate on purchases and balance transfers offer.	11.99%	2.9% for 12 months	$99	21.74%
	St George Vertigo	Take advantage of this great offer from St.George with a low rate on purchases and a low balance transfer offer.	13.24%	0.99% for 12 months	$55	21.49%
	ANZ Platinum Credit Card	An introductory interest rate offer on balance transfers and purchases, plus a $0 first year annual fee.	0% for 6 months (reverts to 19.24% )	0% for 6 months	$0 annual fee for the first year( $87 thereafter)	20.99%