Credit Cards with Low Interest Rates on Purchases

Don't let a high interest charge to your credit card crush your spending power. Switch to a new low interest credit card that allows you to pay more of your balance each month, rather than to satisfy only the exorbitant interest rate.

Credit cards with low interest can make having a credit card and using it much more affordable.

With low credit card interest rates you know that you will not have to pay as much in interest when you repay the amount that you spend on your card. This makes a low credit card well worth the trouble it takes to find the lower rate. There are many benefits to using credit cards with low interest, and this article will address many of them.

A low interest credit card makes your purchases more affordable because you no longer have to waste as much money in interest when you pay off the balance. It also can equate to a much smaller balance because you pay more of the balance off each month and less on interest with low credit card interest rates.

So if you have a credit card with a higher rate of interest (above 15% according to many experts) and a large balance, you should really consider doing a balance transfer to a new low credit card that will save you money in interest payments. This will help to make it easier for you to pay off your credit card debt and will enable you to be debt free more quickly than with a higher rate credit card.

So how do you know whether or not it is important for you to find a credit card with a low interest rate? Basically, if you are someone who regularly has a large balance on their card each month, then you should make a low interest rate your number one priority.

Featured Low Rate Card

With the St.George MasterCard you will save money on purchases as well as paying a low interest rate on balance transfers

• $55 annual fee
• 13.24% p.a. on purchases
• 0.99% p.a. for 12 months on balance transfers
• Cash Advance Rate of 21.49% p.a.
• 55 days interest free
• Minimum Income Requirement of $15,000 p.a.

Read the St George Vertigo terms and conditions.

Comparison of Credit Cards with Low Interest Rates on Purchases

			Interest Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Cash Advance Rate (p.a.)
	St George Vertigo	The St.George Vertigo is a great value credit card offer. It has consistently provided a low interest rate on purchases, and balance transfers.	13.24%	0.99% for 12 months	$55	21.49%
	NAB Low Rate Visa Card	The low rate credit card featuring 0% on purchases until 1st July 2010, a low balance transfer offer for the first 6 months and $0 annual fee in the first year	2.99% for 12 months (reverts to 13.24% )	4.99% for 6 months	$59	21.74%
	ANZ Low Rate MasterCard – Balance Transfer	Give yourself a break and save with a low rate on purchases and balance transfers	0% for 3 months (reverts to 13.24% )	0% for 3 months	$58	21.49%
	Westpac 55 Day Credit Card	Benefit from 0% p.a on purchases for the first 5 months plus $30 saving off the annual fee for the first year	0% for 5 months (reverts to 19.59% )	3.99% for 6 months	$0	21.49%
	Bankwest Breeze MasterCard	Awarded the Cheapest Credit Card for 2010 by Money magazine. It features the lowest interest rate of all Australian MasterCard credit cards.	10.99%	4.99% for 12 months	$69	21.99%
	Citibank Clear Platinum Card	The Citibank Clear Platinum Visa is a low interest platinum credit card, with the added benefit of complimentary international travel insurance, purchase cover and extended warranty on purchases.	11.99%	2.9% for 12 months	$99	21.74%
	Westpac Low Rate Card	The Westpac Low Rate credit card has a low interest rate on purchases, and is the no-frills credit card option from Westpac.	0% for 6 months (reverts to 13.49% )	0% for 6 months	$45	21.49%

How Credit Card Interest Works

Credit card interest is essentially a fee charged by the lending institution in exchange for them enabling you to purchase things on credit. Interest gets charged on the balance you do not pay off each month, and not on all of the purchases you make. Therefore, you will be able to save yourself the most money, and possibly even avoid paying interest at all, if you pay your balance off in full each month.

However, for many consumers, carrying a balance on their credit card is an unavoidable fact of life. You will have to pay interest on whatever balance is leftover at the end of the month. If your monthly balance is large, than your interest payments will be really high.

The way credit card interest is calculated is based on a percentage that is compounded daily. So with a credit card with a 20% interest rate, you would expect to pay 20% on top of whatever the balance is. Compare that amount to a credit card with an interest rate of 10% or 15% and you can see how the savings add up.

Unlike other forms of credit, credit card interest payments are calculated daily, which makes the interest accumulate much faster. So your interest would be adding up on your principal balance, and on the interest from days past. So if you have a large balance, it is imperative to find a low credit card interest rate, or it will take you forever to pay off your balance.

However, if you are financially responsible and generally pay off your card’s balance in full each month, it will not be as important to look for credit cards with low interest rates. Instead you should opt for a card that gives you the most time to pay that balance off before you get charged interest. Some credit cards will give you 55 days, or almost two months, to pay your balance before charging interest. As long as you pay that balance off before the deadline, you will not get charged any interest.

How Is Interest Calculated?

As previously mentioned, credit card interest is calculated daily. But like most consumers, this probably does not fully explain the process for you to truly understand how things work. You start out accumulating interest on your balance, calculated based on a daily percentage rate, which is equivalent to the annual percentage rate divided by the number of days in a year.

Then that amount of interest will get added on top of your principal balance. The total balance multiplied by the daily percentage rate determines your monthly interest charge. If you only make the minimum payments on your credit card your payments will go mostly toward paying the interest payments, which still leaves you with a large balance for the following month.

So if you cannot make much more than the minimum payments and also have a large balance you must be sure to look for credit cards with low interest. If you do not, you are just throwing your hard earned money away. You might also wind up digging yourself even deeper into debt. When in doubt about whether or not you need low credit card interest rates you should always choose the safe option, which means a low interest rate credit card.

Check out today's featured offers:

Westpac Low Rate	Citibank Clear Platinum	Qantas AMEX Discovery	ANZ Platinum
0% p.a. for 6 months on purchases & balance transfers	2.9% p.a. for 12 months on balance transfers	$0 annual fee Up to 10,000 Bonus QFF Points	0% p.a. for 6 months on purchases & balance transfers

Subscribe to our newsletter and get "The Ultimate Guide to Balance Transfers"

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%