Research and compare low rate credit cards through Credit Card Finder’s interactive table.
Comparing low interest rate credit cards can provide a lower interest credit solution giving you the flexibility and convenience to spend and make purchases on your credit card whilst taking advantage of lowest interest repayments.
To help in choosing which card to apply for, we have listed below low interest VISA, MasterCard and American Express credit cards.
We have provided all the information you need below to give you the knowledge and confidence to apply for your low interest credit card. You could begin saving money and reducing your credit card debt.
Low Interest Rate Credit Card Offer
The Low Rate Credit Card from American Express offers a low interest rate on purchases and a low annual fee. You’ll also get a balance transfer offer upon application.
- Low 11.99% p.a on purchases
- 0.99% p.a. on balance transfers for the first 6 months with a one-off 1% credit plan establishment fee (reverts to 11.99% p.a.). Excludes existing or previous Card Members.
- $65 annual fee
- Up to four Supplementary Cards with no annual fee
Comparison of Low Interest Rate Credit Cards
Complete guide to low interest credit cards
What is a low interest rate credit card?
A low interest credit card is a card under a certain Annual Percentage Rate (APR or % p.a.) issued to its users as a system of payment, allowing the user to pay for goods and services with a line of credit. There is no defined APR but Paul Clitheroe, finance analyst from Money magazine believes that a credit card below 15% p.a. is a good indication.
How to find the lowest rate credit card listed in our comparison tables
You can sort through our featured credit cards by ranking them in terms of interest rates. By clicking on the arrows you can sort interest rates or annual fees from ascending or descending order so you can find the credit card best suited to your financial needs.
What types of low interest credit cards are there?
- Standard low interest rate. According to Paul Clitheroe, these include credit cards that are often below 14% p.a. and often have a low annual fee.
- Low interest rate with introductory purchase rate. While these cards maintain a low interest rate, their purchase rate may not. The purchase rate is important to note because that will be the interest you pay back on your purchases. Make you sure know how long the introductory period and exactly what the rate will revert back to after that period.
- Introductory purchase rate only. This type of credit card will revert back to a high interest rate at the end of the introductory period.
- Premium low interest rate. While this credit card has a low interest rate it will also provide some platinum perks such as complimentary travel insurance.
- No-frills low interest rate. This type of credit card has all the non-essential features removed to keep the price low. There is usually a low annual with no interest free days.
- Low interest rate with introductory balance transfer rate. If you have a leftover balance after a balance transfer offer expires the balance will generally revert to the standard purchase rate although in some cases this will revert to cash advance rate.
What is credit card interest?
Credit card interest are the repayments made back to the financial institution for lending you credit. The longer you take to repay the sum, typically the more interest you will need to pay. The longer it takes to repay a purchase or cash advance, the more interest will be accumulated.
Credit card interest rates are also known as APR and are given in figures of p.a. but is accumulated daily as a Daily Percentage Rate.
What types of interest are charged on a low interest card?
- Purchase interest. This is the interest charged on your purchases – whether it be buying groceries at the supermarket, direct debits for bills (eg: memberships, or paying bills by credit card. On this page we have highlighted the purchase interest rates from each credit card in the table above to make it easy for you to compare the cards with the lowest purchase rate.
- Cash advance interest. When you withdraw money directly from your credit card this is known as a cash advance. Cash transactions include ATM withdrawals, transferring funds from your low interest card to another bank account using telephone or internet banking
- Special interest. Special interest refers to interest charged on other amounts or transactions including balance transfers.
- Interest on interest. This is interest that is charged on any outstanding balance on your card as a result of the above three types of interest above, and is charged on your outstanding balance from your last statement period.
How is interest calculated on a low interest rate credit card?
The diagram below explains how interest is calculated on your credit card.
How does a low interest credit card work?
If you find that you are not able to pay off your credit card balance every month in full, low interest rate credit cards are your best choice in a card. You do not have to pay an enormous amount of interest if you carry a balance forward from month to month any longer. Gone are the days when a 20% interest rate was acceptable. You can find very low rate cards that are packed with extra features to help keep your debt under control.
Any time you make a purchase with the credit card you are borrowing money and using credit. You have the option of repaying the entire amount when you receive your statement by post, or you can pay a smaller amount and carry the rest of the balance over to the next month. You will be required, however, to pay at least the minimum requirement, which is usually 2% of the entire balance.
If you decide to use credit and borrow the money for a month you will have to pay an interest charge,. This interest is different from card to card, and it is up to you to do a card comparison to find the best low interest credit cards you can.
- Apply for a low interest card with a 0% for 6 months balance transfer offer. A balance transfer allows you to transfer your existing card’s balance on to your new low interest credit card and pay 0% p.a. interest for 6 months. At the end of the balance transfer period interest rate on the balance will return.
- Pay less interest on credit card purchases. With a low rate, when you make purchases on your card and if you don’t pay them back within the interest free period, you will be charged interest but at a lower rate meaning you will have a reduced interest repayment.
- More affordable for making purchases on your card. You are able to make big purchases on your card and repay them at a low interest rate, keeping down your credit card balance.
- Reduce your credit card balance and repayments. As Paul Clitheroe recommends, if you have a credit card with 15% interest or more, you should opt for a balance transfer to a lower rate credit card to pay off your existing card
- Ideal if you have a revolving credit balance. If you don’t completely pay off your card balance each statement, then it is important to have a low interest rate to ensure you pay the least amount of interest to your bank, taking advantage of low interest rates and saving you money in the long run.
How much money will I save by applying for a low interest card?
|Citibank Clear Platinum credit card||ANZ Platinum credit card|
|Credit Card Balance||$1,000||$1,000|
|Minimum Repayment||2% = $20||2% = $20|
|Over||5 years 10 months||8 years 7 months|
|Difference||$662 over an extra 2 years and 9 months|
What happens when I make a transaction?
When you read the advertising for low rate interest cards you might assume that this rate is applied to all the transactions you make. This gets a lot of people into trouble because they don’t realize that the rate only applies to purchases and not to any other transactions necessarily. Most cards have a separate interest rate for cash withdrawals, balance transfers and other transactions done on the card. If you are not aware of what interest rates apply, you can end up getting quite a surprise at the end of the month when you receive your statement.
Another thing you should know is that a cash withdrawal does not only apply to taking money out of an ATM machine, but it also applies to buying traveler’s checks, foreign currency and making any type of gambling transaction.
If you use your credit card abroad you may have to pay extra fees. Almost all credit cards have a foreign transaction fee, which is charged whenever the card is used overseas. Usually this amount is about 2.75% of the total transaction amount.
How to compare low interest rate credit cards
Here are some of the most important things you should look for when doing a card comparison.
- Annual fee. Try to find the best card that meets your needs and has the lowest annual fee. The annual fee should not be a deciding factor for choosing the right low interest rate credit cards, but if you find two cards that are very comparable the one with the lowest annual fee should win.
- Interest rate. When you are comparing interest rates you want to look for the lowest APR. This is the annual percentage rate including the annual fee and interest charges. It is especially important to find low interest rate credit cards if you are not able to always pay off your balance in full every month and will probably have to pay some interest charges from time to time.
- Introductory rates and balance transfers. You may be able to find a great deal on a card with very low introductory rates. Some cards will even offer a 0% interest rate on purchases or balance transfers for a limited amount of time. If you want to transfer a debt over from an existing card, or have a big purchase that you want to make, you may want to look for one of these deals. If you use smart shopping to pick out the best low rate credit cards, you will come out ahead in the end.
- Revert rate. After the introductory period of your balance transfer or purchase rate, it is essential to know what the rate will revert to. Sometimes it can revert back to the cash advance rate, which on average can up to 20% more. By reading through the terms and conditions properly, you will save yourself from any nasty shocks.
- Hidden fees and charges. You should find out what types of fees and charges apply to the card. You will be able to find out this information by reading the small print on the website before you fill out your application. You may be charged a fee for using an ATM, for using your credit card abroad or for various other transactions. If you find out all about these charges then you’ll be better prepared to use your card resourcefully.
- Interest free days. If your credit card doesn’t have an interest free day period then you will immediately get charged interest. Have a look out for any offers like 55 days interest free days, but please keep in mind that these offers usually apply when you’ve paid back the balance in full by the due date listed on your statement.
Are low interest rate credit cards suitable for you?
Low interest rate credit cards are suitable for people that cannot always pay off the balance every month. Many Australians are in that situation right now and that is why these low rate cards are so popular. It is nice to know that you are covered if you can’t make the whole payment one month, and that’s what a credit card is supposed to represent anyway: a form of security when times get a little rough.
Getting the right credit cards to meet your shopping and repayment needs is key to saving the most money. Credit card policies are not a one size fits all deal. What saves the most money for one consumer might actually cost another consumer hundreds of dollars more than they should be spending.
You should look into a low interest credit card if this describes your spending and payment habits:
- You use your card regularly to make frequent purchases
- You make your payments on time, but typically don’t pay them off in full
- You have a good, well established, credit history
- Your income is stable and consistent
Getting qualified for low interest rate credit cards can be difficult, but it is well worth it if you use your card a lot and tend to have a balance from month to month. You will need to have a strong credit score and credit history to qualify for these cards. If you think you can qualify for them they are well worth the time to look at, since credit card companies are willing to offer better deals in exchange for a reliable consumer base.
You should consider staying away from low interest rate credit cards if any of this describes you
- You don’t use your card very often
- You tend to use your card to make large purchases and pay them off right away
- You almost always pay your balance in full from month to month
- You always pay off your balance before the end of interest free periods
- You are looking for a way to consolidate and transfer your balance to another card
- You have little or no credit history
- Your credit history is poor
- You have had problems in the past making payments on time
- You have been unable to meet past credit card payments due to a lack of money
Low interest credit cards do not meet the needs of every consumer. They are great for people who regularly use their credit cards and tend to always carry a balance. Consumers who keep a credit card to use on rare occasions for large purchases should probably not pick a low rate credit card. Especially not if you plan to pay the balance off in a short amount of time – you may be interested in a balance transfer instead.
Features of a low interest rate credit card
Low interest rate credit cards offer a low rate to reliable and qualified customers because it can help save them money. You will want to make sure that your low interest card doesn’t gouge you with other fees and make sure the rate and fees for these features are low as well:
- Low interest rate. It should go without saying that the most important aspect of low rate credit cards is their interest rate. The APR refers to the interest rate charged on the purchases you make over a period of one year. The APR also would include the annual fee associated with your credit card. Many low interest credit cards do not charge an annual fee. This is ideal for pretty much every credit card user, because it is a fee that everyone would have to pay otherwise. Getting the lowest APR possible will depend on the strength of your credit score, which measures your overall credit history as a consumer. You will have the best opportunities if your credit score is high. To qualify for a low APR you might also have to make higher minimum payments. These features ensure that you will be a reliable customer for your credit card company, which enables them to give you a special, competitive rate.
- Low annual fee. This is one of those features that may or may not pertain to the way you use your card. If you plan to use your low interest credit cards to make cash transactions, you will want to make sure that the low interest rate still applies. Cash transactions include making ATM withdrawals, receiving cash back when you make a purchase, and the purchase of traveller’s checks or foreign money. Even gambling purchases can be considered a cash transaction. These types of purchases may not be eligible for the low interest rate and may also have other fees.
- No cash transaction or cash handling fee. You want to make sure that the card covers all the important bases, such as having no annual fees and a low APR, before you look at the other fees. When you look at the various fees associated with the different cards, feel free to take into account how often you will use the service. If you never plan to travel abroad, it might not matter to you if their foreign transaction fee is high. Only after all of these things are considered should you look at the extras and bonuses offered by the card companies.
- Low introductory rates. Low interest rate credit cards may also offer a number of different promotions to draw in new customers. They may offer super low rates initially, or a rewards program to offer you different ways to get a small return from the purchases you make. None of these features are absolute essentials, but they are extra features that many consumers really like. One of the most common bargains is an introductory interest rate of 0% for as long as a year. This would be great if you are considering making a large purchase, can pay it off within a year, and want to put it on a credit card. Low rate credit cards may also offer a rewards program where you can accumulate points based on the purchase you make with the card. You can redeem these points for cash, gifts, or other neat specials. Just remember that these types of features are extras and not essentials when it comes to making a decision. Low interest credit cards can be an extremely smart decision for the right consumer.
These are just the basic features you should keep in mind when choosing amongst different low rate credit cards. Depending on how you use your card, some features will be more important to you than others. Low interest rates, no annual fees, and low or no fees on many of the other features are what you want to look for when you are comparing different low interest rate credit cards. Not all cards will offer the same features.
Tips to help you compare and choose a low interest rate credit card
Low interest rate credit cards imply that, even if you don’t pay off the bill in full each month, you don’t get slammed with big interest charges on the unpaid balance. Choosing a low interest rate credit card can seem like a no brainer. But getting the most benefit can actually require a lot of research.
- Check for extras. See if there’s a loyalty offer attached. Some banks or building societies will offer an even lower interest rate if you have a current account and a credit card with them, in other words, if you have more of your business with them.
- What is the nature of your transactions? If you’re going to use your low rate credit cards to get money from an ATM, buy foreign currency or travellers’ cheques, do a little gambling or get cash at the supermarket checkout, look for a card that offers a low interest rate on cash transactions because not all of them do. Otherwise, it’s best to use your debit card. A debit card avoids any interest charges on cash transactions and there are no handling fees. With some credit cards, it’s best to check out the fine print thoroughly. Some cards make you pay off your purchase and balance transfer transactions before you can pay off your cash transactions.
- Other fees. Always remember to ask that most basic of questions – is there an annual fee? Don’t make the mistake of thinking the low interest rate on your card is always fixed. Most rates are variable and move in line with changes to the cash rate announced by the Reserve Bank of Australia.
When low rate cards should stay in your wallet. Low rate cards are not good for large one-off purchases like white ware for the home or big pieces of furniture. If you’re going to make those kinds of purchases, do it with an introductory rate credit card, which sometimes give you 10 months’ worth of credit at a zero interest rate. Nor are low rate credit cards good for balance transfers where you’re trying to consolidate all your credit card debt onto one low rate card.
Pros and cons of a low rate credit card
- You pay less interest on purchases you make after the interest free period passes.
- If you’re a regular credit card user who doesn’t clear their balance each month then you could save a lot in interest charges, compared to a card that has a higher rate.
- If you want to reduce and consolidate your credit card debt, low interest credit cards can help. You may be able to combine all your credit card balances onto one card and reduce the balance.
- Sometimes its may be possible to pay zero interest on balance transferred, for a set period of time. If you’re committed to paying off your debt, then a low rate credit card is a good place to start.
- You need to know what type of purchases will qualify for your low interest rate. If your applying for a balance transfer with zero percent, the low introductory rate only applies to amount that you’ve transferred from your previous card.
- Even with low interest, timely payments are very important, some credit card companies could revoke the introductory rate period and charge a higher rate.
- You have to do your homework, while low interest rate cards can be a great benefit if used properly, they can a huge disadvantage if you don’t fully understand them.
Frequently asked questions
- What is considered a low interest credit card? Paul Clitheroe, finance analyst from Money magazine believes that a credit card below 15% p.a. or 15% APR can be considered a low interest credit card.
- I have bad credit – can I still get a low interest card? Most credit card providers require a strong credit history to be eligible for a low interest credit card.
- When is purchase interest charged? For cards with an interest free period, interest is charged on the last day of your statement period. Purchase interest is charged from the day the transaction takes place until the end of the statement period.
- Are there any low interest rate credit cards suitable for students? There are a few, please refer to this page for our featured student cards.
- What are interest free days? Interest free days allow you a grace period to avoid paying interest on your credit card by paying back your credit card balance, in full, by the specified due date.
- Can I avoid paying Interest? Yes. If you pay off your purchase within the interest free grace period, then you are paying $0 in interest repayments back on your purchase, no matter how expensive it was. However, interest free/grace periods do not apply to cash advances.
* The credit card offers compared on this page are chosen from a range of credit cards Credit Card Finder has access to track details from. ‘Best and ‘Top’ are ratings which are subject to our consideration and is not rated against all Australian credit cards. We recommend you take this information into account when comparing credit cards. To seek more information read the terms and conditions of your chosen credit card and seek advice from a financial advisor.
Low interest credit card comparisons
How and where can I apply for a low interest card?
Go back to the top of this page and select a card from the comparison table, then click the Apply button. This will securely transfer you to the relevant banks website, and when you complete the application it will be through their secure online application service. There is no fee for applying from this page.