Who has the cheapest credit card interest rate?

Posted October 2nd, 2010 and last modified August 7th, 2014

A credit card with an extremely low interest rate may be easier to find than you think.

One of the most basic financial tools most Australians have in their arsenal is the credit card, and one of the most basic charges you’ll be familiar with if you have one is interest.

Finding a credit card with a relatively low interest rate can be a money saver for the right type of spender.


Bankwest Breeze MasterCard

Cheap Credit Card Offer

With the Bankwest Breeze you can benefit from a low rate on purchases with a long balance transfer period.

  • $59 p.a. annual fee
  • 12.24% p.a. on purchases
  • 0% p.a. for 13 months on balance transfers
  • Cash Advance Rate of 21.99% p.a.
  • Up to 55 days interest free

Credit Cards with some of the Cheapest Credit Card Interest Rates:

Rates last updated August 28th, 2014.

Interest rate (p.a.) Balance transfer rate (p.a.) Annual fee Cash advance rate (p.a.)
Bankwest Breeze MasterCard
Bankwest Breeze MasterCard
Low interest rate on purchases and balance transfers. 12.24% p.a. 0% p.a. for 13 months $59 p.a. 21.99% p.a. Go to siteMore info
St.George Vertigo Visa
St.George Vertigo Visa
Low ongoing rate on purchases, introductory balance transfer offer, plus a low annual fee. 13.24% p.a. 0% p.a. for 14 months $55 p.a. 21.49% p.a. Go to siteMore info
ANZ Low Rate
ANZ Low Rate
Save with a low rate on purchases and balance transfers with a low annual fee and ongoing purchase rate. 13.49% p.a. 0% p.a. for 16 months $58 p.a. 21.74% p.a. Go to siteMore info
Commonwealth Bank Low Rate Credit Card
Commonwealth Bank Low Rate Credit Card
Get 10 months of 0% p.a. on purchases with a low ongoing purchase rate. 0% p.a. for 10 months (reverts to 13.49% p.a.)* 5.99% p.a. for 5 months $78 p.a. ($48 for qualifying customers) 21.24% p.a. Go to siteMore info
NAB Low Rate Credit Card
NAB Low Rate Credit Card
The NAB Low Interest Visa Card offers a low interest rate combined with a purchase rate offer of 0% p.a. for 12 months. Apply by 19 October 2014. 0% p.a. for 12 months (reverts to 13.99% p.a.) 4.99% p.a. for 6 months $59 p.a. 21.74% p.a. Go to siteMore info
Westpac Low Rate Card
Westpac Low Rate Card
A simple low interest rate card featuring a low ongoing rate on purchases and balance transfers. 0% p.a. for 12 months (reverts to 13.49% p.a.) 1.99% p.a. for 12 months $45 p.a. 21.49% p.a. Go to siteMore info
HSBC Credit Card
HSBC Credit Card
No annual fee for life, plus a low balance transfer offer. 17.99% p.a. 0% p.a. for 6 months $0 p.a. 21.99% p.a. Go to siteMore info
Citibank Clear Platinum Card
Citibank Clear Platinum Card
A low rate platinum credit card with a great purchase and balance transfer offer. 0% p.a. for 9 months (reverts to 12.99% p.a.) 0% p.a. for 9 months $49 p.a. annual fee for the first year ($99 p.a. thereafter) 21.74% p.a. Go to siteMore info
Commonwealth Bank Low Fee Credit Card
Commonwealth Bank Low Fee Credit Card
A credit card with a low interest rate. You could get 10 months at 0% p.a. interest on purchases. when you apply by 15 September 2014. 0% p.a. for 10 months (reverts to 19.74% p.a.) 5.99% p.a. for 5 months $24 p.a. ($0 for qualifying customers) 21.24% p.a. Go to siteMore info
Citibank Rewards Credit Card - Platinum Card
Citibank Rewards Credit Card - Platinum Card
Consolidate your debt with a low balance transfer offer and a host of platinum privileges. Earn up to 1.25 Citibank Reward points for every $1 spend. 20.99% p.a. 0% p.a. for 24 months with 3% balance transfer fee $199 p.a. 21.74% p.a. Go to siteMore info
Citibank Ready Credit - Fixed Payment Option
Citibank Ready Credit - Fixed Payment Option
No annual fees with a competitive unsecured rate of interest over 48 months. 8.99% p.a. for 48 months (reverts to 19.49% p.a.) $0 p.a. Go to siteMore info

How do credit cards with a cheap interest rate work?

Credit cards with low interest rates work in the same way as a regular credit card. You make purchases using your card, receive your statement, and then pay part or all of the funds due.

These cards have a few general characteristics, although because of the ever-evolving market, these aren’t hard and fast rules.

  1. Lower annual fees.
  2. No rewards programs.
  3. Higher number of interest free days.
  4. Usually aren’t platinum cards.

Before you start looking at these types of cards ask yourself:

  1. Do you regularly pay interest on your balances each month? Don’t simply go for the card with the lowest interest rate if you pay your card off in full each month. Cards with low or no annual fees can be a better alternative in this case.
  2. Have a look at cards with no annual fees

  3. Would a balance transfer be more useful? If you have a credit card/cards with a large balance and you’re viewing a low interest credit card as a way to stay afloat while you attempt to pay them off, a balance transfer may be a better option. Please keep in mind that there a number of considerations you must take before completing a balance transfer, like the balance transfer period, how much you can actually transfer, and if you transfer from one particular lender to the other.

    Check out cards with balance transfer offers

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How to compare credit cards with low interest rates

Compare credit cards with low interest rates by looking at the factors listed below.

  1. Interest rate – The main reason why you probably want a credit card with a low interest rate is because you’re going to be paying interest each month. Ensure this figure is reasonable in conjunction to the annual fee.
  2. The annual fee – In addition to the interest rate, the annual fee will be an indicator of how much you’ll be paying each year for the privilege of having a credit card.
  3. Current deals – Many credit cards offer low purchase rate or balance transfer rate deals as an incentive. These can be useful depending on how you’re going to use your card. If you’re getting a low interest rate card to make a big purchase when you first get your card, a low or 0% purchase rate deal might be a good option.
  4. Hidden fees and charges – If you travel overseas often for instance, using your card overseas either physically or online can come with foreign transaction fees and ATM withdrawal fees. Similarly there are also fees for making cash advances, late payment fees and more. If you’re likely to have to pay them try to find a card with lower fees.
  5. Rewards programs – Some cards with low purchase rates may also come with a rewards program. These can add to the cost of the card through higher annual fees, so calculate the value of any rewards you’re likely to receive in a year and ensure it equals or exceeds the annual fees you’re going to pay.
  6. Interest free days – Credit cards on the lower side of the interest rate spectrum are no different to regular credit cards. Some cards will come with no interest free days, whereas others will come with 55, and yet some will sit somewhere in between. How many days you need to pay each statement off depends on you.

Pros and cons of credit cards with the cheapest interest rates

Pros

  • Pay less in interest
  • Pay less in annual fees
  • Most give you 55 days interest free
  • Uncomplicated – it’s just you, your card and your purchases

Cons

  • No rewards programs
  • No platinum benefits e.g concierge, discounts,
  • complimentary insurances

Things to avoid with a credit card with a cheap interest rate

As always, credit cards require discipline, and even if a credit card has a low interest rate this rule still applies. Here are some other things to avoid with this type of card.

  • Making needless purchases – Unless you have a 0% interest deal on your card, any purchase you make using your card which you pay interest on will cost you more than the original price. Interest, no matter how small, is something you want to avoid having to pay.
  • Paying for features you won’t use – A card with a rewards program attached to it may sound good, but if this card isn’t going to be used for regular purchases you’re going to be paying higher annual fees for a feature of little benefit. Likewise, if you’re paying a higher annual fee for a card with 55 days interest free, and you pay your balances off the next day then again this feature may not be worth it.

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Frequently asked questions about cheapest rate credit cards

This depends on how you plan to use your card, so there’s no one answer. Spenders who plan to use their credit card to make a number of large purchases early on may benefit from a card with a rate which is initially very low or 0%. Those who wish to use their card for regular purchases may benefit from a credit card which has a low rate for the life of the card. Using our credit card interest repayment calculator may give you indication of which one is most suitable.

The answer to this question depends again on how you plan to use your card. Cards come with many different features and fees. The right mix of these features, fees and interest rates will help you decide which cards will be worthwhile additions to your wallet.

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Credit Cards Comparison

Rates last updated August 28th, 2014.
Interest rate (p.a.) Balance transfer rate (p.a.) Annual fee Cash advance rate (p.a.)
ANZ Low Rate
ANZ Low Rate
A low rate on purchases, balance transfer and a low annual fee. 13.49% p.a. 0% p.a. for 16 months $58 p.a. 21.74% p.a. Go to siteMore info
Westpac 55 Day Platinum Card
Westpac 55 Day Platinum Card
Exclusive Offer to Credit Card Finder. 0% p.a. for 12 months on Purchases
$0 annual fee with platinum benefits including a platinum concierge service, overseas travel insurance, extended warranty cover and purchase security cover.
0% p.a. for 12 months (reverts to 19.84% p.a.) 3.99% p.a. for 6 months with 1% balance transfer fee $0 p.a. 21.29% p.a. Go to siteMore info
HSBC Platinum Credit Card
HSBC Platinum Credit Card
Earn rewards points plus a balance transfer offer. Access to prestige services including a personal concierge service and VISA Platinum reward program. 19.99% p.a. 0% p.a. for 8 months $0 p.a. 21.99% p.a. Go to siteMore info
ANZ Frequent Flyer
ANZ Frequent Flyer
Get 50,000 bonus Qantas Points once you spend $1,500 on eligible purchases within 3 months. Earn 1.00 point per $1 spent on your AMEX and 0.50 points per $1 spent on your Visa. 19.99% p.a. $95 p.a. (which includes a $40 annual account fee and a $55 Rewards Program services fee) 21.49% p.a. Go to siteMore info
Coles No Annual Fee MasterCard
Coles No Annual Fee MasterCard
Enjoy a low interest rate plus a $0 annual fee. 17.99% p.a. 0% p.a. for 6 months $0 p.a. 17.99% p.a. Go to siteMore info

* The credit card offers compared on this page are chosen from a range of credit cards CreditCardFinder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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