Low Interest Rate Credit Cards

Pauline Hatch     

If you’re not the type of person to pay off your credit card balance each month, you could save money with a credit card that charges lower interest - as low as 8.99% compared to the standard 21% p.a. or more.

On the flip side, cards with low interest rates often have fewer perks. Three things to know about low-interest rate credit cards:
  • The lowest interest rates on credit cards usually come from credit unions and customer-owned banks.
  • Low interest rate cards often don’t dish out rewards and other bonuses.
  • These credit cards can still come with other costs, like annual fees.
Here, you can find the best low interest rate credit cards in one click. Use the toggles to sort the cards by the features you want to prioritise (we suggest starting with the interest rate!). Remember to check other costs before signing up.
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Low interest rate cards

Switching to a low interest rate card could help you save on interest each month, especially if you tend to carry a balance. Rather than giving away low interest rates as a flashy promotion, the rate is ongoing. Remember though, low interest rate cards are usually basic in the way of features.

Got a big balance to pay off and want to do it interest free? A 0% balance transfer offer would let you transfer your balance to a new card without an interest bill each month.

Look at balance transfers

What is a low interest rate credit card?

A low rate credit card is set apart by offering a lower interest rate than standard credit cards. If you’re being charged interest each month because you don’t pay your card off in full, a low interest rate credit card could be the ticket to saving you some money. 

In a new world where some credit cards charge up to 30% interest, low rate cards can be a lifesaver.

How much could you save on a low interest credit card?

Here are some examples of how much interest you’d accrue in one month at different interest rates, assuming you didn’t make any extra purchases.

Balance Low interest rate: 8.99% Mid interest rate: 14.99% High interest rate: 19.99%
 $400  $2.95  $7.88  $14.45
 $800  $5.91  $15.77  $28.91
 $1,200  $8.86  $23.65  $43.37
 $1,500  $11.08  $29.56  $54.21


With a higher interest rate, you’ll find yourself paying a 389% markup in interest on a $1,500 balance. 

What about paying off a credit card balance at low, mid and high rates of interest?

Let’s look at an example of a $2,000 balance with the minimum repayments made each month, at various rates of interest.

Balance Interest rate Total paid Payment duration
$2,000 8.99% $2,849 9 years, 10 months
$2,000 14.99% $4,188 14 years
$2,000 19.99% $7,695 24 years, 9 months


As you can see, the difference between low and high interest rates isn’t just hundreds of dollars, it’s also decades of time. Of course, the best way to treat a credit card is to pay more than the minimum each time, so you’re not spending years paying it with interest as the cherry on top.

Not sure how interest works? Here's a quick recap.

When you have money owing on your credit card (a balance) and you don’t pay it off in full each statement period, you’ll be charged interest. You can find out all about how to calculate interest here, but to make it simple, here’s an example:

Your card has an interest rate of 19.99%. Divide the interest rate by 365 to get the daily rate. In this case, 0.0547%. Whatever your balance is, you’ll be charged 0.0547% daily (this is assuming you don’t buy any new purchases on the card for the month).

Interest rate: 19.99%

Daily rate: 0.0547%

Balance: $2,000

Interest charged for 30 days: $32.82

Interest is added to your balance, so the following month you’ll be paying interest on your balance plus on the interest you accrued the month before. The interest snowball can become difficult to stop.

On top of that, if you have money owing on your card each month, you could lose any interest free days that the card offers. Interest free days are usually 44 to 55 days, giving you time to pay off the card in full and pay no interest at all. If you have a balance on the card, the interest free days are often waived, and you’ll be charged interest immediately.

Low interest rate credit cards might be worth looking at as a way to slow the interest charging cycle.

 

How do you choose the best low rate credit card for you?

As with any type of credit card, you need to compare all the low rate credit cards if you want to choose the best one for you. We make this process as simple as possible by bringing a huge range of low interest cards together in one place so you can compare them with one click.

Here are some things to look for when you’re comparing low interest rate cards:

Step 1. Compare purchase rates. If you have money owing on your card each month, the interest rate should an important factor in your comparison.

Step 2. Compare annual fees. Work out how much you’ll pay in annual fees, but it’s a good idea to keep the interest rate a priority.

Step 3. Compare features. You will usually find low rate cards – especially those that also have a low annual fee – are low on features. However, saving money on interest should stay top-of-mind, so extras can be thought of as an added bonus.

Step 4. Ask if it’s right for you. Make sure you’re eligible for the card, and consider how well it’ll suit the way you live. Remember, you may need to put extras like rewards on the back-burner for now if you really want to focus on saving money.

Why do some credit cards charge more interest than others?

Credit cards are a business, and interest is one way providers make money. Cards with better features will have higher interest rates and annual fees, so providers can recoup costs.

Fortunately, there are some low interest cards with a few extras to help you save money.

In short, low interest rate credit cards are worth thinking about if you want to have a functional little card with a few benefits and pay only a low interest rate for the privilege.  

There may be better options for you if...

you’re great at paying off your balance each month. You might get more value out of a rewards card where you earn points that can be redeemed for travel, retail items and services.

you’re struggling with credit card debt. You could think about a balance transfer where you move your debt to a new card with an interest-free period, so you can pay it down faster.

 

How do you make the most of a low rate credit card?

Even if the rate is lower than average, you'll still be charged interest each month on any unpaid balance on your credit card. 

So, to make the most out of a low rate credit card, pay off as much of your balance as you can each month. If you can budget your repayments and stay on top of your balance, you might then feel you want to try a card that has more features that you want, and not be too concerned about the interest rate because you’ll be paying off your card consistently.

Can you get cards with no interest at all? 

Yes! Some cards offer 0% interest on purchases for a certain timeframe. The interest free period is usually somewhere between six months and 2+ years. 

However, these 0% interest offers are promotional only. Once the period ends, you'll go back to paying interest.

So, they're a great option if you want time to pay off a big purchase like a couch or a holiday, but not necessarily for long-term spending. You can compare 0% purchase offer credit cards here.

By comparison, low interest cards offer lower rates as an ongoing feature of the card, so you’ll never be surprised by a sudden interest bill on your balance.

Is a low interest rate credit card the best kind of card?

There’s not really any such thing as the ‘best’ card because it all comes down to how you use it, and what you want to use it for.

If you spend big and you like getting free stuff, a rewards credit card might be a good fit.

If you carry a balance, you might find a low interest card like those listed here, or a 0% purchase rate card works out well.

Or, if you travel a lot, you might want a card with no foreign conversion fees or that rewards you for travelling and overseas spending.

The best kind of card is the one you choose because it’s most compatible with the way you live and spend. Use our easy comparison tool to compare credit cards by their different features and offers to find the best one for you.

What about my balance transfer? Will it revert to a low interest rate?

When you transfer a balance from one credit card to another with a 0% balance transfer offer, you won’t be charged interest on the amount until the promotional period is over.

What you’ll be charged in interest depends on the card. Most times, a balance transfer jumps back to the revert rate, which is often the cash advance rate (and can be very high).

You’ll have to compare these three things carefully if you’re looking for a low interest rate credit card with a balance transfer offer.

  • How long the balance transfer introductory period goes for. The interest free period can be up to 36 months.
  • The standard, ongoing interest rate on new purchases. This is the everyday interest rate offered by the card.
  • The revert rate after the 0% balance transfer period is over. On our comparison guide, you’ll see a note under the Balance Transfer tab that shows the revert rate.

To give you an example directly from a credit card, the ANZ Low Rate Credit Card comes with a 0% Balance Transfer offer. Its ongoing rate is 12.49%, putting it in the mid-bracket for interest charges. The revert rate for the balance transfer (after the 30 month interest free period) is 20.24% p.a. The card has an annual fee of $59, with the first year free.

The ANZ Low Rate Credit Card is a good example of a card that offers low annual fee, a reasonable interest rate, and a lengthy 0% balance transfer period.

You’ll have to remember that if you carry a balance transfer, you won’t get the interest free days on your card, which means you’ll be charged interest on new purchases right away.

You can compare the best balance transfer offers on our comparison page.

All rates, fees and offers correct at the time of publication as of 02nd November 2021

What are interest free days?

Most credit cards offer a certain number of ‘interest free days’ when you clear your balance the previous month.

So, say your card offers up to 55 days interest free on purchases. The number of days you get interest free depends on when the purchase is within the credit card statement cycle.

If you make a purchase on day one of your statement cycle, you’ll have 55 days before that purchase is pinged with interest. This is because there are 30 days of your statement cycle left, and 25 days until your bill payment is due.

If you make a purchase on day 20 of your statement cycle, you’ll have 35 days before interest starts accruing on that purchase. Ten days of your statement cycle, and 25 days until your bill payment is due.

Pauline Hatch

Pauline Hatch is a personal finance expert at Creditcard.com.au with 8 years of finance writing under her belt. She loves turning complex money concepts into simple, practical actions so you can win financially. You can ask Pauline any questions by submitting a comment below and get a personal reply.

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77 questions (showing the latest 10 Q&As)

John

John

1 June 2024
I have a cba platinum credit card with auto pay each month, when offered to me there was no fee increase .annual fee this month increased from $59.00 to $96.00 plus interest free days decreased, seams like price gouging to me
    Pauline - CreditCard.com.au

    Pauline

    7 June 2024
    Hi John, I couldn’t find any CBA credit cards that have annual fees. They all are charged a monthly fee now. If CommBank has changed your credit contract, you should give them a call as soon as you can. Best of luck John!
Brendan Laws

Brendan Laws

14 February 2024
How long is the process from applying to card in the mail?
    Pauline - CreditCard.com.au

    Pauline

    16 February 2024
    Hi Brendan, the time to receive the card varies depending on several factors like how quickly the card issuer processes everything. Typically, you're looking at around 5 to 10 business days from the moment you get the approval for the card.
Kat

Kat

28 August 2023
Hi Pauline, using credit cards for an IVF round, (say it’s $30,000) is that covered under the 15 month no interest? What would be the interest after that period of time?
    Pauline - CreditCard.com.au

    Pauline

    30 August 2023
    Hi Kat, I’m not 100% sure because most cards list government payments as an ineligible transaction, so it would depend on where you’re getting the IVF treatment. I don’t know if a government hospital would be considered ineligible. But, if it’s a private facility that is set up as a regular transaction merchant it should technically work. You could ask the credit card company directly once you know what kind of facility it is. I hope that helps Kat, and all the best to you.
Phillip Gemmell

Phillip Gemmell

7 August 2023
I am looking at a credit card for emergencies as our car has broken down and need parts. Probably looking at $3000 only to be used as an emergency
    Pauline - CreditCard.com.au

    Pauline

    8 August 2023
    Hi Phillip, sorry to hear about your car issues! One idea might be a credit card with a 0% purchase offer, which means you won't be charged interest on what you buy for a certain time period (12 months, for example). Some of these cards also have no annual fee the first year, so you could use it and pay it off without very little extra cost. Another idea is a cashback card with a low annual fee, that could help you earn some money back if you have to use it. Just remember to weigh everything up against any interest you'll pay. All the best Phillip!
Rick Oddie

Rick Oddie

15 April 2023
I would like to cancel my latitude GO card account , how can I do this ?
    Pauline - CreditCard.com.au

    Pauline

    17 April 2023
    Hi Rick, you’ve actually reached Australia’s top credit card comparison site. You can reach out to Latitude directly at 1300 462 273 for your request.
Leonie knight

Leonie knight

12 April 2023
Wats annual fee n does the credit come with the card n can U repay the credit fortnightly.
    Pauline - CreditCard.com.au

    Pauline

    14 April 2023
    Hi Leonie, an annual fee is a fee charged by credit card issuers for having and using one of their cards and it needs to be paid each year. Annual fees vary in amount and may depend on the type of credit card and card issuer. You can find this in our review pages of each of the cards. As for credit card payments, usually, it’s due and paid monthly but some credit card issuers may allow partial or multiple payments within a billing cycle, including fortnightly payments. It's important to check with your specific credit card issuer to understand their policies and procedures for making payments, as they may vary. But please note though that paying at least the minimum amount due on time each month is crucial to avoid late fees and potential negative impacts on your credit score.
Wendy

Wendy

18 February 2023
What
    Pauline - CreditCard.com.au

    Pauline

    20 February 2023
    Hi Wendy, please let me know how I can help.
Jack ogilvie

Jack ogilvie

10 January 2023
How much will the monthly payments on a no frills card be for $3000.
    Pauline - CreditCard.com.au

    Pauline

    11 January 2023
    Hi Jack, hard question to answer. it actually depends on what the interest and cash advance rates you have on your card. If you’d like an estimation, you can check our credit card repayment calculator for more information.
Grahame rogers

Grahame rogers

10 August 2022
Will I get a credit card
    Pauline - CreditCard.com.au

    Pauline

    16 August 2022
    Hi Grahame, if you’ve applied for a card already, please reach out to the card issuer directly to check the status of your application. If however you haven’t yet, you can use our comparison tool to see the different offers of some of the cards we’re currently partnered with to see what your options are.
Helen

Helen

7 June 2022
Hi. I am unemployed but I'm on government funding fortnightly. I am looking to apply for a credit card that is on a really interest rate or none at all. I just need it for emergency.
Kerry-Anne Simpson

Kerry-Anne Simpson

3 June 2022
I want to use a credit card to start marketing my business. I have a job and am building business on the side and want to use a credit card business expenses and marketing. I have had a look at some low rate offers Bankwest breeze, American express, Nab straight up. Can you give me some advice I am not going to be able to get a business loan or overdraft and there more expensive anyway so looking for a card that I may be able to extend the limit as the business grows as the business income comes in a lot later after serving clients ( mortgage broking)
    Pauline - CreditCard.com.au

    Pauline

    8 June 2022
    Hi Kerry-Anne, many startups have bootstrapped themselves, including Atlassian here in Australia. Whilst we can’t recommend one card over another, we suggest you read our detailed reviews , click the “heart” icon and save cards to your saved list. This way you can compare the fees, rates, perks, rewards etc side by side. The card you need will be the one that works for you and your business. Keep in mind a business credit card will have extra features such as integration with accounting software so you can streamline business reporting. Hope this has helped and let us know how you go.
Helen

Helen

21 January 2022
I am on a pension (disability) which means I have limited income and do not work is it possible for me to get a credit card
    Pauline - CreditCard.com.au

    Pauline

    25 January 2022
    Hi Helen, different cards have different eligibility criteria that must be met before you apply. We have written an article that may be of help to you - tips on getting a credit card as a pensioner. The article goes into detail about what you’ll need to do to be able to apply for a credit card with some of Australia's bigger banks.
Noemi

Noemi

10 December 2021
I have never had a credit card in my life. An unforeseen situation came up, so i am trying to solve it. 55 days interest fee means that i have that time to pay the amount back? i would probably need around 4000, i work full time, but have no experience with credit cards.
    Pauline - CreditCard.com.au

    Pauline

    14 December 2021
    Hi Noemi, the 55 days interest free period is the duration of when your purchase transaction will not be charged with interest. However, to enjoy this feature, you need to pay the minimum amount on or before the due date indicated on your statement monthly. If you’d like to compare a range of cards that have a 0% interest promotion, this may be more suited to your use case. There is also a new type of card that has come out recently, the no interest credit card. There’s the Community First n0w card, the Commbank Neo and the Nab Straight Up Card. These come with a maximum $3,000 limit, but definitely worth comparing. Hope this has helped!
Nic

Nic

25 May 2021
I wouldlike to do a balance transfer. I am currently on maternity leave but work casually once a week. Is there a card that has an extremely low minimum salary requirement?
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    26 May 2021
    Hi Nic, thanks for your question! The ANZ Low Rate has a minimum income requirement of $15,000 but we're not aware of any cards that have a lower requirement. You can check the list of Low Income Credit Cards to compare more options.
Kerry

Kerry

29 April 2021
What does it mean after a period of time.. then it will have an amount?
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    12 May 2021
    Hi, thanks for your question! Different cards have different offers and these offers are usually with a limited duration and after that certain period of time, it will then go back to its regular rate (depending on the card).
John Heggart

John Heggart

30 March 2021
To make a purchase of $1500.00 what will be the min rate of repayment
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    30 March 2021
    Hi John, it depends on the card. Minimum monthly repayments are variable and typically are charged as 'the greater of X% or $X'. For example, with CommBank, the minimum monthly repayment is 'the greater of Any amount you owe that exceeds your credit limit; 2% of the closing balance, rounded down to the nearest dollar; or $25.
Kamini Chandra

Kamini Chandra

12 October 2020
I need low interest credit card and not transfer fees for $16,000
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    12 October 2020
    Hi Kamini, that combination is not available right now. For such a large balance transfer, the focus should be on that. Low rate cards will generally not approve a large enough limit for this amount fo transfer. Additionally best practice is not to spend on the card while the balance transfer is active. A balance transfer also needs to be between different banks. A few offers that could work are the HSBC Platinum and Virgin Flyer (Citi). Both are 0% for 22 months on balance transfer with no balance transfer fee. Of the low interest offerings, have a look at the St George Vertigo. Same term with 1.5% balance transfer fee.
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