Low Interest Rate Credit Cards

Updated 2 June 2021

If you don’t pay back your credit card balance in full each month, you can save with a low-interest rate credit card.

A low interest-rate credit card is exactly what it sounds like: a credit card that comes with a low interest rate. The exact rate differs between providers, but you will usually find a rate from 9-10% p.a. and up to 14-15% p.a.

Three things to know about low-interest rate credit cards:

  • You can get the lowest interest rate on credit cards from credit unions and customer-owned banks
  • Low-interest rate cards don’t usually come with rewards and other perks
  • These credit cards can still come with other costs, like annual fees.
You can find a bunch of low-interest rate credit cards below. We’ve included a handy visual tool to help you see how good the card offer is. 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 month-to-month, especially if you tend to carry a balance. These cards offer a low interest rate ongoing, and typically keep it simple in the way of features.

Carry a balance regularly and want to pay it down faster? A balance transfer card would let you transfer your balance to enjoy a much lower rate.

Look at balance transfers

What is a low rate credit card?

A low rate credit card is a card that charges a low rate of interest on purchases. By choosing a low rate credit card, you can save on interest when you carry a balance. This makes them a great option for cardholders who don’t always manage to clear their balance each month when their statement is due.

This money-saving works in two ways. First up, when you carry a balance, that balance starts to accrue interest. The higher your purchase rate, the more you pay in interest on that balance. As interest starts to stack up, it becomes more and more difficult to pay down your debt, which can make it difficult to keep on top of.

Secondly, carrying a balance means no more interest free days on new purchases. To take advantage of interest free days, you usually have to clear your balance the previous month. If you don’t, any new purchases will attract interest from the day they are made. Again, the higher the purchase rate, the more you pay in interest – and the easier it is to get into trouble.

As with any type of credit card, you need to compare low rate credit cards if you want to choose the best one for you. At CreditCard.com.au, we make this process as simple as possible.

Step 1. Compare purchase rates. If you carry a balance, the rate you pay on that balance should the most important factor in your comparison.

Step 2. Compare annual fees. Factor in how much you will pay in annual fees, but keep purchase 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 be your first priority, so extras can be thought of as an added bonus.

Step 4. Assess compatibility. Make sure you are eligible for the card, and consider how well it will suit your needs. Remember, you may need to put extras such as rewards on the back-burner for now if you really want to focus on saving money.

Just like annual fees, interest rates on credit cards vary according to what the card offers.

Credit cards are a business, and as such, credit card providers are not in the business of giving away stuff for free. That’s why you will usually find cards with higher annual fees and interest tend to offer more in the way of features and extras – while cards with lower annual fees and interest are more basic.

However, you can make this work to your advantage, as long as you know what’s most important to you. Do you want to save money on interest and keep your credit card under control? A low rate credit card could help you do that. Do you always clear your balance and want more from your card? As long as your card offers value, a card with a higher rate could work for you.

Want to avoid making mistakes on your new card? One of the most important things to remember when using a low rate card is the fact that you are still paying interest on your balance. Yes, that interest will be growing at a slower rate than if you had a card with a higher rate, but it is still growing.

If you want to make the most of your low rate card, pay off as much of your balance as you can, as often as you can. Try not to let your focus slip just because you think your lower rate lets you off the hook. The goal is always to pay down your balance, and keep it clear month-to-month. Doing this should also let you take advantage of interest free days on your purchases.

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

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 made with regards to your credit card statement cycle.

If you make a purchase on day 1 of your statement cycle, you will have 55 days before that purchase starts accruing 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 will 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.

In general, low interest credit cards offer a low rate over the long term. However, there are cards that offer a lower rate as an introductory offer. With these cards, you pay a much lower rate over a short period of time, making them a handy option if you want to save on interest over the short term. Find out more about 0% Purchase Offers here.

TIP: To make the most of this type of card, plan your purchases and set a repayment plan to pay them all off before they start accruing interest. Make sure you know what the standard purchase rate is after the intro period ends.

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64 questions (showing the latest 10 Q&As)

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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