Low interest rate credit cards
If you don't pay your balance in full every month, a low rate credit card can help you save money on your bill.
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If you don't pay off your credit card in full every month, you could save yourself some money with a card that charges a lower interest rate. Competitive interest rates typically range between 8.99% p.a. and 14.99% p.a., and these cards help you save significantly compared to others that charge between 18% p.a. and 22% p.a.
Compare the latest low interest rate credit card deals
Some low rate credit cards offer promotional 0% interest or low rates for an introductory period. Make sure to check those offers and their revert rates while you're comparing.
How do low interest rate credit cards work?
Who are low interest rate credit cards best suited to?
Low interest credit cards are designed to help you save on interest costs. As most cards have 44-55 days interest-free, you'll only pay interest if you carry a balance from month to month. So these cards can help if you often struggle to pay your balance in full by the due date on your statement.
🗓 What is the interest-free period?
This is the maximum number of days where interest is not charged on new purchases. For example, if your credit card offers 55 interest-free days and you make a purchase on the first day of your statement period, you'll have 55 days to pay it back before you're charged interest. If you make that purchase on the twelfth day of your statement period, you'll have 43 interest-free days, and so on. This only applies if you pay the amount required by the provider by the specified due date as listed on your statement.
Cards that offer a 0% purchase interest rate for an introductory period are ideal if you've got some large purchases, like a holiday, wedding or renovation, coming up. These offers allow you to pay no interest during that period and can give you the breathing room you need as long as you're making the minimum repayment.
Pros and cons of low interest credit cards
- Savings. These cards can be a cheaper option as you pay less interest on purchases, which will help you save money and avoid falling into unmanageable debt.
- Low fees. Many low interest rate credit cards are paired with lower annual fees, which will also help you save.
- Promotional offers. Low interest rate credit cards sometimes offer 0% promotions on purchases and/or balance transfers, allowing you to avoid interest altogether for an introductory period.
- Less competitive rewards. If a low rate credit card offers a rewards program, it usually has a lower earn rate and smaller bonus points offer than more expensive cards.
- Fewer extra features. Lower rates generally mean fewer extra features, unlike platinum cards which often come with insurance covers and concierge services.
- Revert rates. If your card charges 0% on purchases for a promotional period, it will revert to a higher purchase rate after that.
How to compare low rate credit cards
With so many competitive low interest rate credit cards on the market, here are some of the features that can help you narrow down your options:
From low ongoing interest rates to promotional 0% deals and interest-free days, here are the key factors to look at when comparing interest rates:
- Promotional interest rates. Some Australian credit cards offer 0% interest rates on purchases for a promotional period. The length of the interest-free offer usually varies between 6 and 15 months depending on the card. These offers can give you breathing room to repay your purchases and save without any additional interest costs. At the end of the promotional period, any remaining debt will collect the standard interest rate, so it’s wise to know when this rate applies and aim to clear your debt beforehand.
- Standard interest rate. On a low rate card, the purchase interest rates typically start at 8.99% p.a. and go up to around 15% p.a. If you want a long-term option, a card with an ongoing low interest rate could potentially be a better fit than a card with 0% for a promotional period.
- Balance transfer rates. Some low interest credit cards also come with 0% balance transfer offers that can last for up to 26 months. If you’re paying off an existing debt, you can use a balance transfer to save interest and repay your debt faster. If you’re struggling with credit card debt, it’s wise to concentrate on paying it off instead of using a card to make additional purchases.
- Cash advance rates. The interest rate for cash advances is usually higher than the rate applied to purchases and can be as high as 23% p.a. This rate is charged for transactions such as ATM cash withdrawals, foreign currency purchases and gambling. Cash advances also aren't eligible for interest-free days.
- Interest-free days. Most credit cards also come with interest-free days when cardholders pay their balance in full in the previous statement period. The number of interest-free days will vary between products, but usually range between up to 44 or 55 days.
Fees and charges
- Annual fee. Some low rate cards come with a $0 annual fee for the first year or for life, while others charge annual fees that can be as high as $100 or more. Before you apply, you should weigh up the savings you’ll get from the interest rate against the annual fee to determine which card is right for you.
- International transaction fees. If you use your card to make a purchase overseas or online with an international merchant, you may be charged a foreign transaction fee (for example 3% of the transaction). However, there are some credit cards tailored for international use and offer 0% foreign transactions fees. Some cards do offer 0% foreign fees that can help save you money on these transactions.
- Minimum repayments. Each statement period, you’re required to make a minimum repayment. This is usually a small percentage (which can range from 2% to 10%) of your total balance owing. If you don’t pay this, you’ll usually be charged a late payment fee. However, if you want to minimise your interest payments and avoid falling into debt, it’s wise to pay as much as you can before the statement due date.
Credit cards with low interest rates generally come with fewer frills than costly cards, but here are some of the extra features you might want to consider:
- Rewards programs. Competitive frequent flyer or rewards credit cards usually come with higher interest rates and fees, but you can earn points on some low rate cards in the market. These cards usually come with less competitive earn rates, but can still be rewarding without the high price tag.
- Cashback. Some low rate cards also come with cashback offers, although you’ll usually need to meet a certain spend requirement to get the money back. As long as the spend requirements align with your budget and you can afford to pay it off, this can be another way to get extra value from your card.
- Complimentary insurance. Some low rate cards offer cardholders complimentary travel insurance and purchase cover. These features can help you reduce other necessary costs, but make sure you check out the eligibility requirements, inclusions and exclusions of the cover before you apply.
If you often carry a balance, a low interest credit card could be right for you. However, as there is no one best low interest card on the market, it's wise to compare a few options before you apply. Just remember to compare interest rates and consider the other features, such as introductory offers, annual fees and complimentary extras, to help you find a card that best suits your needs.
Frequently asked questions
Something still not clear? Check out these answers to common questions about low interest credit cards. If you have a question of your own, you can also get in touch with us using the comment box below.
Does the low interest rate on a credit card apply to balance transfers?
This depends on the credit card and any applicable balance transfer offers. If the card allows balance transfers, it may come with a 0% interest rate for a promotional period before reverting to a standard rate. Some low interest rate cards apply the standard purchase rate to balance transfers after the introductory period while others apply the cash advance rate. Read our guide to balance transfer revert rates to find out which providers apply the purchase rate.
Do low interest rate credit cards have other interest rates?
Yes. Low interest rate credit cards also have a cash advance rate that applies to cash advance transactions. Depending on the card, the cash advance rate will apply to any or all of the following: cash withdrawals from an ATM or supermarket, foreign currency purchases, gift card and prepaid debit card purchases, gambling transactions, BPAY transactions, government charges and balance transfers after the introductory period.
When you compare credit card rates, it's important to consider both the purchase rate and the cash advance rate (as well as any promotional rates) so that you can find a card that's affordable based on how you plan to use it.
What is the best low interest rate credit card?
There is no one "best" low interest rate credit card in Australia. With so many cards on the market, a card's individual features have an impact on how well it suits your circumstances. So the card that's right for you may not be right for someone else. Comparing low interest rate credit cards based on the features you're looking for will help you find a card for your individual needs.
What is the lowest interest rate credit card?
Credit card interest rates are variable, which means they can change regularly. So the lowest interest rate card can vary depending on when you're comparing cards. You can click on the "Purchase rate" column of our comparison table to order the credit cards based on their current interest rates.
Just keep in mind that the lowest interest rate credit card could be listed as one with a promotional 0% interest rate. When that's the case, you can continue scrolling through the table to find the card with the lowest ongoing interest rate.
How are credit card interest rates calculated?
Credit card interest rates are usually advertised by the annual rate that applies to the account, shown as "per annum" or p.a. However, interest on your account balance is typically calculated daily and then charged monthly on the statement due date. This means that for every day that you don't make a payment, the interest charges will build up (or compound).
If you want to learn more about credit card interest in detail, you can check out Finder's comprehensive guide to interest rates.
How can I get a low rate credit card?
You can apply for a low rate credit card online in around 10–20 minutes. Get started by comparing cards in the table above (or on individual review pages). When you find a card you like, click the "Go to site" button and you will be taken to the bank's secure application page.
From there, you'll need to provide details about yourself, your employment situation and your financial situation. In order to prove your identity, you will usually need your driver's licence, passport or Medicare card details. Most online credit card applications give you a response within 60 seconds of submitting the completed form.
Is a low interest rate card the cheapest credit card option?
There isn't a single "cheapest" credit card option because everyone uses credit cards differently. There are also other costs to consider beyond the purchase rate, such as annual fees and interest rates for cash advances or balance transfers. On the flip side, some people might find cards with high rates and fees "cheap" because of all the complimentary extras.
Simply put, the term "cheapest credit card" is really subjective and varies from person to person. So when you're trying to find a credit card that's affordable, make sure you consider all of the potential costs based on how you plan to use the account. That way, you'll be able to find one with rates and fees that are affordable for you.
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* The credit card offers compared on this page are chosen from a range of credit cards finder.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.