Whether you want to clear your debt, save on fees or cut down on interest costs, compare some of the cheapest credit card offers* in Australia.
Credit cards can be a great way to free up cash flow while building your credit history, but they often come with expensive rates and fees. In this guide, we've rounded up some of the cards with the most competitive interest rates and fees to help you save on standard card costs. So whether you want to consolidate and clear your debt with a 0% balance transfer, pay no annual fee or save with a card with a low interest rate, you can compare and find the cheapest cards for your needs here.
Compare credit cards with low rates and fees
How to compare the cheapest credit cards* in Australia
The cheapest credit card for you will depend on how you plan to use it. For example, if you want to pay off an existing balance over time, a card with a 0% promotional balance transfer interest rate might be the cheapest option. If you hardly ever use your credit card or always pay your balance in full, it might be less expensive to get a card with a $0 annual fee. If you're travelling overseas or shopping online, a card 0% foreign fees could help you avoid hefty conversion fees. Or if you're using your card for purchases, you could opt for a card with a low or 0% interest rate on purchases or a card that offers interest-free days when you pay your balance in full. From 0% balance transfer deals to no annual fee cards, you can compare different types of credit cards to find the right one for you below.
Credit cards with low or 0% interest rates
If you don't think you can pay off your balance by the statement due date and you regularly carry a balance from month to month, you can compare cards with 0% promotional purchase rates or low standard variable rates of interest. If the card has a 0% purchase rate, it'll usually only apply for a promotional period (which can often vary between 3 to 12 months). After the introductory period ends, the standard purchase rate will apply to any remaining balances.
If you'd prefer a card with a low purchase rate that applies longer than a promotional period, a low standard variable rate of interest might be better for you. These cards usually come with purchase rates between 9.90% and 13.49% (although it varies), which is much lower than other products which can have purchase interest rates of up to 22%. Although you'll still have to pay interest if you're carrying a balance between statement periods, the overall costs will be much lower than if you opted for a card with a high compounding interest rate.
Who are low interest credit cards best suited to?
- Good if: You want to pay off your purchases over time or often carry a balance on your card.
- Bad if: You’re an infrequent spender or always pay your balance in full by the end of the statement period, as you won't get much benefit from a 0% purchase rate if you don't usually carry a balance from month to month.
How much can I save with a 0% purchase rate credit card?
To help you decide if this type of credit card will be cheap for you, let's say you spent $2,000 on a credit card with an interest rate of 21.99% p.a. and planned to pay $200 off it each month. At this rate, it would take you 12 months to pay off the debt and cost you$229.66 in interest.
In comparison, if you spent $2,000 on a credit card with a promotional 0% p.a. on purchases for 12 months and made the same $200 payments each month, you'd clear the debt in 10 months and pay $0 in interest.
Compare credit cards offering 0% on purchases
Credit cards with interest-free days
Many credit cards offer interest-free days for each statement period, which usually range from up to 44 to 55 interest-free days. When you pay your balance in full by the statement due date, you can take advantage of interest-free days on purchases. If your card offers up to 55 interest-free days and you pay your balance in full on the first day of the statement, you'll get 55 interest-free days. If you pay it in full on the second day, you'll get 54 interest-free days and so on.
Interest-free days only apply to purchases, so you can't take advantage of this perk if you're carrying a balance from cash advance transactions such as ATM withdrawals and balance transfers.
Who are credit cards with interest-free days best suited to?
- Good if: You always repay your balance each month and make regular purchases on your credit card.
- Bad if: You often miss repayments or are unable to pay your balance in full.
Compare credit cards with up to 55 interest-free days on purchases
No annual fee credit cards
There are two different types of no annual fee credit cards. Some give you $0 annual fee for the life of the credit card, while others offer no annual fee in the first year. These credit cards are usually the cheapest option for people who pay back their card balance by the statement due date or who rarely use their cards.
Many no annual fee credit cards also feature up to 55 days interest-free. Pay back what you spend by the statement due date and a no annual fee credit card could cost you nothing to own and use. But take note that no annual fee credit cards often have higher interest rates than low rate credit cards. They can sometimes be light on value-adding features such as complimentary insurance or rewards points. However, cards with $0 annual fee for a promotional period usually have more features than cards with no annual fee for life.
Who are $0 annual fee credit cards best suited to?
- Good if: You rarely use your credit card or want to cut down on extra costs.
- Bad if: You want to take advantage of extra features such as rewards, complimentary insurance and concierge services.
0% balance transfer offers
A balance transfer credit card can be a great way to pay off an existing debt quicker and cheaper. These cards offer a promotional 0% interest rate (or reduced rate) when you move existing debt to the new account. The interest-free period can generally last from 12 to 30 months. At the end of the balance transfer promotional period, a standard interest rate will apply to any remaining debt from the balance transfer.
Keep in mind that a balance transfer credit card shouldn’t be used for purchases, which will accrue interest at the purchase rate for that card. Interest-free days also don’t apply if you’re carrying a balance transfer balance from month to month.
Who are 0% balance transfer credit cards best suited to?
- Good if: You want to consolidate several debts under one card or pay off a debt without the burden of interest.
- Bad if: You plan to use your card for purchases.
0% balance transfer credit cards comparison
Rewards credit cards with no annual fee
Most rewards credit cards come with high annual fees, but you can use these cards to earn points without paying any yearly fees. This means you don't have to worry about weighing up the value of the rewards you could redeem with the annual fee of the card. While some rewards cards offer $0 annual fee for life, others may only offer no annual fee for the first year. These cards may come with a high purchase rate, so they're best suited to cardholders who can repay their balance in full each month to avoid interest costs.
Who are $0 annual fee rewards credit cards best suited to?
- Good if: You want to earn rewards while cutting down on standard card costs.
- Bad if: You want to take advantage of competitive earn rates and bonus points offers.
Compare rewards credit cards with no annual fee
Credit cards with 0% foreign transaction fees
These credit cards are a cheaper option if you want to pay with plastic overseas. You can use a credit card with no foreign transaction fees to spend overseas or online with international retailers without paying the extra 2-4% currency conversion fee that most cards charge. To put this in perspective, if a card charged you 3% for a foreign transaction worth AUD$500, it would cost you an extra $15. These fees can quickly add up when you’re overseas, so 0% foreign fee cards offer a cheaper alternative.
Some of these credit cards also include complimentary international travel insurance, which could also help you save on costs if you're travelling or spending overseas.
Who are 0% foreign transaction fee credit cards best suited to?
- Good if: You regularly shop online with international merchants or have an overseas trip coming up.
- Bad if: You don’t regularly spend in foreign currencies and want to save on other standard fees such as interest rates on purchases.
Compare credit cards with no foreign transaction fees
The difference between a cheap credit card and an expensive one comes down to how you spend and repay your credit card balance. For example, a no annual fee rewards credit card represents good value for money if you can pay your balance back in full each month, while a low rate credit card will be cheaper if you carry debt. If you need help with your comparison of the cheapest credit cards, get in touch with us using the form at the bottom of this page. You can also check out our guide to the best credit cards to compare other options.
* The offers compared on this page are chosen from a range of products finder.com.au has access to and are not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of the terms "best" and "top" are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.
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