Switch to a low interest credit card

Information verified correct on December 11th, 2016

Discover how you can get out of debt sooner by switching to a credit card with a lower interest rate.

If you have credit card debt, paying high interest can make it difficult to get out of the red. A balance transfer to a card with a lower interest rate could help you save money on interest charges and pay your credit card debt off sooner rather than later.

There is a wide range of balance transfer deals out there, many with a 0% promotional interest rate period. This guide explains how balance transfers work, examines the different cards that offer ongoing low interest rates and discusses the other factors to consider before applying for a new card. If you decide this option is right for you, we also outline the steps you need to take to switch to a low interest credit card.

St.George Vertigo Visa

Low Interest Credit Card from St.George

St.George offer a low interest credit card called the St.George Vertigo Visa. It will give you a low interest rate on both purchases and balance transfers, and is a great card to consider if you are looking to switch credit cards.

  • $55 p.a. annual fee
  • 1% p.a. for 12 months (reverts to 13.24% p.a.) on purchases
  • 0% p.a. for 18 months on balance transfers
  • Cash Advance Rate of 21.49% p.a.
  • Up to 55 days interest free

Choose your type of low interest credit card

How do balance transfers work?

A balance transfer is designed to save you money on your credit card interest repayments by allowing you to move your existing debt to a new card with a low promotional interest rate. Say you have a $5,000 credit card debt accruing interest at 20% p.a. If you apply for a credit card offering a 0% interest rate on balance transfers for 6 months, you could save up to $487 in interest repayments during the introductory period.

At the end of the introductory period, the promotional interest rate will revert to the purchase or cash advance rate, depending on the credit card. Depending on your circumstances, you could then do a second balance transfer to get another introductory rate on your credit card debt. If you decide to take this path, keep in mind that applying for these offers regularly could have a negative impact on your credit rating and may lead to declined applications.

Comparison of Balance Transfer Credit Cards

Rates last updated December 11th, 2016
$
% p.a.

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Balance transfer rate (p.a.) Purchase rate (p.a.) Annual fee Interest Saved
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Offers 0% p.a. interest rate on balance transfers for 18 months to help you manage your existing credit card balance with a reduced annual fee in the first year.
0% p.a. for 18 months 20.74% p.a. $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
0% p.a. for 15 months 19.99% p.a. $149 p.a. Go to site More info
ANZ Platinum Credit Card - Exclusive Offer
Receive a low introductory offer of 0% p.a. on purchases for 3 months and 0% p.a. on balance transfers for 12 months. Also, enjoy an annual fee waiver in the first year.
0% p.a. for 12 months 0% p.a. for 3 months (reverts to 19.74% p.a.) $0 p.a. annual fee for the first year ($87 p.a. thereafter) Go to site More info
NAB Low Rate Credit Card
The NAB Low Rate Card offers 0% p.a. on purchases and balance transfers for 15 months. This card also comes with a low annual fee.
0% p.a. for 15 months with a one off 3% balance transfer fee 0% p.a. for 15 months (reverts to 13.99% p.a.) $59 p.a. Go to site More info
NAB Low Fee Card
Enjoy a low introductory rate of 0% p.a. on balance transfers and purchases for 15 months.
0% p.a. for 15 months with a one off 3% balance transfer fee 0% p.a. for 15 months (reverts to 19.74% p.a.) $30 p.a. Go to site More info
St.George Vertigo Visa
Introductory offer of 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months on purchases, plus a low annual fee.
0% p.a. for 18 months 1% p.a. for 12 months (reverts to 13.24% p.a.) $55 p.a. Go to site More info
St.George Vertigo Platinum
A platinum card with a balance transfer offer of 0% p.a. for 18 months and an introductory purchase offer of 1% p.a. for 12 months with an annual fee waiver for the first year.
0% p.a. for 18 months 1% p.a. for 12 months (reverts to 12.74% p.a.) $99 p.a. Go to site More info
Virgin No Annual Fee Credit Card
Enjoy a long term balance transfer plus a $100 cashback offer (spend criteria applies) and never pay an annual fee for this card.
0% p.a. for 18 months with 2% balance transfer fee 18.99% p.a. $0 p.a. Go to site More info
Westpac Low Rate Card
A no frills credit card with an introductory rate of 0% p.a. for 16 months on balance transfers and 1% p.a. for 12 months on purchases.
0% p.a. for 16 months 1% p.a. for 12 months (reverts to 13.49% p.a.) $59 p.a. Go to site More info
American Express Essential Credit Card
Receive a $50 credit on eligible spend and get Smartphone screen insurance combined with a no annual fee for life card. Also enjoy a 0% p.a. balance transfer rate for 12 months.
0% p.a. for 12 months with 1% balance transfer fee 14.99% p.a. $0 p.a. Go to site More info
Bank of Melbourne Vertigo Visa Credit Card
Enjoy a low annual fee combined with 0% p.a. balance transfer offer for 18 months and 1% p.a. for up to 12 months on purchases.
0% p.a. for 18 months 1% p.a. for 12 months (reverts to 13.24% p.a.) $55 p.a. Go to site More info
Bank of Melbourne Vertigo Platinum
A platinum card with a low balance transfer offer of 0% p.a. interest for 18 months and 1% p.a. for 12 months on purchases combined with complimentary insurance covers.
0% p.a. for 18 months 1% p.a. for 12 months (reverts to 12.74% p.a.) $99 p.a. Go to site More info
BankSA Vertigo Visa
A low interest rate card with a low annual fee, a long term balance transfer offer of 0% p.a. for 18 months and an introductory offer of 1% p.a. for 12 months on purchases.
0% p.a. for 18 months 1% p.a. for 12 months (reverts to 13.24% p.a.) $55 p.a. Go to site More info
Citi Simplicity Card
Take advantage of the 0% p.a. for 9 months offer on balance transfers, a low interest rate on purchases, an annual fee waiver for life, plus 5% cashback on retail purchases.
0% p.a. for 9 months 19.99% p.a. $0 p.a. Go to site More info

What about cards with low ongoing interest rates?

Low interest rate credit cards offer competitive standard variable purchase rates that are lower than many other cards. Unlike low promotional rates, this type of card gives you ongoing low interest rates that could be beneficial if you regularly carry a balance.

Low rate credit cards can also feature promotional purchase rate offers and balance transfer offers. So if you have a card debt that will take longer than 12 months to pay off, you may want to consider transferring it to a card that offers a promotional balance transfer rate and a low ongoing interest rate. This could help you save money on interest charges when paying down debt over several years.

Comparison of Low Interest Rate Credit Cards

Rates last updated December 11th, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee Interest Free Period
ANZ Low Rate Platinum Credit Card
$250 Back plus 0% p.a. for the first 6 months on purchases from approval.
0% p.a. for 6 months (reverts to 13.49% p.a.) $99 p.a. Up to 55 days on purchases Go to site More info
NAB Low Fee Card
Enjoy a low introductory rate of 0% p.a. on balance transfers and purchases for 15 months.
0% p.a. for 15 months (reverts to 19.74% p.a.) 0% p.a. for 15 months with a one off 3% balance transfer fee $30 p.a. Up to 44 days on purchases Go to site More info
ME Bank frank Credit Card
A low interest rate on purchases and cash advances with no annual fee charge.
11.99% p.a. $0 p.a. Up to 55 days on purchases Go to site More info
American Express Essential Credit Card
Receive a $50 credit on eligible spend and get Smartphone screen insurance combined with a no annual fee for life card. Also enjoy a 0% p.a. balance transfer rate for 12 months.
14.99% p.a. 0% p.a. for 12 months with 1% balance transfer fee $0 p.a. Up to 55 days on purchases Go to site More info
NAB Low Rate Credit Card
The NAB Low Rate Card offers 0% p.a. on purchases and balance transfers for 15 months. This card also comes with a low annual fee.
0% p.a. for 15 months (reverts to 13.99% p.a.) 0% p.a. for 15 months with a one off 3% balance transfer fee $59 p.a. Up to 55 days on purchases Go to site More info
St.George Vertigo Visa
Introductory offer of 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months on purchases, plus a low annual fee.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Up to 55 days on purchases Go to site More info
Westpac Low Rate Card
A simple low interest rate card featuring a low ongoing rate on purchases, up to 55 days interest-free on purchases and a low annual fee.
1% p.a. for 12 months (reverts to 13.49% p.a.) 0% p.a. for 16 months $59 p.a. Up to 55 days on purchases Go to site More info
St.George Vertigo Platinum
A platinum card with a balance transfer offer of 0% p.a. for 18 months and an introductory purchase offer of 1% p.a. for 12 months with an annual fee waiver for the first year.
1% p.a. for 12 months (reverts to 12.74% p.a.) 0% p.a. for 18 months $99 p.a. Up to 55 days on purchases Go to site More info
Coles Low Rate MasterCard
A low rate MasterCard with a competitive rate on purchases and a low annual fee.
12.99% p.a. 0% p.a. for 6 months $49 p.a. Up to 62 days on purchases Go to site More info
Bank of Melbourne Vertigo Visa Credit Card
Enjoy a low annual fee combined with 0% p.a. balance transfer offer for 18 months and 1% p.a. for up to 12 months on purchases.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Up to 55 days on purchases Go to site More info
Bank of Melbourne Vertigo Platinum
A platinum card with a low balance transfer offer of 0% p.a. interest for 18 months and 1% p.a. for 12 months on purchases combined with complimentary insurance covers.
1% p.a. for 12 months (reverts to 12.74% p.a.) 0% p.a. for 18 months $99 p.a. Up to 55 days on purchases Go to site More info
Australian Military Bank Low Rate Visa Credit Card
Enjoy a low interest rate of 10.99% p.a. on purchases, combined with a balance transfer offer of 0% p.a. for 12 months and a low annual fee.
10.99% p.a. 0% p.a. for 12 months $49 p.a. Up to 55 days on purchases Go to site More info
ANZ Low Rate
$100 Back plus 0% p.a. for the first 6 months on purchases from approval.
0% p.a. for 6 months (reverts to 13.49% p.a.) $58 p.a. Up to 55 days on purchases Go to site More info
BankSA Vertigo Visa
Enjoy a low balance transfer offer of 0% p.a. for 18 months and a low ongoing purchase rate from BankSA.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Up to 55 days on purchases Go to site More info
Citi Clear Platinum Card
Enjoy 0% p.a. for 9 months interest-free purchasing and 0% p.a. for 9 months on balance transfers.
0% p.a. for 9 months (reverts to 14.99% p.a.) 0% p.a. for 9 months $99 p.a. Up to 55 days on purchases Go to site More info
BankSA Vertigo Platinum
Experience Platinum card benefits with complimentary insurance policies and 24/7 Visa Platinum Concierge Service. Get 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months if you apply by 4 January 2017.
1% p.a. for 12 months (reverts to 12.74% p.a.) 0% p.a. for 18 months $99 p.a. Up to 55 days on purchases Go to site More info

If you decide to transfer your balance to a card with a low standard variable purchase rate, be sure to check the revert rate at the end of the balance transfer promotional period. The balance transfer rate will revert to either the purchase or the cash advance rate, and the cash advance rate of a low rate credit card can be as high as 22% p.a., which is not ideal if you still have debt to pay off.


Other factors to consider

Before switching to a low interest credit card, make sure you consider the following factors:

  • Standard interest rates. These are the ongoing rates of interest that apply after the introductory promotional period has finished. Be sure to check both the purchase rate and the cash advance rate, as well as which rate will apply to any remaining balance on the card.
  • Annual fees. Annual fees for cards with low ongoing interest rates can range from $0 to $99, but can also be over $400 for some premium cards with balance transfer offers. This is an ongoing cost you will have to pay for most cards, so remember to compare a range of options to find the features you want for an annual fee you’re willing to pay.
  • Balance transfer fees. Some credit card companies charge a one-off balance transfer fee, usually worth around 1-2% of the balance transfer amount. For example, if you transferred a debt of $5,000 to a card that charged a 1% balance transfer fee, this fee would cost you $50. Make sure you read the balance transfer requirements and factor this cost into your comparison so you can choose a card that’s affordable for you.
  • Maximum transfer amount. Credit card companies put a cap on the maximum amount you can balance transfer. The maximum balance transfer amount ranges from 75-100% of your approved credit limit and is subject to application and lending criteria for individual cards.
  • Interest-free periods for purchases. You’re ineligible for interest-free days on purchases if you’re carrying a balance on your card. This means any new purchases you charge to the account will accrue interest right away.
  • Complimentary extras. Many low rate credit cards also offer value-adding features such as complimentary travel insurance, purchase protection insurance or even rewards. These features usually attract a higher annual fee, so they are only really worth it if you regularly make use of them.
  • Late payment fees. If you don’t pay off at least the minimum of your balance every month, you could be charged a fee of around $10-$30. Late payments will also result in a listing on your credit file, which could negatively affect your credit score.

Steps you can take to switch into a low interest credit card

woman-on-couch-with-laptop-and-creditcard

Once you’ve compared cards and found one you’d like to switch to, follow these steps to complete the process:

1. Find out your current balance. Work out how much credit card debt you need to transfer to pay off your credit card(s).

2. Check the application requirements. Assess whether you’re eligible for the balance transfer credit card. Some cards require a minimum income amount and also list balance transfer limits, which will be important when you’re preparing to make the switch.

3. Apply for the card. Provide as many details as possible in all sections of the application, including your personal information, employment information and assets and liabilities. In order to receive the balance transfer offer, you usually have to request it when you apply. There will be a section on the form that prompts you to enter the details of your existing debt, including the account name and number, provider details and the amount of debt you wish to transfer to the new card.

4. Activate the card. Balance transfers can’t be fully processed until the new credit card is activated, so once you’re approved and have received your new card, follow the steps provided for activation. Also remember to continue making any payments on your existing card if they are due before the balance is transferred.

5. Wait for the balance transfer to be finalised. Your new bank must contact and buy your credit card debt from your old bank. This process usually takes around 10 business days but could be more or less depending on the issuer and your circumstances.

6. Close your old account and start paying off the new one. It’s your responsibility to close your old credit card account after you’ve completed a balance transfer. This will help you to save on credit card fees and reduce the temptation to spend more on credit.

When you want to switch to a low interest rate credit card, it’s important to have an understanding of how long that rate applies for. Some cards offer promotional low interest rates, others offer ongoing low purchase rates and there are some that provides both promotional and ongoing low rates. But whatever you’re looking for, remember to consider the card’s annual fee so that you can find the right standard features and promotional offers for an acceptable price. If you need help comparing credit cards, ask us a question using the form below and a member of our team will be in touch.

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