Switch to a low interest credit card

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.

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 November 18th, 2017
$
% p.a.

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Name Product Balance transfer rate (p.a.) Purchase rate (p.a.) Annual fee Amount Saved Product Description
St.George Vertigo Platinum - Online Offer
0% p.a. for 24 months
12.74% p.a.
$0 p.a. annual fee for the first year ($99 p.a. thereafter)
Platinum card benefits plus 0% p.a. for 24 months on balance transfers (with no BT fee) and $0 annual fee in the first year. Ends 13 December 2017.
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
0% p.a. for 18 months
20.74% p.a.
$129 p.a.
Earn 3 bonus Velocity Points per $1 for the first 3 months, a first year annual fee refund and a yearly $129 Virgin Australia Gift Voucher.
Westpac Low Rate Card - Online Only Balance Transfer Offer
0% p.a. for 24 months with 2% balance transfer fee
13.49% p.a.
$59 p.a.
Take advantage of 0% p.a. for 24 months on balance transfers with a 2% balance transfer fee when you apply online by 31 January 2018.
NAB Premium Card
0% p.a. for 20 months with 2% balance transfer fee
19.74% p.a.
$90 p.a.
Benefit from premium perks including travel insurance, Platinum Concierge Service plus 0% p.a. for 20 months on balance transfers.
Citi Platinum Credit Card - 100k Bonus Points
0% p.a. for 15 months with 1% balance transfer fee
20.99% p.a.
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
Earn 100,000 reward Points, take advantage of a long-term balance transfer offer and receive complimentary travel insurance.
ANZ Platinum Credit Card - Exclusive Offer
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)
Exclusive to finder, receive 0% p.a. interest on purchases for 3 months and 0% p.a. on balance transfers for 12 months with no balance transfer fee.
HSBC Platinum Credit Card
0% p.a. for 22 months with 2% balance transfer fee
19.99% p.a.
$129 p.a.
Earn 1 Reward Point per $1 of eligible spend and receive complimentary travel and purchase protection insurances.
Bankwest Breeze Classic Mastercard
0% p.a. for 13 months with 2% balance transfer fee
0% p.a. for 13 months (reverts to 12.99% p.a.)
$79 p.a.
Receive up to 55 days interest-free on purchases and free worldwide emergency card replacement.
St.George Vertigo Visa - Online Offer
0% p.a. for 18 months
13.24% p.a.
$0 p.a. annual fee for the first year ($55 p.a. thereafter)
Take advantage of 0% p.a. for 18 months on balance transfers (with no BT fee). Plus, $0 annual fee in the first year. Ends 13 December 2017.
Bank of Melbourne Vertigo Platinum
0% p.a. for 24 months with 2% balance transfer fee
12.74% p.a.
$99 p.a.
Get a range of complimentary insurance covers, access to a 24/7 concierge and up to 55 days interest-free on purchases.
NAB Low Fee Card
0% p.a. for 16 months with 2% balance transfer fee
19.74% p.a.
$30 p.a.
Receive complimentary purchase protection insurance, special offers from Visa Entertainment and up to 44 days interest-free on purchases.
Virgin Money Low Rate Credit Card
0% p.a. for 14 months
11.99% p.a.
$49 p.a.
Receive a discounted annual fee, $100 cashback when you meet the spend requirement and up to 44 days interest-free on purchases.
BankSA Vertigo Visa
0% p.a. for 18 months with 2% balance transfer fee
13.24% p.a.
$55 p.a.
Get up to 55 days interest-free on purchases and be protected by a 24/7 fraud monitoring service.
NAB Low Rate Platinum Card
4.99% p.a. for 6 months
0% p.a. for 9 months (reverts to 13.99% p.a.)
$100 p.a.
A platinum card that offers 0% p.a. for 9 months on purchases. Plus 4.99% p.a. on balance transfers for 6 months.
Citi Rewards Platinum Credit Card
0% p.a. for 24 months with 1.5% balance transfer fee
20.99% p.a.
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
Offers a long-term balance transfer. Earn extra points on eligible international spend, plus complimentary travel insurance.
Woolworths Everyday Platinum Credit Card
0% p.a. for 14 months
19.99% p.a.
$0 p.a. annual fee for the first year ($49 p.a. thereafter)
Receive a $50 eGift Card when you apply by 31 January 2018 and make an eligible purchase by 28 February 2018.
American Express Essential Credit Card
0% p.a. for 12 months with 3% balance transfer fee
14.99% p.a.
$0 p.a.
Get Smartphone Screen Insurance of up to $500 when you pay for your phone or contract with your Essential Credit Card.
American Express Explorer Credit Card
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
$395 p.a.
Receive a $400 Travel Credit every year and up to two entries per year to the American Express Lounge at Sydney International Airport.
Virgin Australia Velocity Flyer Card - Bonus Points Offer
0% p.a. for 18 months
20.74% p.a.
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
Earn up to 60,000 bonus Velocity Points in the first 3 months on eligible spend and enjoy a discounted annual fee of $64 for the first year.
Qantas Premier Platinum
0% p.a. for 15 months
19.99% p.a.
$149 p.a. annual fee for the first year ($299 p.a. thereafter)
Fly further with 75,000 bonus Qantas points, up to 2 Qantas Points per $1 spent and 2 yearly complimentary Qantas Club lounge invitations.

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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 November 18th, 2017
Name Product Purchase rate (p.a.) Interest Free Period Annual fee Balance transfer rate (p.a.) Product Description
St.George Vertigo Platinum - Online Offer
12.74% p.a.
Up to 55 days on purchases
$0 p.a. annual fee for the first year ($99 p.a. thereafter)
0% p.a. for 24 months
Platinum card benefits plus 0% p.a. for 24 months on balance transfers (with no BT fee) and $0 annual fee in the first year. Ends 13 December 2017.
Westpac Low Rate Card - Online Only Balance Transfer Offer
13.49% p.a.
Up to 55 days on purchases
$59 p.a.
0% p.a. for 24 months with 2% balance transfer fee
Take advantage of 0% p.a. for 24 months on balance transfers with a 2% balance transfer fee when you apply online by 31 January 2018.
St.George Vertigo Visa - Online Offer
13.24% p.a.
Up to 55 days on purchases
$0 p.a. annual fee for the first year ($55 p.a. thereafter)
0% p.a. for 18 months
Take advantage of 0% p.a. for 18 months on balance transfers (with no BT fee). Plus, $0 annual fee in the first year. Ends 13 December 2017.
Bankwest Breeze Classic Mastercard
0% p.a. for 13 months (reverts to 12.99% p.a.)
Up to 55 days on purchases
$79 p.a.
0% p.a. for 13 months with 2% balance transfer fee
Receive up to 55 days interest-free on purchases and free worldwide emergency card replacement.
Virgin Money Low Rate Credit Card
11.99% p.a.
Up to 44 days on purchases
$49 p.a.
0% p.a. for 14 months
Receive a discounted annual fee, $100 cashback when you meet the spend requirement and up to 44 days interest-free on purchases.
McGrath Pink Visa
4.99% p.a. for 8 months (reverts to 8.99% p.a.)
Up to 55 days on purchases
$40 p.a.
4.99% p.a. for 8 months
A basic, no-frills credit card with up to 55 days interest-free that donates half of the card's annual fee to the McGrath Foundation.
Bankwest Breeze Platinum Mastercard
0% p.a. for 13 months (reverts to 12.99% p.a.)
Up to 55 days on purchases
$99 p.a.
0% p.a. for 13 months with 2% balance transfer fee
Receive complimentary international travel insurance, extended warranty cover and 0% foreign transaction fees.
Bank of Melbourne Vertigo Visa Credit Card
13.24% p.a.
Up to 55 days on purchases
$55 p.a.
0% p.a. for 18 months with 2% balance transfer fee
Receive up to 55 days interest-free on purchases and the protection of Verified by Visa online purchases.
NAB Low Rate Platinum Card
0% p.a. for 9 months (reverts to 13.99% p.a.)
Up to 55 days on purchases
$100 p.a.
4.99% p.a. for 6 months
A platinum card that offers 0% p.a. for 9 months on purchases. Plus 4.99% p.a. on balance transfers for 6 months.
ANZ Low Rate
12.49% p.a.
Up to 55 days on purchases
$58 p.a.
With a low minimum credit limit of $1,000, this no frills card allows you to add up to 3 additional cardholders for $0 and has Mastercard PayPass.
Bank of Melbourne Vertigo Platinum
12.74% p.a.
Up to 55 days on purchases
$99 p.a.
0% p.a. for 24 months with 2% balance transfer fee
Get a range of complimentary insurance covers, access to a 24/7 concierge and the convenience of Visa payWave contactless technology.
Virgin Australia Velocity Flyer Card - 0% Interest Offer
0% p.a. for 12 months (reverts to 20.74% p.a.)
Up to 44 days on purchases
$129 p.a.
0% p.a. for 6 months
Until 30 November 2017, save with 0% p.a. on purchases for 12 months. Plus, up to 0.66 Velocity Points per $1 spent.
American Express Essential Credit Card
14.99% p.a.
Up to 55 days on purchases
$0 p.a.
0% p.a. for 12 months with 3% balance transfer fee
Get Smartphone Screen Insurance of up to $500 when you pay for your phone or contract with your Essential Credit Card.
ANZ Low Rate Platinum
11.49% p.a.
Up to 55 days on purchases
$99 p.a.
Get $250 back to your new ANZ Low Rate Platinum when you spend $500 on eligible purchases within the first 60 days from card approval.
bcu Classic Credit Card
11.80% p.a.
Up to 55 days on purchases
$45 p.a.
Enjoy a competitive interest rate of 11.8% p.a. on purchases, plus up to 55 days interest-free on purchases.
Greater Bank Visa Credit Card
11.95% p.a.
Up to 55 days on purchases
$40 p.a.
Same low 11.95% p.a. interest rate on purchases and cash advances, plus, up to 55 interest-free days on purchases.
NAB Low Rate Credit Card
0% p.a. for 6 months (reverts to 13.99% p.a.)
Up to 55 days on purchases
$59 p.a.
4.99% p.a. for 6 months
This card offers a low introductory rate of 0% p.a. for 6 months on purchases. Plus 4.99% p.a. on balance transfers for 6 months.
BankSA Vertigo Visa
13.24% p.a.
Up to 55 days on purchases
$55 p.a.
0% p.a. for 18 months with 2% balance transfer fee
A no-frills Visa with the protection of a zero liability policy and a 24/7 fraud monitoring service.
Australian Military Bank Low Rate Visa Credit Card
10.99% p.a.
Up to 55 days on purchases
$49 p.a.
0% p.a. for 12 months
Enjoy up to 55 interest-free days on purchases, add an additional cardholder for $0 and enjoy the convenience of Visa payWave.
Bankwest Low Rate Business Mastercard
0% p.a. for 12 months (reverts to 11.99% p.a.)
Up to 55 days on purchases
$99 p.a.
Offers an introductory 0% p.a. interest rate on purchases for 12 months. Plus, add up to 3 additional cardholders for $0.
Westpac Lite Card
9.90% p.a.
Up to 45 days on purchases
$108 p.a.
Keep credit card costs low with a maximum credit limit of $4,000 and no foreign transaction fees.

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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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