Save money on purchases and transactions with a low interest rate credit card
Choosing a credit card with a lower interest rate can save you a considerable amount of money in the long-run. Compare and find a credit card with lower interest to save money today.
Comparison of low interest rate credit cards
Rates last updated April 24th, 2017.
- ANZ Low Rate Platinum
New balance transfer offer of 0% p.a. for 16 months with 2% balance transfer fee.
March 15th, 2017
- ANZ Low Rate
$100 cashback and intro purchase rate have been discontinued. New BT offer of 0% p.a. for 16 months.
March 15th, 2017
- Virgin Money Low Rate Credit Card
Balance transfer period has changed from 6 months to 12 months and is valid until 15 June 2017.
April 3rd, 2017
How do credit cards with a cheap interest rate work?
Credit cards with low-interest rates work in the same way as a regular credit card. You make purchases using your card, receive your statement, and then pay part or all of the funds due.
These cards have a few general characteristics, although because of the ever-evolving market, these aren’t hard and fast rules:
- Lower annual fees
- No rewards programs
- Higher number of interest-free days
- Usually aren’t platinum cards.
Before you start looking at these types of cards ask yourself:
- Do you regularly pay interest on your balances each month?
Don’t simply go for the card with the lowest interest rate if you pay your card off in full each month. Cards with low or no annual fees can be a better alternative in this case.
- Would a balance transfer be more useful?
The balance transfer period, how much you can actually transfer, and if you transfer from one particular lender to the other.
How to compare credit cards with low-interest rates
Compare credit cards with low-interest rates by looking at the factors listed below:
- Interest rate. The main reason why you probably want a credit card with a low-interest rate is because you’re going to be paying interest each month. Ensure this figure is reasonable in conjunction to the annual fee.
- The annual fee. In addition to the interest rate, the annual fee will be an indicator of how much you’ll be paying each year. You might benefit more from a card with no annual fees.
- Current deals. Many credit cards offer low purchase rate or balance transfer rate deals as an incentive. These can be useful depending on how you’re going to use your card. If you’re getting a low interest rate card to make a big purchase when you first get your card, a low or 0% purchase rate deal might be a good option.
- Hidden fees and charges. If you travel overseas often, using your card to make purchases in foreign currencies can incur foreign transaction fees and ATM withdrawal fees. You can also be charged fees for cash advances, late payment and more. If you're likely to incur a number of these, you might want to find a card with lower foreign transaction fees.
- Rewards programs. Some cards with low purchase rates may also come with a rewards program. These can add to the cost of the card through higher annual fees, so calculate the value of any rewards you’re likely to receive in a year and ensure it equals or exceeds the annual fees you’re going to pay.
- Interest free days. Credit cards on the lower side of the interest rate spectrum are no different to regular credit cards. Some cards will come with no interest free days, whereas others will come with 55, and yet some will sit somewhere in between. How many days you need to pay each statement off depends on you.
Pros and Cons of credit cards with the cheapest interest rates
- Pay less in interest
- Pay less in annual fees
- Most give you 55 days interest-free
- Uncomplicated - it’s just you, your card and your purchases
- No rewards programs
- No platinum benefits e.g. concierge, discounts,
- complimentary insurances
Things to avoid with a credit card with a cheap interest rate
As always, credit cards require discipline, and even if a credit card has a low interest rate this rule still applies. Here are some other things to avoid with this type of card:
- Making needless purchases. Unless you have a 0% interest deal on your card, any purchase that will incur interest will cost you more than the original price. Interest, no matter how small, is something you want to avoid having to pay.
- Paying for features you won’t use. While a rewards program may sound good, if you're not going to be using the card for regular purchases you could just end up paying higher annual fees for a feature of little benefit.
- Take note of your payment pattern. Likewise, if you’re paying a higher annual fee for a card with 55 days interest-free, and you pay your balances off the next day then again this feature may not be worth it.