Why pay more when you don't have to?
Have you just received a big credit card bill? You're in good company – the average credit card debt rose to a five-year high of $3273 in June. But there's no need to despair, there are plenty of low-rate credit cards that can really speed up the process of paying down the debt once and for all.
Standard and rewards credit cards from ANZ, CBA, NAB and Westpac still charge up to 20% interest, so unless you enjoy paying more than you have to, now's a good time to find a better rate.
In this article:
Best low-interest credit cards
Note: We urge you to consider the financial risk if you can't afford to pay the balance on your credit card right away.
Best low-interest credit cards*
Best low interest rate credit cards (by annual fee)
- American Express, Low rate, 8.99%, $0 annual fee
- Community First, McGrath Pink Visa, 8.99%, $40 annual fee
- Easystreet, Easy low rate Visa, 8.99%, $40 annual fee
Best low-rate credit cards with 0% balance transfer offers (by annual fee)
- American Express, Low rate , 0% for 12 months reverts to 8.99%, $0 annual fee
- Education Community Visa, 0 % for six months reverts to 9.99%, $0 annual fee
- Bank First, Visa Platinum, 0 % for six months reverts to 9.99%, $99 annual fee
Big Banks' low-rate credit cards compared
- ANZ, Low rate, 12.49%, $58 annual fee
- Commbank, Essentials, 9.90%, $60 ($24 autopay)
- Commbank, Low rate, 13.24%, $58 annual fee
- NAB, Low rate, 13.99%, $59 annual fee
- Westpac, Lite, 9.90%, $108 annual fee
- Westpac, Low, 13.49%, $58 annual fee
*By purchase interest rate, last updated 27 August 2018.
Do you need a new credit card?
You might not have to switch credit cards to get a better rate. Sometimes all it takes is a phone call to your credit card provider. For example, the big banks all offer low-rate cards that charge less than 14% interest, a rate cut of about six percent. CBA and Westpac even have cards that are nearly as good as the best low-rate credit cards on the market and American Express offers one of the best.
Credit card traps
Interest rates are arguably the most important consideration when it comes to picking a credit card, but other factors should be taken into account. The top things to consider are:
Rates for cash advances
A cash advance on a credit card is a really bad idea as the interest applies immediately and can range up to 29.49% on some cards (Latitude, formerly GE Money – Go MasterCard).
For example, the ANZ low rate card charges 21.74% interest on cash advances.
Note that some credit cards, like the CBA Essentials and Westpac Lite credit cards, don't offer cash advances.
Your low-interest card can really lose its sparkle if you get hit with high annual fees. They can range from $0 to $108 for the cards in our list, so be sure to check before you apply for a new card.
Cards that offer cheap balance transfer rates often charge high rates if you don't pay the balance off within the promotional period. Also watch out for balance transfer fees. Do not use the card for other purchases during the balance transfer period as interest-free days may not apply until you have paid off the full balance – including the balance transfer amount.
Most low-rate credit cards offer interest-free days. Yours should too.
Late payment fees
These should be reasonable, not punitive. They can range from $0 to $35.
They range from $0 to $40.