If your current credit card provider is charging you a staggering interest rate, now could be the perfect time in the lead up to Christmas to consider switching to some plastic with a low rate attached.
Our database shows the average credit card rate is currently sitting at a high 17.43% and this jumps up even higher for Big 4 credit cards which average 18.91% with an average annual fee of $139.
By comparison, mutuals which are customer owned banks have a much lower average rate of just 13.73% and less than half the annual fee of $58. The reason mutuals are able to offer much lower rates and fees is because they pass profits back to customers not shareholders.
So how much could you save by switching to one of these customer owned banks?
Well when we crunched the numbers we found the average Australian cardholder would save an impressive $466 in fees and interest each year (more than enough to pay for your Christmas gifts and lunch!) by switching to Quay Credit Union’s Visa Credit Card with the lowest ongoing purchase rate in the market of 7.99% with a $36 annual fee.
Here’s a quick rundown of the credit cards with the lowest ongoing purchase rates in our database:
Top low rate credit cards
|Credit card||Ongoing interest rate||Annual fee|
|Quay Credit Union Visa Credit Card||7.99%||$36|
|Community First Credit Union McGrath Pink Visa||8.99%||$40|
|Bank Australia Low Rate Visa||9.89%||$59|
|ME frank Credit Card||9.99%||$0|
|G&C Mutual Bank Low Rate Visa Credit Card||9.99%||$50|
|Intech Credit Union Titanium 55 Credit Card||9.99%||$46|
|Victoria Teachers Mutual Bank Visa Platinum Credit Card||9.99%||$84|
Lowest rate cards from Big 4
|Credit cards||Ongoing interest rate||Annual fee|
|ANZ Low Rate Card||13.49%||$58|
|Westpac Low Rate Card||13.49%||$59|
|Commonwealth Bank Low Rate Card||13.49%||$59|
|NAB Low Rate Card||13.99%||$59|
Tips for using a credit card the right way
Once you’ve got some new plastic in your pocket, here are some thrifty tactics to help you avoid the bite of credit card debt:
- Steer clear of cash advances. If you use your credit card to withdraw cash from an ATM you won’t be charged the low purchase rate, instead you’ll be slapped with the cash advance rate, which can soar near the 20% mark.
- Pay the balance in full. Don’t just pay the minimum payment amount because to live interest free you’ll need to pay the entire balance in full and on time each month.
- Set up automatic payments. The savviest way to ensure you never get behind on your credit card payments is by setting up a direct debit from your bank account to the credit card provider.