Are no interest credit cards worth it?

By Ceyda Erem ·

If you like to keep up with the latest in personal finance, then you might know that interest-free credit cards are among some of the latest offers to hit the market. As the name suggests, these are credit cards that feature no interest on an ongoing basis.   

In early September, NAB launched its Straight Up credit card and was shortly followed by CommBank’s Neo credit card, both resembling a Buy Now, Pay Later (BNPL) service. 

But should you be picking one up in the near future or are you better off sticking with a low rate credit card? To help you make a decision, we’ll look at the pros and cons, plus how they stack up to low rate and 0% introductory rates credit cards.

No interest credit cards vs low rate credit cards: what’s the better deal?

Besides having no interest rate, no interest cards also come with a few different features to the standard credit card. For instance, both the Straight Up and Neo credit card have a monthly fee, and fixed monthly payment, depending on your chosen credit limit. 

Low rate credit cards are credit cards that typically have an interest rate below 12%, a low annual fee and other charges. 

Although never having to pay interest might sound like a dream, the monthly fees have the potential to add up over time. For example, if you were to choose the $3,000 credit limit with the Straight Up card, you’d pay a $20 monthly fee - that’s $240 a year.  

By comparison, the average annual fee for a credit card below 12% is only $47.  

Let’s say you’ve racked up a balance of $1,100 on a no interest credit card, which has a $3,000 limit and $20 monthly fee and a minimum $110 repayment: it would take you 10 months to pay it off completely with a total spend of $1300

However if you were to have the same balance with the G&C Mutual Bank Low Rate Credit Card, you’d have the lowest purchase rate in the Mozo database of 7.49% and a $50 annual fee. According to the Mozo Credit Card Debt Repayments calculator, while it would still take you 10 months to pay off, you’d only pay an extra $83 in interest and fees - a difference of $117.

Which type of credit card is the right option for me?

Every Aussie has different spending needs, so it makes sense to compare all your options rather than picking the first offer. Some of your options for budget-friendly spending are:

  • Low rate credit card: These are great cards for everyday spending, as they allow you to carry a balance without costing a fortune. You might also consider a low rate credit card if you’re someone not fussed with earning rewards points or having flashy perks. 
  • 0% introductory rate credit card: If you’ve got a large purchase coming up, then opting for a 0% introductory credit card could be a savvy way to avoid paying interest. Just keep in mind that 0% rate on these cards do expire after a certain period of time, reverting to a rate that may be higher than 12%. 
  • No interest credit card: You might consider a no interest credit card if you don’t like the idea of having any personal debt and can afford to make the minimal repayments every month. Just keep in mind that the monthly fee can add up significantly over time.

Ready to start shopping around? Then make your next stop our low rate credit card comparison table or get started with the offers below!

Compare low rate credit cards - page last updated October 17, 2020

Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure.

  • Thumbnail icon for CUA
    CUA Low Rate Credit Card

    11.99% p.a.

    0% p.a. for 20 months and then 21.74% p.a.

    $49 $0 in the first year

  • Hot Deal$200 Cashback Offer (T&Cs apply)

    Thumbnail icon for Westpac
    Westpac Low Rate

    13.74% p.a.

    0% p.a. for 20 months and then 21.49% p.a. (1.00% balance transfer fee)


  • Thumbnail icon for St.George
    St.George Vertigo

    0% p.a. for 7 months then 13.99% p.a.

    0% p.a. for 22 months and then 21.49% p.a. (1.50% balance transfer fee)

    $55 $0 in the first year

  • Thumbnail icon for ME
    ME frank Credit Card

    11.99% p.a.

    No current offer



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Ceyda Erem
Ceyda Erem
Money writer

Ceyda Erem is Mozo’s authority on Energy, as well as having broader expertise as a personal finance writer. She loves to put her researching and writing talents into stories that help our readers to make more informed financial choices, whether that’s about finding the best energy deal or writing about the latest sneaky bank tricks. Ceyda has a Bachelor of Arts (major in writing) from Macquarie University.