Credit cardholders could save $500 every year with low rate cards
Even while the lowest rate credit card could save the average credit cardholder $466 in fees and interest every year, there aren't enough options for consumers to choose from, according to the latest data collected by Mozo.
After looking at 171 credit cards from 57 providers to reveal the cheapest low rate cards on the market, Mozo found there are only six cards charging ongoing interest rates below 10%.
“While it’s great to see a handful of low rate cards providing great value, it’s not enough to drive competition or provide enough choice for consumers,” said Mozo Director Kirsty Lamont.
“The average credit card rate is 17.55% yet a huge 54% of cards have an interest rate over and above 18%”.
According to Mozo, the cheapest low rate credit card charges just 7.99% interest and costs $1,942 to maintain over five years. The average cost over five years is $4,273 while about a third of cards in the Mozo database cost more than $5,000 over that time. Mozo’s money experts found 10 low rate cards as offering great value but none of them are from a big bank.
“Credit Unions and Mutuals have really stepped up to the plate when it comes to low purchase rates and low annual fees, while the big banks don’t rate a mention,” said Lamont.
Mozo’s pick of Australia’s cheapest credit cards
| Card | Purchase rate | Annual fee | Stand-out features |
| Best Low Rate Credit Card | |||
| Quay Credit Union Visa Credit Card | 7.99% | $36* | Lowest cost of over 5 years ($1,942) |
| Best Fee Free Card with lowest interest rate | |||
| ME frank Credit Card | 9.99% | $0 | 55 interest free days |
| Best Platinum Credit Card with lowest interest rate | |||
| P&N Bank Platinum Visa Credit Card | 11.49% | $80 | Concierge, Travel Insurance, Extended Warranty, Purchase Protection benefits |
| Best Overseas Transaction Credit Card with lowest interest rate | |||
| Bankwest Zero Platinum MasterCard | 17.99% | $0 | 0% foreign exchange margin, 55 interest free days |
| *Waived in first year |
The above cards were recognised among others in Mozo’s Experts Choice Credit Card Awards but are singled out for having the lowest rate in their given category. Source: Mozo.com.au as at 14/9/15
“While premium and rewards credit cards have dominated the market in recent years, there is still a great need for low rate cards and we’d like to see a lot more of them,” said Lamont.
Top 5 Low Rate credit cards Versus the Big 4
Top 5 Low Rate Credit Cards | Ongoing Interest Rate | Annual Fee | Lowest rate cards from the Big 4 | Ongoing Interest Rate | Annual Fee | |
1. | Quay Credit Union Visa Credit Card | 7.99% | $36* | ANZ Low Rate Card | 13.49% | $58 |
2. | Community First Credit Union | 8.99% | $40 | Westpac Low Rate Card | 13.49% | $59 |
3. | ME frank Credit Card | 9.99% | $0 | Commonwealth Bank Low Rate Card | 13.49% | $59 |
4. | GC Mutual Bank | 9.99% | $50* | NAB Low Rate Card | 13.99% | $59 |
5. | Maritime, Mining & Power Credit Union Visa Credit Card | 10.12% | $60* | NA | NA | NA |
| *Waived in the first year. Source: Mozo.com.au as at 18/9/15 | ||||||
For a full list of Mozo’s Experts Choice Credit Card winners and award criteria, click here.
Credit card comparisons on Mozo - page last updated September 26, 2020
Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure.
CUA Low Rate Credit Card
11.99% p.a.
0% p.a. for 13 months and then 21.74% p.a.
$49 $0 in the first year
-
CompareDetailsCUA Low Rate Credit Card
11.99% p.a.
0% p.a. for 13 months and then 21.74% p.a.
$49 $0 in the first year
-
Go to siteCompareDetailsSt.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
-
CompareDetailsSt.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
-
Go to siteCompareDetails
Bankwest Zero Platinum Mastercard
Bankwest Zero Platinum Mastercard
17.99% p.a.
2.99% p.a. for 9 months and then 17.99% p.a.
$0
-
Go to siteCompareDetailsHot Deal$200 Cashback Offer (T&Cs apply)
Westpac Low Rate
13.74% p.a.
0% p.a. for 20 months and then 21.49% p.a. (1.00% balance transfer fee)
$59
-
CompareDetailsWestpac Low Rate
13.74% p.a.
0% p.a. for 20 months and then 21.49% p.a. (1.00% balance transfer fee)
$59
-
Go to siteCompareDetailsCUA Platinum Credit Card
19.99% p.a.
0% p.a. for 13 months and then 21.74% p.a.
$149 $0 in the first year
CUA Platinum Rewards
CompareDetailsCUA Platinum Credit Card
19.99% p.a.
0% p.a. for 13 months and then 21.74% p.a.
$149 $0 in the first year
CUA Platinum Rewards
Go to siteCompareDetails
^See information about the Mozo Experts Choice Credit Cards Awards
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