Why switching to a low rate credit card could save cardholders millions

Ceyda Erem

09 Jul 2018

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A recent report by ASIC has revealed that one in six Aussies have fallen into a ‘debt trap’ because of their credit cards.

As of June 2017, the country has a total outstanding credit card debt of $45 billion, $31.7 billion of which was accruing interest.

One of the big reasons ASIC believes Aussies are falling into a debt trap is because they are biting off more than they can chew with their plastic - often opting for cards with higher interest rates.

And according to ASIC, these cardholders could have saved themselves over $621 million in 2016-17, simply by using a low rate credit card with an interest rate of around 13%.

So if you’re now thinking you need to shake up your plastic by switching to a low rate credit card, check out some of these low rate deals below.

5 low rate credit card options - rates updated daily

  • Promoted

    Bankwest Breeze Mastercard

    0% p.a. for 6 months and then 9.90% p.a.

    9.90% p.a.

    $79 $0 in the first year

    0% purchase rate for the first 6 months, then moving to 12.99% thereafter, great for consolidating debt. 0% p.a. on balance transfers for 26 months (2% BT fee applies)

    • 0% p.a. for 6 months and then 9.90% p.a.

    • $79 $0 in the first year

    • 9.90% p.a.

    • 55

    • 21.99% p.a.

    • 2%, Min $4.00

    Read our Mozo Review to learn more about the Breeze Mastercard

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  • Promoted

    Virgin Money Virgin Australia Velocity Flyer Card - Purchase Rate and Balance Transfer Offer

    0% p.a. for 6 months and then 20.99% p.a.

    0% p.a. for 14 months then 20.74% p.a.

    $129 $64 in the first year

    Receive a $129 Virgin Australia gift voucher each year. 0.0% p.a. on purchases for up to 14 months. $64 annual fee in the first year ($129 after)
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    • 0% p.a. for 6 months and then 20.99% p.a.

    • $129 $64 in the first year

    • 0% p.a. for 14 months then 20.74% p.a.

    • 55

    • 20.99% p.a.

    • 2.7%, Min $2.70

    • Points are credited to the Velocity Frequent Flyer program.

    Details Close

  • Promoted

    Heritage Bank Gold Low Rate

    No current offer

    11.30% p.a.

    $0

    Heritage Bank Gold Low Rate Credit Card offers a 11.30% purchase and cash advance rate and comes with no annual fee.

    • No current offer

    • $0

    • 11.30% p.a.

    • 0

    • 11.30% p.a.

    • 2%, Min $2.50

    Read our Mozo Review to learn more about the Gold Low Rate

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  • Promoted

    Bankwest Breeze Platinum Mastercard

    0% p.a. for 6 months and then 9.90% p.a.

    9.90% p.a.

    $99 $0 in the first year

    Streamline your budget with a low ongoing interest rate, up to 55 interest free days and 0% p.a. on balance transfers for 6 months. Plus, travel with free international travel insurance for you and your family by buying your tickets on your card.

    • 0% p.a. for 6 months and then 9.90% p.a.

    • $99 $0 in the first year

    • 9.90% p.a.

    • 55

    • 21.99% p.a.

    • 2%, Min $4.00

    Read our Mozo Review to learn more about the Breeze Platinum Mastercard

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What to look for in a low rate credit card

While we all love the sound of a low rate card, there are a number of other features you’ll need to compare if you’re thinking about picking one up, like:

  • Low fees - Since you’re already after a budget-friendly card, it makes no sense for you to be paying a hefty annual fee. Aim to find a card that has both a low rate and low annual fee.

  • Interest-free days - Something else you might notice are ‘interest-free’ days, which can be a major way to reduce cards costs. If you pay off your balance in full every month, you’ll pay no interest at all on cards that offer an interest-free period.

  • Cash advance costs - While some merchants will only accept cash, even though you’ve got a low rate credit card on your side, you should still avoid withdrawing money from ATMs with your plastic.

  • Rewards options - There are usually less reward options out there for low rate cards, however there are some that offer perks like gift vouchers, retail discounts and even free flights.

  • Introductory offers - Many credit cards will have introductory offers, like 0% interest for a few months. Just keep in mind that most lenders will still require you to pay the minimum every month to keep your interest-free period. Another thing to remember is the revert rate - the rate your card will revert back to once the interest-free period ends -  which you’ll want to make sure is low.

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