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

Ceyda Erem   |   09 Jul 2018

redactor/hero-images/369/cc_content.jpg

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

  • Bankwest Breeze Platinum Mastercard

    0% p.a. for 13 months and then 12.99% p.a. (2.00% balance transfer fee)

    0% p.a. for 13 months then 12.99% p.a.

    $99

    Complimentary international travel insurance for yourself and your family when you purchase return tickets

    • 0% p.a. for 13 months and then 12.99% p.a. (2.00% balance transfer fee)

    • $99

    • 0% p.a. for 13 months then 12.99% p.a.

    • 55

    • 21.99% p.a.

    • 2%, Min $4.00

    Details Close

  • Bendigo Bank Low Rate Platinum Mastercard

    No current offer

    11.99% p.a.

    $89

    Purchase interest rate 11.99% p.a & up to 55 days interest free

    • No current offer

    • $89

    • 11.99% p.a.

    • 55

    • 13.99% p.a.

    • 0.50%, Min $3.25

    Details Close

  • NAB Low Rate Platinum Card (Cashback Exclusive)

    0% p.a. for 6 months and then 21.74% p.a. (2.00% balance transfer fee)

    13.99% p.a.

    $100

    ENJOY $20 CASH BACK* EVERY MONTH FOR 12 MONTHS (UP TO $240). Up to 55 days interest free on purchases

    • 0% p.a. for 6 months and then 21.74% p.a. (2.00% balance transfer fee)

    • $100

    • 13.99% p.a.

    • 55

    • 21.74% p.a.

    • 2%, Min $2.50

    Details Close

  • ANZ Low Rate

    0% p.a. for 15 months and then 21.74% p.a.

    12.49% p.a.

    $58

    0% p.a. first 15 months on balance transfers (T&Cs apply)

    • 0% p.a. for 15 months and then 21.74% p.a.

    • $58

    • 12.49% p.a.

    • 55

    • 21.74% p.a.

    • 2%

    Details Close

  • American Express Essential Credit Card

    0% p.a. for 12 months and then 14.99% p.a. (3.00% balance transfer fee)

    14.99% p.a.

    $0

    Earn up to 1 Membership Rewards point for every $1 spent. $0 Annual fee.

    • 0% p.a. for 12 months and then 14.99% p.a. (3.00% balance transfer fee)

    • $0

    • 14.99% p.a.

    • 55

    • Transfer points to a range of airline programs or redeem your points for travel, gift cards, retail rewards and shopping gift cards.

    Details Close

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.

Mozo may receive advertising fees from the financial institutions, issuers of financial or credit products and third party advice providers that are shown on this page. These fees are based on a cost per click, cost per acquisition, or a fixed fee.