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

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 - last updated 17 April 2024

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  • NAB Low Rate Card - Balance Transfer Offer

    Spend with confidence with a low 13.49% p.a. variable purchase rate and 0% p.a. interest on balance transfers for the first 28 months (T&Cs apply). 2% balance transfer fee applies. There’s also up to 55 interest free days on purchases to help you manage your budget better when you make minimum repayments. Minimum credit limit $1,000. No annual fee for the first year (usually $59).

    Purchase rate
    13.49% p.a.
    Balance transfer rate
    0% p.a. for 28 months and then 21.74% p.a. (2.00% balance transfer fee)
    Annual fee
    $59 $0 in the first year
    Compare
    Details
  • American Express Low Rate Credit Card

    Competitive low rate with $0 Annual Fee. Offers Card Refund Cover and Card Purchase Cover. Must have no history of bed debt or payment default, be aged 18 years and over, and be an Australian citizen, permanent resident, or hold a long term visa.

    Purchase rate
    10.99% p.a.
    Balance transfer rate
    No current offer
    Annual fee
    $0
    Compare
    Details
  • HSBC Low Rate Credit Card

    Purchase rate
    12.99% p.a.
    Balance transfer rate
    0% p.a. for 12 months and then 25.99% p.a. (2.00% balance transfer fee)
    Annual fee
    $99
    Compare
    Details
  • Australian Unity Low Rate Visa Credit Card

    Purchase rate
    9.90% p.a.
    Balance transfer rate
    No current offer
    Annual fee
    $59
    Compare
    Details
  • MOVE Bank Low Rate Credit Card

    Purchase rate
    8.99% p.a.
    Balance transfer rate
    0% p.a. for 6 months and then 8.99% p.a.
    Annual fee
    $59 $0 in the first year
    Compare
    Details

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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