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

    CUA Low Rate Credit Card

    0% p.a. for 13 months and then 21.74% p.a.

    11.99% p.a.

    $49 $0 in the first year

    0% balance transfer rate for 13 months and up to 55 interest free days. No annual fee for the first year and $49 after.

    • 11.99% p.a.

    • -

    • 0% p.a. for 13 months and then 21.74% p.a.

    • 21.74% p.a.

    • 55

    • 0.0

    • 3.40%

    • $49 $0 in the first year

    • $12.50

    • 2.00%, Min $3.50

    Read our Mozo Review to learn more about the Low Rate Credit Card

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  • Promoted

    St.George Vertigo

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

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

    $55 $0 in the first year

    Enjoy 0% p.a. for 22 months on balance transfers at card application. 1.5% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. Plus, 0% p.a. on purchases for 7 months. Rate then switches to applicable variable purchase rate. First year annual card fee waived for the first year ($55 thereafter). Available to new cards only, Eligibility criteria and T&Cs apply. Offer ends September 30th 2020.

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

    • 0% p.a. for 7 months

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

    • 21.49% p.a.

    • 55

    • 0.0

    • 3.00%

    • $55 $0 in the first year

    • $15.00

    • 2%, Min $2.50

    Read our Mozo Review to learn more about the Vertigo

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  • Promoted

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

    Westpac Low Rate

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

    13.74% p.a.

    $59

    Enjoy 0% p.a. interest on balance transfers for the first 20 months. Get $200 cashback with $1k minimum spend on eligible purchases within 90 days of card approval. 55 interest free days and low on-going rate of 13.74% on all purchases.

    • 13.74% p.a.

    • -

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

    • 21.49% p.a.

    • 55

    • 3.00%

    • $59

    • $15.00

    • 2%, Min $2.50, Max $150

    Read our Mozo Review to learn more about the Low Rate

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  • Promoted

    NAB StraightUp Card ($10/month - $1,000 Credit Limit)

    No current offer

    0% p.a.

    $120 $10/month - waived if no spend & no balance owing

    Pay no interest and no late payment fees, just a $10 monthly fee for a $1,000 credit limit. Plus, if you don't make any purchases and have an outstanding balance of $0 during the whole statement period, the monthly fee will be reversed. Also pay no foreign currency fees when you shop online or overseas.

    • 0% p.a.

    • -

    • No current offer

    • 0

    • 0%

    • $120 $10/month - waived if no spend & no balance owing

    • $0.00

    • n/a

    Read our Mozo Review to learn more about the StraightUp Card

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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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