No annual fee vs Low interest credit card, which is better?

which-cc

Credit cards come in all shapes and sizes and if you’ve decided to pick one up for yourself, you might have already started comparing your options. If you like to keep your spending on the frugal side and have ruled out a rewards card, you could be tossing up between a low rate or no annual fee credit card.

While both are budget-friendly choices, the type of spender you are can help determine which is the better pick for you. So if you’d like to find out the difference between a low rate and a no annual fee credit card, check out our explainer below.

No annual fee credit card

As the name suggests, this is a credit card with no annual fee. This type of plastic could be a great pick for someone who’s looking to either use the card sparingly or intends to pay the balance off in full every month. This is because the card might have a higher interest rate to make up for the lack of annual fee. 

Depending on the type of card you opt for, some providers have special offers that waive the annual fee for the first year or have a ‘life of the card’ deal - meaning that as long as you keep your plastic active you won’t ever have to pay an annual fee. 

Just keep in mind that if the card you choose has no annual fee, there are other fees you will need to watch out for, such as:

  • Late payment fees
  • Foreign exchange fees
  • Additional cardholder fees
  • Any interest charged if you don’t pay your balance off.

Low interest rate credit card

Low interest credit cards are generally classified as cards with an interest rate below 14%. If you’re someone who can’t guarantee you’ll always be able to pay back your balance, a low rate card could benefit your spending needs. These cards are also handy if you need to make a large purchase, as it can help you spread the cost without breaking the bank. 

But if you play your cards right (pun intended), you might be able to kill two birds with one stone: finding a low rate card with no annual fee. At the moment there are 16 credit cards in the Mozo database that have both, so it’s always best to do your research. 

Ready to find your plastic match? Head on over to our credit card comparison tool or get started with some of the offers below.

Compare low interest credit cards - rates updated daily

Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure.
  • Apply By 30 June 2021
    placeholder
    Bendigo Bank Low Rate Credit Card

    0% p.a. balance transfer for 24 months (Reverts to 11.99% p.a). Low annual fee of $45 and no fees for additional cardholders.

    Purchase rate
    Balance transfer rate
    Annual fee
    11.99% p.a.
    0% p.a. for 24 months and then 11.99% p.a. (2.00% balance transfer fee)
    $45
    Go to site
    Details
  • Apply By 31 May 2021
    placeholder
    Citi Simplicity

    There is no annual fee ever, you'll get up to 55 days interest free, free wine when you dine with the Citi Dining Program and the convenience of worldwide acceptance with Visa and Visa payWave. Plus for the first 6 months you'll enjoy 0% on balance transfers.

    Purchase rate
    Balance transfer rate
    Annual fee
    0% p.a. for 6 months then 21.49% p.a.
    0% p.a. for 6 months and then 22.24% p.a.
    $0
    Go to site
    Details
  • placeholder
    Defence Bank Foundation Credit Card

    Defence Bank Low Rate Credit Card offers a 3.99% p.a. 6 month introductory rate on balance transfers, purchases and cash advances. Up to 55 days interest free on purchases.

    Purchase rate
    Balance transfer rate
    Annual fee
    3.99% p.a. for 6 months then 8.99% p.a.
    3.99% p.a. for 6 months and then 8.99% p.a.
    $45
    Go to site
    Details
  • placeholder
    St.George Vertigo

    0% p.a. for 28 months on balance transfers requested at card application. 0% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. New cards only, Eligibility criteria and T&Cs apply. Offer ends September 28th 2021.

    Purchase rate
    Balance transfer rate
    Annual fee
    13.99% p.a.
    0% p.a. for 28 months and then 21.49% p.a.
    $55
    Go to site
    Details
  • Apply By 7 September 2021
    placeholder
    Westpac Low Rate

    Enjoy a super low rate of 13.74% with 55 days interest free plus 0% balance transfer for up to 28 months at 1% BT fee. No annual card fee for the first year, $59 thereafter.

    Purchase rate
    Balance transfer rate
    Annual fee
    13.74% p.a.
    0% p.a. for 28 months and then 21.49% p.a. (1.00% balance transfer fee)
    $59 $0 in the first year
    Go to site
    Details

^See information about the Mozo Experts Choice Credit Cards Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.