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


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 check the best credit cards in Australia!

Compare low interest credit cards - last updated 25 January 2022

Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure
  • Apply By 28 Feb 2022
    Bendigo Bank Low Rate Credit Card

    0% p.a. on purchases for up to 18 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
    0% p.a. for 18 months then 11.99% p.a.
    No current offer
  • Virgin Money Low Rate Card

    Receive a low 11.99% p.a purchase rate. 0% p.a on balance transfers for the first 15 months (1% BT fee applies). Get tap and pay feature, plus 55 days interest free. Loyal card holders could see annual fee waived in 2nd year (conditions apply).

    Purchase rate
    Balance transfer rate
    Annual fee
    11.99% p.a.
    0% p.a. for 15 months and then 21.69% p.a. (1.00% balance transfer fee)
  • Bankwest Breeze Mastercard

    Enjoy 0% p.a on balance transfers for 15 months then 9.90% thereafter. No annual fee for the first year. Limited time only. Other fees, T&Cs apply. New Breeze Mastercard customers only.

    Purchase rate
    Balance transfer rate
    Annual fee
    0% p.a. for 15 months then 9.90% p.a.
    0% p.a. for 15 months and then 9.90% p.a.
    $49 $0 in the first year
  • 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. New Cards only. Offer ends February 24th 2022. T&C's and exclusions apply.

    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

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