Low interest rate rewards credit cards

By Mozo ·

Hang on a second - a low interest rate and rewards power? That sounds too good to be true, right?

Not at all! There aren’t all that many on the market, but you can have your cake and eat it too when you snag a low rate rewards card. So if you want to earn big rewards without the price tag to match, then check out all the details below on these budget-friendly, freebie-filled pieces of plastic.

Ready to make your decision? Compare now. - page last updated October 23, 2020

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  • Thumbnail icon for American Express
    mozo-experts-choice-2020
    American Express Qantas Discovery Card

    Qantas Frequent Flyer

    $0

    No current offer

    0.75 points uncapped

      Compare
    Details
  • Thumbnail icon for Westpac
    Westpac Altitude Platinum

    Qantas Frequent Flyer

    $200 $99 in the first year

    60,000

    0.5 points uncapped

      Compare
    Details
  • Thumbnail icon for Qantas Money
    Qantas Money Qantas Premier Platinum

    Qantas Frequent Flyer

    $299 $199 in the first year

    100,000

    1 point up to $10,000/month, then
    0.5 points uncapped

      Compare
    Details
  • Thumbnail icon for Bankwest
    Bankwest Qantas Platinum Mastercard

    Qantas Frequent Flyer

    $160

    30,000

    0.75 points up to $2,500/month, then
    0.3 points uncapped

      Compare
    Details

Who should opt for a low interest reward card?

With a low interest reward card, you can have the best of both worlds - all the rewards and freebies your heart desires, along with the low interest rate your budget needs. But they aren’t for everyone - after all, every credit cardholder is different. Here’s how to tell if a low rate rewards card is the one for you:

Right for you if…

You sometimes carry a balance on your credit card. The low interest rate will minimise the damage done to your savings if you wind up missing a payment or two.

But not if…

You REALLY love the perks of a rewards card. The trade off for a low interest rate is that sometimes your card will exclude some of the freebies other rewards cards come with, like complimentary insurances or sky high points earning power. If you’re really committed to racking up a huge pile of rewards, a low rate rewards card might not have the oomph you need to get you there.

Right for you if…

You use your credit card all the time. Firstly, using your plastic wherever you go will help you build up rewards points quicker. But also, if you put every spend on your credit card, then you’ll have a bigger balance to pay interest on. As mentioned above, a nice low interest rate will protect you from the worst of the damage.

But not if…

You rarely flash your plastic at the checkout. This is true of most rewards cards actually - if you’re not using them all the time and spending big, then the amount of points you’ll earn is often not worth paying for. You might be better off forgoing reward programs and choosing a low fee credit card instead.

What features to look for

So, if you’ve established that a low rate rewards card is right for you, the next thing to do is choose the right one.

  • Low interest rate. There are rewards cards options to be found with interest rates below 15% - but they’re rare, and your rewards earning power will suffer. Instead, you might have to start looking at options with interest rates below 18%. There are a few more of these around, and in terms of rewards cards, this is a budget-friendly interest rate.
  • Low annual fee. Another cost that tends to skyrocket when you attach a rewards program to a credit card is the annual fee. Even so, there are some great deals to be found that come with no annual fee at all. So if you can snag a piece of plastic with a solid rewards program and an annual fee under $100, you can consider that a competitive offer.
  • Interest free days. Choosing a card with a low interest rate is a good money saving tactic - but another way to keep costs down is to take full advantage of your interest free days. Most cards come with 44 or 55 interest free days, so pay off your entire bill in this timeframe and you won’t have to worry about interest at all.
  • Great introductory offer. Another way to avoid the sting of being charged interest - at least temporarily - is to choose a card with a killer 0% interest introductory offer. Just remember that this offer will end after a number of months, so you’ll need to check that your new credit card won’t revert to a sky high interest rate afterwards.
  • Useful rewards program. When you choose a rewards credit card, you should consider what reward program is on offer. If you only ever fly Virgin, it’s no use having a Qantas rewards program, right? Or, if you’d rather your points go toward retail products, a frequent flyers card probably isn’t the right choice.
  • Good rewards value. After you’ve picked the right rewards program, make sure your card is going to bag you the most points possible. Some low rate rewards cards might come with lowered points earning value - so be sure to check the fine print and make sure you’re getting the most bang for your buck.
  • Rewards caps and expiration. As with any rewards card, points caps and expiration dates might also affect your pile of points. So, to make sure you actually get to cash points in for awesome rewards, check when they expire and if there are monthly or annual points caps and plan your spending accordingly.

What rewards are on offer?

You know you need to pick the right rewards program for you, but what’s on offer? With a low interest rewards card, you’ll have the same options as you would with any other rewards card. Those include:

  • Retail rewards. If you love to hit the shops, a retail rewards program might be just the ticket. You can trade in points for a huge range of products, plus gift cards, shopping vouchers, event tickets or even cashback.
  • Airline rewards. These programs are aligned with a specific airline’s reward program, so your points are funnelled straight into getting you freebies like flights, accommodation, rental cars and airport lounge access.
  • Supermarket rewards. For the down-to-earth shopper, a supermarket rewards program will shave dollars off your grocery bill every time you hit the shops.

Does a low interest rate mean fewer rewards?

The short answer is: it doesn’t have to. Low rate rewards cards are generally attached to the same programs that other rewards cards are, and while some come with slightly less earning power, many are on par with other cards.

As a rule of thumb, you should aim to get at least 1 reward point for every $1 you spend.

Tips to get the best value from your rewards points

  • Look for bonus offers. A quick way to boost your points stash is to cash in on bonus offers. Keep in mind that you can often only grab these as a sign-up bonus - so make sure you get a good one!
  • Spend, spend, spend. The main way to build up a pile of points is simply to spend! Flash your plastic each time you head to the cashier. But that doesn’t mean you should overspend your budget - rewards points are not worth winding up in debt for.
  • Redeem wisely. Not all rewards are created equal - make sure you’re cashing in your points for the best value possible. Mozo has found that redeeming for flights and travel is one of the best ways to use your points, while shopping at rewards stores isn’t so great.

Find a low interest rewards card

Ready to start spending and earning rewards points? Head over to our rewards credit card comparison table and find a low rate rewards card to put in your pocket.

^See information about the Mozo Experts Choice Rewards Credit Cards Awards

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