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Spend with confidence with a low 12.49% 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).
Spend with confidence with a low 12.49% 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).
Read our Mozo Review to learn more about the NAB Low Rate Card - Balance Transfer Offer
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.
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.
Read our Mozo Review to learn more about the American Express Low Rate Credit Card
Read our Mozo Review to learn more about the HSBC Low Rate Credit Card
Read our Mozo Review to learn more about the Australian Unity Low Rate Visa Credit Card
Read our Mozo Review to learn more about the MOVE Bank Low Rate Credit Card
^See information about the Mozo Experts Choice Credit cards Awards
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See more credit card providersIf you're on the hunt for a new or replacement credit card a low interest option might be what you need.
Low interest cards, or low rate cards, generally have a purchase rate of 14% p.a. or less. This means that your credit card bills may end up being cheaper, with any leftover balance attracting less interest than another card with a higher rate.
Many credit card interest rates are over 20% p.a., so you may be wondering what the catch is with low interest cards.
Read on as we outline the key features of low interest cards, the pros and cons of these low rate options, and explain some of the differences between them and their higher interest counterparts.
Generally, there three main types of cards offers that fall into the low interest category:
Low rate cards have the same standard features as regular credit cards, these include:
Some low rate cards may also offer more premium features. Even though generally more perks are available on credit cards with higher purchase rates, there are some exceptions. These cards may come with higher annual fees, while still having relatively low interest rates.
Since you are looking at a card with minimal interest rates, you may have to pay some fees. Here are some fees to keep in mind with a low rate card:
It’s easy to look at all of the numbers being advertised by credit card companies and to think of a low rate credit card as the right choice for you, but it’s important to weigh up the pros and cons.
Pros of a low rate credit card |
Cons of a low rate credit card |
Interest can be one of the major contributors to credit card debt. By keeping interest low, you’ll minimise costs - even if you have a balance left on your card at the end of the month. |
Low rate cards aren’t automatically a cheaper option. There are still a wide range of fees to consider. |
Often low rate cards also have low annual fees. |
Looking for a low rate card might hold you back from some of the more enticing rewards programs. |
A good option for first time and new credit card holders to prevent the debt trap. |
Can be fairly no-frills as far as credit cards go, so may not be ideal options for those who regularly pay off their balance and want some extra features. |
If you don't always pay your card balance off in full each month then a low rate card might be a great option for keeping your interest repayments to a minimum and make it easier to pay back your debt in a shorter time frame.
However, for many people, other credit cards might be a better fit. This might be the case if:
The amount of money you'll save by opting for a low rate card over, for example, a rewards card, will depend on your ongoing spending and repayment habits.
The lowest purchase rate available in the Mozo database at time of writing is 7.49% p.a. In contrast, the average purchase rate in the Mozo database for rewards cards is 20.11% p.a. That’s 12.62% higher than the lowest rate card you could be looking at, not including 0% offers on credit cards.
Let's look at the following scenario as an example:
Say you have a credit card with a balance of $3000. This card does not have an annual fee, but the interest rate is 19.99% p.a. You are paying back $300 a month. It will take you 1 year, and cost you $309 in interest to pay off the card according to Mozo's credit card debt repayments calculator, assuming you didn’t add to the debt balance along the way.
If you switched to a low rate credit card with a 9.90% p.a. interest rate and a $60 annual fee, you’d pay off that same balance in 11 months, and you’d only pay $204 in interest and fees combined.
Keep in mind that many people don’t ever get their balance to zero, as they make new purchases on the card while paying off the balance that has rolled over. This means that the amount of interest paid over the life of the card is much higher. This is why having a low ongoing interest rate is so important if you do carry a balance on your card regularly.
If you’re interested in finding out more about credit cards, check out the Mozo picks for best credit cards.
Credit card interest rates change regularly, with low rate cards being those whose purchase rates fall generally beneath 14% p.a. The average credit card interest rate in the Mozo database is 17.10%, which is significantly higher.
The absolute lowest interest rate possible on a credit card is 0% p.a., which is possible if you are looking at an interest-free card like the Commonwealth Bank Neo, NAB StraightUp Card, or the Westpac Flex Card. Other cards may offer 0% p.a. introductory rates for extended periods - just make sure to note the purchase rate your card will revert to once the introductory rate has expired!
For a more long-term option, the current lowest purchase rate on a credit card in the Mozo database is 7.49% p.a. This is with the G&C Mutual Bank Low Rate Visa. Other low rate options include the American Express Low Rate Credit Card, Auswide Bank Low Rate Visa, Community First Bank Low Rate Credit Card and Defence Bank Foundation Credit Card.
How worth it a low interest rate credit card is to you will come down to your personal circumstances.
If you are regularly leaving a balance on your credit card, it will most likely pay off in spades to have a credit card that isn’t charging you high interest on that balance. You’ll be able to pay down debt faster, and pay less extra in the long run.
However, if you aren’t the target market for a low rate card - you like to pay off your balance in full - then there are definitely other options that will be better for your bank account. By opting for a card whose main feature is its low purchase rate, you’re essentially choosing a card whose main perk you don’t use.
Before you make any decisions regarding which credit card to choose, think honestly about what type of spender you are and what type of credit card might suit you.
There’s no single answer when it comes to the best low rate credit card, because the best for any one person’s financial situation and requirements may be completely different to another person.
As a starting point to help you with your own journey, Mozo completes the annual Mozo Experts Choice Awards. In the 2022 Mozo Experts Choice Awards for Credit Cards, our experts compared 221 personal credit cards issued by 75 providers to find those delivering the best value.
For the year following the 2022 awards, the title of Credit Card Provider of the Year was taken out by American Express for the sixth year in a row.
In the title of best Low Rate Card, winners included the American Express Low Rate Credit Card, Bankwest Breeze Mastercard, Bendigo Bank Bright Credit Card, G&C Mutual Bank Low Rate Visa, and the MOVE Bank Low Rate Credit Card.
The cheapness of a low rate credit card will depend largely on how you use them. No matter how low the purchase rate is of a credit card, no card will be particularly cheap if you’re spending outside of your means. Remember that any money you’re spending on a credit card is borrowed, and debt can snowball very quickly.
That said, if you do tend to have a balance remaining on your card month after month, a low rate card may be a cheaper option than a rewards card or another card with a higher purchase rate.
That’s what we’re here for! While no credit card is necessarily cheap, compare credit cards in the table above, or use our switch and save calculator to find out what the difference is between another credit card and your current provider. You can also search to find credit cards that fit your needs.
The rewards systems and flexibility is the main appeal. However, processes are long especially in regards to disputes. There is lack of protection and communications.
Read full reviewThe rewards systems and flexibility is the main appeal. However, processes are long especially in regards to disputes. There is lack of protection and communications.
I can highly recommend Westpac because on a few occasions I have had to seek their help with fraudulent activities against my account, and also they have assisted me greatly in choosing the right credit card to suit my needs. They consistently provide excellent customer service with positive and friendly attitudes in a professional matter. Sincerely
Read full reviewI can highly recommend Westpac because on a few occasions I have had to seek their help with fraudulent activities against my account, and also they have assisted me greatly in choosing the right credit card to suit my needs. They consistently provide excellent customer service with positive and friendly attitudes in a professional matter. Sincerely
Just don't. The customer service, and being able to access the right person in a timely and convenient manner is impossible. Then everything falls apart. Constant issues with calling the right phone, being put on hold, only to be transferred to another, and another. Or phone lines are down, website not working, app difficult to get into. The moment something goes wrong, they make it difficult for you to get through to them for an amicable and timely resolution. But they are quick to put the blame on you. Not worth it.
Read full reviewJust don't. The customer service, and being able to access the right person in a timely and convenient manner is impossible. Then everything falls apart. Constant issues with calling the right phone, being put on hold, only to be transferred to another, and another. Or phone lines are down, website not working, app difficult to get into. The moment something goes wrong, they make it difficult for you to get through to them for an amicable and timely resolution. But they are quick to put the blame on you. Not worth it.
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