Low Interest Rate Credit Card

While there is no definite standard set, any credit card with a Purchase Rate below 15% p.a. generally earns the Low Rate Credit Card descriptor. 

The low interest rates these cards feature refer to the purchase rate of the credit card, other transactions such as cash advances and balance transfers have their own applicable interest rates. Hence, if you’re the type of credit card user who usually pays only the minimum or a portion of your outstanding balance, you can really keep interest costs down with a credit card that offers low interest rate.

Thumb westpac low rate credit card

Introductory Offer: 0% p.a. Balance Transfer for 24 months a 2% BT fee applies.

  • Up to 55 interest free days on purchases
  • Additional Card Holder - Add an additional card holder for $0
  • Low annual card fee - $59 p.a.
  • Low minimum Income eligibility - $15,000 p.a.
  • Card Security - covered by Cardshield and Fraud Protection by Falcon.
  • Visa payWave - convenience of tap and go quick payments on transactions up to $100.

Offer conditions: Offer closes 31st January 2018, Balance Transfer fee of 2% applies, reverts to Cash Advance Rate of 21.49% p.a. after 24 months 

Introductory Offer: 0% p.a. Balance Transfer for 24 months a 2% BT fee applies.

  • Up to 55 interest free days on purchases
  • Additional Card Holder - Add an additional card holder for $0
  • Low annual card fee - $59 p.a.
  • Low minimum Income eligibility - $15,000 p.a.
  • Card Security - covered by Cardshield and Fraud Protection by Falcon.
  • Visa payWave - convenience of tap and go quick payments on transactions up to $100.

Offer conditions: Offer closes 31st January 2018, Balance Transfer fee of 2% applies, reverts to Cash Advance Rate of 21.49% p.a. after 24 months 

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How to select the Best Low Rate Credit Card

 

If you are in pursuit of a low rate credit card, you probably believe you will be carrying a balance on your credit card some months, and so incurring interest charges, interest charges you want to limit by having the lowest rate. When assessing the low rate credit card options it’s important to realize early on that not all low rate cards are equal, as many cards that purport to be low rate cards are merely standard credit cards that are using a low rate as an enticement to attract new cardholders. The tips and hints below are designed to help you navigate through the low rate card options to select the best low rate credit card for your circumstances.

 

Low Rate Credit Cards - 5 types to select from

 

  1. Standard low rate credit card - these are the real deal and original low rate credit cards that offer the lowest on going purchase rate, which should be below 15% p.a. This rate is offered for the life of the card, though it may be changed at the discretion of the card issuer.

 

  1. Low Rate with Introductory Low Rate credit card - this combination of an introductory purchase rate and low on going purchase rate to which all purchases will revert, once the introductory purchase rate ends, is a compelling offer for those seeking to minimize their interest charges both in the short, and medium terms. As these credit cards gain popularity the introductory purchase rates are becoming lower to the point now that 0% p.a. introductory purchase rate credit cards are now prevalent in the market.

 

  1. Introductory Low Rate credit card - The focus here is on a low introductory purchase rate, often as low as 0% p.a. for a fixed introductory period. Critically once this introductory period ends the Purchase rate reverts back to a rate not within the realms of low rate credit cards, but more in line with standard purchase rates of around 20% p.a. plus.

 

  1. Premium Low Rate credit card - A relatively new type of credit card that offers the prestige of Gold or Platinum without the high purchase rates usually associated with these premium credit cards. These cards tend to have a slimmed down range of services, though represent good value, particularly where complimentary travel and purchase insurances are included.

 

  1. Low Rate and Introductory balance transfer rate credit card - Introductory Balance Transfer rates are a great way of saving interest when paying down historical debt, but once the balance transfer period ends any debt still remaining is usually charged a high interest as it reverts to a high Cash Rate or Purchase Rate. With theses credit cards the Balance Transfer rate reverts to the Low Interest Rate at the end of the Introductory Balance Transfer period, thus lightening the load of the monthly interest charges.

 

Low rate credit card comparison

Low Rate Credit Cards offer much more than a low purchase rate, so when comparing the options it is important to assess the full range of rates and benefits each Low Rate Card offers. Some of the card features to include in your comparison are:

 

Purchase rate - With 15% p.a. as your starting point look for credit cards that have on going purchase rates below this level. 

Introductory rates and balance transfers - An increasing number of Low Rate credit cards offer balance transfers to make the switch to a new card that bit sweeter if you are carrying a debt on your current card. Four aspects of these cards should be included in your comparison:

  • Balance Transfer Rate - Look for a 0% p.a. rate
  • Balance Transfer Period - Periods of 6 - 24 months are common
  • Revert Rate - This is the Rate to which the Balance Transfer reverts at the end of the balance transfer period - Look for cards where the Balance Transfer reverts to the low purchase rate as opposed to the higher cash advance rate
  • Balance Transfer fee - this maybe a fixed dollar amount or a % of the Balance to be transferred, usually in the 1-2% range.

Low Annual Fee - A low rate in combination with a low annual fee is a great, but rare combination. Currently the American Express Essential Card delivers this rare package. It’s good to remain mindful that credit cards with higher annual fees will tend to include more benefits, so review how relevant the cards benefits are to your circumstances, and balance these against paying a higher fee.

Other fees and charges - Depending on how you plan to use your credit card some additional fees maybe worthy of consideration, these include charges for ATM withdrawals, Overseas Cash withdrawals, late payment and over limit fees.

Frequently Asked Questions

Are their any Low Rate Credit Cards that include offer frequent flyer points?

Pretty much 95% of low rate credit cards offer no rewards program. The sole low rate credit card which offers frequent flyer based rewards is the American Express Essential Credit Card 

This low rate cards reward program enables you to earn 1 Membership Rewards point per dollar spent on all purchases except utilities, insurance, telecommunications providers and government bodies in Australia where you will earn 0.5 points per dollar spent. Any points earned maybe transferred to a choice of 8 airline rewards partner programs including Singapore Krisflyer Miles, Virgin Velocity Points and Cathay Pacific Asia Miles, or redeemed online for a gift card from many leading retail partners.

Do Low Rate Credit Cards offer 0% Balance Transfer deals?

Yes, many low rate credit cards include balance transfer deals, many with a 0% p.a. Balance Transfer Rate for periods of between 12 and 24 months.

A low rate card with a balance transfer deal is an ideal option when you are looking to consolidate your debts on to a single credit card, but still need to use your card for some purchases. To maximize the savings from making a balance transfer to a low rate credit card it’s imperative that the debt you transfer is paid off within the balance transfer period as any balance not repaid will attract a higher rate which is usually either the cards purchase or cash advance rate.

Low Rate Credit Card vs Low Fee Credit Card, how do they differ?

A low rate credit card is one that offers a low interest rate on purchases, while a low fee credit card offers a low annual fee.

With a low rate or low interest credit card, the focus is on the purchase rate which is generally below 15% p.a. These low rates, and therefore cheaper interest costs, makes these low rate cards a good choice for credit card users who may carry a small balance on their credit card each month. 

A low fee credit card is one that allows you to use a credit card without having to pay very high fees to be a cardholder. In some cases, the annual fee is waived for the first year, or even for the life of the card. Because a low/no fee card usually bears high interest rate, this is a good option for those who just want a credit card on standby for emergency purposes. If you don’t use the card for an entire year for instance, you don’t have to pay any fee for the privilage of holding the card..