Low interest credit cards

Get some breathing space and financial flexibility by using a low interest card to cut the amount of interest you pay on purchases and carry a balance on your account.

By   |   Verified by David Boyd   |   Updated 10th September 2020

Comparing low interest credit cards

NAB Straight Up Credit Card

On NAB's website

NAB Straight Up Credit Card

Balance transfer

N/A

Purchase rate

0% p.a. ongoing

Annual fee

N/A

Highlights

  • Get the newest credit card from NAB - simple, cheap and most of all no interest charges!
  • No Use, No Pay. If you don't use your NAB Straight Up credit card during the whole statement period, the monthly fee will be reversed. No surprise charges!
  • Use your card to pay foreign currency and enjoy no foreign transaction fees!
  • Predictable fixed minimum payments based on your credit limit, giving you certainty of what to pay each month.
ANZ Low Rate

On ANZ's website

Last clicked an hour ago

ANZ Low Rate

Balance transfer

25 months at 0% p.a.

Purchase rate

12.49% p.a. ongoing

Annual fee

$0.00 for 1st year

Highlights

  • 0% p.a. for 25 months on balance transfers (1.5% balance transfer fee applies). Reverts to 20.24% p.a. (balance transfer rate). T&Cs, eligibility criteria, fees and charges apply (including annual fee, currently $0 for first year, $58 thereafter).
  • No annual fee for the first year ($58 thereafter).
  • Low 12.49% p.a. ongoing rate on purchases.
MoneyMe Freestyle Virtual Card

On MoneyMe's website

Last clicked an hour ago

MoneyMe Freestyle Virtual Card

Balance transfer

N/A

Purchase rate

16.99% p.a. ongoing

Annual fee

From $0.00 p.a. ongoing

Highlights

  • Apply online in minutes with an outcome on the spot.
  • No waiting days for a physical card, it's instantly accessible via your mobile wallet.
  • Tap n Pay in-store using Apple Pay or Google Pay.
  • Shop online using your virtual card details found in the MoneyMe App.
  • Shop now, pay later with up to 55 days interest-free on purchases.

Bank promo

  • Get MoneyMe's lowest advertised rate EVER of 16.99% p.a.
  • Receive a $250 credit back when you spend a minimum of $1,000 on purchases using your MoneyMe Freestyle Virtual Card within 12 months of approval. Terms and conditions apply.
Westpac Low Rate Credit Card

On Westpac's website

Apply by 31 March 2021Last clicked 4 hours ago

Westpac Low Rate Credit Card

Balance transfer

24 months at 0% p.a.

Purchase rate

13.74% p.a. ongoing

Annual fee

$59.00 p.a. ongoing

Highlights

  • Enjoy 0% p.a. for 24 months on balance transfers with a 1% balance transfer fee. Reverts to variable cash advance rate of 21.49% p.a.
  • Plus, get $200 cashback when you spend $1,000 on eligible purchases within 90 days of card approval.
  • Enjoy up to 55 days on purchases.

Finty Rewards

More info
  • $50 cashback when you apply via Finty and are approved
St.George Vertigo Visa

On St.George's website

Apply by 30 March 2021Last clicked 3 hours ago

St.George Vertigo Visa

Balance transfer

24 months at 0% p.a.

Purchase rate

13.99% p.a. ongoing

Annual fee

$0.00 for 1st year

Highlights

  • Enjoy 0% for 24 months on Balance Transfers with 0% balance transfer fee. Reverts to cash advance rate of 21.49% p.a.
  • $0 p.a annual fee for the first year ($55 p.a. thereafter).
  • Up to 55 days interest free on purchases.
Bendigo Bank Low Rate First Credit Card

On Bendigo Bank's website

Bendigo Bank Low Rate First Credit Card

Balance transfer

6 months at 0% p.a.

Purchase rate

11.99% p.a. ongoing

Annual fee

$29.00 p.a. ongoing

Highlights

  • Low 11.99% p.a. purchase rate.
  • Exclusive for customers 18 to 25 years old.
  • 0% p.a. on balance transfers for 6 months. Purchase rate of 11.99% p.a. applies thereafter.
Bankwest Breeze Mastercard

On Bankwest's website

Bankwest Breeze Mastercard

Balance transfer

9 months at 2.99% p.a.

Purchase rate

15 months at 0% p.a.

Annual fee

$49.00 p.a. ongoing

Highlights

  • 0% p.a. for 15 months on purchases (reverts to 10.99% p.a. thereafter).
  • 2.99% p.a. for 9 months on balance transfers with no balance transfer fee (reverts to 10.99% p.a. thereafter).
  • Low annual fee of $49 p.a.
  • Limited time only. Fees, T&Cs apply. New Breeze Mastercard customers only.
Bankwest Breeze Platinum Mastercard

On Bankwest's website

Last clicked 23 hours ago

Bankwest Breeze Platinum Mastercard

Balance transfer

9 months at 2.99% p.a.

Purchase rate

15 months at 0% p.a.

Annual fee

$69.00 p.a. ongoing

Highlights

  • 0% p.a. for 15 months on purchases (reverts to 10.99% p.a. thereafter).
  • 2.99% p.a. for 9 months on balance transfers with no balance transfer fee (reverts to 10.99% p.a. thereafter).
  • Low annual fee of $69 p.a.
  • Limited time only. Fees, T&Cs apply. New Breeze Platinum Mastercard customers only.
Bendigo Bank Low Rate Platinum Credit Card

On Bendigo Bank's website

Bendigo Bank Low Rate Platinum Credit Card

Balance transfer

6 months at 0% p.a.

Purchase rate

11.99% p.a. ongoing

Annual fee

$89.00 p.a. ongoing

Highlights

  • Enjoy 0% p.a. for 6 months with 0% on balance transfers.
  • Low-interest rate of 11.99% p.a.
  • Low annual fee of $89 p.a.
Bendigo Bank Low Rate Credit Card

On Bendigo Bank's website

Apply by 31 January 2021

Bendigo Bank Low Rate Credit Card

Balance transfer

N/A

Purchase rate

15 months at 0% p.a.

Annual fee

$45.00 p.a. ongoing

Highlights

  • Enjoy 0% p.a. for 15 months on purchases.
  • Receive a $150 Woolworths Supermarket Gift Card when you spend $1,000 on eligible purchases within 90 days of account opening.
  • Save with its low annual fee of $45 p.a. ongoing.
St.George Vertigo Platinum Credit Card

On St.George's website

Apply by 09 February 2021

St.George Vertigo Platinum Credit Card

Balance transfer

12 months at 6.99% p.a.

Purchase rate

15 months at 0% p.a.

Annual fee

$49.00 for 1st year

Highlights

  • 0% p.a. on purchases for up to 15 months from card approval.
  • Low revert rate on purchases of 12.99% p.a. (ongoing).
  • $49 p.a. fee for the first year ($99 p.a. thereafter).
BankSA Vertigo Credit Card

On BankSA's website

Apply by 30 March 2021

BankSA Vertigo Credit Card

Balance transfer

24 months at 0% p.a.

Purchase rate

13.99% p.a. ongoing

Annual fee

$0.00 for 1st year

Highlights

  • Enjoy 0% for 24 months on Balance Transfers with 0% balance transfer fee. Reverts to cash advance rate of 21.49% p.a.
  • $0 p.a annual fee for the first year ($55 p.a. thereafter).
  • Up to 55 interest free days on purchases.
Bank of Melbourne Vertigo Visa

On Bank of Melbourne's website

Apply by 30 March 2021Last clicked an hour ago

Bank of Melbourne Vertigo Visa

Balance transfer

24 months at 0% p.a.

Purchase rate

13.99% p.a. ongoing

Annual fee

$0.00 for 1st year

Highlights

  • Enjoy 0% for 24 months on Balance Transfers with 0% balance transfer fee. Reverts to cash advance rate of 21.49% p.a.
  • $0 p.a annual fee for the first year ($55 p.a. thereafter).
  • Up to 55 interest free days on purchases.

Overview

Low interest credit cards have a lower-than-average interest rate. Most credit cards issued in Australia charge a high rate of interest on unpaid balances carried from one month to the next. Many charge an APR of between 19% p.a. and 22% p.a. on unpaid purchases balances. However, most card issuers offer at least one low interest card, where the interest charged on carried-over balances is much lower than normal, typically between 11%-14% p.a. This is, of course, only a low interest rate in relative terms, when compared with most other credit cards. It's still a high rate of interest when compared with home loan rates or many personal loan rates.

Low interest usually means low benefits

As a trade-off against the low interest rate, a low rate credit card will also be lacking in the attractive benefits that usually accompany cards with a high rate of interest. You won't find a low interest card loaded with complimentary benefits like international travel insurance plus airport lounge access, free flights and a concierge service, or one that earns reward points or frequent flyer points at a fast rate. However, there are one or two cards that offer low interest plus travel insurance, or low interest plus reward points.

Low interest or no interest?

The best way to use a credit card is to pay no interest charges at all, by repaying your account balance in full and on time every month.

Every credit card issued in Australia has a grace period on purchases – known as 'interest-free days' – which will typically be up to either 44 or 55days, depending on the card's Terms & Conditions. This grace period is the time which elapses between the date of a credit card purchase transaction and the date on which the monthly repayment is due, but it is only granted when the previous month's closing balance was repaid in full and on time. If, for example, you had no unpaid balance on your account and then made just a single purchase during the month, on the first day of the monthly billing cycle, you would usually be entitled to between 44 and 55 interest-free days before you were required to make any repayments.

This means that you can use the bank's money absolutely free of charge for up to 44 or 55 days if you always repay your monthly balance in full and on time. But if your financial circumstances mean that you will sometimes (or always) need to use your credit card as a revolving line of credit, paying interest on a balance carried over from month to month, then a low interest card will be your recommended choice.

Learn about low interest credit cards

How they work, how to use them, and the drawbacks to avoid.

  • Pros & cons

  • Tips

  • FAQs

Low annual fee

Because low interest credit cards are aimed at users who may be struggling with their finances, the cards tend to have few frills (i.e. no or limited reward points and complimentary benefits) and are therefore lower cost cards in terms of the annual fee.

Low interest usually means no frills

A low rate credit card is never going to offer heaps of reward points or complimentary benefits. If there are any points or benefits attached to a low rate credit card, they will be at the lower end of the scale.

No interest-free days if you carry a balance

The low interest rate could tempt you into letting your financial discipline slide, and fail to make the full monthly repayment. This is not a good idea, because most credit cards will not allow you any interest-free days on the next month's purchases if you have a balance unpaid beyond the payment due date.

Paying interest – even at a low rate – is always painful

Don't be lulled into the idea that because you're paying interest at a lower rate, your financial troubles are over. The best way to use a credit card is to use the bank's money interest free for a month or more, and then repay your balance in full to avoid interest charges altogether. Unnecessary interest charges will always hurt, even if they're lower than they might otherwise have been.

Possibly a low cash advance interest rate

While most low interest cards only have a low rate for purchases, and a much higher rate (e.g. 20% p.a. or more) for cash advances, there are a few which extend the low rate to cash advances as well. And while taking cash advances is never a good idea if you can possibly avoid it (because there are never any interest-free days on cash advances), a low cash advance rate is useful if you are taking up a balance transfer offer because the revert interest rate is often the cash advance rate.

Save heaps of interest

For anyone who nearly always has a carried-over debt on their credit card, the benefit of a card with a low interest rate is pretty obvious. A $5,000 debt at 20% p.a. is going to incur monthly interest charges of around $83. The same debt at 12% p.a. will incur monthly interest charges of $50, saving you $396 per year.

Combine low ongoing interest with a low balance transfer rate

For those who already have credit card debt, switching to a low interest credit card with an introductory 0% balance transfer rate is a great strategy. The temporary interest holiday should give you time to make a serious dent in your debt if you avoid making any new purchases, since 100% of your repayment amounts will be going towards paying off the debt rather than having them almost swallowed up by interest charges. When the balance transfer offer period expires your interest-free days will return if you have repaid your balance in full. You will be able to start using your card again for purchases, secure in the knowledge that if you do occasionally miss full repayment of your balance, you'll be charged interest at a much lower rate.

Consider a personal loan for major purchases

If you need to buy new technology, furniture or appliances, try to avoid purchasing these items with a credit card if you know you can't afford to repay the full amount immediately. You may be able to successfully apply for a personal loan instead, and pay interest at a lower rate than even the lowest rate credit card.

Low interest cards are not the best for everyone

If you know that you will always – or almost always – be able to repay your credit card balance in full and on time every month, a low interest card is not the best choice for you. You'd be much better off choosing a card with reward or frequent flyer points and complimentary benefits for travellers and shoppers. The value of the points and benefits will usually exceed the annual fee cost as long as you put all your everyday purchases and bills through your card, and you won't need to worry about the card's high interest rates because you won't be incurring any interest charges.

Are credit card interest rates variable?

Yes they are. The interest rate could go up or down at any time, and all the bank needs to do is notify you in advance of the change becoming effective. But credit card interest rates are fairly stable. They don't go up and down in line with the cash rate set by the Reserve Bank. Banks usually only change their credit card rates when there has been some modification in the way they calculate their costs and profit margin.

Are there any surprises I should be aware of?

Yes. Just because the interest rate on purchases is relatively low, there’s no guarantee that the cash advance rate will be equally low. So check the cash advance rate as well, if this is a feature you intend to use. The cash advance rate could be as high as 20%+ p.a.

Also be aware of any potential late payment fees or fees for spending more than your credit limit, both of which can add up very quickly. Late payments can also negatively affect your credit rating.

Are there low interest rate credit cards with rewards?

Yes, there are a few low rate cards (but only a few) that give you some complimentary benefits such as a free bottle of wine or travel insurance. There are even fewer low rate credit cards that let you earn points while you spend and redeem them for rewards. It’s really a trade off between rewards vs cost. Would you rather have a no-frills low cost credit card, or have a card with higher interest rates with complimentary benefits and rewards points?

Can I transfer a balance to a low interest card?

Yes you can. Many low interest rate cards have 0% p.a. balance transfer offers lasting for as long as 18 months, occasionally even longer. So you get the best of both worlds – 0% p.a. on the transferred balance and a low ongoing interest rate on new purchases. Just be aware that in most cases the balance transfer will temporarily cancel your interest-free days on purchases, meaning that you'll have to pay interest on any new purchases from the transaction date until you have repaid your purchases balance.

Does a low interest rate mean a higher annual fee?

No. In fact, most card issuers set the annual fee of their low interest card near the bottom of the scale. Many low interest credit cards with no complimentary benefits attached have an annual fee of around $50 or less. There are, however, some low interest cards badged as 'platinum' or 'gold', and these have annual fees of $80-$100 to help pay for complimentary benefits.

Do low interest rate credit cards have all the tech bells and whistles and security you find on high interest rate cards?

Yes. Just because the interest rate is low, the banks don’t cut corners on technology or security. Card issuers offer the same high tech and security features on all the cards in their range. So if a bank offers, for example, Google, Apple and Samsung Pay, they will be available on all cards, not just the expensive ones. And if there’s a system for monitoring or preventing potentially fraudulent transactions, it will be applied to every one of the bank’s credit cards, including low interest cards.

Do low rate cards have an annual fee?

Because the ongoing interest rate is low, most of these cards will charge annual fees to recoup costs. The annual fee is a mechanism that the banks use to offset the low rate and make some money. But you can still find credit cards with low ongoing interest rates and no annual fees for life, and others with no annual fee for the first year.

What does 'low rate’ actually refer to?

The interest rate that banks use to advertise their credit cards is generally the purchase rate – the interest that is applied to the part of your carried-over balance that is for normal purchases and bill payments. Low interest credit cards usually have an interest rate that falls in the range 11%-14% p.a. Other transactions, such as cash advances (and balance transfers if there is no introductory offer) are often set at a different rate, which may be much higher than the purchase rate.

The rate is shown as an annual percentage rate (APR), which is the amount of interest the balance would theoretically attract over the course of a year. The interest is actually calculated on a daily basis with a daily percentage rate, and the amount appears once a month on your credit card statement. You can calculate the daily percentage rate as APR% / 365.

The interest rate starts to come into effect when you have an ongoing balance on your account after the monthly interest-free days (e.g. up to 44 or 55 days) have ended.

What is a typical interest rate on a credit card?

Premium credit cards loaded with complimentary benefits, and/or reward points earned at a fast rate, typically have an interest rate on purchases that is above 20% p.a., as well as a high annual fee.

Medium-rate cards, with fewer benefits, or a slower earning rate for reward or frequent flyer points, will usually have an interest rate of between 15%-19% p.a. and a more moderate annual fee.

Cards with an interest rate of 11%-14% p.a., or sometimes even lower, are classed as low interest rate cards and typically have nothing, or very little, in the way of complimentary benefits or reward points. But they usually have a low annual fee to match the low interest rate.

What other types of interest can be charged?

A different rate, usually higher, is applied to cash advances, including ATM withdrawals, buying foreign currency, gambling payments and transferring funds from your credit card to a different bank account.

Many banks offer new customers a special interest rate as an introductory offer. This can include a low purchase rate or balance transfer rate, or a combination of the two. These promotions last for a fixed period, usually several months, and when the offer ends the interest reverts to a higher rate, typically the purchase rate or cash advance rate. When you are comparing and selecting a low rate credit card it is important to decide whether you want to take advantage of an introductory offer, or would prefer an ongoing lower interest rate.

What other types of low cost cards are there?

We have created some other comparison pages for these types of low cost cards:

  • 0% purchase: Cards with an introductory offer of 0% on purchases for a specified number of months, during which you can pay only the 2-3% minimum repayment and be charged no interest on the remaining balance.
  • Balance transfer: Cards with an offer of a low or 0% interest rate on a balance transferred from another credit card, for an introductory period.
  • No annual fee: Cards with an ongoing annual fee of $0, or an annual fee waiver in the first year.

Who should apply for a low interest rate credit card?

Anyone who doesn’t pay off their balance in full every month and wants the security of a low rate of interest charged on the balance. However, if you already have a large balance on your existing card, you would probably do better by choosing a balance transfer credit card, with an offer of a low or 0% interest rate on the transferred balance for an introductory period. You may even be able to find a low interest rate card with a balance transfer offer.

Will I automatically get the low interest rate advertised by the bank?

If your application for a low interest card is approved, then yes, you will most likely qualify for the advertised low interest rate applicable on that date. But there's no absolute guarantee that you will be offered the advertised rate, since the bank may decide that it needs to charge you a higher interest rate if you don't have a reasonably good credit score. Also bear in mind that credit card interest rates are variable, not fixed. The bank can change the interest rate you are being charged at any time, simply by notifying you in advance of the change, although in practice credit card interest rates change far less often than, for example, home loan interest rates.

Will the interest rate on my card change if my credit score changes?

It's unlikely. Banks only check your credit score when you first apply for the card, to help them decide whether or not to approve your application. They won't be continually monitoring your score and are unlikely to check it unless you do something very unwise, such as failing to make the minimum monthly repayments. If you are not monitoring your credit score, sign up to get your credit report with Finty.