Cheapest Credit Cards
Compare the Cheapest Credit Cards in Australia
Cheap credit card options do exist, the trick is finding the cheap card option that will deliver the value you are seeking, as in the credit card world cheapest may mean different things to different people. For example which is most important to you, a cheap (low) interest rate or a cheap (low) annual fee?
The starting point to understand which is actually going to deliver the most value and the cheapest credit card is to establish how you plan on using the card. If you simply want a card for emergencies, and as such will use the card very infrequently and pay the balance of in full each month, the interest rate will not be high on your list of critical features.Though the annual fee will be important, so you will probabaly skew towards a low annual fee credit card to deliver a cheap credit card solution for your needs. On the other hand if you plan on using the card frequently to spread your spending, the interest will be paramount in your decision making, and the low interest rate cards will be high on your consideration list.
Guide to Cheap Credit Cards
Step one when looking for a cheap credit card is to establish how you are going to use your credit card, as finding the cheapest credit card is as much about finding a credit card type which fits your financial circumstances, as it as about finding a credit card with low costs and charges.
The Credit Card Types that offer cheap credit card deals
1. Credit Cards with Introductory Offers
Not so much a credit card type but an important consideration when looking for a cheap credit card, as the introductory offers typically focus on providing enhanced value through discounted interest rates, bonus reward points or discounted card fees. Each of these introductory offers typically last for a limited period after which the credit cards revert to their standard terms, and so when appraising any card with an introductory offer it is important to be mindful of the duration of any offer and the terms to which the credit card reverts to post the expiry date.
2. 0% Interest Credit Cards
Paying 0% interest will certainly classify these cards as some of the Cheapest Credit Cards available. No Interest credit cards charge zero interest on purchases made using the card for a fixed period of time, once this period finishes the purchase rate reverts back to a higher rate, which is usually the cards standard purchase rate.
These no interest credit cards are a good option for large one off purchases that you wish to pay for over a period of time without incurring any interest charges. It is important to note that to retain the 0% deal on these cards the minimum monthly payment must be paid each month and any debt must be cleared by the expiry date of the introductory 0% interest period, or it will incur interest charges at the revert rate of the card.
3. Low Interest Rate Card
If your spending habits see you carry a balance on your card each month a cheap credit card option maybe a low rate card whereby you will minimize the interest charges you incur on the debt carried on your card each month.
Low Interest rate cards tend to charge an annual fee, typically in the range of $50-$100 p.a. with the cards charging the higher fees offering either a lower purchase rate or including an introductory purchase or balance transfer rate.
The cheapest low interest rate cards are those that combine a 0% purchase rate offer as outlined in 1 above, with a low on going purchase rate (revert rate) in the range of 10%-14%. Even though these cards tend to charge annual fees at the higher end of the range, if you have to carry a balance over some month, the savings in interest over a higher-interest but lower annual fee card will save you money. This is a case where a more expensive card is actually a cheaper card for you in the long run.
4. Cheap Balance Transfer Cards - 0% Balance Transfer
These introductory offer credit cards entice credit card holders to switch their credit card to a new balance transfer card in return for a 0% interest period on any balance transferred to the new card. They are an attractive cheap credit card option when you have a balance on a card that you are looking to repay as cheaply as possible, over a fixed period of time, by saving on interest charges.
Balance Transfer Credit cards can work out to be a cheap credit card but to gain the savings available from these cards it is imperative that the monthly repayments are made each and every month and that the balance transferred is fully repaid before the expiry date on the balance transfer period. Failure to meet these 2 conditions may result in the balance incurring interest at a higher rate, know as the revert rate which tends to be either the Purchase or Cash Advance rate of the card.
5. Interest Free Period Credit Cards - up to 55 interest free days
By repaying your monthly balance in full an interest free period credit card could be a cheap credit card option, though if you are not 100% sure you can repay this balance in full each and every month they should not be on your shortlist for the cheapest credit card. By repaying your monthly card bill in full each month you would in effect pay no interest charges on any purchases, but any lapse I this discipline soon erodes the benefit of the interest free period, so it is a cheap credit card only if you have the financial means and self discipline to make these monthly repayments.
6. Rewards Credit Card - Can they be cheap?
Reward credit cards are focused on delivering rewards to card holders in return for using the card to make purchases, they are fundamentally not focused on providing a cheap no frills card, with low costs and interest charges.
If rewards are important to you there are a number of cheap rewards credit cards that have kept the annual fees and interest rates down at the lower end of the ranges. But be mindful that the very presence of a reward program is typically going to see these charges not at the cheapest levels available in the market. Many of the rewards cards do include interest free periods so look out for these, where up to 55 days interest free can be enjoyed, so long as the monthly balance is repaid on time and in full.
Compare Low Interest rate Instant Decision Credit Cards - With a conditional acceptance within 60 seconds these Low Interest rate cards can be in your hands within a couple of weeks of applying, so where speed and value are on your list of criteria these cards are worth a look. Read more
Side by Side comparison of 0% Balance Transfer Cards - With 0% interest on your balance transfer these cards are focussed on saving you interest charges on the debt you have acrued on your current cards, with balance transfer periods of upto 14 months, and savings versus your current card calculated, this is the ultimate guide to making a balance transfer work its hardest. Read more
How is the interest charged on my credit card balance calculated? - Knowledge is power. Once you understand how interest is calculated it will help you greatly work out which type of card is right for you and which will deliver the best value combined with the features which you'll actually use. Read more
Credit Cards for Low Income earners - Credit cards suitable for pensionors, new employees and people recieving Goverment benefits focus on delivering real value and application criteria which is in synch with your current circumstances, income levels of $15,000 p.a. is generally the minimum requirement. Read more
Cheapest Credit Cards - Frequently Asked Questions
A low rate credit card is one that offers low interest rate on purchases while a low fee credit card offers a low annual fee, which is a fixed cost charged on the anniversary date of opening the credit cardd account.
With a low rate or low interest credit card, the purchase rate is generally below 15% p.a. which means if you carry over any debt on your card, these cards will generally be the ones which charge you the least interest, which makes this type of card a good choice for credit card users who may carry a small balance on their card every month.
A low fee credit card, is one that allows you to use a credit card without having to pay very high fees for. In some cases, the annual fee is even 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.
Low or no fee cards can charge either high or low interest rates depending on the features that are included with the card. For instance, there are rewards credit cards that have low or zero annual fees, but the purchase rate may be high.
If you’re simply looking for a standard, no-frills card, you can still find a credit card that offers both a low annual fee and a low interest rate. This type of card is best for those who are not after the perks and added extras that high fee and high rate cards come with.
Some No Annual Fee cards do charge annual fees, so its importnat to understand waht types of No Fee cards are on offer:
No Annual Fee for Life. This credit card will never ever charge you an annual fee for its entire duration. As long as you keep your account active or don’t switch credit cards, you won’t ever be billed an annual fee. Credit card providers may decide to withdraw this offering from the market but those who already own one can be given an option to continue using it.
No Annual Fee for the First Year. These $0 annual fee cards oofer no fee for just the 1st 12 months after which the annual fee will revert to the normal fee for any subsequent years you decide to retai the card. While you only get to enjoy cost savings for one year, it’s still worth considering these credit cards because they usually include a range of features, not included with the No Annual Fee for life cards.