Low Interest Rate Credit Cards

Compare Low Rate Credit Cards


A Low Rate Credit Card is a credit card that comes with a low interest rate relative to other credit cards in the market. While there is no definite standard set for this type of credit card, any credit card with a Purchase Rate below 15% p.a. is generally classified as a Low Rate Credit Card


It should be understood however, that the low interest advertised typically refers 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.



A guide to selecting the Best Low Rate Credit Card


Low interest Rate Credit Cards - 5 types to select from


  1. Standard low purchase rate credit card - these are the original Low Rate credit cards that focus on offering the lowest on going purchase rate, which tends to be below 15% p.a.
  2. Low Interest Rate with Introductory Purchase 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% introductory purchase rate credit cards are now prevalent in the market.
  3. Introductory Purchase Rate Only 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.
  4. Premium Low Interest Rate credit card - A relatively new type of credit card that offers the prestige of Gold or Platinum without the high purchase rates associated with premium credit cards. These credit cards tend to have a slimmed down range of premium services, though represent good value, particularly where complimentary travel and purchase insurances are included.
  5. Low Interest 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.


How to compare low interest rate credit cards


Low Interest Credit Cards offer much more than simply a low purchase rate, so when comparing these cards to find the one that fits your needs it is important to assess the full range of rates and benefits each Low Interest Rate Card offers. 


Include these points in your card comparison to select the best deal for your circumstances:


Interest rate per annum - In our definition of Low Interest Rate Credit Cards we stated that a purchase rate of below 15% is considered a Low Interest Rate in the current market. 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 Interest credit cards are now offering introductory balance transfer offers. The 4 aspects of these that should be compared are:

  • The Balance Transfer Rate
  • The Balance Transfer Period
  • 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)
  • Any balance Transfer fee which maybe a fixed dollar amount or a % of the Balance to be transferred.


Annual fee - All other things being equal you should be seeking the card with the lowest annual fee. Be mindful though that cards with higher annual fees will tend to include more benefits, so review these benefits relevance to your circumstances and balance these against paying a higher fee.


Revert rate - At the end of introductory periods on Balance Transfers and Purchase Rate offers the interest rate will revert to a higher rate, this is generally the cash rate or purchase rate. Review both these rates and look to find a card that sees any introductory offer revert to a low rate as close to 15% p.a. as possible.


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


Instant Approval Low Rate Interest Credit Cards compared and reviewed - Many of the major card providers now support online applications for credit cards which in turn has enabled them to provide very fast decisions on card applications, which for Instant Approval Cards tends to be within 60 seconds. A number of Low Interest Rate Credit are offerd with this instant approval which are featured in this review. Read more


Cheapest Credit Cards in Australia - From low purchase rate cards to low annual fee cards the cheapest card is the one that delivers real value to the card holder, as each of us manage our finances differently selecting the cheapes card is very mush about finding a card which fits your needs which has competitive charges. Read more


Perfect for Infrequent card users - No Annual Fee Credit Cards - Looking for the security of having a credit card for tose unpredictable or emergency situations, these no fee cards won't charge you for the privilege of holding the card and not using it. Read more


Low Interest Rate Credit Cards - Frequently Asked Questions

Any credit card that offers a low interest when compared to other cards is considered a Low Rate Credit Card, also called a Low Interest Rate Credit Card. Although there is no definite rate set for what can be categorized as ‘low interest’, the rate of this credit card often ranges from 12% to 15% per annum.

The crucial thing to remember with a low rate credit card is that the low interest refers to the purchase rate, or the rate charged for your regular purchases. Other credit card transactions have their own corresponding interest rates. 

If you plan on getting a low rate credit card, it is best to be aware of the various interest rates, fees and charges beforehand so you would have a better idea of how much you would be charged for what specific transactions.

A Low Rate Card offers a low interest rate for purchases, while a Balance Transfer Card offers a low interest rate for balances transferred from another credit card. This means that these two cards are aimed for different groups of credit cardholders.

A low interest or low rate credit card works best if you’re starting from zero debt, and are planning to make some purchases without paying off the ensuing credit card balance right away. Because a lower interest rate is applied on your purchases, this means you’ll be paying less in interest costs over the course of the debt.

On the other hand, a balance transfer card is most suitable if you already have an existing balance with other credit card providers. With some credit cards offering zero interest balance transfer rate for the length of the introductory period, you get to save a lot on interest. If you don’t charge any new purchases to the card, any payment you make will go towards paying down your original debt, allowing you to settle the balance more quickly than if you would have stayed with your previous card provider.

However, there are many credit cards that offer low interest for both balance transfers and purchases for a certain period.

Understanding the different credit card transactions and the interest rate that may be charged for these transactions is key to getting the right credit card. With a low rate card, the low rate is applied on any purchases you make using this card. However, there are still other transactions that you may use the card for, each with their own applicable interest rates.

The types of interests charged on a card may include the following:

  • Interest on purchases. This is the interest applied on purchased goods and availed services. Transactions such as supermarket purchases, merchandise and/or appliance shopping, bills payments, and others are considered as ‘purchases’.
  • Cash advance interest. This is the interest charged for ATM or over-the-counter cash withdrawals. This also applies to any transaction where you get the equivalent of cash such as when purchasing traveller’s cheques or for gambling transactions.
  • Special interest. Special interest is interest charged on promotional offers such as balance transfers, or reduced APR for limited periods.
  • Interest on previous month’s interest. If you opt not pay the balance in full and carry over the balance over a few months, the interest costs charged for one month will also be incurring interest. The interest rate applied would be the same as that of the purchase rate.

Interest-free days are days when your purchases aren’t charged any interest yet. Most credit cards offer an interest-free period, with these periods usually ranging from 44 to 55 days.

However, you need to know how interest free days work to be able to maximize this feature.

Basically, you won’t be able to enjoy the full 44 or 55 interest free period for every purchase. It all depends on how far you are into your statement period when you use your credit card. The first interest-free day is counted on the day the purchase is made. Say for example your statement period starts every 1st of every month and ends every 30th. If you make a purchase on the 1st day of a certain month, say August, you would have enjoyed 30 interest-free days by August 30, which also happens to be your statement cut-off. Now for every billing cycle you still have about 15 to 25 days before the minimum balance is due. If you pay the balance in full on the due date, you would only have to pay the exact purchase amount.

So if your credit card provider gives you 15 days to pay the minimum, that would work out to an interest-free period of 45 days. Purchases made on August 2 would enjoy 44 days interest-free days, August 3 would have 43 days, and so on. On the downside, if you only pay the minimum or any amount less than the outstanding balance, any remaining balance will incur interest starting from the purchase date, in our example August 1. The additional interest will then reflect on your billing statement ending Sept. 30.

The key therefore is to pay your outstanding credit card debt in full always to be able to enjoy the card’s benefit of interest-free days.

No. Interest-free days are only applicable for purchase transactions, and a balance transfer is not considered a purchase. However, there are low rate credit cards that also offer zero interest on balance transfers so you really won’t be needing the interest-free days for these transactions, at least for the duration of the introductory period.

A Low Rate Credit Card offers many benefits for the credit cardholder who frequently uses his card and usually carries an outstanding balance from month to month. So while getting approved for a low rate card can be tough, it’s certainly worth a try because of the potential savings in interest costs. Among the most common requirements credit card providers look for in a low interest credit card application are:

  • Good credit score. While this is a must with practically all credit card applications, a good to excellent credit score is especially important for this type of credit card which is targeted to consumers who often don’t pay off their balances every month. There are a lot of low interest cards to choose from so if you cannot meet the credit score requirement of one card, you can try with other credit card providers or put off getting a low rate card first until you can improve your credit score.
  • Proof of employment. Low rate cardholders are expected to carry a balance from time to time so providers want to make sure that those who own a low rate card have a steady source of income and have  the capability to pay their balances. In most cases, the applicant must have been employed with his current employer for a certain number of months, usually from 6 to 12 months minimum.
  • Credit history free of delinquencies and collections. If you’ve recently struggled with missed payments and collection letters, then a low rate card may not be possible at this time. Instead, focus your efforts in paying off debts and improving your credit history and score in the process. 

Most low rate credit cards are not linked to any rewards program. This is because the low interest is already considered as the ‘reward’ or the attractive feature for this credit card type.

A few exceptions however, are rewards credit cards that offer low purchase rates for a limited period such as 5 or 6 months. Credit card providers are offering these deals to attract new customers into getting their cards. But if you’re interested in getting these rewards cards with low introductory rates, look closely at how high the interest rates will be at the end of the introductory period. Most of these cards will revert to default interest rates in the vicinity of 20% p.a. and above. If you don’t pay off your balances by then, that could lead to hefty interest fees.

Other credit cards that offer both rewards and relatively low interest rates may also charge steep annual fees. As with any financial decision, it is best to look closely at the terms and conditions as well as all applicable fees and charges for any credit card to ensure that you get the card most suited to your situation.

No, cash advance transactions don’t qualify for interest-free days. In fact, cash advances are charged a higher interest rate that starts right on the day when the transaction is made.

Yes, many low rate cards include balance transfer options that offer zero or very low interest rates.

A low rate card with balance transfer offer is an ideal option for a credit cardholder who has an existing credit card debt which he wants to pay down quickly, but may still need to use the new card for some purchases. But to be able to maximize this facility, it’s imperative that the amount transferred from another card is paid off within the introductory period because high interest rates may apply as soon as that period ends.

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.

With a low rate or low interest credit card, the emphasis is on the purchase rate that is lower than what other cards offer. The reduced rate, and therefore cheaper interest costs, makes this card a good choice for credit card users who may carry a small balance on their card every month. 

A low fee credit card on the other hand, is one that allows you to use a credit card without having to pay very high fees for its maintenance. 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. If you don’t use the card for an entire year for instance, you don’t have to pay anything at all. 

That said, a low or no fee card can charge either high or low interest rates depending on the features that you want with it. For instance, there are rewards credit cards that have low or zero annual fees but the interest rate for purchases 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.