Low interest credit cards

While many credit cards charge 20% or more on purchases, low interest rate credit cards can save you hundreds of dollars a year. These cards are a cheaper way to manage purchases if you tend to carry your balance from month to month. Or perhaps you simply forget to pay off your balance from time to time. Both are good reasons to look into low interest credit cards. Compare cards below.

Low interest credit card comparisons on Mozo - page last updated September 23, 2020

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  • Thumbnail icon for CUA
    mozo-experts-choice-2020
    CUA Low Rate Credit Card

    11.99% p.a.

    0% p.a. for 13 months and then 21.74% p.a.

    $49 $0 in the first year

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    Details
  • Thumbnail icon for St.George
    St.George Vertigo

    0% p.a. for 7 months then 13.99% p.a.

    0% p.a. for 22 months and then 21.49% p.a. (1.50% balance transfer fee)

    $55 $0 in the first year

      Compare
    Details
  • Hot Deal$200 Cashback Offer (T&Cs apply)

    Thumbnail icon for Westpac
    Westpac Low Rate

    13.74% p.a.

    0% p.a. for 20 months and then 21.49% p.a. (1.00% balance transfer fee)

    $59

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    Details
  • Thumbnail icon for ME
    mozo-experts-choice-2019
    ME frank Credit Card

    11.99% p.a.

    No current offer

    $0

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    Details
  • Thumbnail icon for NAB
    NAB StraightUp Card

    $10/month - $1,000 Credit Limit

    0% p.a.

    No current offer

    $120 $10/month - waived if no spend & no balance owing

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    Details
  • Thumbnail icon for Bank of Melbourne
    Bank of Melbourne Vertigo

    0% p.a. for 7 months then 13.99% p.a.

    0% p.a. for 22 months and then 21.49% p.a. (1.50% balance transfer fee)

    $55 $0 in the first year

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    Details
  • Thumbnail icon for St.George
    St.George Vertigo Platinum

    0% p.a. for 15 months then 12.99% p.a.

    6.99% p.a. for 12 months and then 21.49% p.a.

    $99 $49 in the first year

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    Details
  • Thumbnail icon for BankSA
    BankSA Vertigo

    0% p.a. for 7 months then 13.99% p.a.

    0% p.a. for 22 months and then 21.49% p.a. (1.50% balance transfer fee)

    $55 $0 in the first year

      Compare
    Details
  • Thumbnail icon for NAB
    NAB StraightUp Card

    $20/month - $3,000 Credit Limit

    0% p.a.

    No current offer

    $240 $20/month - waived if no spend & no balance owing

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    Details

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Low interest credit cards explained

If you're on the hunt for a new or replacement credit card why wouldn't you choose one that has the lowest interest rate? Low interest cards, or low rate cards generally have an interest rate of 14% p.a. or less. With many credit card interest rates over 20% p.a., you may be wondering what the catch is with low interest cards. Read on as we outline the key features of low interest cards and explain some of the differences between their higher interest counterparts.

What types of low interest cards are available?

Banks are very good at marketing and so you'll find that there are a range of low rate offers available when you look for a new card. Generally, there three main types of cards offers that fall into the low interest category.

Features of low interest rate cards, what should I look for? 

Low rate cards have the same standard features as regular credit cards, these include:

  • Interest free days. Most low interest cards will have up to 55 interest free days. This means if you pay your balance off in full each month you will not pay any interest at all.
  • Worldwide access. You'll be able to make purchases online or in person worldwide through the MasterCard, Visa or American Express network. Just be aware that your bank may charge you foreign transaction fees for overseas purchases.
  • Tap 'n go and payPass. Credit cards now come chip enabled which means you can go contactless for purchases under $100 in Australia.
  • Contactless payment options. Having contactless payment options like Apple, Google or Samsung Pay are a lot more handy than you think. With these nifty perks, you can afford to leave your wallet at home. 
  • Cash advances. While your card will allow you to make cash withdrawals, you should generally try avoid using your credit card for this purpose. Interest free periods generally do not apply for cash advances and the interest rate is generally much higher than the standard purchase rate for the card.

Some low rate cards also offer:

  • Complimentary insurance. Many credit cards now come with overseas insurance cover and other insurances like price protection, extended warranty and purchase cover. Be sure to check eligibility criteria as this can vary.
  • Concierge. Some low rate platinum cards will come with concierge service to assist you with shopping, restaurant or entertainment bookings.

What fees could I pay with a low interest card?

Annual fee: Most low rate cards will have annual fees under $60, though if you opt for a platinum version you could expect to pay an annual fee of around $100 a year.

Cash advance fee: If you make a cash withdrawal you will either pay an upfront fee or a percentage fee of the cash advance amount whichever is higher.

Foreign transaction fee. Low rate credit cards are generally not designed for frequent international travel so you would expect to pay a foreign exchange fee on any purchases or withdrawals. The standard charge is around 3% of the Australian dollar transaction account.

Late payment fee. This fee can be completely avoidable so set up automatic monthly deposits for the minimum payment. Late payment fees can be as high as $30.

Replacement fee. If you lose your card you'll need to pay a replacement fee. Just be aware that the cost for replacing a card overseas will be much higher than if you lose your card in Australia. There may also be an emergency card fee on top of the replacement fee if you need the replacement card urgently.

Are low rate cards for everyone?

If you don't always pay your card balance off in full each month then a low rate card will be a great option for keeping your interest repayments to a minimum and make it easier to pay back your debt in a shorter timeframe.

There are a number of instances when an alternative credit card could be a better choice. These include:

  • You always pay off your balance in full each month. If you always stick within your card's interest free period then a card with a low interest rate won't really matter as you won't pay interest charges. You should think about finding a card with a low or no annual fee or consider getting a rewards card.
  • You travel internationally more than once a year. Foreign exchange fees can add up, so if you're going to be travelling overseas regularly you should really think about getting a card that doesn't charge international fees. See here for travel credit card options.
  • You shop frequently at international online stores. For the same reason that if you travel regularly, if you purchase goods from international sites you'll get charged a foreign transaction fee. Even if the site allows you to pay in Australian dollars your bank will still charge a foreign transaction fee for the Australian dollar amount, so consider getting a card that doesn't charge these fees.

How much could I save with a low rate card?

The amount of money you'll save by opting for a low rate card over a rewards card, for instance, will depend on your ongoing spending and repayment habits. But let's look at the following scenario as an example.


Jill has a credit card with a balance of $3000. This card does not have an annual fee but the interest rate is 19.99%. She can afford to pay back $300 a month. It will take Jill 1 year and cost her $309 in interest to pay off the card according to Mozo's credit card debt repayments calculator. If instead she had a low rate card from one of the Big 4 Banks, with a $59 annual fee and an interest rate of 13.49%, she would pay off the card in 11 months and only pay $260 interest.

Now, many people do not ever get their balance to zero as they make new purchases on the card, so the amount of interest paid over the life of the card is much higher, which is why having a low going interest rate is so important if you do carry a balance on your card regularly.

Written by: Kelly Emmerton, Mozo Money Editor

Picture of Kelly Emmerton
JP Pelosi
Managing editor

Jean-Paul (JP) Pelosi is an experienced journalist and editor who has contributed to many of Australia's leading media outlets including The Guardian, News.com.au, Domain.com.au, Investment Magazine and ANZ's Bluenotes. He has also edited news and communications for large financial services companies such as CommBank, Suncorp, Allianz and Amex. He loves a well told story and applying his editorial experience to content that readers both care about and enjoy. JP heads up our writing team.

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