Low rate credit cards

Lowest credit card interest rates July 2023

According to the Finder database, these credit cards offer the lowest standard interest rates for purchases in July 2023:

1. G&C Mutual Bank Low Rate Visa Credit Card: 7.49% p.a. variable, with a $50 annual fee
2. Illawarra Credit Union Low Rate Credit Card: 8.99% p.a. variable, with a $0 first-year annual fee (then $50 per year)
3. Community First Low Rate Credit Card: 8.99% p.a. variable, with a $40 annual fee

There are a few other low rate credit cards on the market in Australia that offer 8.99% p.a. purchase rates. But the Community First Low Rate and Illawarra Credit Union Low Rate cards were both finalists in the Finder Credit Card Awards for 2023.

💡Tip: When you're comparing low rate credit cards, keep in mind that most of these cards don't offer perks like rewards or complimentary insurance. So the best card for you might have a different low interest rate and offer value in other ways.

Who are low rate credit cards best suited to?

Low interest credit cards are suited to people who want to save on interest costs. As most cards have 44-55 days interest-free, you'll only pay interest if you carry a balance from month to month.

So, low rate cards can help save on these interest charges if you don't pay your balance in full by the due date on your statement.

There are also cards that offer a 0% purchase interest rate for an introductory period, which is basically the lowest rate you can get (even if it's only for a limited time).

These cards are ideal if you have some large purchases, like a holiday, wedding or renovation coming up. They allow you to pay no interest during that period and can give you the breathing room you need as long as you're making the minimum repayment.

Pros and cons of low rate credit cards

How to compare low rate credit cards

With so many competitive low interest rate credit cards on the market, here are some of the features that can help you narrow down your options:

Interest rates

Credit cards have different types of interest rates, including ongoing low rates and promotional offers. So here are the key factors to look at:

• Promotional interest rates. If you're looking at cards that offer an introductory 0% interest rate on purchases, the promotional period is usually between 6 and 17 months – but could be up to 25 months depending on the card. After that, any remaining balance from your purchases will collect the standard interest rate, so it’s wise to know when this rate applies and aim to clear your debt beforehand.
• Standard interest rate. On a low rate card, the purchase interest rates typically start around 8% p.a. and go up to around 15% p.a. If you want a credit card for long-term use, one with an ongoing low interest rate could be a better fit than a card with 0% for a promotional period.
• Balance transfer rates. Some low interest credit cards also come with 0% balance transfer offers that can last for up to 36 months. If you’re paying off an existing debt, a balance transfer can help you save on interest and repay your debt faster. It’s a good idea to focus on paying off this balance before making new purchases, because a higher interest rate is charged after the introductory period.
• Cash advance rates. The interest rate for cash advances is usually higher than the rate applied to purchases and can be as high as 24% p.a. This rate is charged for transactions such as ATM cash withdrawals, foreign currency purchases and gambling. Cash advances also aren't eligible for interest-free days.
• Interest-free days. Most credit cards also come with interest-free days, which you can make use of when you pay your balance in full for the previous statement period. The number of interest-free days is usually up to 44 or 55 days, but can be higher depending on the card. For example, the humm90 Mastercard has one of the longest interest periods of up to 110 days.

Fees and charges

These credit card costs can also have an impact on how much value you get – and how much you can potentially save compared to other cards.

• Annual fee. Some low rate cards come with a $0 annual fee for the first year or for life, while others charge annual fees of $100 or more. Make sure this cost doesn't outweigh the value you get from the low interest rate.
• International transaction fees. If you use your card to make a purchase online with a business based overseas – or when you're actually overseas – you will usually be charged a foreign transaction fee (e.g. 3% of the transaction). But some credit cards are more tailored to international use and offer 0% foreign transactions fees.
• Minimum repayments. Each statement period, you’re required to make a minimum repayment. This is usually a small percentage (which can range from 2% to 10%) of your total balance owing. If you don’t pay this, you’ll usually be charged a late payment fee. To lower your interest payments and avoid ongoing debt, try to pay as much as you can before the statement due date.
• Balance transfer fee. Some balance transfer cards charge a one-time fee worth around 1-3% of the balance you transfer. Even when you get an introductory 0% interest rate, this adds to the cost and may change the amount that you save through an offer.

Additional features

Credit cards with low interest rates generally come with fewer frills than costly cards, but here are some of the extra features you might want to consider:

• Rewards programs. Competitive frequent flyer or rewards credit cards usually come with higher interest rates and fees, but you can earn points on some low rate cards in the market. These cards usually come with less competitive earn rates, but can still be rewarding without the high price tag.
• Cashback. Some low rate cards also come with cashback offers, although you’ll usually need to meet a certain spend requirement to get the money back. If the spend requirements fit with your budget and you can afford to pay it off, this can be another way to get extra value from your card.
• Complimentary insurance. Some low rate cards offer you complimentary travel insurance and purchase cover. These features can help you save on buying insurance policies, but make sure you check out the eligibility requirements, inclusions and exclusions of the cover before you apply.

If you often carry over a balance from one month to the next, a low interest credit card could help you save on interest charges. While there is no "best" low rate care, the mix of credit cards available in Australia means you can compare different offers and features to help find a card that you want.

Frequently asked questions

• What is the lowest interest rate credit card?

  Finder's database shows that the lowest credit card interest rate in Australia is 7.49% p.a. on the G&C Mutual Bank Low Rate Card, as of 14 July 2023.

  But credit card interest rates are variable, which means they can change regularly. So the lowest interest rate card can vary depending on when you're comparing cards. You can click on the "Purchase rate" column of our comparison table to order the credit cards based on their current interest rates.

  Just keep in mind that the lowest interest rate credit card could be listed as one with a promotional 0% interest rate. When that's the case, you can continue scrolling through the table to find the card with the lowest ongoing interest rate.

• I'm looking for a cheap credit card. Which is the cheapest?

  The cheapest credit card will depend on how you use it. If you pay off your balance every month, a $0 annual fee credit card would likely be the cheapest option.

  If you regularly carry a balance from month to month, the cheapest credit card will have a low interest rate and a modest annual fee (less than $100). There aren't many cards on the market that offer both a $0 annual fee and a low rate, but using the table above you can find what you consider to be a cheap credit card.

• What is the best low interest rate credit card?

  There is no one "best" low interest rate credit card in Australia. With so many cards on the market, a card's individual features have an impact on how well it suits your circumstances. So the card that's right for you may not be right for someone else. Comparing low interest rate credit cards based on the features you're looking for will help you find a card for your individual needs.

• How are credit card interest rates calculated?

  Credit card interest rates are usually advertised by the annual rate that applies to the account, shown as "per annum" or p.a. However, interest on your account balance is typically calculated daily and then charged monthly on the statement due date. This means that for every day that you don't make a payment, the interest charges will build up (or compound).

  If you want to learn more about credit card interest in detail, you can check out Finder's comprehensive guide to interest rates.

• Does the low interest rate on a credit card apply to balance transfers?

  This depends on the credit card and any applicable balance transfer offers. If the card allows balance transfers, it may come with a 0% interest rate for a promotional period before reverting to a standard rate.

  Some low interest rate cards apply the standard purchase rate to balance transfers after the introductory period while others apply the cash advance rate, which can be as high as 25.99% p.a. The average standard credit card interest rate is currently 19.94% according to Finder analysis of Reserve Bank of Australia data.

• Is a low interest rate card the cheapest credit card option?

  There isn't a single "cheapest" credit card option because everyone uses credit cards differently. There are also other costs to consider beyond the purchase rate, such as annual fees and interest rates for cash advances or balance transfers. On the flip side, some people might find cards with high rates and fees "cheap" because of all the complimentary extras.

  Simply put, the term "cheapest credit card" is really subjective and varies from person to person. So when you're trying to find a credit card that's affordable, make sure you consider all of the potential costs based on how you plan to use the account. That way, you'll be able to find one with rates and fees that are affordable for you.

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