Where can I get a credit card with a low interest rate?

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on June 29, 2021
Where can I get a credit card with a low interest rate?

The lowest interest rates for credit cards can be under 10% per annum, but what are the catches?

With record low interest rates for home loans and savings accounts, it might come as a shock that interest rates on credit cards can still top 20% per annum.

A credit card essentially gives you an unsecured loan, topped off with an interest free period. And as credit cards can be used by a wide variety of people with various risk profiles and income levels, the penalty for not paying off the ‘loan’ by the due date on your bill can be steep. So, if you’re after a credit card with a low interest rate, where do you find one?

Read on to find out how to get a low interest rate, and the catches associated with low interest rate credit cards.


The table below compares a range of credit cards with different interest rates.

What are some credit cards with low interest rates?

“Low interest rate”. It’s a relative term when it comes to credit cards, especially when you consider home loans can be under 3.00% p.a. We’ve rounded up a list of some of the lowest interest rate credit cards on the market, disregarding any temporary promotional offers.

G&C Mutual Bank

G&C Mutual Bank’s credit card comes with one of the lowest interest rates we’ve seen in the market. However, apart from that rate, it’s pretty light on features. For example, you won’t receive any Qantas points or other perks, such as complimentary travel insurance. Its late payment fee is $15 and its foreign conversion fee is 2.85%. One bonus is, however, its $0 first-year annual fee. There is also a $0 over the limit fee.

Auswide Bank

Auswide’s card is another low-rate product. However, once again, other than the low rate, it’s pretty light-on with features. Its foreign conversion fee is 3%, and complimentary travel insurance is not included. The minimum late payment fee is $20. There is a $0 over the limit fee.

American Express

American Express is unique among this top five in that it has both a low interest rate and no ongoing annual fee. Apart from that, unlike other American Express cards, this one is features-light. The currency conversion fee is 3%, and there is no complimentary travel insurance. There is, however, purchase protection. The minimum late payment fee is $30 and its over the limit fee is $15.

Community First Credit Union

It’s a similar story with Community First’s Blue credit card. While there is a low interest rate on offer, there is an annual fee and little in the way of features. The currency conversion fee is 3% and there is no complimentary travel insurance. The minimum late payment fee is $25 and its over the limit fee is $30.

Easy Street

Easy Street is another provider with an 8.99% purchase rate and a $40 annual fee. Aside from that there’s not much in the way of features. There’s a 3% currency conversion fee and no complimentary travel insurance. Its late fee is $25 minimum, and its over the limit fee is $30.

Zero Interest Credit Cards Compared

Both NAB and CommBank have introduced credit cards with 'zero' interest to compete with buy now, pay later platforms. While there is technically zero interest, what usually happens is a monthly fee applies whenever you use the card and until the balance is paid off. More details can be found below.

What to consider with low interest rate credit cards

While you might be lured in by the low interest rate, there’s a few things you should know about these products.

  • Interest free days: Most have fairly standard interest free day periods. However, in our research, there are products out there with short interest free periods of around 40 days. Some we’ve found even have 0 interest free days, which could mean you’re being charged interest as soon as you purchase something.

  • Promotions: Some credit cards may offer certain periods where you don’t accrue interest, such as 0% for the first year. This can be tempting, but be cautious of this if you are constantly failing to pay off the bill in full, as the 0% rate could revert and you’ll be stung with a higher rate.

  • Late payment fees: Chances are if you’re looking at low interest rates, you’re thinking there could be a chance you fail to pay off your whole bill in time. If you also fail to make a minimum repayment, you’ll likely be stung for that one too - sometimes upwards of $30.

  • Low features/points: Probably coming as no surprise, none of the five cards we looked at have a frequent flyer points system. Though, if all you’re after is a simple, low-rate card, you probably don’t care too much about this. The international jetsetter or businessman might desire a card with more extra fluff, however.

  • Annual fee: This is a big one - many of the cards analysed have some sort of annual fee. While low compared to rewards credit cards, it makes no sense to pay this fee if you're not actually going to use the card and see benefit from it!

Overall, like with all types of credit cards, it pays to look at a few key areas. A credit card could be useful arsenal in your wallet, but where they primarily make their money is your failure to make payments, so do your research and do your due diligence before leaping into any product.

Savings.com.au's two cents

Low interest credit cards can be attractive for no surprising reasons, but there’s some key things you should keep in mind before signing up for one.

One of the most obvious ones is that they typically have little in the way of perks and features, so don’t expect a low interest credit card to give you access to airport lounges or provide you with a 24/7 concierge service.

Another thing you should consider is why you’re looking for a credit card with a low interest rate in the first place, given the fact interest only kicks in if you fail to pay off the card before the end of the interest free period. Perhaps you don’t expect to be able to pay off your credit card each month, which can be a bad sign.

Some people rely on credit cards to get them through the occasional expensive period, so they aren’t always able to pay off the balance each month. It’s understandable why someone in this position would be drawn to a low interest credit card, but for some, this situation is the gateway to a debt trap. Even with a low rate credit card, interest costs can really rack up over time, so don’t sign up to one if you think there’s a chance you’ll consistently fail to pay off the card each month.

Article first published 22 April 2020, last updated 29 June 2021.

Photo by YTCount on Unsplash

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

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