Low rate credit cards with interest rates below 9%

Finance Journalist · 24 April 2020
Consumers looking to keep their credit card balance in check could consider shopping around for a lower rate card. Some providers now offer interest rates below 9% on new purchases.

The average Australian household has a credit card debt of $3,000, according to Australian Bureau of Statistics data. Findings from Canstar’s 2019 Consumer Pulse Report also indicate that credit cards can be a big debt trap for some Aussies. The report found around two thirds (67%) of those surveyed had credit card debt.

If you’re looking to reduce the amount of interest you’re charged on any balance you carry over on your card at the end of each billing period, you may want to consider switching to a low rate credit card. With several options on Canstar’s database below the 9% mark, now could be a good time to compare some of the lowest interest rate credit cards on the market.

If you want to learn more about how low rate credit cards work and to get an idea of how they can stack up against other kinds of credit cards, read on.

Low rate credit cards on Canstar

If you’re in the market for a new card, the table below displays a snapshot of low rate credit cards on Canstar’s database, sorted by purchase rate (lowest to highest) then by provider name (A-Z). The results are based on a monthly spend of $1,000 ($12,000 annually). Before committing to a particular credit card, check upfront with your provider and read the terms and conditions to confirm the purchase rate you will be offered, and whether the product as a whole meets your needs.

To see the full list of low rate credit cards on Canstar’s website, click here.

What are low rate credit cards?

Low rate credit cards typically come with lower purchase rates than other types of cards, with some on our database as low as 7.49% at the time of writing. Keep in mind, though, that low rate credit cards are generally ‘no frills’ and tend to not include the rewards programs, perks and bonuses that premium cards may offer.

According to Canstar Research, as at 21 April 2020, the average non-rewards credit card purchase rate on our database is 13.76%, while the highest is 24.99%. This is based on personal credit cards on Canstar’s database.

So if you were to take out a card with a purchase interest rate below 9%, you’d be paying less interest than the average non-rewards card. Some cards even offer introductory rates of 0%, before switching to a higher rate later on. When deciding on a suitable card, it could be a good idea to consider whether the card as a whole is right for you, including the rate of interest that would apply over the long term and not just the introductory rate that may be on offer. Additionally, it can be a good idea to pay off as much of your balance as possible each billing period to minimise interest costs, regardless of what the rate on your credit card is.

In some cases, low rate credit cards may be suitable for customers who want to transfer an existing balance to a new card to save on interest, or for those who just want a no-frills product for their everyday transactions. Using ASIC’s credit card calculator, a $2,000 credit card debt charged at 24.99% interest per annum, while making only the minimum monthly repayments, could cost you $6,253 in interest over 23 years and six months. Here, the minimum repayment is $52 for the first month. Minimum repayments are calculated as a percentage of your closing balance, so they will decrease in line with your balance over time.

In contrast, a 7.49% purchase rate for that same debt with minimum repayments ($41 for the first month) would mean you’d pay $652 in interest over nine years and two months. This would more than halve the amount of time required to clear your balance and reduce the amount of interest you pay by $5,601.

Pros and cons of low rate credit cards

Here are some of the potential pros and cons of low rate credit cards:

Low rate credit cards: pros and cons



  • Lower interest rates can mean lower monthly interest repayments when compared with higher-rate credit cards.
  • Some low rate cards may also come with low fees, meaning they could be suitable for consumers looking for a ‘no frills’ card without premium features.
  • Low rate credit cards may also come with even lower rate balance transfer offers.
  • Low rate cards tend to not come with rewards programs and so tend not to be as appealing to people seeking rewards, although there can be exceptions.
  • They typically don’t come with the same perks and bonuses as some premium cards. For example, it typically won’t include complimentary travel insurance.

5-Star low rate credit cards

The following low rate credit cards received a 5-Star Rating in April 2020:

Company Winning Product
American Express Low Rate Credit Card
Auswide Bank Low Rate Visa
Bank Australia Low Rate Visa Credit Card
Bank of us Visa Credit Card
Bendigo Bank Low Rate First Mastercard (for<25)
Community First CU Low Rate Blue Credit Card
Community First CU Low Rate Credit Card
Community First CU Low Rate Pink Credit Card
Easy Street Fin Services Easy Low Rate Visa
Endeavour Mutual Bank Visa Credit Card
First Option Bank Low Rate Visa Credit Card
G&C Mutual Bank Low Rate Visa Credit Card
MOVE Bank Low Rate Credit Card
Sydney Mutual Bank Visa Credit Card

Source: Canstar Credit Card Star Ratings, April 2020.

How to compare low rate credit cards

When searching for a low rate credit card, there a few factors that could be worth keeping in mind, including:

  • The introductory purchase rate and revert rate (the purchase rate your card reverts to after any introductory period, if applicable) on the card
  • The fees, such as any annual fees, late payment fees or balance transfer fees
  • Whether the card has any perks or bonus features
  • If you will be making a balance transfer onto the card, the promotional balance transfer rate, how long it lasts for and what interest rate it will revert to
  • The number of interest-free days – our database shows the maximum for credit cards is currently 110, while on the other hand, some low rate cards have zero, meaning interest would begin accruing on the card straight away.

To compare credit cards based on these factors and more, you can use Canstar’s comparison tables:


Original author William Jolly

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