Who has the best low rate credit card of all the major Australian banks? Why don’t we compare the 4 major banks by rates and features on their main low rate credit card options?

So let’s get this straight, Australians major 4 banks have a similar purchase rate on each of their low interest credit cards as of writing this article. Could this be right? In a system of market competition they all have the same rates. There are other banks that offer even lower rates but this comparison is only for Australia’s major 4 banks so let’s keep going.

The cash rate, for when you draw money in the form of cash on credit. Never a good idea to draw a cash advance rate because of the higher interest rate this incurs and none of these credit cards offer too much relief in this area. All the banks showed big cash interest rates in the high 21% but Westpac had a little less at the lowest purchase rate of 21.24%, 25 basis points off the other three banks CAB, NAB and ANZ at 21.49%. So cash advances are not the best use of these credit cards.

Westpac have the lowest annual credit card fee at $45 with CBA having the highest at $79($48 if you qualify). NAB the next best annual fee at $49, only $4 more that Westpac’s yearly fee and ANZ at a seemingly close $58. So credit card annual fees vary between the banks being compared but not by too much.

ANZ has the best balance transfer at 0% interest over 6 months. All the other cards have a higher balance transfer rate between 3.99% to 5.99%. If you were choosing to transfer your credit card balance then ANZ might be the way to go.

All the compared credit cards have the same 55 day interest free terms on purchases.

If you were only considering these cards then you would not be doing your credit card research properly, there are other credit cards that can save you money in the low interest area. You just need to consider other lenders to find a better deal.

Bank West for instance, that have a genuinely competitive interest rate on it low rate credit card but if you haven’t heard of them or are not near a bank branch you might never getting choose. With the internet, online applications can have a great impact on your ability to apply for a different credit card easily. You can apply for most credit cards online these days so you should look to more credit card lenders to find better deals.

If you own a credit card your probably know how all too easy it is to build up a debt. Here are some great tips about reducing your credit card debt that can really help reduce debt.

Make regular repayments
Stop Spending on your card for a while
Use a debit card instead
Use your savings
Consider Switching Cards

Make Regular Repayments
Do you know when you should repay your credit card? as soon as you can? That’s why you should always make a budget to make regular repayments on your credit card. Yes credit cards are useful for buying anything without cash but you should avoid the interest charges you get for any debt, it’s too easy build the debt up and harder to get it down.

On your credit card statement you will see a minimum repayment amount; this is the amount your credit card lender wants you to repay. If you repayed your credit card at that minimum rate you probably never get rid of your card debt. This is why you should always repay more that the minimum, and probably pay as much as you can regularly.

Stop Spending on your card for a while
If you can resist the temptation, stop using your credit card until you have reduced your cards balance. Debt can creep up on you slowly, especially with credit cards. So if you find yourself in debt difficulty you will want to manage your money better and try to stop spending on it. Which means you stop racking up the debt, start using cash for all purchases and chip away at your credit card debt until it’s gone.

Use a Debt Card instead
A debit card is like a credit card except it draws money directly from your own bank account. Think of it as like an eftpos card that can use credit card payment facilities. Debit cards give you the buying convenience of shopping online and not incurring any debt. This will help you if you have to use your credit card for payments like’s essentials avoiding a debt in the first place.

Use your Savings account?
If you do have money sitting in a savings account, you should pay off your card debt and avoiding interest charges. The interest you earn from your savings account doesn’t offset the higher credit card interest charges. You can start saving again once you have reduced your credit card debt.

Consider a credit card switch
Does your current credit card give you a competitive interest rate? You can switch credit cards to get a better interest rate or annual fee. You should compare what your current credit card charges you and what other low rate credit cards could offer you. Even just a few percent interest reduction can save you a lot in the long run.

Most new credit card applications offer a balance transfer period where little to no interest is charged on all of your transferred debt. These interest free periods are there to help you switch credit cards and give you an opportunity to meet all your repayments.

Have you noticed when the Reserve Bank of Australia changes the cash rate, credit card interest rates don’t seem to move too much. That is because the interest rates charged on credit cards is generally so much higher that the rates the RBA sets.

The RBA uses what’s called the monetary policy to control financial markets in Australia, it is the cash rate the RBA changes that has the most influence.

“The cash rate is the rate charged on overnight loans between financial intermediaries. It has a powerful influence on other interest rates and forms the base on which the structure of interest rates in the economy is built.” (http://www.rba.gov.au/monetary-policy/about.html)

Yet the cash rate in relation to credit cards doesn’t move the credit card rates as much as Home Loans.

The cash rate is so much lower that the interest charged on credit cards that when the RBA do change the cash rate, credit card interest rates don’t move as much. An example would be the card lender borrows money for a lower rate (say 5%) and charges 4 times that for a credit card (20%).

Still the lenders usally increase their rates quickly when the cash rate does move up and more slowly when the cash rate heads south as we have just seen through the GFC.

If you are concerned about the interest rates on your card, you should consider balance transferring to a low interest credit card and minimise any interest you do have to pay.