Compare Low Rate Credit Cards

They’re generally two types of credit card interest rates, purchase rate and cash advance rate.

Purchase rate is charged when you buy anything on a credit card, like when you use your credit card in the shops or online.

Cash advance rate is charged when you draw cash directly from your credit card. Cash advances usually have a higher interest rate and are not recommended for most credit cards, you need to check your credit cards cash advance rate if you need to use it. Also note the terms of cash advances, they usually stop any interest free periods until you repay your card in full.  Something to watch out for!

The Interest rate charged is calculated using a compound interest formula. What compound interest does is add interest to the principle daily. Every day your balance owing grows because of this interest added. If you repay more than minimum repayments, then you can greatly reduce the compound interest effect on your debt.

Most lenders offer low interest credit cards but some lenders offer lower rates than others to get your business and effectively compete in the Australian credit card market.

Low rate credit cards differ to standard credit cards in the reduced interest rate, sometimes the difference can be more than 5% less. You trade off credit card benefits like rewards and frequent fliers for genuine low interest which when you calculate the interest charges over a long period of time, it can save you a lot of money.

With a low interest credit card, you get a very competitive interest rate on all your purchases. Low rate credit cards are suitable for people who leave money on the card for long amount of time, usually people use their credit card like a revolving line of credit, never quite paying off the credit card before charging more on it. This is a way of life for a lot of people and if this sound like you the you stand to gain from low rate credit cards reduced interest charges.

The low interest rates are not the only thing you can benefit from; you can get a balance transfer to help you switch from any other credit card you might have, and with the introductory low interest period you can reduce the interest charges even more. Then you benefit from lower interest rates for the rest of the time on your new credit card.

You still get up to 55 days interest free on purchases which  usually only applies when you don't carry over a  credit  each month. You just need to budget your credit card repayments on a regular basis.

Low annual fees are also another plus that help reduce your overall credit costs. Low rate credit cards can offer you lower annual fees too.