Credit card debt can be crippling, especially if you are someone who relies on it when you travel. According to ASIC, on average, Australians pay around $700 a year in credit card interest alone, with interest rates between 15%-20%.
Now, unless you like to pay that sort of high interest, it might be a really good time to find a new credit card with a better rate. Switching to a lower rate card can truly change your finances, and if you’re struggling to stay on top it will push you in a new direction.
Best low-interest credit cards
Here is a list of the best low-interest credit cards as of January 2019. Credit cards aren’t for everyone, and you need to consider the cost of balance transfers before going down the path of changing credit cards. This list is a great guide, but it doesn’t mean it will be best for you.
- The Low Rate Credit Card from American Express, 8.99%, $0 annual fee
- Bank Australia Low Rate Visa Credit Card, 9.39%
- McGrath Pink Visa Credit Card, 8.99% $40 annual fee
- Virgin Money Low Rate Credit Card, 11.99%, $40 annual fee
- Commonwealth Bank Essentials Credit Card, 9.90%, $60 annual fee
- Credit Union SA Education Community Visa, 0 % for six months, 9.99%, $0 annual fee
- Bank First, Visa Platinum, 0 % for six months, 9.99%, $99 annual fee
Do You Really Need To Switch To A New Credit Card?
It’s important to know that you might not actually need to switch to a new credit card provider. It can be as simple as making a phone call to your current credit card supplier to see if they have a better option. All of the big banks offer credit cards with rates lower than 14%, so if you’re on a 20% plus rate, then this could be the simple change that saves your finances. No extra credit applications mean less wasted time and stress on your part, and an interest rate cut of at least 6% will save you a lot of money.
There are other things to consider also, when applying for credit cards. There are many ways the banks make money from you, and you should know about them before you apply.
Cash Advance Rates
Cash advance rates are a very bad idea. Usually a cash advance will apply interest immediately and can be close to 30% on some cards. You don’t get interest free periods on cash advances.
Depending on how often you use your card, high annual fees can really sting you, so be wary of the fees.
Cheap balance transfer rates will most likely mean high interest rates. Know what you are getting into.
Most low-rate cards will offer interest-free days. It’s best to pay your card back before interest hits, so don’t overspend.
Credit cards (when used right) are a great way to build your credit rating and as long as you don’t overspend you should be fine. However, if you treat it like cash you never had before, that’s one way to get yourself into debt you never had before. Know what you are getting into, and don’t live beyond your means.