Low rate credit cards

Getting a great rate on your credit card is certainly a good thing, but there is more to a low rate credit card than just a low rate.

In addition to featuring a low rate of interest, low rate cards will also generally feature low ongoing fees along with minimal features and benefits.

How Low Rate Credit Cards Work

A low rate credit card is similar to most other credit cards, however they are generally a 'no frills' type of card with limited features. All banks and cards are different though, so be sure to check specific rates and conditions associated with the card you choose.

Low rate cards often have no interest free period, and interest will be payable from the moment you make a purchase. This is different to interest free credit cards that can offer up to 55 days interest free on purchases.

Rewards point programs are available on some low rate cards, however in other cases you may be charged additional ongoing fees to access the rewards program.

Unlike more expensive credit cards, low rate cards generally do not feature additional benefits such as purchase insurance or travel insurance.

Generally someone looking for a low rate credit card will not require these additional features and benefits anyway, and the low rate will be the most important factor.

Should I Get A Low Rate Credit Card?

People who are not high volume users of their card, or those who carry a balance on their card from month to month may be more suited to a low rate credit card.

If you are able to clear your credit card balance each month, then a credit card with an interest free period may be suitable. In this case the interest rate will have no bearing on the decision and the choice can be made based on the features and benefits offered.

For those that are not able to clear their balance each month and are being charged interest, a low interest rate credit card with low fees may be a better option. In this case it may be better to avoid cards with additional features and benefits due to the increased fees that often accompany them.

For personalised advice tailored to your financial situation, speak to a qualified financial planner or other financial professional.

Choosing a Low Rate Credit Card?

There are a number of factors to consider when choosing a low rate credit card.

Here in Australia there are numerous banks, credit unions and other financial institutions offering credit cards of all types, including low rate cards.

Many people opt for credit cards with their existing bank, however it can be worth shopping around to see if you can get a better deal through a different bank or other institution.

Finding a card with a low rate is one thing, but you need to ensure that the low rate is not offset by higher monthly or annual fees. There is no point getting a credit card with a low rate if you’re paying more in high fees.

The rates and fees of the various credit cards can be found directly on most banks' websites, however an easier option can be to use an online financial comparison website which quickly compares the rates and fees from multiple cards all on the one screen.

How To Apply For A Low Rate Credit Card?

Many banks now enable to you apply online. You will still need to provide your identification documentation, and in most cases you will also need to provide evidence of your income.

Credit cards can be very useful when used properly, but it is important to find a card that suits your needs whilst also offering a competitive interest rate and low fees.

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