Can a low rate credit card help you out of debt?

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There is a lot you can do to lower your credit card debt but you certainly can’t do it while you are sitting on your hands. Get out there, be proactive and chase down a low interest credit card that will help you manage your debt not contribute to it.

If you’re struggling to pay your credit balance off every month, then a card with a reduced interest rate is probably for you.

Typically a low rate credit card comes with a skinnier interest rate, and as a consequence, may not offer much in the way of bells and whistles such as rewards programs, extra warranty protection or frequent flyer points.

The cheapest credit cards are useful for those cardholders who carry a balance over in full each month, or are on a tight budget. Despite the cheap rates, some low credit card rates still offer balance transfers and interest free days of up to 55 days.

Balance transfers

Some low-cost cards may offer attractive balance transfer terms, which are carrots used by lenders to encourage you to switch credit cards.

Balance transfers are innovative as they come with a honeymoon period of say 6 – 12 months. Over this period, the interest rate charged against the balance transfer amount can be as low as 0 percent. But be warned, when the honeymoon is over, the interest rate may revert to a higher charge.

Nevertheless, if you’re sensible, a balanced transfer with low credit card rates can slash hundreds of dollars in extra interest payments, and help you out of a financial pothole.

Interest-free periods

Opting for a credit card with an interest-free period can also be a smart decision, as it gives you more time to save some cash to cover a purchase. That said, the interest-free period only applies if you pay off your card in full on a monthly basis.

Annual fees

If you fit the profile for a low-cost credit card, be aware annual fees may still apply – although there are exceptions to this rule.

Moreover, with some of the low rate cards, the annual fee may be waived if you spend above a certain amount annually. However, to earn this bonus, you may be required to spend many thousands of dollars. 

Stop wondering and start seeking solutions for your credit card woes. A low rate credit card could be just what you need to turn your financial worries around. Use the RateCity credit card comparison to compare some of Australia’s best low rate credit cards.


^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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