Compare 12 month low interest cards

Find a credit card that best suits your needs. Compare interest rates, balance transfer rates, annual fees and more from Australia's leading lenders, big and small. - Data last updated on 26 Aug 2019

Compare 12 month low interest credit cards

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  • Credit card interest is what credit companies charge their customers every time they make a purchase through that credit card. There are a variety of transactions that can be made through a credit card, which is why the interest rates vary for each one.

    The main interest rate is what is charged on the items you purchase. Cash advance interest is when you withdraw cash or make money transfers from your card. A balance transfer interest is charged when you transfer a balance from one bank’s credit card to another. A promotional or introductory interest rate are special interest rates which all you to have a lower interest rate on your card for a limited period of time.

    Do credit cards with low interest rates on purchases even exist?

    Credit cards with low interest rates on purchases do exist, but the time period specified varies from one credit card to another.

    For example, some cards have an introductory period of 13 months during which they offer an interest rate of 0 per cent p.a. (per annum). This means that you can purchase items with that credit card without the usual interest rates for 13 months, as specified.

    After the specified time period passes, the credit company will charge you the usual interest rate that they hold for the particular card.

    Many banks offer credit cards with low interest rates (or no interest) for special introductory periods. In fact, some credit card companies offer more than just 12 or 13 months of low interest rates. Some go as far as 18 or even 24 months.

    Why would banks offer this? Is there a catch?

    Both big and small Australian banks have decided to offer these introductory low-interest periods in order to lure customers from their rivals.

    Given the incentive that comes in the form of low interest rates offered within a limited time frame, customers will feel more at ease and confident in using their credit cards in their everyday transactions.

    Aside from this, banks also offer lower interest rates on purchases in order to effectively sell a particular credit card to their potential customers. As more and more banks continue to do this, there is more competition in which credit card company gets to offer the best deal. This is why some banks go as far as to offer lower interest rates up until, say, 18 or even 24 months, whereas some banks would only offer a 12-month or six-month time period.

    Where to find and compare credit cards with low interest rates

    Many websites readily provide charts that show customers the differences and pros or cons of getting this credit card or that.

    It isn’t hard to find lower interest rates offers. Many Australian banks offer low-interest credit card purchases, and provide explanatory information that is accessible on their websites.

    There are many options to choose from, given that there are several dozen lenders in Australia offer more than 200 credit cards between them.

    How is credit card interest rate calculated?

    A credit card interest rate is usually calculated based on the balance that you owe daily – although many cards offer an interest-free period before this charge kicks in. This is why people are often advised to pay off their entire credit card bill each month; by doing so, you can avoid being charged interest.

    Credit card interest rates also depend on the kind of card you get, whether it is a standard card, gold or platinum. Platinum cards have some of the highest interest rates in the market, as well as rewards credit cards.

    Things to consider before getting a credit card

    Some credit card companies charge on purchases because sometimes customers fail to pay off their full closing balance on their last statement before the due date stated. If a customer does not pay off the balance before the specified time frame, they will not receive what is called the “interest-free” days on their card. Interest-free days are sometimes offered by credit companies, but others continue to charge interest on all purchases regardless.

    Having an outstanding balance on your credit card could also mean that you will lose interest-free privileges on your card.

    Pros and cons of getting a credit card

    Owning a credit card means more purchasing options. Transactions can be done online or on the phone. When making purchases in person, you won’t have to go through your wallet or write a cheque—all you have to do is swipe.

    You can also opt to pay in installments, which comes in handy especially if you’re making a big purchase, such as a car. Many like to have credit card for emergency purposes, like in the event that you have to pay for something you cannot afford at the moment.

    All of this also has a downside. Credit cards could lead to overspending, which could lead you into debt if you’re not careful. The fees and interest rates that come along with it can also cost you hundreds of dollars every year.

    ^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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