4 perks on having a low interest rate credit card

Published on November 30th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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When looking for a new credit card the most offered advise is to look for a card that has a low interest rate. Besides the low repayments that come with it, and its ability to help you save a few dollars here and there what other benefits does it have to better your life? Here are four perks that a low interest rate credit card can add to your life.

You can save in a big way

One of the biggest drawcards with a low interest rate card is that you can save on the interest payments that come with it. If you carry a balance from your credit card every month and you are looking for a cheaper way to save on costs, then it is the way to go.

Some credit cards have an interest rate that goes as high as 20% while a low interest credit card can be lower with a 10% interest rate cutting your monthly payments in half. You can also opt for cards that have a 0% interest rate, but you should enjoy this 0% bargain for the set period which is usually between 6 and 15 months before the prices on it increase.

Pay off your current debt

If you have accumulated debt on your credit card and are looking for ways to reduce the costs, then a balance transfer credit card will be the next best thing. It comes with a low interest rate, or you can opt for the 0% interest rate an all balance transfers for an introductory period.

A tip when using this kind of credit is to make sure that you meet all the monthly repayments while the rate is still low to save you on a couple of hundreds when they decide to increase the rate. It will also mean that you will be able to pay off both loans sooner.

It’s also best to be aware that this is a temporary fix before your lender decides to increase the interest rate which can be in the range of 20%. If you want a card that will consistently stay at a low interest rate, then you should shop and compare for low interest credit cards which are more long term.

The perks are worth it

If you are looking for a card that will aid you in terms of spending less and saving more then a low interest or 0% interest card will be a major drawcard for you. With the drawback feature of having no rewards that come with the card, you will be able to avoid spending money that you could need just for the sake of earning points. A bonus with this is that if you have a lower credit limit and interest rate on your purchases this will give you enough space to meet your balance requirements without falling into the debt trap.

You can bag the best deal by simply comparing

Online credit providers are becoming a popular option with its informative tools that can help you find a low rate credit card by filling in a few details. To walk away with the best deal in the bag will mean you having to compare, but with friendly advisors on standby and tools at the touch of your fingertips you can eliminate unnecessary footwork scouting for the best deal. Try to be vigilant when accessing online credit providers by making sure that they are a registered provider in your state. Never sign anything until you have understood the terms and conditions that come with it.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

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