Low Rate Credit Cards

Updated 11 August 2020

All credit cards charge a certain rate of interest on purchases and cash advances. While there are cards that have purchase rates that reach 22-23% p.a., there are also cards that offer a much lower purchase rate, usually ranging between 9% and 14% p.a. As the name suggests, a low rate credit card is a card that has a low purchase rate.

Low Purchase Rate

While all low rate cards have a low purchase rate, how low that rate is will depend on the card provider. Some low rate cards may offer purchase rates as low as 9% p.a., while other low rates can reach 14% p.a. The other features on offer – and the annual fee – can affect how ‘low’ the low rate card is.

Low Annual Fee

Low cost cards tend to pair a low purchase rate with a low annual fee (sometimes referred to as an account fee if paid 6-monthly). This can help cardholders keep outgoing costs down while still enjoying access to credit. However, some low rate cards will charge a higher annual fee, especially if it has more features to offer.

Basic Features

Low rate cards typically keep features to a minimum, especially if they also feature a low annual fee. This can be a great option for cardholders who want to keep things simple. However, there are low rate options that offer features such as entertainment and retail perks, access to rewards programmes, and other extras.

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American Express Low Rate Credit Card

2 reviews
$0 saved over months

ANZ Low Rate Visa Credit Card

5 reviews
$0 saved over 24 months

ASB Visa Light Credit Card

3 reviews
$0 saved over 6 months

BNZ Low Rate Credit Card

1 review
$0 saved over months

Kiwibank Zero Credit Card

1 review
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Kiwibank Low Rate Credit Card

4 reviews
$0 saved over 6 months

Kiwibank Platinum Visa Credit Card

1 review
$0 saved over 6 months

Westpac Low Rate Mastercard

1 review
$0 saved over 12 months

Fair Rate Credit Card

1 review
$0 saved over 6 months

Low Rate Credit Card Features

Want to know what a low rate card can offer and who it is best suited?

Why Choose A Low Rate Credit Card?

Low rate credit cards can suit a wide variety of cardholders. Want to know if a low rate card would work for you? Let’s take a look at the types of cardholders that benefit most from have a low rate credit card in their wallet.

Cardholders Who Carry A Balance

When you carry a balance, that means you do not pay off your balance in full at the end of the statement period. When you do this, your carried over balance attracts interest at the card’s standard purchase rate (cash advances attract the card’s cash advance rate). Obviously, the higher the purchase rate, the more interest you will pay. So, choosing a low rate card could help you save in interest, helping you pay off what you owe sooner.

Cardholders Who Are New To Credit

When you’re new to credit, it can be all too easy to get carried away, spending money when you really can’t afford to. If you overspend on a card with a high purchase rate, it can be harder getting yourself out of trouble. By choosing a low rate card, your unpaid balance will attract interest at a lower rate, allowing you to pay it off and get back to even ground much easier.

Cardholders Who Struggle To Budget

Budgeting is tough. As hard as you try, you may not always stick to your budget, which means you overspend now and again. While this is not a great way to deal with your finances if it happens all the time, it’s understandable if it happens occasionally. Being able to fall back on your credit card is great – as long as you know you can pay it all off within a reasonable amount of time. With a low rate card, you can do this while paying less in interest.

Benefits of Low Rate Credit Cards

Pay Less In Interest

It goes without saying that one of the biggest benefits of having a low rate card is the money it could save you in interest. When you carry a balance, that balance attracts interest. If your card has a high purchase rate, you will pay more interest, making it harder to pay off what you owe, which could mean you stay in debt longer.

Clear Your Balance Faster

With a low rate card, you should pay less interest on your balance month to month, allowing you to pay it all off faster. Aside from that great feeling of no longer being in debt, you can also enjoy one other important benefit: interest free days on your purchases. As long as you pay off your balance by the due date each month, you could take advantage of your card’s interest free period on purchases. This should help you save even more, as you will no longer be paying interest on each new transaction from the date you make it.

Enjoy A Softer Landing

Whether you sometimes spend a bit more than you should, or you’re new to credit, a low rate card can provide a softer landing if you can’t pay off your balance at the end of the month. Instead of getting whacked with a huge lump of interest thanks to a high purchase rate, your low rate card will add a lower rate of interest, making it easier to pay it off and get out of bother.

Keep It Simple

Low cost cards such as low rate cards tend to be low on features. While this will not suit everyone, it can be great for those who want to keep it simple. When you’re not interested in earning rewards, when you don’t want the hassle of features and extras, when you don’t want to pay extra for features you just don’t use, a no frills low rate card could be the card for you.

Find Features Where Needed

While most low rate cards will only offer the basics, there are options that provide a bit more. Low rate platinum cards and low rate cards with higher annual fees can offer handy features to cardholders who need them. While these cards typically cost more in annual fees, they can still help to keep interest costs down with a lower than average purchase rate.

Ready to check out the awesome range of low rate cards here on CreditCard.co.nz? Simply compare the options and apply for the card that best suits you. Easy!

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