Why Choose a Low Cost Credit Card?
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Why Choose a Low Cost Credit Card?

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Credit cards are not one size fits all. While they all provide access to credit, what they offer on the side can vary hugely. Some cards offer enticing introductory offers, extensive features and the opportunity to earn rewards, while others keep it simple while helping to keep costs down. These are the low cost cards we’ll be discussing on this page.

Low cost cards can be a great option for cardholders looking to save money, either offering a low annual fee, a low purchase rate, or in some cases, both. But are they the right choice for you?

No Annual Fee Cards

With a no annual fee card, you will pay no annual fee for the life of the card. Some cards may offer no annual fee for the first year as an introductory offer, which could help you save money and get more value from the card, but it’s important you know what the standard annual fee will be, and whether it is worth paying to keep the card in the long term.

Low Fee Cards

While they may not offer as much in the way of savings as a no annual fee card, low fee cards can still help to keep costs down, as you pay a lower than average annual fee. This fee may be paid yearly, or split evenly to be paid every six months or monthly.

Low Rate Cards

A low rate card has a lower than average purchase rate, allowing you to pay less in interest if you carry a balance. This could lower your interest costs overall, to allow you to pay off your balance sooner.

Cards with Purchase Offers

Any type of card can feature a purchase offer. This provides new cardholders with a low introductory rate – sometimes as low as 0% p.a. – on purchases for a certain period of time. While you need to be careful to pay off what you spend during this introductory period, an offer such as this could help you save on large purchases and everyday spending. Note, cards with these offers may not be low cost over the long term.

What do low cost cards offer?

Why would you choose a low cost card such as a no annual fee card or low rate card? There are plenty of reasons to choose a low cost card. Here are just some of the benefits on offer.


As the name suggests, low cost cards offer you access to credit at a lower cost. So, they can help you save money. When it comes to annual fees, some cards can charge hundreds of dollars each year.

If you do not find value in those cards, if you can’t afford their annual fees, or if you simply don’t see the point in spending that much on a card, then a no annual fee card could offer a great money-saving alternative.

Similarly, a low rate card could also help you save money, especially if you carry a balance. When you carry a balance on your card – that is, when you don’t pay off the balance when it’s due – it starts to accrue interest. A card with a lower purchase rate will attract interest at a lower rate than a card with a higher interest rate, helping to keep costs down.


Credit cards with lots of features tend to come at a higher cost, often charging more in annual fees and interest. Correspondingly, low cost cards tend to be simpler, with fewer features on offer. However, this doesn’t necessarily have to be a bad thing. Simple can be better.

Cards such as no annual fee cards and low rate cards can be easier to understand. With no complex rewards programmes to get your head round, and no convoluted features to sign up for and meet certain conditions to take advantage of, low cost cards can be a better choice for some.

While it’s still important to read the small print on any credit card before you apply, you may find there is less of that small print to cover with a no annual fee card or low rate card.

Lower Minimum Income Requirements

While every card varies, it is usually the case that low cost cards such as no annual fee cards and low rate cards have lower minimum income requirements than cards further up the ladder, such as platinum cards.

This can make it easier for lower income earners to get approved. Those cardholders may then work their way up to more complex cards if they treat their credit correctly. It’s worth bearing in mind that with a lower income usually comes a lower credit limit, but this could make the card easier to manage.

Why would a low cost card suit you?

Considering a no annual fee card or low rate card? Let’s take a look at the type of people low cost cards tend to suit.

You want a simple card

  • If you are new to credit, you may want a simple card that’s easy to understand. Getting your head round this type of card could allow you to make better decisions as you move on to more complex cards later on.
  • If you have no need of fancy features then there’s no point paying for them. With a low cost card, you get what you need – access to credit – and you don’t need to pay for features you never use.

You want to save money

  • If you tend to carry a balance, a low rate card could help you keep interest costs as low as possible.
  • If you simply want to keep costs down, a card with a low purchase rate and a low or no annual fee could help you do just that.

Think a low cost card could suit you? Check out the great range of low rate and no annual fee options on CreditCard.co.nz now.

Founder - Roland B Bleyer

Roland Bleyer

Founder of Creditcard.co.nz. Roland has extensive knowledge about credit cards in New Zealand. Known as a credit card expert, he has been featured on tv and in various publications.
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