A low rate credit card is designed to help you save money on purchases and existing card debt by charging less interest than other credit cards. If you don’t pay your card off in full each month, a low rate card helps keep your interest charges to a minimum. Switching to a card with a lower interest rate can also help you pay your debt faster.
Use this guide to compare low rate credit card features and offers available now and learn how low interest rate cards work so you can find a credit card that is affordable for you.
Low interest rate cards offer you a lower ongoing interest rate for purchases than standard credit cards. While credit cards in New Zealand typically have interest rates that range from 16.95% to 20.95% per annum (p.a.), low rate cards offer standard variable rates as low as 12.69% p.a. Some cards even offer promotional 0% rates on purchases for a fixed period (you can learn more about these in finder’s guide to 0% purchase credit cards.
A low rate credit card makes sense if you regularly pay with plastic and know you won’t always pay off the balance in full each month. It gives you the flexibility to pay off your balance over time, without the higher interest charges of some other cards.
But if you have a large existing credit card debt and want to pay it off, you may want to consider a balance transfer card instead. If you always pay your balance in full, then a card with a low annual fee or extra benefits such as reward points might make more sense.
How much money can I save with a low rate credit card?
Even a small difference in credit card interest rates can save you a lot of money. Say you have a $2,000 balance on your credit card and you take 6 months to pay it off. With an interest rate of 20% p.a., you would pay $118.30 extra on your debt.
But if you had a low rate card that charged 12% p.a., you would pay $70.60 in interest over the same time period. That’s a saving of $47.70. The bigger your expenditure, the bigger the difference gets. So if you compare credit card rates before you apply, you will be able to find a card that is affordable based on your needs.
How to compare low interest rate credit cards
With a range of low rate credit cards on offer in New Zealand, comparing your options will help you to find one that suits your needs. Here are the key factors you should consider:
Credit card interest rates are usually advertised based on the annual rate that applies to the account, shown as “per annum” or p.a. However, interest on your account is typically calculated daily, based on your existing balance and then charged monthly on the statement due date.
Put simply: the lower the rate, the less interest you will pay. But when it comes to your rates, these factors can all impact on your potential savings and costs:
Promotional interest rates. Some credit cards give you an introductory low or 0% interest rate for purchases or balance transfers. This can be useful if you have planned purchases or an existing debt you want to pay off. However, you need to keep in mind that when the introductory period ends, a higher percentage rate will then apply.
Standard interest rate. The “standard” or “revert” rate is the variable interest rate that applies at the end of any introductory 0% period. Depending on the card you choose, this rate could be much higher and not considered a “low rate” option. So always check the standard rate to make sure the card you are applying for provides an ongoing low interest rate.
Cash advances. The interest rate for cash advances is usually higher than the rate applied to purchases. This rate is charged for transactions such as ATM cash withdrawals, foreign currency purchases, and gambling. Cash advances aren’t eligible for interest-free days either.
Interest-free days. If there is an interest-free period for purchases (and you are eligible for it), interest won’t be calculated for those purchases until after that period ends. However, the interest will apply in full if you don’t pay off the total owed by the due date on your statement. Learn more about how this works in our guide to interest-free days.
Fees and charges
Annual fee. Try to find a card with a low annual fee, but don’t make this your sole deciding factor. A $0 annual fee isn’t helpful if the base interest rate on purchases is a lot higher. Annual fees can range from $0 for cards with basic features to up to $390 for prestige cards.
Other fees and charges. Fees may apply when you use your card at an ATM, overseas, online with international retailers or even when you apply for a balance transfer. Make sure you are aware of the relevant charges that apply to your card.
While most low rate credit cards have limited features, more premium cards could offer extra perks. Some of the most popular include:
Complimentary extras. Gold or platinum low rate credit cards may include perks such as travel insurance, purchase protection insurance or concierge services. If you know you will use these extras, they have the potential to offset the cost of any annual fee you pay.
Rewards. Most low rate credit cards don’t offer rewards points for your spending, as they are somewhat conflicting propositions. There are currently no New Zealand providers that offer low rate credit cards that earn rewards.
No international transaction fee. If you plan to use your credit card when you travel overseas, a low rate card that waives foreign transaction fees – such as the Westpac Low Rate Mastercard – could help you save even more money.
Pros and cons of low rate credit cards
You will pay less interest on purchases, making it easier to manage your credit card debt.
Many low rate cards also have low annual fees.
You may be able to combine low rate cards with other features such as balance transfers or zero foreign transaction fees.
You are less likely to receive reward points and other perks.
You may not qualify if you have a poor credit history.
If you opt for a card with a 0% purchase rate, it will only be available for a promotional period.
If you often carry a balance on your credit card, a low interest card could help you save on additional fees and charges. Just remember to consider the other features – such as introductory offers, annual fees, and complimentary extras – to help you find a card that best suits your needs.
How to get a low interest rate credit card
After you have compared your options, applying for a low interest rate credit card is easy. Click the “Go to site” button from the table above and you will be taken to the bank’s secure application page. From there you will need to provide details about yourself, your employment, your financial situation and prove your identity. In order to prove your identity, you will usually need your driver’s licence or passport. Applications usually take about 15 minutes and must provide a response within 60 seconds.
Answers to frequently asked questions about low interest rate credit cards
This depends on the credit card and any applicable balance transfer offers. If the card allows balance transfers, it may come with a 0% interest rate for a promotional period before reverting to a standard rate. Some low rate cards apply the standard purchase rate to balance transfers after the introductory period, while others apply the cash advance rate. Read our guide to balance transfer revert ratesto find out which providers apply the purchase rate.
Yes. Low rate credit cards also have a cash advance rate that applies to cash advance transactions. Depending on the card, the cash advance rate will apply to any or all of the following: cash withdrawals from an ATM or supermarket, foreign currency purchases, gift card and prepaid debit card purchases, gambling transactions, BPAY transactions, government charges and balance transfers after the introductory period.
When you compare credit card rates, it’s important to consider both the purchase rate and the cash advance rate (as well as any promotional rates) so that you can find a card that’s affordable based on how you plan to use it.
There is no one “best” low rate credit card in New Zealand. With the cards on the market, the individual features have an impact on how well a card is suited to your circumstances. So the card that is right for you may not be right for someone else. Comparing low interest rate credit cards based on the features you are looking for will help you find a card for your individual needs.
Credit card interest rates are variable, which means they may change regularly. So the lowest interest rate card can vary depending on when you are comparing cards. You can click on the “Purchase rate” column of our comparison table to order the credit cards based on their current interest rates. Just keep in mind that the lowest rate credit card could be listed as one with a promotional 0% interest rate. When that is the case, you can continue scrolling through the table to find the card with the lowest ongoing interest rate.
There isn’t a single “cheapest” credit card option, because everyone uses credit cards differently. There are also other costs to consider beyond the purchase rate, such annual fees and interest rates for other charges such as cash advances or balance transfers. On the flipside, some people might find cards with high rates and fees “cheap” because of all the complimentary extras.
Simply put, the term “cheapest credit card” is subjective and varies from person to person. So when you are trying to find a credit card that is affordable, make sure you consider all the potential costs based on how you plan to use the account. That way, you will be able to find one with rates and fees that are affordable for you.
Most low rate cards offer an interest-free period on purchases, up to a set number of days in each statement period. However, interest-free days are only available for purchases if you pay your balance in full by the due date on each statement.
Yes, you will still have to pay at least the minimum amount for each statement period. Depending on your credit card provider, this is usually around 2-3% of your total balance. If you want to avoid interest charges, you will need to make higher repayments to clear your balance before the end of the promotional 0% interest period.
Although the interest rate advertised is a yearly (per annum) number, credit card interest is actually calculated daily based on your average daily balance. It is then charged to your account at the end of each statement period.
Most low rate credit cards do have an annual fee that you will have to pay each year you have the account. However, there are a few cards that offer low rates and $0 annual fees, as well as some that waive the annual fee in the first year. When you are comparing low rate cards, you can click on the “annual fee” column to compare them by this cost. You may also want to read our guide on no annual fee vs. low interest rate cards.
Typically, low interest credit cards or low fee credit cards are a good option for students to consider. You can also check out finder’s specific guide to Student Credit Cards and compare your options.
Yes, a range of low rate cards also offer balance transfers. You may be able to get a promotional low or 0% balance transfer rate during the introductory period, when you move debt from an existing card with a different issuer onto the new card.
At the end of the introductory period, a standard rate will apply for any debt remaining from the balance transfer. While some low rate cards will apply the low, ongoing purchase rate to your remaining balance transfer debt, others will apply the higher, cash advance rate. Make sure you check the revert rate for each low rate card you compare so you can find one that is affordable for you.
Sally McMullen is Finder's credit cards and frequent flyer editor by day and a music maven by night. She's also one half of the Pocket Money podcast. Her byline can be spotted on Yahoo Finance, Dynamic Business, Financy and Mamamia as well as Music Feeds and Rolling Stone. Sally has a first-class Honours degree in Communications and Media Studies (majoring in Journalism and Professional Writing) from the University of Wollongong.
How likely would you be to recommend finder to a friend or colleague?
Very UnlikelyExtremely Likely
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.