No annual fee cards vs. low interest credit cards

When selecting a credit card, you need to consider how the features offered with them will work, regarding saving you money.

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You need to decide whether a card with a low-interest rate or one with a minimal annual fee is of more benefit to you. Working out which card is right for you usually comes down to your spending habits when using your card, so you need to weigh up the benefits of low interest vs no card fee credit cards.

Comparison of No Annual Fee and Low Interest Rate credit cards

Updated January 24th, 2020
Name Product Purchase rate (p.a.) Annual fee Additional Card Holder Fee
Kiwibank Zero Visa
13.95% APR
$0 p.a.
ASB Visa Light
ASB Visa Light
0% for 6 months (reverts to 13.5% APR)
$0 p.a.
With no account fee, lowest ongoing purchase interest rate and the Smart Rate purchase feature
American Express Airpoints Card
0% for 6 months (reverts to 19.95% APR)
$0 p.a.

Be rewarded with 50 bonus Airpoints Dollars. Simply apply, be approved, and spend $750 on your new Card in the first 3 months of membership.

Compare up to 4 providers

Learn more about No Annual Fee Credit Cards

People that struggle to make regular payments on their credit card may find it more useful to have a low interest credit card, which means if you take longer to reduce the balance, your interest is not excessively high. Another benefit of low interest cards is they usually include an interest-free period, which gives you a bit longer to pay for purchases without worrying about accumulating interest.

When you need to make a larger than usual purchase, for example, an item costing $2,000, that is beyond your budget to pay within the interest-free period; you have the peace of mind of knowing the interest is at a lower rate than other types of credit cards.

If you know you can’t pay your balance in full each month, it might be worthwhile considering a low annual fee card. These cards, although having the annual fee cost, tend to offer a very low rate of interest, so overall you will make a saving if you repay the debt over a prolonged period.

No annual fee credit cards are a better alternative for people that enjoy the convenience of having a credit card, but either doesn’t use it frequently or are in a position to pay off their account in full each month. It’s useful to know you have a credit card available if you want to do some online shopping or need to access funds unexpectedly.

There is no gain in having a low interest card, if you intend to pay your account by the due date. It is of more benefit for people in this position to have a no annual fee card, as they aren’t receiving the advantages of a low interest one. This is where the choice between a low interest vs no card fee, should be the no annual fee card.

Knowing you can access money in an emergency always gives peace of mind, and you don’t have to worry about unforeseen costs catching you out. However, there is no point to having a card if you don’t utilise one that most benefits your circumstances.

The deciding factor on the card you should select is whether you will have an ongoing balance each month or you will pay it in full. So, based on that criteria it should simplify your selection of card between one with a low interest vs a card with no fee.

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2 Responses

  1. Default Gravatar
    RangiDecember 20, 2018

    I’m wondering if I can have name to a account please

    • Avatarfinder Customer Care
      nikkiangcoDecember 20, 2018Staff

      Hi Rangi,

      Thanks for getting in touch! No banks or lenders have the right to give out a name and account number to anyone as part of their privacy policy.
      Hope this clarifies.


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