If you’ve spent any time comparing credit cards you’ll have noticed how many different types of credit cards are available and how much the advertised interest rates vary.
Credit cards from the major banks tend to have higher interest rates than the lowest rate credit cards as the major banks tend to rely on their existing customer base and brand name to get customers, and feel less need to compete on the lowest possible interest rates.
Credit cards that are offered from stores, airlines and other non banking institutions tend to be more expensive as they offer credit to people who are after the discounts and bomuses that can be offered on these cards ( like frequent flyer points, hotel upgrades or gift vouchers).
Cards that are easy to obtain and accept a wider range of credit rating and those who offer instant approval credit cards typically have higher interest rates to cover the risk involved with giving credit. However these days instant approval credit cards are just as competitive as others in the credit card marketplace.
Shopping around for credit cards by researching, undertaking a credit card comparison or calling your existing lender can significantly cut the interest rates that are paid.
While credit cards with few additional features can offer very low interest rates they may not offer what we have come to expect as standard terms – like 55 days interest free. Currently the credit card with the lowewst interest rate in Australia is the the Mecu with 0 interest free days, a credit card with a slightly higher rate and 55 days interest free would be more suitable for the astute credit card shopper.
Most low rate or “no frills” credit cards do not offer rewards programs. It is also rare to find a low rate credit card that will provide purchase insurance on products that are bought with the credit card. Purchase insurance can include accidental loss or damage for goods bwithin the first few months of purchase.
It’s also important to remember that low rate credit cards vary in their terms and conditions just as their higher rate counterparts do. Some credit cards have an introductory rate that is considerably lower than the market interest rate and revert to a standard variable rate after a specific term like 6 or 12 months. Similarly some 0 or low rate balance transfer credit cards revert to a standard variable interest rate after the balance transfer period has expired and some revert to the variable cash advance rate with no interest free days after the introductory term has ended.
When in the market for a credit card what is most important is how you use your credit card and what features are most important to you.
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| ANZ Low Rate Purchases : 0% for 3mths (Offer ends 12.06.12) then 13.39% p.a. Balance Transfer: 0% for 3mths Annual Fee: $58 Interest Free Days: Up to 55 Cash Advance : 21.49% p.a. More Info |
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