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A low rate credit card charges a lower interest rate on purchases than a standard or rewards card, usually with a low annual fee and few extras. It is the card to look at if you carry a balance some or most months, because the rate then costs you more than anything else about the card.
The gap is large. In August 2026 the RBA's average standard credit card rate was 20.99% and its average low rate card rate was 13.49%, a difference of 7.5 percentage points. This guide explains how to judge a low rate card beyond the headline, and the costs that can make a low rate card more expensive than it looks.
By Better Rate Mate Editorial Team ยท Last reviewed
The one with the lowest total cost for the way you use it, which isn't always the lowest advertised rate. Judge a low rate card on these, in order:
A rough, hypothetical comparison: carrying an average $5,000 balance for a year at the RBA's average standard rate of 20.99% costs about $1,050 in interest. At the average low rate of 13.49% it costs about $675. The saving of roughly $375 a year is more than most people earn in rewards.
| Card type | Average rate (% p.a.) |
|---|---|
| Standard credit cards | 20.99 |
| Low rate credit cards | 13.49 |
| Gap | 7.50 percentage points |
Some cards charge no interest on purchases at all and replace interest with a flat monthly fee. CommBank, for example, lists two such cards, CommBank Neo and an Interest-free Low Fee card, both at 0% p.a. on purchases for a monthly fee. They can make costs predictable, but a monthly fee on a card you barely use is still a cost: work out the yearly total and compare it with the interest you'd pay on a low rate card at your usual balance.
If you already have a balance, a balance transfer pauses interest for a period, but whatever is left then reverts to a higher rate, usually the purchase rate. A low rate card doesn't have that cliff. Many low rate cards also offer a balance transfer, which can combine the two: a 0% period, then a low rate on anything left. Either way, the debt only goes away with repayments above the minimum.
If you always pay the full closing balance by the due date, the interest rate doesn't affect you, because interest-free days apply to purchases. Then the annual fee and features matter more; see no annual fee cards and rewards vs cashback cards. And if repayments are already a struggle, talk to your bank about hardship or call the National Debt Helpline on 1800 007 007 before taking on a new card.
The one with the lowest total cost for how you use it: compare the ongoing purchase rate (not an introductory one), the annual or monthly fee, interest-free days, and cash advance and late fees. On a small balance a no-fee card with a slightly higher rate can cost less.
Anything well below the average. In August 2026 the RBA's average standard credit card rate was 20.99% and the average low rate card was 13.49%.
Rates change often and we don't publish a live product table. Some cards charge 0% on purchases in exchange for a monthly fee, so compare the yearly cost, not only the rate.
Many do, but interest-free days only apply if you pay the full closing balance by the due date. If you carry a balance, new purchases usually attract interest from the day you make them.
If you carry a balance, almost always. Interest at a rewards card's higher rate usually costs more than the points are worth. If you pay in full every month, the rate doesn't matter and the fee and rewards do.
We don't list cards or quote issuers' rates, fees or earn rates: they change often and we don't have a live product feed. Average rates are the RBA's published figures for the month shown. Before you apply, read the card's key facts sheet and Target Market Determination, which set out its actual rates, fees and interest-free days.
Card types, fees, interest-free days and credit limits, explained in one place in ourguide to comparing credit cards. When you're ready, tell us how you use a card and we'll match you on rate and fees.
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