Top 5 Low Rate Credit Cards
The average Australian credit card account holder could potentially save over $340 a year by investing less than an hour to do a little homework. Here is a very simple way you could save a lot of money. It's not rocket science and it shouldn't take more than an hour of time.
Here it is:
Find a credit card with a low rate and a balance transfer deal!
How do I do that? See the Top 5 Low Rate Credit Cards at the bottom of this page!
According to the Reserve Bank of Australia (RBA) there are 14 million credit card accounts held by Australian's and the average outstanding balance is $3,142.
Given the average credit card balance is $3,142 the interest cost on a single month if you had an "average" credit card would be $45 but this would drop to $32 if you had a low rate credit card. Annualised this difference works out to be around $150.
But wait there's more. If you take advantage of a credit card balance transfer deal where the interest rate on the funds transferred are 0% for 6 months you would save $45 per month and a further $12.53 for the remaining 6 months of the year. This works out to be an annual saving of $345.
- Apply online for a credit card - 15 mins
- Filling out a balance transfer form - 15 mins
- Total estimated time- 30 mins
Estimated savings for the average Australian credit card account holder - $345.
Using the same basis as above we have prepared the following table for comparison.
Potential Savings - Changing to a Low Rate Credit Card and Balance Transfer Deals
By changing from a credit card with "average" interest rate to a low rate credit card you could potentially save the following amounts.
| Outstanding Balance | Potential Savings With Low Rate Credit Card pa | Potential Savings With Balance Transfer pa |
|---|---|---|
| $1,000 | $48 | $110 |
| $3,000 | $144 | $330 |
| $5,000 | $240 | $550 |
| $7,500 | $359 | $824 |
| $10,000 | $479 | $1,099 |
| $15,000 | $719 | $1,649 |
| $20,000 | $958 | $2,198 |
Assumptions
- Credit card "Average" interest: 17.19% pa*
- Low rate credit card interest: 12.40% pa (based on the average of 5 popular low rate credit cards)
- Balance Transfer Deal: 0% for the balance transferred for 6 months.
- Annual fees are assumed to remain constant.
For ease of calculation the balance is assumed to remain constant.
For a more detailed calculation of potential savings check out our credit card comparison calculator. This shows the savings over the life of the credit card.
Disclaimer:
Please note that the information provided on this page is of a general nature and not intended to be personal financial advice. You should always seek information from your current credit card provider about any fees prior to closing any account.
