You could save big by reducing your credit card interest

Do you know what your credit card interest rate is? A lot of people don’t and the truth is, many credit cards charge very high interest each month. So while the convenience of paying off your credit card cannot be argued, you need to make sure you’re not really paying for it later with high interest and other fees and charges that can add up each month.

The great news is, there are some fantastic credit cards out there that not only charge lower interest, but also minimise fees and offer great benefits for cardholders. In particular, now could be a great time to look at transferring your balance to a credit card that offers an interest free period, to really save some money in the coming months.

The key is to do your research, shop around and make sure you’ve got the best deal for your situation. So, what should you look for in a good low interest rate credit card?

 

Finding a low or no interest rate credit card

You may be surprised to learn that many credit cards come with a hefty interest rate of around 20% p.a. Of course you don’t get charged any interest on purchases if you pay your balance off each month, but it’s not always possible to pay the full balance each month.

While some of these credit cards offer perks like retail discounts, frequent flyer points or even cash back offers, they may not make up for the high interest rate you’ll pay. By shopping around, you can find credit cards that charge a lower rate of interest, with some as low as 8.99% p.a.1, like the Low Rate Blue & Pink Visa cards from Community First.

Even better, there are some great deals to be found by opting to transfer the balance of your existing credit card to a new credit card with a provider offering 0% p.a.2 interest on balance transfers.

That’s right, you’ll pay no interest on the balance transferred for a set period of time.  That can save you some serious cash in interest payments, and ultimately help you pay back the balance more quickly. If you want to pay down your card, it’s a good idea to use the interest free period to pay off as much as possible.

 

Check the interest rate at the end of the interest free period

Before you dive right in and switch over your credit card, make sure you check what the interest rate will revert to after the interest free period ends. There’s no point saving money for 6 months if you’ll then be paying even more interest at the end of the initial interest free period.

Also worth considering is the fact that while you could look for a new interest free balance transfer offer when your interest free period ends, continually changing credit cards in order to take full advantage of these balance transfer offers can actually harm your credit rating over time.

A better plan is to find a great credit card with an interest free period on balance transfers, and a low on-going rate. The Community First Low Rate Blue & Pink Credit Card is currently offering 0%p.a.2 interest on balance transfers for 6 months, and a low on-going rate of just 8.99% p.a.1 for purchases and cash advances which is extremely competitive.

 

Other benefits to look for in a low interest rate credit card

While a great interest rate is appealing, it’s also important to check the other fees and charges, as well as any other benefits that are on offer before switching your credit card over.

Be sure to check if there is a balance transfer fee, as some lenders charge this up front when you transfer your balance over from another credit card.

Also check the annual fee on the card. Most credit card providers charge an annual fee that can range from $40 up to $299 per year. Generally, the higher the fees, the more benefits such as frequent flyer points, discounts on goods and services and other rewards you’ll receive each year. So it’s important to do your homework and understand what benefits you’ll get from the credit card.

 

Feel good about using your credit card

Last but not least, it’s possible to feel good about your credit card. Some providers, including Community First Credit Union, will make charitable donations on your behalf each year from your annual fees.

The Low Rate Blue & Pink Credit Cards come with a low annual fee of just $40, with $20 of this fee donated to the Prostate Cancer Foundation of Australia and the McGrath Foundation respectively, each year. Now that’s a reason to switch credit card providers.

 

Ready to pay less credit card interest?

With 0% p.a.2 interest on balance transfers for 6 months, a low on-going interest rate of just 8.99% p.a.1 and a $20 donation to the Prostate Cancer Foundation of Australia or McGrath Foundation, the Community First Credit Union Low Rate Blue & Pink Credit Card could save you money while doing a little bit of good for our community.  Find out more

 

 

 

 

 

Credit eligibility criteria, terms and conditions, fees and charges apply.

1 Rate is current as at 20/04/20 and subject to change. 

2 This is an introductory rate for 6 months only on balance transfers from funding date. After the initial 6 month introductory period, the interest rate on the remaining balance transferred will revert back to the standard credit card rate at the time - currently 8.99% p.a. Offer available for new and existing card holders where new balances are transferred to the card and offer can be withdrawn at any time. Excludes internal balance transfers. Community First donates half the annual fee ($20) from the Low Rate Blue Card to the Prostate Cancer Foundation of Australia and half the annual fee ($20) from the Low Rate Pink Card to the McGrath Foundation each year you hold these cards. The Prostate Cancer Foundation of Australia raises money to reduce the impact of prostate cancer on Australian men, their partners and families. The McGrath Foundation raises money to fund McGrath Breast Care Nurses in communities right across Australia and increase breast awareness in young Australians, with a particular emphasis on young women.

 

Last updated: 10 June 2020

The information contained in this article is only correct at the point of time of publication. It is general information and has been prepared without taking into account your personal circumstances, objectives or needs. Please consider if this information is right for you before making a decision to acquire any product.