The Benefits of Low Interest Rate Credit Cards NZ

Low rate credit cards provide their users with plenty of benefits — the main one being a low interest rate! There is a wide variation in credit card interest rates in New Zealand, so if you’re looking for a low rate card, you’ve come to the right place.

According to the latest statistics from the Reserve Bank of New Zealand, New Zealanders owe $6,190 million on credit cards at an average interest rate of 17.7%. While these people may be happy with their current credit card providers, there’s potential there to save a lot of money by transferring the balance of their credit card debt to a low rate card with another credit card company.

Read on to find out about the benefits of low rate credit cards, as well as a comparison of three low rate cards currently available.

The advantages of low interest rate cards

Low rate cards can provide you with the following benefits.

Lower repayments

Obviously, your repayments will be lower when you’re charged a lower interest rate on your card balance. If your credit card has an interest free period, no interest will accrue during the interest free days. However, if there is a balance owing after the interest-free period, interest will start to accrue. With a higher rate, your required payments will be higher.

You can transfer other high interest rate card debt over to your low rate card

Most low rate cards will allow you to transfer the balance of your higher interest rate cards to them, up to your low rate card credit limit. This transfer will reduce your overall interest payments on your credit card debt. Many low rate cards will charge you an introductory lower interest rate (or sometimes no interest at all) on balance transfers for a limited period of time after the transfer. This can give you more time to get on top of your finances.

Low associated fees

Many (but not all) low rate cards also have low (or sometimes no) other fees associated with them. You should check the terms and conditions of any credit card to compare the interest rate as well as the fees to find the best overall deal that you can. Some of the more common fees you'll find with credit cards:

  • Late payment fee (applicable if you do not pay the minimum payment each month).
  • Annual fee.
  • Cash advance fee, (applicable if you need a cash withdrawal).

Three of New Zealand's low rate credit cards

Below is a comparison of the key features of three low rate credit cards currently available in the market.

Co-operative Bank Fair Rate Credit Card

Type of card: Mastercard.

Interest rate: 12.95% floating.

Interest-free period: up to 55 days on purchases.

Cash advances available?: Yes.

Balance transfer offer: Nil for the first six months on balances transferred. The minimum transfer is $100 and the maximum is 80% of your credit card limit.

Annual fees: $20 ($10 charged every six months).

Annual additional/joint card fees: $10 ($5 every six months).

Foreign currency purchase fees: 2.5% of the New Zealand dollar value.

Minimum credit limit: $1,000.

Maximum credit limit: depends on your income and credit history.

Discover more about Co-operative Bank Fair Rate Credit Card.

 

American Express Platinum Card

Type of card: charge card.

Interest rate: Nil, but you must pay off the entire balance in full each month as you cannot roll over any outstanding balance. In return, you earn points rewards.

Points rewards: This AMEX card comes with some very generous rewards, 2 points for every $1 spent. These points can be transferred to airline and hotel programs. You can also receive a travel credit of up to $200 per year to spend through American Express Travel and a dining credit of up to $300 per year to spend at New Zealand restaurants.

Interest-free days: Not applicable.

Cash advances available?: Yes — they attract a fee of $2 when requested in New Zealand and $5 when requested overseas.

Annual fees: $1,250.

Annual additional/joint card fees: Nil.

Foreign currency purchase fees: 2.5% of the New Zealand dollar value.

Minimum credit limit: Not applicable.

Maximum credit limit: Depends on your income.

Learn more about eligibility criteria and the great rewards of the American Express Platinum Card.

 

Kiwibank Zero Visa

Card Type of card: Visa card.

Interest rate: 12.90% floating.

Interest-free period: up to 55 days on purchases.

Cash advances available?: Yes.

Balance transfer offer: 1.99% introductory rate for the first six months. The minimum transfer is $200, and the maximum is your full credit limit.

Annual fees: Nil.

Annual additional/joint card fees: Nil.

Foreign currency purchase fees: 1.85% of the New Zealand dollar value.

Minimum credit limit: $500.

Maximum credit limit: Depends on your income.

Learn more about Kiwibank Zero Visa Card.

Low interest rate credit cards can provide you with many benefits — and are often on par with the more expensive card options! At the end of the day, it comes down to finding something that suits your needs.