American Express sparks low rate interest war

Low rate credit cards are getting more competitive, as American Express reduce their rate to 8.99% with no annual fee

We love to spend and these days we love to swipe. But as we know, our addiction to plastic can be something that ends up being costly. However, spending up at the mid season sales now won’t have you drowning in debt.

“Low rate credit cards are the new black,” Sally Tindall from RateCity said. “It just means that the credit card war is heating up,” 

American Express is now becoming the first major lender to slash credit card interest rates to a market low — offering 8.99% with no annual fee on their Low Rate Credit Card.

Community First’s Low Interest Rate Visa and Easy Street Credit Union’s low rate visa credit card are offering the same rate (8.99%) — but there’s an annual fee of $40 for each.

You’ll pay a little more for Bank Australia’s Low Rate Visa Credit Card* (9.39% & $59 annual fee) and G&C Mutual Bank’s Low Rate Visa Credit Card (9.49% + $50).

9Saver Tip: Compare credit cards and find the right deal for you at creditcardcompare.com.au*

While the big 4 banks are on board too, their rates and annual fees are the most expensive — ANZ’s Low Rate Platinum Mastercard* is the most affordable at 11.49% while NAB’s Low Rate Card is the highest at 13.99%.

“The down side with low rate credit cards is there’s no free lunches. You’re not going to get rewards points.” Tindall said.

Instead, you’ll reap the rewards of not being slugged with exorbitant fees and charges.

But a word of warning — it’s easy to get in over your head. Financial experts recommend you don’t spend more than you earn, and always pay more than the minimum monthly repayment.

And if you’re tempted to transfer your credit card debt to another bank – do your homework.

“While they look really good on the surface if you have a debt outstanding by the end of the honeymoon period , you’re going to be in a world of financial pain.” Tindall said.

*In highlighting particular offers we are not making specific recommendations as this article does not cover all available products and may not compare all features relevant to you. Any advice provided is general in nature and does not take account of your needs, objectives or financial situation. Individuals should consider their own circumstances, and if in doubt seek appropriate advice, before proceeding.