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If you are a consumer who finds they carry a balance on their credit card at the end of each billing month and cannot pay the outstanding debt off then you should look for a credit card that has a low interest rate. Credit cards can charge as much as 30% annual percentage rates on outstanding balances, so it makes a lot of sense to opt for a low interest credit card instead to help keep your debt manageable.

How low interest rate credit cards work

Whenever you use your credit card, you are actually borrowing money. At the end of each billing cycle, your card issuer will give you the option of making a full repayment on what you owe or offering the option for you of paying a smaller amount and carrying the outstanding balance into the following billing cycle. Your card issuer will expect you to pay a minimum amount however, which is usually approximately 2% per cent of your outstanding balance.

If you do not pay your entire debt off at the end of the billing cycle and decide instead to carry the balance you are also charged interest on the amount, and this is where low interest cards become useful. There are a couple of things you should consider when comparing low interest credit cards.

Transactions - Many low interest card cards use their rates to promote themselves so borrowers can be excused for believing the rate applies to all transactions. This is not actually case, the rate being advertised is the rate you will charged if you use your credit card to make a purchase. If you make a cash withdrawal using your card, or you use it for any other type of transaction, the rate will in fact be much higher and you should make yourself aware of the rates that can be charged on the different types of transactions to avoid nasty surprises.

Interest rate - When you are comparing low interest rate credit cards, check the annual percentage rate (APR). If you carry a balance on your credit card and do not pay off your debt then it is very important to choose a card with as low an interest rate as is possible.

No matter what type of credit card deal you are looking for, Money-AU is the best place to begin your search. As a financial comparison website, Money-AU puts a range of different credit card deals from a variety of different banks that will enable consumers to make a quick comparison and select the card they think would be best for them.