Just because you slap an adjective on something, doesn't make it so. We should know - insisting our friends call us Captain Awesome resulted more in alienated friends than awesomeness.
In the same way, labeling this card the 'Low Rate' won't convince any consumer who has done more than ten seconds of research that 14.66% is 'low' by any definition. On the Cannex table of 319 Australian credit cards, 14.66% is the 116th cheapest (not even in the top third).
Admittedly, ANZ may have intended the name 'Low Rate' to be interpreted relative to the other three Business One options (
Rewards,
Cash Rewards and Interest Free Days), but we think it's unlikely.
A better name may have been the ANZ Business One No Annual Fee, as that's the card's major selling point. The Low Rate is the only Business One card to offer a $0 annual fee and $0 additional cards, but you'll need to spend at least $20,000 per year to be eligible, otherwise the annual fee defaults to $130 and additional cards are $20.
Like the Business One Rewards, the card doesn't offer an interest free period, which is a major fault. An interest free period of 40 or 44 days (such as is offered on the Cash Rewards and Interest Free Days) can make a big difference to the total amount of interest paid over time.
As with all ANZ cards, you can choose an image (or supply your own) for the background of your card.
Despite the $0 annual fee on the Low Rate, the Rewards may offer better value, depending on how much you spend each year. If you spend less than $20,000 (about $384 a week), you'll pay a $130 annual fee on the Low Rate. On the Rewards, you'll pay a $130 annual fee and a $60 per card Reward Program Services Fee, which makes the total fee for a single card account $190.
On the Rewards, you'll also accumulate value in the form of reward points. With a total annual spend of less than $20,000, the most you can accumulate is 13,333 points, which equates to roughly $107 in value. That reduces the net cost of the Rewards card to around $83 ($190 minus the $107 rewards value), making it better value than the Low Rate.
The difference in interest between the two cards is negligible. On the Low Rate, the purchase rate is 14.66%. On the Rewards, it's 14.74% - a difference of 0.08%. Even a hypothetical $20,000 purchase at the beginning of the year with no repayments over a 12 month period would only accumulate a difference of $16.
If you'll spend more than $20,000 it's a different story. The Low Rate's total fees are $0, while the total fees for the Rewards remain unchanged ($190). In order to accumulate enough reward points value to compensate the $190 annual fee, you'll need to spend around $35,625 per year.
Conclusion: if you'll use the reward points (on items like department store vouchers, power drills or wine) and plan on spending less than $20,000 per year or more than $35,625, you're better off with the Business One Rewards. If you'll spend between $20,000 and $35,625 (between $384 and $685 per week), the Low Rate may be the cheapest Business One option for you, particularly if you need more than one card.
