Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including card rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the bank’s website for the most current information.
Author: Bankrate Staff | Last Updated: November 6, 2018
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Bankrate’s experts have many years of experience offering guidance on some of the most important financial decisions in a person’s life, such as financial advice around home buying, student loans, and investing. Credit cards are a big part of everyday finances and identifying the best card for you can save you on interest expenses and help you to earn cash back on your day-to-day spending.
It’s rarely a good idea to carry a balance on a credit card because of the high rates of interest, however, sometimes it’s unavoidable. A low-interest credit card can help you save on APR expenses or provide that extra layer of peace of mind in case you’re unable to clear your balance one month. Bankrate’s scoring methodology awards each card a score out of 100 and for cards in this category we have focused on the most important elements for low-interest credit card users: APR, introductory APR offer, annual fee, balance transfer offer, and any extras and discounts.
- APR: We pay close attention to APR which can be split between “standard” and “penalty.” Standard APR can range from below 10% to above 20%. Penalty APR is the rate you would incur if you were late in making a payment, this can reach almost 30%. With low-interest at the top of mind, we pay particular attention to APR in all its forms.
- 0% Introductory APR offer: The 0% introductory APR periods can be very generous and can significantly help cardholders looking to use the card as a tool to pay down debt.
- Annual fee: Many cards charge an annual fee, our experts analyze when the cards annual fee is worth it, such as in cases where the rewards more than make up for the expense.
- Balance transfer offer: For cardholders looking to consolidate debt from one lender to another, a favorable balance transfer offer is paramount.
Recap: Editor’s take on the best low interest credit cards
If you’re looking for a card with a low cost of ownership and easy-to-earn flexible rewards, look no further. The Capital One Venture Rewards Card earns an unlimited 2X the miles on every $1 spent and you can redeem those miles to book travel any way you like.
- The $95 annual fee is waived the first year.
- Coming soon, cardholders will be able to transfer miles to multiple airline programs at generous transfer rates.
- Use Capital One’s “Purchase Eraser” to receive a statement credit for travel booked anyway you choose.
- There are no blackout dates and no restrictions.
If you’re like many suburban households, you spend a lot of time and money at the supermarket and at the gas pump. The Blue Cash Everyday Card from American Express offers solid rewards for spending in those areas, paying 3% cash back rewards on up to $6,000 in spending at U.S. supermarkets and 2% back at U.S. gas stations and select U.S. department stores and 1% back on all other spending.
- Earnings are automatic, there’s no enrollment or rotating categories to keep track of.
- There’s no annual fee.
- There’s an introductory 15-month 0% APR offer on purchases and balance transfers. After that, the standard variable APR of 14.99% to 25.99% will apply.
The Discover it® Cash Back earns 5% cash back at different places each quarter like gas stations, grocery stores, and more up to the quarterly maximum each time you activate. Also, earn an unlimited 1% cash back on all other purchases. Redeem your cash back any amount, any time because your rewards never expire.
- At the end of the first year, Discover will match dollar-for-dollar all of your earnings.
- With this card, the first late payment fee is waived.
- There’s a 14-month 0% APR introductory interest rate on purchases and balance transfers. Following the intro period, the standard APR is a variable 13.99% to 24.99% based on your creditworthiness.
The Citi Double Cash Card offers some of the best value of any no fee cash-back card available today. Cardholders earn 1% cash back when they make a purchase and another 1% back when they pay for their purchase.
- This card comes with trip insurance and purchase protections.
- There’s an 18-month 0% introductory APR on balance transfers. After that, the variable APR will be 15.49% – 25.49% based on your creditworthiness.
- Rewards can be redeemed in several ways—as a statement credit, a check or a gift card.
What makes this card intriguing is that, like most Discover cards, the issuer will match your first-year earnings dollar for dollar. The Discover it® Miles card earns 1.5 miles for every dollar, which is a just-OK rate. But the first-year earnings work out to be 3 miles for every dollar, which puts it on a par with some of the best cash-back cards on the market.
- There’s no annual fee, foreign transaction fees and the penalty fee of up to $37 is waived with the first late payment.
- The intro APR is 0% on purchases for 14 months, and balance transfer intro is 10.99% for 14 months. After that, the standard variable APR of 13.99% to 24.99% will apply.
- Rewards can be redeemed in any amount as cash back or airline miles.
How to get a credit card with a low interest rate
Owning a credit card with a low interest rate can save you money. If you qualify for the lowest rate offered by the issuer, and you typically carry a balance, you’ll pay less over time than if your rates were higher.
There’s also an option with some cards to get an introductory 0% interest rate on purchases, balance transfers or both. The length of time at 0 percent interest typically ranges from 12 months to as long as 21 months, after which the standard variable APR will apply.
When choosing a card with low interest or a zero interest sign-up offer, consider your spending habits first. If you almost always carry a balance, you may be better off with a card that has a set low interest rate then one at 0% that will likely jump up to double digits when the promotional period is over.
You can apply for a low interest credit card online and you’ll usually find out if you’re approved within minutes. But, if your credit is just fair or worse, you may not qualify for a credit card that offers advantageous rates.
Pros and cons of low interest cards
Low interest credit cards are typically good for balance transfers and large purchases. However, these cards typically come with limited sign-up bonuses.
- Shifting a high-interest balance to a card with a lower rate can save you money.
- If you have a large purchase to make and you need some extra time to pay it off, a low interest card can be a good option.
- You can pay off your debt faster since less of your money will be going towards finance charges.
- If you haven’t paid off your debt by the time the 0% promotional period ends, you could end up with a higher rate than before.
- Having a card with low or no interest could tempt you to spend beyond your means.
- Some cards will charge you a stiff penalty APR if you miss or make a late payment, so if you aren’t rigorous about paying your bill, you could lose the advantageous rate.
How to save money with a low APR card
The current average variable APR on a credit card is between 16% to 17%. If you typically carry a balance, you can benefit by switching to a card with a lower APR. For example, if you have a balance of $10,000 on a card with an APR of 16%, over the course of a year if you leave that balance untouched, you’ll accrue an additional $1,600 in finance charges. But, shift that balance to a card with an introductory 15-month 0% offer and after a year, that same $10,000 balance won’t have racked up any finance charges, saving you $1,600.
Balance transfers onto low interest cards
If you are carrying a lot of high-interest debt, shifting the balance to a card with a lower APR can save you money. But, it’s important to do the math before making the switch. Many cards that offer an introductory 0 percent APR will also charge a balance transfer fee. Typically, this fee ranges from 3%-5% of the amount being transferred.
In some cases, the cost of a balance transfer fee could outweigh the savings of shifting to a low interest card. For example, if you have a balance of $10,000 on a card, but you plan on paying this balance off over the course of a year, it may cost you less in interest than if you shift this balance to a card with a 0 percent introductory offer that has a 5 percent balance transfer fee, which will cost you $500 to move.
Low interest vs. 0 interest
When it comes to choosing a credit card that offers better terms than what you may currently have, it’s important to make the distinction between low interest cards and ones with an introductory zero percent offer. There are no credit cards that offer 0% interest forever, as the definition of a credit card is a card that lets you pay off a balance over time in exchange for accruing interest on the amount of debt you’re carrying. If you want a truly interest free piece of plastic in your wallet, you’d be better off with a charge card which doesn’t carry any interest charges but you have to pay the balance in full every month. Or consider just using a debit card, which subtracts the amount of your purchase directly from your bank account. Keep in mind that using a debit card won’t help you build a strong credit score as transactions on a debit card are not reported to the big three credit reporting agencies.
How to choose the right low interest card for your situation
No one sets out to carry a balance on their credit card. The interest is extremely high and your balance can quickly get away from you. However, 38% of households in the U.S. have revolving credit card debt, according to the National Foundation for Credit Counseling’s annual Financial Literacy Surveys. There are many reasons that people fall into credit card debt, and it’s usually due to an unforeseen event or emergency situation such as getting laid off from work or dealing with a medical expense.
Medical costs have risen 35% over the last decade whereas income has only risen 20% in the same time period, according to the U.S. Bureau of Labor Statistics Consumer Price Index, of September 2017. That means medical bills are outpacing income rates which makes it easier to fall into debt if you or a family member falls unwell.
If you lose your job it can be hard to fund the gap while you’re finding a new job. In the interim, you still have a rent to pay or mortgage payments to make, and to provide food and essentials for you and your family. Credit cards are often an easy option — and sometimes the only choice — to cover the gap.
With all of this in mind, it’s important to choose the right low interest card for you that will help you to manage your debt and minimize the amount you owe. It’s important to consider not just the short-term benefits but how you’ll use the card in the years ahead.
In general, if you typically carry a balance — or know that there is a good chance you might have to carry a balance in the future — it’s probably best to choose a card that has a low APR over one with an introductory 0 percent offer, as once the offer expires, the variable APR is likely to be higher than that of a card that has a consistently a low interest rate.
The most important thing is to use your balance as sparingly as possible and to pay off your balance as soon as you can. It can seem like an easy short-term solution but credit card interest can make for a long-term headache. Choosing the right card now will save you in the long run.
For anyone looking for a card that will help you spread the cost of a large purchase and pay it off over time, a card with an introductory 0 percent offer makes sense, especially if you find a card that has some lasting value to you after the welcome offer. Again, make sure to pay off your balance before the introductory period ends, or at least ensure that the variable APR rate after the intro period is favorable.
More reviews and research
Still need to do more research? No worries, we have plenty of reviews and helpful content to help you make a decision. We have reviews on almost every major low interest credit card on the market. Check out those and other related review categories below.