Low-interest credit cards save you money by lowering the cost of debt. You can repay what you’ve borrowed more quickly when you pay less in interest. The greatest interest will be saved in the short term by a card with a 0% intro APR period. Seek one with a longer-than-a-year initial interest-free period. A card with a low ongoing interest rate will benefit you in the long term if you carry a balance for most months.
What is a Low-Interest Credit Card?
The annual percentage rate (APR), which can be variable or fixed, is what defines a low-interest credit card. Most of the time, if the variable percentage at the low end is between 12% and 14%, the card has a low-interest rate. The majority of credit cards have variable interest rates, which means their APRs change in tandem with the prime rate.
See BEST CREDIT CARD FOR GROCERIES: The Top 13 Options, Updated
Pros and Cons of Low-Interest Credit Cards
Pros
- It has the potential to save you money. A low-interest card could save you money on interest if you occasionally carry a balance on your credit card. Paying off your balance is of course the greatest method to prevent interest.
- A 0% introductory APR is possible. Low-interest credit cards frequently provide 0% introductory APRs, allowing you to pay off an amount without incurring interest.
Cons
- Minimum credit score. To qualify for one of the top low-interest cards, you must have a credit score of 670 or above. A higher score will help you get a better rate.
- It is possible that you will not receive any rewards. It’s possible that rewards won’t be earned on low-interest credit cards. The Wells Fargo Reflect Card, for example, does not. But, other low-interest credit cards, like Chase Freedom Unlimited, do give incentives. Make sure to do your homework to locate a card that works for you.
How to Make the Most of Low-Interest Credit Cards
If low-interest credit cards would save you money in the long term, all you need to do is do some easy math. Let’s take a look at one example to understand how simple it is to compute your savings or lack thereof.
How much could you save if you made a $2,500 purchase with a low-interest credit card with no balance and then contributed $150 toward it each month? You will pay around $2,899, including approximately $399 in interest, if you use a card with an 18% purchase APR. You will pay roughly $2,796, including about $296 in interest, if you use a low-interest card with a purchase APR of 14%.
Tips for saving money with a low-interest credit card:
- Move a balance to a card with a low-interest rate and a 0% introductory APR. You should intend to pay off the balance before the interest-free period expires, but utilizing a low-interest card will lessen the impact if any of the balance is still outstanding when the standard rate kicks in. Make sure the balance transfer charge is less than the interest savings.
- Request a rate reduction from your credit card company. If you have a long and positive payment history with the issuer, your chances are better.
Low-Interest Credit Cards
Paying your credit card bill in full each month will allow you to avoid paying interest, but we understand that this isn’t always practical. Low-interest credit cards might help you save money and pay off your debt faster if you occasionally carry a balance. Use a credit card interest calculator to determine how much you can save with a low-interest credit card. Next, check out our recommendations for the best low-interest credit cards.
#1. Discover it® Cash Back
This card may be an appealing option if you’re seeking a card that provides continual value with no annual fee. You’ll get 5% cash back on rotating category purchases up to $1,500 every quarter, then 1% (activation required), and a Discover match for any cash back earned in the first year of your account. For a card that may just require a credit score of 670, this is a lot of value.
Pros
- A cash-back match for the first 12 months and no annual fee make this card extremely valuable.
- The as low as 670 credit score requirement makes the card more accessible.
Cons
- Receiving 5% cash back is limited to $1,500 in purchases per quarter, after which it earns 1%. (activation required).
- It can be difficult to maximize your earnings. You must maintain track of the altering categories and enroll each quarter.
#2. Wells Fargo Reflect® Card
The Wells Fargo Reflect Card has a great introductory APR offer of up to 21 months and no annual fee. Cardholders will get a 0% introductory APR on purchases and qualified balance transfers made in the first 18 months after opening an account. If you make on-time payments during the promotional term, your 18-month offer will be extended for an extra three months (17.49 percent to 29.49 percent variable APR thereafter).
Pros
- The extended intro APR applies to purchases as well as qualifying debt transfers.
- The absence of an annual cost and mobile security against damage or theft is sufficient benefits that add value to this card.
Cons
- This card does not allow you to earn cash back or points on your purchases.
- There is a 3% foreign transaction fee with the card.
#3. Citi® Diamond Preferred® Card
The Citi Diamond Preferred Card has one of the longest introductory periods with 0% APR on balance transfers. Enjoy 21 months at 0% intro APR on balance transfers before the usual APR (17.49% to 28.24% variable) kicks in. Adding this card could give you a tool that could help you cut down on your interest payments.
Pros
- The introductory APR period for balance transfers is among the longest available.
- Cardholders with exceptional to excellent credit may qualify for an APR rate that is significantly lower than the average.
Cons
- The card does not have a rewards program.
- The 5% balance transfer fee (or $5, whichever is greater) is at the high end of the average range (3 to 5 percent).
#4. Capital One Quicksilver Cash Rewards Credit Card
This card is worth considering because of its good flat-rate rewards system and low fees. You’ll also have a variety of redemption choices to choose from, such as checks, bill credits, gift cards, or using the card’s automated redemption feature to avoid having to keep track of your rewards balance entirely.
Pros
- There are no yearly or foreign transaction fees with this card.
- The welcome offer is reasonably achievable, with a $500 minimum purchase requirement within the first three months to receive a $200 cash incentive.
Cons
- Lower introductory APR offers for purchases and balance transfers compared to other cards.
- Other cards on the market might provide better rewards.
#5. Chase Freedom Flex℠
This card should be on your list if you want a card with a full suite of rewards and cash-back benefits. The Freedom Flex is a strong contender for one of the best low-interest credit cards. It has no annual fee, a mix of useful and unusual bonus categories, and a rewards program that you can change to fit your needs.
Pros
- The cardholders who want to finance major purchases will like the long introductory APR period.
- Most cardholders can take advantage of the welcome offer of a $200 cash bonus for $500 spent during the first three months of account activation.
Cons
- the rewards structure may be challenging to manage for first-time cardholders.
- Cash-back limits apply to the rotating rewards categories.
#6. Blue Cash Everyday® Card from American Express
The American Express Blue Cash Everyday Card is a terrific alternative for families. Get additional points for purchases such as groceries and gas. Without the annual charge, the cashback you earn goes directly into your pocket. Use the introductory APR offer to get a lot of cash back at US grocery stores, gas stations, and online stores.
Pros
- This card has no annual fee, which is unusual for American Express.
- Get a $200 statement credit after spending $2,000 on your new card in the first six months.
Cons
- The 2.7 percent international transaction fee will raise the cost of family vacations overseas.
#7. Petal® 2 “Cash Back, No Fees” Visa® Credit Card
Do you want to work your way up to greater cashback? A fantastic alternative is the Petal 2 “Cash Back, No Fees” Visa Credit Card. After making 12 on-time monthly payments, you will receive a reward rate of 1% on qualifying purchases or up to 1.5 % on eligible purchases. The card’s variable APR range, which ranges from 17.49 percent to 31.49 percent, makes it a good low-interest option.
Pros
- This card has very lenient credit score restrictions, making it ideal for folks who are just starting.
- Cardholders that make 12 on-time monthly payments can earn up to 1.5 percent cash back on certain purchases.
Cons
- There are a few cardholder advantages and privileges with this card.
- Balance transfers are not available.
#8. Citi Rewards+® Card
The Citi Rewards+ Card provides three benefits to frugal consumers: a low regular APR (17.99% to 27.99% variable APR), a simple way to earn points on daily purchases, and no annual fee. Another generous feature that gives even more value to the card is that the reward points round up to the nearest 10 points on every purchase.
Pros
- The roundup of points to the closest ten points on every purchase feature offers significant value.
- Get an initial 0% APR on purchases for the first 15 months following account opening (then 17.99 percent to 27.99 percent variable APR).
Cons
- Thank you points cannot be transferred to other travelers.
- Earning 2X points on grocery and petrol station purchases is limited to $6,000 per year, after which it lowers to 1X.
Which Credit Card is Low Interest?
Discover it Cash Back: This is the best option for first-year incentives.
As long as you pay off your bill in full each month, any credit card might technically have a low-interest rate. Your interest rate is effectively zero percent if you never carry a balance. But if those perfect circumstances do not exist, you may want to explore a credit card with a low-end APR range.
What Is a Good Interest Rate On a Credit Card?
A credit card with an APR of less than 10% is ideal, but you may have to go to a local bank or credit union to locate one. The Federal Reserve, which keeps an eye on credit card interest rates, also thinks that an APR below the average is a good thing.
How Can I Get a Credit Card With Low Interest?
If you’re looking for a low-interest credit card, you should realize that, in general, the better your credit, the greater your chances of qualifying for the card.
Borrowers with good or strong credit are more likely to be approved for a new credit card with a lower interest rate. One of the best ways to build and keep good credit is to pay your bills on time every month. It is also beneficial to keep your credit card balances low.
Do Balance Transfers Hurt Your Credit?
In some situations, a balance transfer can help you pay less interest on your loans over time and improve your credit score. But, obtaining new credit cards and shifting balances to them on a regular basis will harm your credit ratings over time.
Why You Shouldn’t Carry a Balance On Your Credit card
Carrying a balance can harm your credit score. For example, if you have a big balance, you may have a high credit utilization rate, which is the percentage of your total credit limit that you are currently using. This could hurt your credit score.
Should I Have 3 Credit Cards?
If you want to get or keep a good credit score, it’s usually best to have two to three credit card accounts and other sources of credit. You may be able to increase your credit mix by using this combination. In your credit report, lenders and creditors prefer to see a diverse range of credit types.
Conclusion
We considered overall satisfaction data, annual fees, APRs, balance transfer offer durations, and introductory APR lengths for purchases while determining the Best Low-Interest Credit Cards list. An annual nationwide survey is used to collect satisfaction statistics.
For the card to be considered, it must offer 0% APR on purchases or balance transfers for at least 14 months and have a minimum APR of 17.99% or less. In one or more of these categories, several of the cards on our list provide significantly better terms. Consider how you’ll use the card and compare offers to see which one is best for you.
Related Articles
- LINE OF CREDIT: Best UK Practice And What You Should Know
- What Is A Balance Transfer Fee? How It Works
- FINANCE CHARGE: What Exactly Are Finance Charges? Why Are They Important?
- $2000 LOANS: What to Know About Getting a $2000 Loan With No Credit Check
- Best Business Credit Cards For Startups In 2023
References
