Best low-interest credit cards
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Credit card rewards can help you earn free trips or additional cash back, but if you can’t pay off your balance every month, you may be better off choosing a low-interest credit card without those high-value perks.
“If you carry a balance from month to month, you need a low-interest card to cut interest charges and save money,” says personal finance expert Laura Adams. Otherwise, you could wind up with more debt – especially if you pick a high interest credit card with enticing rewards to encourage heavy spending.
The best low-interest credit cards pair reasonable interest rates with lengthy, interest-free promotions, helping borrowers whittle away debt and keep their monthly balances under control. Some low-interest cards also offer modest rewards for responsible users.
To help you choose the best credit card for your budget and spending habits, CreditCards.com evaluated some of the top-rated cards in the low-interest card category and asked a panel of judges to rate CreditCards.com staff’s top three picks. Judges for Best Low-Interest Card of Winter 2016 were personal finance journalist Laura Adams, financial blogger Ginger Dean, personal finance journalist Taylor Tepper, CreditCards.com Editor-in-Chief Daniel P. Ray and CreditCards.com senior industry analyst Matt Schulz.
First Place: PNC Core Visa credit card
Other features: Travel and emergency protection, online account tools
The Core Visa credit card from PNC Bank – with its affordable terms and lengthy promotional rates – was judged No. 1 for best low-interest card.
Judges praised the PNC Core Visa card’s competitive minimum APR (10.99 percent), which is considerably lower than the APRs charged by many of its competitors (average minimum APR of at least 12 percent, according to CreditCards.com data). And that 10.99 percent is nearly 5 percentage points below the national average APR (16.14 percent) for credit cards.
“When it comes to low-interest cards, math wins,” says CreditCards.com Editor-in-Chief Daniel P. Ray “And the PNC Core Visa has an outstanding regular APR.”
While the no annual fee Core Visa’s maximum APR of 20.99 percent is low compared to the typical low rate card’s maximum APR of 21.70 percent. This means cardholders with a less-than-perfect credit score can get a rate that’s more affordable than with other similar cards.
This plain vanilla credit card doesn’t offer a rewards program, nor does it offer a large number of perks, such as car rental insurance or purchase protection. Core Visa cardholders get a basic package of benefits, including travel and emergency protection, $0 fraud liability and online account tools, such as online bill pay.
Despite the lean benefits package, personal finance journalist and Money magazine staff writer Taylor Tepper says the bare-bones card is worth it.
“You’re looking for a low-interest card because you’re carrying a debt, or are planning to, and you want the lowest charges possible,” he says. “That means rewards, like cash back, probably shouldn’t factor into your equation.
“Look for the lowest APR possible – which is why PNC ekes out a win here. You should think of a balance-carrying card as short-term financing, and only move on to rewards if you pay off your bill in full each month.”
The PNC Core Visa card also offers a lengthy promotional offer on purchases and balance transfers.
“If you have a large credit card balance to tackle, the Core Visa card’s generous 15-month interest-free period gives you a good head start, and its low standard APR can help you get across the finish line,” Ray says.
How best to use this card: “Use this card to pay off higher interest accounts faster, and pay as little interest on your balance as possible,” Adams says.
Second Place: Citi Diamond Preferred card
Other features: Choose your payment due date, worldwide car rental insurance, purchase protection, extended warranty, trip cancellation/interruption protection
The Citi Diamond Preferred card’s extra-long 0 percent introductory period – 21 months on purchases and balance transfers – landed it in second place in our low-interest card contest.
Most credit card promotions, by contrast, offer interest-free financing for 12 to 15 months
“The extra six months with 0 percent makes a huge difference when paying down debt as you have the extra time to do so while paying a 0 percent interest rate,” says financial blogger Ginger Dean. “This feature sets the Citi Diamond Preferred card above the rest.”
CreditCards.com senior industry analyst Matt Schulz agrees. “It’s hard to argue with a card that gives you 0 percent on purchases and balance transfers for 21 months,” he says.
In addition to a generous rewards rate, the Citi Diamond Preferred card also comes loaded with other money-saving features that can be hard to find on lower interest credit cards, including car rental insurance and other travel protection benefits, concierge service and ticket presales.
The standard APR on the Citi Diamond Preferred is higher than many of its competitors, though, making it a harder card to justify after the end of its promotional period. After 21 months, cardholders with excellent credit are charged a minimum variable APR of 13.99 percent, while cardholders with lower scores could get hit with an APR as high as 23.99 percent.
Third Place: Suntrust Cash Rewards credit card
Other features: No foreign transaction fee, free FICO credit score, car rental insurance, extended warranty, price protection, purchase protection, travel assistance
The SunTrust Cash Rewards credit card – with a sign-up bonus, cash back on every purchase and low APRs – earned the No. 3 spot in our best low-interest card contest.
This SunTrust card offers modest cash back rewards in exchange for frequent spending. For example, cardholders earn 5 percent cash back on the first $6,000 cardholders spent on gas and groceries (a $300 value) in the first 12 months, unlimited 2 percent cash back on gas and grocery purchases after the introductory period, and 1 percent cash back on general purchases.
Unlike most rewards credit cards, though, the SunTrust Cash Rewards card offers unusually affordable terms. Cardholders with the best credit scores, for example, could qualify for an APR as low as 12.24 percent.
Cardholders with lower scores, though, could draw the card’s maximum APR (22.24 percent), which is high.
However, cardholders will have plenty of time to use their cards before they have to start paying interest. The SunTrust Cash Rewards card gives cardholders up to 15 months to charge purchases interest-free or pay down a transferred balance.
This is the first year that CreditCards.com has held a contest for best cards in their class. To help choose the best cards for each category, the CreditCards.com staff consulted credit card and personal finance experts and nominated the top three cards as finalists. CreditCards.com staff also rated cards through its credit card reviews program.
A panel of five judges – including three independent personal finance experts and two members of the CreditCards.com staff – were asked to independently judge the three finalists and rank them in order of preference. The card with the best average rank was chosen as the winner.
All best credit card stories are prepared by CreditCards.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 story is accurate as of the date of the story. Check the credit card terms and conditions link on the issuing bank’s website for the most current information.