Best low-interest credit cards
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If you’re planning to carry a credit card balance – or if you’re already grappling with a significant amount of debt – you’ll want to steer clear of high-yield rewards cards that charge enormous annual fees in exchange for plump rewards and benefits. Instead, personal finance experts recommend sticking to a basic, plain vanilla credit card that pairs relativel y low rates with lengthy interest-free promotions.
The best low interest credit cards let you carry a balance for as long as a year or more without paying any interest. That way, you can pay off big purchases over time without getting saddled with extra charges. A good low interest credit card should also offer an affordable standard APR so that you can continue to maintain control over your credit card balance long after the card’s interest-free promotion has expired.
To help you narrow your options, CreditCards.com evaluated some of the top-rated cards in the low interest card category and asked a panel of judges to rate the CreditCards.com staff’s top three picks. Judges for the Best Low Interest Credit Card were personal finance expert Ginger Dean (girlsjustwannahavefunds.com), millennial personal finance expert Stefanie O’Connell (stefanieoconnell.com), Kiplinger’s Personal Finance contributing editor Lisa Gerstner, CreditCards.com Editor-in-Chief Daniel P. Ray and CreditCards.com senior industry analyst Matt Schulz.
Winner: U.S. Bank Visa Platinum card
Other features: $600 cellphone protection, car rental insurances
One of the few cards available nationwide that charges a minimum rate below 12 percent, the U.S. Bank Visa Platinum card won first place in the best low interest rate credit card contest.
For cardholders who need to carry a balance, the U.S. Bank Visa Platinum card is a rare find: It offers one of the lowest rates you can get on a big bank credit card and also gives cardholders a substantial amount of time to make purchases and pay off transferred balances without paying any interest.
The U.S. bank card charges a minimum APR of just 11.24 percent, which is unusually low for a bank-issued credit card. Most cards from major banks charge new cardholders at least 12 percent or more – even if you have excellent credit. According to our weekly rate report, the average low interest credit card charges a minimum APR of 12.87 percent.
Lengthy interest-free promotion
The U.S. Bank Visa Platinum card also offers one of the most generous interest-free offers available, says CreditCards.com senior industry analyst Matt Schulz, making it a good pick for cardholders who need to pay down a large balance or finance a major purchase.
“That’s what makes the U.S. Bank Visa Platinum card appealing,” says Schulz. “It offers an 11.24 percent APR to those with the best credit and it also gives you 18 months of zero interest on both purchases and balance transfers. That’s one of the longest offer periods on the market.”
Most general market credit cards that advertise a 0-percent interest rate give cardholders just 12 to 15 months to carry a balance interest-free.
No penalty rate
Judges also liked that the U.S. Bank Visa Platinum card doesn’t charge a penalty rate, making it a safer card for consumers who may occasionally fall behind on payments.
According to personal finance expert Stefanie O’Connell, the U.S. Bank’s consumer-friendly terms could help win over cardholders who sometimes have trouble staying on top of bills and are concerned about driving up their interest payments.
A “penalty APR is typically imposed when you miss the deadline for making a minimum monthly payment by more than 60 days, and can impact how much you pay in interest on your balance,” says O’Connell. “For example, PNC Core Visa and the Citi Diamond Preferred card both have a penalty of APR of 29.99 percent. If you get hit with a penalty interest rate like that, it could take you longer and cost you more to pay off your credit card debt, which is why U.S. Bank’s Visa Platinum card with no penalty interest rate can be an appealing alternative. The less money you have to pay toward interest, the easier it will be to make on-time payments in the future and eventually, get your credit card balance down to zero.”
The U.S. Bank card does charge a late payment fee as high as $38, though, so missing a payment on this card can still get pricey.
Potentially high APR for cardholders with lower scores
Not everyone who qualifies for a U.S. Bank card will be offered an exceptionally low rate either. U.S. Bank also advertises a maximum APR as high as 23.24 percent, which is slightly above average for a low interest credit card. According to CreditCards.com data, the average low rate credit card charges a maximum APR of 22.79 percent.
If you can qualify for the U.S. Bank card’s lowest rate, though, judges say that it’s a solid choice for carrying a balance – especially in the card’s first 18 months.
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
Slightly more expensive than the U.S. Bank Platinum Visa, the Citi Diamond Preferred card won second place in the best low interest card contest.
The Citi Diamond Preferred card doesn’t offer nearly as low an interest rate as some of its competitors; but it offers the lengthiest 0-percent promotional offer you can get on a plain vanilla credit card, making it a good choice for cardholders who need to carry some longer term debt. (Note: The introductory period for new purchases has decreased to 12 months since this story was published.)
“My top choice is the Citi Diamond Preferred card hands down,” says personal finance expert Ginger Dean. “The 21 month 0-percent introductory period is very generous, giving those transferring balances almost two years to reduce the debt with no interest,” she adds.
In addition, cardholders also get 21 months to carry over new purchases interest-free.
“This card also works well if you have a large purchase on the horizon and need to finance it without having to pay interest over the course of several months during the repayment period,” says Dean. With almost two years to pay off purchases over time, you could use this card to affordably finance a number of major purchases, such as new appliances or electronics, without expanding the purchase price with interest.
“I’m not aware of a more generous 0-percent window on any other credit card,” says personal finance writer Lisa Gerstner. “For a family in need of a little extra cash to, say, finance a minor home renovation or cover a car repair, the opportunity to avoid interest for close to two years is remarkably valuable.”
Just be sure to only charge what you can afford to repay in 21 months. The Citi Diamond Preferred card’s standard APR is lower than what’s offered by some competitors, says Dean. But it’s still relatively high for a plain vanilla credit card. New cardholders could be charged anywhere between 14.24 percent and 24.24 percent – well above average for a low rate card. “If you have any doubt that you’ll be able to pay off the balance in 21 months, think twice before you apply,” says Gerstner. “Currently, the standard variable APR ranges from 14.24 percent to 24.24 percent.”
Despite the higher rates, the Citi Diamond Preferred card’s extra generous promotion could still make it worth an application, say judges – particularly since APRs on even the lowest rate credit cards are still relatively high. By offering cardholders such a long period of time to revolve a balance without paying for it, the Citi Diamond Preferred card makes it possible for many cardholders to never pay interest at all.
“Owing interest on even a low-rate credit card can hurt,” says Gerstner. “If you’re charged a below-average rate of 10.99 percent on a $10,000 balance, for example, and pay only a monthly minimum of $25 or 1 percent of the balance plus interest (whichever is higher), you’d fork over more than $8,400 in interest alone. Ouch.”
If you can manage to pay off that $10,000 balance in 21 months – knocking out just over $476 a month – you’d be able to avoid that hefty interest payment altogether. And even if you could only afford to pay the minimum amount due, you would still shave your interest payments significantly by shedding a substantial amount of debt over a two-year period.
The Citi Diamond Preferred card also offers a number of ancillary benefits that aren’t always offered by competitors and drive up the card’s overall value. “The Citi Diamond Preferred card is the best option because of the generous introductory terms and access to premium features which gives customers peace of mind and a safety net when making purchases,” says Dean. For example, the Citi card offers identity-theft resolution services, travel accident insurance, and extended warranties on purchases. It also offers consumer benefits, such as price protection and presale concert tickets.
“Although Citi Diamond Preferred offers no points or cash back on everyday spending, it comes with some attractive benefits,” says Gerstner. “Cardholders get access to Citi Private Pass, through which they can get presale tickets or VIP packages for concerts and sporting events, plus free movie screenings.”
In addition, “Citi Price Rewind, another card perk, tracks prices on qualifying items that you register for 60 days after the purchase,” she adds. “If Citi finds a lower price, you may get a refund of the difference.”
Third Place: PNC Core Visa card
Other features: Travel and emergency protection, online account tools
Less flashy than its competitors, the PNC Core Visa placed third in the best low interest card contest thanks to its extra low rate and solid promotional offer.
Exceptionally low APR
The PNC Core Visa doesn’t offer nearly as long a promotional period as some of its competitors. It gives cardholders 15 months to pay off a balance or revolve new purchases interest-free. But its exceptionally low standard APR makes it a winning choice for cardholders who want to pay as little as possible in interest.
PNC Core Visa cardholders could pay a rate as low as 10.99 percent -- which is one of the lowest rates you can get on a widely available credit card. Usually the only other institutions that offer such low rates are regional and specialty banks and credit unions. The PNC card’s maximum rate of 20.99 percent is also lower than many of its competitors.
The PNC card’s low rates, combined with a valuable 15-month promotion, make it a good pick for revolvers with good credit who are looking for a long-term credit card, say judges.
“The PNC Core Visa is a good card for those with balances hanging over their heads,” says CreditCards.com Editor-in-Chief Daniel P. Ray. “It’s a plain-vanilla card with no rewards – but you shouldn’t care about rewards if you have a balance. It has no annual fee, a lengthy 15-month balance transfer period and its ‘go-to’ rate tops out at 20.99 percent.”
Meet the judges
Ginger Dean, personal finance expert
Favorite low interest card: Citi Diamond Preferred credit card
“Overall, the Citi Diamond Preferred card is the best option because of the generous introductory terms and access to premium features, which gives customers peace of mind and a safety net when making purchases.”
Lisa Gerstner, contributing editor at Kiplinger’s Personal Finance
Favorite low interest card: Citi Diamond Preferred card
“Citi Diamond Preferred stands out from the pack because it gives the cardholder the best shot at paying off a big purchase before interest kicks in.”
Stephanie O'Connell, millennial personal finance expert
Favorite low interest card: U.S. Bank Visa Platinum card
“In addition to the 0-percent introductory APR offer on purchases and balance transfers for 18 billing cycles, the U.S Bank Visa Platinum card has no penalty APR, which can be a particularly attractive feature for consumers who may have difficulty staying on top of their payments and are concerned about racking up additional interest.”
Matt Schulz, senior industry analyst at CreditCards.com
Favorite low interest card: U.S. Bank Visa Platinum card
“When you’re paying down debt, every percentage point counts. That’s what makes the U.S. Bank Visa Platinum card appealing.”
Daniel Ray, editor-in-chief at CreditCards.com
Favorite low interest card: U.S. Bank Visa Platinum card
“If you want to avoid interest like the plague, then the U.S. Bank Visa Platinum card gives you the best odds.”
How we choose our best cards
This is the second year that CreditCards.com has held a contest for best cards in their class. To help choose the best cards for each category, we consulted credit card and personal finance experts and nominated the top three cards as finalists. We also rated cards through our credit card reviews program.
For each review, we rank cards using a weighted scoring system that assesses the cards’ most relevant attributes. Each card attribute is ranked on a scale of 1 to 5. For low interest cards, we evaluate a number of common low rate card features, including:
- Rates and fees (85 percent): We look at how costly it is to use the card and how much you’ll be charged in interest, fees and penalties. We give the largest weighting to how much it costs to carry a balance over three years. We calculate this using the regular APR, introductory APR and length of the introductory period. We also consider the card’s fees and the size and presence of a penalty APR.
- Features/Perks (10 percent): We also look at the quantity, uniqueness and value of the features for each card and rate the features on a scale of 1 to 5.
- Rewards (5 percent): Rewards tend to drive up the cost of credit, making a low interest card less attractive. We give considerably less weight to rewards programs than to other factors that affect a card’s affordability, such as APRs and fees.
After three cards were chosen as finalists for the best low interest card contest, a panel of five judges -- including credit card and personal finance experts and two members of the CreditCards.com staff -- were asked to independently judge the 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.