A low rate credit card makes large balances a little more manageable. If you carry a balance from one month to another, a low interest credit card could be a good choice for you. Browse the best low interest credit card offers from our partners and compare introductory rates, ongoing rates, annual fees, and rewards to find the right card for you.
See the best low interest credit card offers from our partners below.
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Updated: April 9, 2018
Low interest credit cards – cards under the national average of 16.62% – are helpful if you plan to carry a balance, making a difference in savings in the amount of hundreds of dollars. Although it's usually best to pay off the balance each month, sometimes that isn't possible. That's where low interest cards come in.
If you want to look at how interest rates work on credit cards, look no further. We crunched the numbers on more than 800 credit cards to determine the best credit cards with low interest rates, and also included information on how to best utilize these cards. Here, we look at:
Wondering if you qualify? Want to understand how your score affects your interest rates? We look at that and more.
Low interest rate credit cards can help you pay down your debt or reduce interest on large purchases paid off over several months. Low interest credit cards are suitable for those that typically carry a credit card balance from one month to another. Our experts have compiled top low interest credit cards that have different perks and fees.
Low interest credit cards analyzed: 869
Criteria used: Regular APR, intro APR, other rates and fees, rewards rates, rewards categories, redemption options, miscellaneous features and benefits, customer service, security, credit needed, ease of application
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.”
The national average for credit card interest rates is just over 16.5%, although averages for categories can be considerable lower or higher. For example, low interest is under 13.5%, while bad credit is at almost 24%. Here are the most common categories, with their average rates:
|Credit Card Category||Average Interest Rate|
Retail cards are among the highest in interest rates, although they have advantages such as loyalty rewards and they will often require lower credit. Retail cards had an average rate of 24.99% in late 2017, according to a CreditCards.com poll. Store-only cards' rates were even higher, at 26.38%, while co-branded cards were at 22.51%. A co-branded card is typically a card within one of 3 major card networks (Visa, Mastercard, American Express) that also carries the store's logo. But it's the rewards programs that make retail cards competitive.
APR, or annual percentage rate, is the cost of credit expressed as an annual percentage. To determine the monthly periodic rate, divide the APR by 12 months, says Chase. To determine a daily periodic rate, divide the APR by 365 days.
"An interest charge is the sum of interest on your credit card account," says Chase, with the interest charge broken down by transaction type, such as purchases, cash advances and balance transfers. "If you pay less than the full balance, pay after the payment due date (or if your credit card does not have an interest free period) then you will pay interest on those purchases. Cash advances and some balance transfers have no interest free period. This means they start accruing interest as soon as the transaction is made. This will result in interest due, even if your balance is paid in full."
A high interest rate is one of the biggest culprits in attaining card debt. If you owe $3,000 and you are paying a rate of 16.5% APR, then it would take you 124 months to pay the minimum amount, and you would end up paying $2,122 in interest alone.
One of the biggest surprises about card debt, though, is who the debtor is. A CreditCards.com poll found that, surprisingly, consumers with higher incomes were more likely to have debt than those with lower incomes:
To avoid that debt, the best thing you can do is to pay in full each month. Also, avoid putting charges on your card that you can't pay in full by the due date. Want that big-screen TV but don't have the cash? Start setting aside the money rather than paying with your card without a plan.
If you're already stuck in debt, you can avoid paying some interest by paying more than the minimum amount. Remember that $3,000 at a 16.5% rate, in which you end up with more than $2,000 in interest charges because you paid the minimum? Well, if you paid $200 a month, those interest charges would drop to $383.
|Rate||Monthly payment||Months to pay off||Amount owed||Interest to pay off|
|16.5%||3% or $25, whichever is greater||124||$3,000||$2,122|
Another way to save money on interest is to transfer an existing balance to a balance transfer card or a low interest card.
With a lower interest rate, and even better, 0% intro APR, you can pay off that card debt at a faster rate. Also, you save hundreds of dollars in interest charges.
|Card||Regular APR||Rate||Monthly payment||Months to pay off||Amount owed||Interest to pay off|
|Capital One VentureOne Rewards||13.49%-23.49%, variable||13.49%||3% or $25, whichever is greater||110||$3,000||$1,515|
|Capital One VentureOne Rewards||13.49%-23.49%, variable||23.49%||3% or $25, whichever is greater||177||$3,000||$4,598|
As you can see, even when you are paying the minimum, with the same card but the lowest and highest interest rate offered, the difference in the amount paid in interest is considerable, with the lowest rate paying more than $3,000 less in interest charges than the highest rate.
So, how do you get the lower interest rate? Card issuers look at a number of factors, including your credit score and your payment history, when deciding which rate to give you. Also, know that it's worth your while to simply ask for a rate decrease. A CreditCards.com poll found that of the 19% consumers who asked for a rate decrease, 13% were given what they asked for.
Even with the best intentions, we can incur thousands of dollars on our credit cards within months. And often, it isn't because of an unexpected medical bill or car repair. Rather, everyday spending is the primary contributor to card debt, making up 32% of the reasons why cardholders have debt.
But it's not just the original expense that can impact your wallet – interest charges can actually run more than the original expense if you pay the minimum amount due each month.
And there's another reason why you should avoid keeping a balance on your card. The second most important factor of your credit score is your credit utilization ratio, or how much you owe on your cards compared to how much credit you have available. So, if you owe $500 and you have $5,000 in available credit, then your utilization ratio is 10%.
|Card||Credit available||Amount owed||Credit utilization ratio|
|Barclaycard Arrival Plus||$2,000||$200||$200/$2,000=10%|
|Capital One Quicksilver Cash Rewards||$2,000||$300||$300/$2,000=15%|
|Discover it Cashback Match||$1,000||$0||$0/$1,000=0%|
As you can see, there is a ratio for each card and a total ratio for all cards combined. Both matter. The industry standard is to keep the ratios under 30%, but it's best to keep them as close to 0% as possible, partly to avoid paying interest and partly to keep your credit healthy.
Ideally, you stay away from card debt, partly because of your credit's health, but also because it's wasted dollars in the way of interest charges. But how do you avoid card debt? Here are 6 tips, with a sample budget:
|Credit card expenses||Item||Checking account expenses|
Maybe you've already incurred debt on your credit card. What to do?
Here, we look at the 6 steps you should take to dig out from under that balance:
There are a couple of ways to avoid paying interest on a credit card:
While you are quoted an APR, or annual percentage rate, your interest is calculated at the end of each day. To find out how much will be accrued each day, divide the APR by 365 days. Then, multiple that amount by the amount owed, and add that with the amount owed. Here's how you calculate how much you are paying each day:
As can be expected, the amount you owe each day goes up considerably the higher your balance. Take this example:
As you know now, most creditors assess interest or finance charges based on your average daily balance, and the interest is accrued daily, says credit expert Todd Ossenfort.
"Each day the balance of your account is multiplied by the daily periodic rate and the interest calculated is added to your balance," he says.
"As an example, a $13,000 balance at a daily periodic rate of .02805 percent would add $3.6465 in finance or interest charges to your balance.
"The next day of the billing cycle your balance would be $13003.65 and multiplied by the daily periodic rate would add interest charges of $3.6475, which begins to add up," Ossenfort says.
To calculate interest on a credit card, use our handy-dandy interest calculators, which allow you to figure out how long it will take you to pay off a balance with the minimum payment; how much you can save by speeding up the payment process; and more.
Here, we offer 5 calculators to help you figure out which card is best for you, how long it will take you to pay off a balance and more.
The annual percentage rate or APR is a financial term that is used by lenders to let you know how much interest you are being charged on a yearly basis for your loan, says Ossenfort. APR is fairly simple for the fixed-rate loan example, he says. It gets more complicated with outstanding credit card balances. That's because you may have several different APRs on one credit card account.
For example, you may have an APR for balance transfers of 1.9 percent, an APR for purchases of 12 percent and a much higher APR of around 25 percent for cash advances, he says.
"The key ingredient to getting the best possible APR for any loan is to have your credit in the best shape possible," Ossenfort says. That means paying in full and on time, every time, and regularly checking your credit reports and score.
Here are the typical APRs charged by card issuers:
The higher your credit score, the better your interest rate can be, depending on the product. This goes for both credit cards and installment loans such as mortgages and car loans. Some cards offer a range -- your credit score, payment habits and balance can affect the interest rate your receive.
In the case of installment loans, Forbes compares two neighbors, each with a refinance of $300,000 with a 30-year fixed mortgage. The difference is one has a 750 credit score, while the other has a score of 620.
Because of the score differences, the neighbor with the 750 score gets a 4.25% rate, paying $1,476 a month, while his neighbor gets a 4.75% interest rate, paying $1,565 a month.
Forbes points out that by paying 2 points or $6,000, the neighbor with the lower score can get the lower rate, a rate that the neighbor with a 750 score received at no extra cost, all because of having a great score.
In the same way, your higher credit score can get you a better APR on your card, typically from within a range. But how do you get a better credit score?
Low interest credit cards are about more than just the APR. You'll want to also factor in the different types of APRs, the annual fee and more.
|Card||Purchase APR||Cash advance APR||Penalty||Annual fee||Rewards|
|Discover it Cashback Match||13.49%-24.49% variable||26.49% variable||No penalty APR; no late fee first time; return payment up to $37||$0||Enroll every quarter to earn 5% cash back on up to $1,500 in purchases made in rotating categories throughout the year; match cash back at end of first year|
|Capital One VentureOne Rewards||13.49%-23.49% variable||24.49% variable||Late Payment Fee: up to $38||$0||20,000 miles/$1,000 spend in 3 mths; 1.25X on purchases|
As you can see, the cards' lowest rates and annual fees are comparable, while the cash advance rate is lower for the VentureOne. If you plan to pay off your balance, the rewards for either card can also be worth your while.
Whether you are carrying a balance or planning to get rid of one, a low interest credit card can be a good choice. Here are the people who might benefit from a low interest credit card.
You can read some individual reviews for low interest credit cards at our reviews section. You can get a better ideas of how products compare to one another so you can definitively decide on the best offer for your needs. Link to rate report to compare to our current national averages.
|Card||Best For:||0% Purchase APR Period||Regular APR|
|Capital One® VentureOne® Rewards Credit Card||Low variable APR and travel||12 months||13.49% - 23.49% Variable|
|Blue Cash Everyday® Card from American Express||Long 0% purchase APR period and gas/groceries spending||15 months||14.49% - 25.49% Variable|
|Discover it® Cashback Match™||Low variable APR and online shopping||14 months||13.49% - 24.49% Variable|
|Chase Freedom Unlimited®||Long 0% purchase APR period and flat-rate cash back||15 months||16.24% - 24.99% Variable|
|Citi® Double Cash Card||Long 0% purchase APR period and no annual fee||18 months||14.99% - 24.99% Variable|
|Chase Freedom®||Long 0% purchase APR period and rotating bonus categories||15 months||16.24% - 24.99% Variable|
|Discover it®||Low variable APR and balance transfers||6 months||13.49% - 24.49% Variable|
|Citi ThankYou® Preferred Card||Dining and entertainment purchases||15 months||14.99% - 24.99% (Variable)|
|Wells Fargo Cash Wise Visa® Card||Cash sign-up bonus||12 months||14.49% - 26.49% Variable|
|Chase Slate®||Long 0% purchase APR period and purchase protection||15 months||16.24% - 24.99% Variable|
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