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 our partner offers and compare introductory rates, ongoing rates, annual fees, and rewards to find the right card for you.
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Updated: January 16, 2018
Low interest/APR cards can help you pay down your debt or reduce interest paid on large purchases paid off over several months. It can also be your go-to line of credit in case of emergencies. Additionally, they can help those with irregular incomes float their expenses until they get paid again. If one of those situations sounds like yours, consider the following factors to help you make the best decision. But first, a summary of our featured cards this month.
There are cards out there that are well below the average APR for credit cards. The bottom line is that it’s helpful to have a card with a low interest rate as a backup. In the meantime, you can use it to build credit.
Here, we look at:
The average interest rate on a credit card is just over 16% APR. The lowest category is low interest at just under 13%, and the highest category is bad credit at about 23.5%
Some cards offer relatively low rates (13% APR variable and below), provided you have excellent credit, but they are still higher than the rates of installment loans, such as car loans and mortgages. Therefore, cards should not be used for long-term loans, although a card with a low interest rate can be handy as a backup. Instead, use a credit card as a way to build credit – by paying in full and on time each month, you avoid interest charges and you impact 65% of your FICO score.
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, your $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.” 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.
To avoid paying interest on a credit card, simply pay in full and on time each month. This has the bonus of helping you boost your credit score – those 2 good habits impact 65% of your FICO credit score, the dominant scoring model. They also positively impact your VantageScore, which you can get for free at CreditCards.com.
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 credit expert Todd 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.
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||0% Purchase APR Period||Annual Fee||Regular APR|
|Discover it® Cashback Match™||14 months||$0||12.24% - 24.24% Variable|
|Capital One® VentureOne® Rewards Card||12 months||$0||13.24% - 23.24% Variable|
|Capital One® Venture® Rewards Card||N/A||$0 in first year, then $95||14.24% - 24.24% Variable|
|Discover it® Miles||14 months||$0||12.24% - 24.24% Variable|
|Blue Cash Everyday® Card from American Express||15 months||$0||14.24% - 25.24% Variable|
|Citi® Diamond Preferred® Card||12 months||$0||14.24% - 24.24%* Variable|
|Wells Fargo Cash Wise Visa® Card||12 months||$0||14.24% - 26.24% Variable|
|Chase Slate®||15 months||$0||16.24% - 24.99% Variable|
|Chase Freedom Unlimited®||15 months||$0||16.24% - 24.99% Variable|
|Capital One® Quicksilver® Cash Rewards Credit Card||9 months||$0||14.24% - 24.24%* Variable|
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