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If you're looking for a credit card, getting one with a low interest rate should be one of your top priorities. It's always ideal to pay off your balance in full each month, but sometimes it's not possible. Low interest credit cards can tide you over when you come up short. They can also serve as a back-up emergency fund, and even help you pay off debt quickly. Here are our top picks for the best low interest credit cards.
Key Links
- Overview of The Best Low Interest Credit Cards
- What is a Low Interest Credit Card?
- Types of Low Interest Credit Cards
- How to Compare the Best Low Interest Credit Cards
- How to Get a Low APR Credit Card
- How does Credit Card Interest Work?
- How to Use a Low Interest Credit Card
- Is a Low Interest Card Right for You?
Best Low Interest Credit Cards
| Card | Rating | Great For |
|---|---|---|
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Rating image, 5.00 out of 5 stars.
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Great For: Balance transfers and purchases |
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Rating image, 4.50 out of 5 stars.
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Great For: Long intro 0% APR on purchases and balance transfers |
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Rating image, 4.50 out of 5 stars.
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Great For: Long balance transfer and purchase offer |
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Rating image, 5.00 out of 5 stars.
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Great For: Balance transfers and cash back |
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Rating image, 4.50 out of 5 stars.
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Great For: Bonus cash back |
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Rating image, 5.00 out of 5 stars.
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Great For: Balance transfers and cash back |
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Rating image, 4.50 out of 5 stars.
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Great For: Long 0% intro APR for balance transfers and purchases |
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Rating image, 4.50 out of 5 stars.
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Great For: Unlimited cash back |
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 BEST OF 2022 |
Rating image, 5.00 out of 5 stars.
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Great For: 0% intro APR for balance transfers and purchases |
The Ascent's picks for the best low interest credit cards:
- Balance transfers and purchases: BankAmericard® credit card
- Long intro 0% APR on purchases and balance transfers: Citi® Diamond Preferred® Card
- Long balance transfer and purchase offer: Citi Simplicity® Card
- Balance transfers and cash back: Citi® Double Cash Card – 18 month BT offer
- Bonus cash back: Bank of America® Customized Cash Rewards credit card
- Balance transfers and cash back: Discover it® Balance Transfer
- Long 0% intro APR for balance transfers and purchases: U.S. Bank Visa® Platinum Card
- Unlimited cash back: Capital One Quicksilver Cash Rewards Credit Card
- 0% intro APR for balance transfers and purchases: Wells Fargo Reflect℠ Card
Great for: Balance transfers and purchases
Apply Now
On Bank of America's Secure Website.
Rating image, 5.00 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 5.00/5
Apply Now
On Bank of America's Secure Website.
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This no-annual-fee card has among the longest 0% intro APR offer for purchases and qualifying balance transfers. Few cards pack in such a long promo period for both, plus a sign-up bonus. Read Full Review
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- Sign-up bonus
- Long 0% intro APR offer
- No annual fee
- FICO® Score for free
- No penalty APR
- No rewards
- Balance transfer fee
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- $100 statement credit online bonus after making at least $1,000 in purchases in the first 90 days of account opening.
- 0% Introductory APR for 18 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the intro APR offer ends, 12.99% - 22.99% Variable APR will apply. A 3% fee (min $10) applies to all balance transfers.
- No annual fee.
- No penalty APR. Paying late won't automatically raise your interest rate (APR). Other account pricing and terms apply.
- Access your FICO® Score for free within Online Banking or your Mobile Banking app.
- Contactless Cards - The security of a chip card, with the convenience of a tap.
- This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.
Great for: Long intro 0% APR on purchases and balance transfers
Apply Now
On Citi's Secure Website.
Rating image, 4.50 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 4.50/5
Apply Now
On Citi's Secure Website.
Intro APR
Purchases: 0%, 12 months
Balance Transfers: 0%, 21 months
Regular APR
13.74% - 23.74%, variable
Rewards
N/A
Annual Fee
$0
Welcome Bonus
N/A
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A hard-to-beat 0% intro APR credit that's a fit for cardholders wanting to pay off debt faster with balance transfer strategies and/or finance the cost of a purchase and temporarily avoid costly interest charges. Read Full Review
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- Great intro APR
- No annual fee
- Free credit score monitoring
- No rewards
- Foreign transaction fee
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- 0% Intro APR for 21 months on balance transfers from date of first transfer and 0% Intro APR for 12 months on purchases from date of account opening. After that the variable APR will be 13.74% - 23.74%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
- There is a balance transfer fee of either $5 or 5% of the amount of each transfer, whichever is greater
- Get free access to your FICO® Score online.
- With Citi Entertainment®, get special access to purchase tickets to thousands of events, including concerts, sporting events, dining experiences and more.
- Shop with confidence knowing that you have dependable protection benefits, including $0 Liability on Unauthorized Purchases and Citi®Identity Theft Solutions.
- The standard variable APR for Citi Flex Plan is 13.74% - 23.74%, based on your creditworthiness. Citi Flex Plan offers are made available at Citi’s discretion.
Great for: Long balance transfer and purchase offer
Apply Now
On Citi's Secure Website.
Rating image, 4.50 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 4.50/5
Apply Now
On Citi's Secure Website.
Intro APR
Purchases: 0%, 12 months
Balance Transfers: 0%, 21 months
Regular APR
14.74% - 24.74%, (Variable)
Rewards
N/A
Annual Fee
$0
Welcome Bonus
N/A
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With a long 0% intro APR offer, no late fees, no annual fee, and no penalty rate, this card is an unmatched pick. Read Full Review
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- Great intro APR
- No annual fee
- No late fees
- No penalty APR
- No rewards
- Foreign transaction fee
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- No Late Fees, No Penalty Rate, and No Annual Fee... Ever
- 0% Intro APR for 21 months on balance transfers from date of first transfer and 0% Intro APR for 12 months on purchases from date of account opening. After that the variable APR will be 14.74% - 24.74%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
- There is a balance transfer fee of either $5 or 5% of the amount of each transfer, whichever is greater.
- The standard variable APR for Citi Flex Plan is 14.74% - 24.74%, based on your creditworthiness. Citi Flex Plan offers are made available at Citi’s discretion.
- Stay protected with Citi® Quick Lock and $0 liability on unauthorized charges
Citi® Double Cash Card – 18 month BT offer
Great for: Balance transfers and cash back
Apply Now
On Citi's Secure Website.
Rating image, 5.00 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 5.00/5
Apply Now
On Citi's Secure Website.
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Earn up to 2% on all purchases - 1% when you buy, and 1% when you pay the minimum each month. Add that to no annual fee and an 18 month 0% intro APR offer on balance transfers and this card is a winner. Read Full Review
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- Industry-leading cash back
- 0% intro APR balance transfer offer
- No annual fee
- Free credit score monitoring
- No sign-up bonus
- Foreign transaction fee
- No 0% intro APR on purchases
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- Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
- To earn cash back, pay at least the minimum due on time.
- Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 13.99% – 23.99%, based on your creditworthiness.
- Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
- If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
- The standard variable APR for Citi Flex Plan is 13.99% – 23.99% based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
Bank of America® Customized Cash Rewards credit card
Great for: Bonus cash back
Apply Now
On Bank of America's Secure Website.
Rating image, 4.50 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 4.50/5
Apply Now
On Bank of America's Secure Website.
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Includes a big bonus in the no-annual fee category and a flexible cash rewards program that enables you to earn premium cash back in a category of your choice. Plus, the long intro APR offer makes this card a standout among its peers. Read Full Review
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- Competitive sign-up bonus
- Bonus cash back in a category of your choice
- No annual fee
- 0% intro APR offer
- Foreign transaction fee
- Limit on bonus cash back
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- $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening.
- Earn 3% cash back in the category of your choice, automatic 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases) and unlimited 1% on all other purchases.
- If you're a Preferred Rewards member, you can earn 25% - 75% more cash back on every purchase. That means you could earn up to 5.25% cash back on purchases in your choice category.
- No annual fee and no expiration on rewards.
- 0% Introductory APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the intro APR offer ends, 13.99% - 23.99% Variable APR will apply. A 3% fee (min $10) applies to all balance transfers.
- Contactless Cards - The security of a chip card, with the convenience of a tap.
- This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.
Great for: Balance transfers and cash back
Apply Now
On Discover's Secure Website.
Rating image, 5.00 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 5.00/5
Apply Now
On Discover's Secure Website.
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Get the best of both balance transfer and cash back worlds with this card. Not only do you get a great intro APR on balance transfers, but you also get a rich cash back program. Read Full Review
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- Great intro APR offer
- Sign-up bonus offer
- Robust cash back program
- No annual fee
- FICO® Score for free
- No fixed bonus categories
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- INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
- Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
- Redeem cash back any amount, any time. Rewards never expire.
- Get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
- No annual fee.
- Discover is accepted nationwide by 99% of the places that take credit cards.
- Click "APPLY NOW" to see rewards, FICO® Credit Score terms, Cashback Match™ details & other information.
Great for: Long 0% intro APR for balance transfers and purchases
Apply Now
On U.S. Bank's Secure Website.
Rating image, 4.50 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 4.50/5
Apply Now
On U.S. Bank's Secure Website.
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With a 20 billing cycle intro APR offer for both balance transfers and purchases, this is one of the best low interest credit cards we've come across. Read Full Review
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- Long 0% intro APR offer
- No annual fee
- Cell phone protection
- Free credit score monitoring
- No rewards
- Foreign transaction fee
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- Limited Time Offer!
- 0% Intro APR on purchases and balance transfers for 20 billing cycles. After that, a variable APR currently 14.49% - 24.49%.
- Get up to $600 protection on your cell phone (subject to $25 deductible) against covered damage or theft when you pay your monthly cellular telephone bill with your U.S.Bank Visa® Platinum Credit Card. Certain terms, conditions, and exclusions apply.
- Choose a payment due date that fits your schedule
- No Annual Fee
- Terms and conditions apply.
Capital One Quicksilver Cash Rewards Credit Card
Great for: Unlimited cash back
Apply Now
On Capital One's Secure Website.
Rating image, 4.50 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 4.50/5
Apply Now
On Capital One's Secure Website.
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One of the most versatile and flexible cash-back cards we've seen. The long 0% intro APR makes the offer hard to pass up, especially if you're wanting to keep a one-card wallet that packs in a rich rewards program. Read Full Review
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- Competitive sign-up bonus
- Solid cash back rate on every purchase
- No annual fee
- Great intro APR
- No bonus categories
- No balance transfer offer
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- One-time $200 cash bonus after you spend $500 on purchases within 3 months from account opening
- Earn unlimited 1.5% cash back on every purchase, every day
- No rotating categories or sign-ups needed to earn cash rewards; plus, cash back won't expire for the life of the account and there's no limit to how much you can earn
- 0% intro APR on purchases and balance transfers for 15 months; 14.99%-24.99% variable APR after that
- $0 annual fee and no foreign transaction fees
BEST OF 2022Great for: 0% intro APR for balance transfers and purchases
Apply Now
On Wells Fargo's Secure Website.
Rating image, 5.00 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. 5.00/5
Apply Now
On Wells Fargo's Secure Website.
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A clear leader with a 0% intro APR offer that is among the longest we've come across. The card also includes an innovative intro APR extension with on-time payments. Read Full Review
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- Long 0% Intro APR offer
- No annual fee
- Cell phone protection
- Balance transfer fee
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- 0% intro APR for 18 months from account opening on purchases and qualifying balance transfers. Intro APR extension of up to 3 months with on-time minimum payments during the intro and extension periods. 12.99% to 24.99% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min $5
- $0 Annual Fee
- Get up to $600 of cell phone protection when you pay your monthly cell phone bill with your eligible Wells Fargo card (subject to a $25 deductible).
- Through My Wells Fargo Deals, you can earn cash back in the form of a statement credit while you shop, dine, or enjoy an experience simply by using your eligible Wells Fargo Credit Card
- Select "Apply Now" to learn more about the product features, terms and conditions
Whether you're looking to round out your wallet or open your first credit card, a low interest credit card is a must-have. If you ever need to carry a balance or use a credit card to cover an emergency, you don't want to be hit with astronomical interest fees. If you're paying down debt, look for a low interest credit cards that comes with a 0% intro APR offer, which could save you hundreds of dollars. Here's everything you need to know about choosing and using low interest credit cards.
Overview of the best low interest credit cards
Here are the highlights of our top picks for low interest credit cards.
BankAmericard® credit card
Great for: 0% intro APR and welcome bonus
The BankAmericard® credit card includes a great intro 0% APR offer on purchases and qualifying balance transfers. New cardholders can also earn a statement credit bonus.
Read the full BankAmericard® credit card review
Citi® Diamond Preferred® Card
Great for: 0% intro APR
The Citi® Diamond Preferred® Card doesn't charge an annual fee and starts you off with an impressive purchase and balance transfer 0% intro APR.
Read the full Citi® Diamond Preferred® Card review
Citi Simplicity® Card
Great for: No late fees or annual fee
The Citi Simplicity® Card eliminates common credit card fees, as it doesn't charge a late fee, annual fee, or penalty APR.
Read the full Citi Simplicity® Card review
Citi® Double Cash Card – 18 month BT offer
Great for: Cash back rewards
The Citi® Double Cash Card – 18 month BT offer has one of the best balance transfer offers. It also earns up to 2% back on all eligible purchases (1% when you make the purchase and 1% when you pay your bill on time).
Read the full Citi® Double Cash Card – 18 month BT offer review
Bank of America® Customized Cash Rewards credit card
Great for: Bonus cash back
The Bank of America® Customized Cash Rewards credit card lets you choose a cash back bonus category. It also includes a generous welcome bonus and 0% intro APR.
Read the full Bank of America® Customized Cash Rewards credit card review
Discover it® Balance Transfer
Great for: Balance transfers and bonus cash back
The Discover it® Balance Transfer gives you plenty of time to pay off balances you transfer over. In addition, it offers robust cash back rewards.
Read the full Discover it® Balance Transfer review
U.S. Bank Visa® Platinum Card
Great for: 0% intro APR
The U.S. Bank Visa® Platinum Card has one of the longest 0% intro APR offers we've seen, and it applies to both purchases and balance transfers.
Read the full U.S. Bank Visa® Platinum Card review
Capital One Quicksilver Cash Rewards Credit Card
Great for: 0% purchase and balance transfer intro APR and cash back
The Capital One Quicksilver Cash Rewards Credit Card charges no interest on purchases and balance transfers for an introductory period and offers flat-rate cash back rewards.
Read the full Capital One Quicksilver Cash Rewards Credit Card review
What is a low interest credit card?
Low interest credit cards, or low APR credit cards, are cards that charge a below-average annual percentage rate (APR) on purchases, either on a temporary or a permanent basis. The best low interest rate credit cards can save you a tremendous amount of money if you carry a credit card balance, and they can also help you pay down debt faster.
The interest rate you pay on any given credit card depends on a few factors, such as your credit history and overall debt profile. If you qualify for low interest credit cards, you'll be charged less interest than usual, making it more affordable to carry a balance. Some cards even offer 0% intro APRs for several months on both purchases and balances transferred from other cards. Generally speaking, this is the best way to save money on your credit card balances.
Types of low interest credit cards
There are two main types of low interest rate credit cards:
- 0% intro APR: Credit cards that temporarily charge no interest on purchases or balance transfers. This lasts only for a certain period of time, typically ranging from 12 to 20 months. In addition to the 0% intro APR periods, these cards also vary significantly in terms of the fees charged and other benefits offered.
- Low permanent APR: Credit cards with constant below-average APR. These still typically fluctuate with benchmark interest rates but tend to stay lower than the average APRs on the market. It isn't easy to identify these cards, as interest rates depend on several factors.
How to compare the best low interest credit cards
To compare low interest credit cards, start by deciding if you need:
- A 0% intro APR on purchases
- A 0% intro APR on balance transfers
- A low permanent APR
- A combination of the above perks
Next, pick out cards that have the features you're looking for and see how they measure up. To make this easier, use a tool for comparing credit cards side by side.
Let's say that you need a 0% intro APR on purchases to finance a kitchen remodel. In that case, you'd narrow down your search to low interest cards with an intro 0% purchase APR. You could then see which cards have the longest intro 0% APR offers.
As you're comparing low interest cards, it's worth looking at other features besides the APR, such as welcome bonuses and purchase rewards. These also add value and can work well as a tiebreaker if multiple low interest credit cards meet your needs. For example, if you need a 0% intro APR for 15 months or more and you find several cards offering that, you could compare their rewards to make your selection.
Check out the video below to learn how to pick the best low interest card.
How to get a low APR credit card
When you're ready to get a low APR credit card, here are the steps to follow.
- Check your credit score so you know which cards you can qualify for.
- Choose low APR credit cards with the features you want.
- Compare the credit cards you selected.
- Apply for the card that you like the most.
See our guide on how to apply for a credit card for more details.
Any time you're planning to get a new credit card, the first thing you should do is check your credit. You can do this through free credit score services online. Look for one that provides your FICO® Score, because that's the most widely used credit score by lenders.
Review the best low APR credit cards and compare what each one has to offer. Make sure that the cards you pick are all available for consumers in your credit score range. This gives you a better chance of being approved.
Once you've found the right low interest credit card, select the "Apply Now" option. Fill out the application with the required information. After you submit the application, there are three possible outcomes:
- An instant approval
- A denial
- A further review
If your application is approved, then you're finished. If it's denied, you can either call the card issuer and ask for a reconsideration or choose another low interest card to apply for.
How does credit card interest work?
It's important to understand how credit card APRs work so that you understand how much your credit card balance is costing you.
APR stands for "annual percentage Rate." It's the rate of interest applied to your balances. Most credit card companies use an average daily balance method for calculating interest. To arrive at the daily interest rate, they divide the card's APR by 365.
To illustrate the impact the best low interest credit cards can have, compare how making a payment of $100 per month on a $3,000 initial credit card balance would reduce your debt over six months in three different APR scenarios:
| Month | Balance with 18% APR | Balance with 12% APR | Balance with 0% intro APR |
|---|---|---|---|
| 0 | $3,000 | $3,000 | $3,000 |
| 1 | $2,945 | $2,930 | $2,900 |
| 2 | $2,889 | $2,859 | $2,800 |
| 3 | $2,833 | $2,788 | $2,700 |
| 4 | $2,775 | $2,716 | $2,600 |
| 5 | $2,657 | $2,569 | $2,500 |
| 6 | $2,597 | $2,495 | $2,400 |
Note: Figures rounded to the nearest dollar.
Here's the takeaway: After six months, the cardholder with a 0% intro APR would have reduced their debt by nearly $200 more than the cardholder with an 18% APR, even though they both made the same payments.
How to use a low interest credit card
Low interest credit cards can come in handy if you utilize them correctly. Here are a few tips on how to best put them to use.
Keep one in your wallet to cover emergencies. Ideally, you should have enough cash in an emergency fund to cover at least six months of living expenses. But if you don't have anything in your savings account, or it's not enough to pay for an unexpected expense, you could use a low interest credit card as a kind of backup emergency fund.
Unlike some other options, such as a personal loan, the funds on a credit card are immediately available. And the low interest rate should help keep your payments affordable. You can use our emergency fund calculator, to calculate how much you may need in an unexpected situation.
Use it to finance a big purchase. Low interest credit cards can be a good way to buy big-ticket items you can't afford to pay for all at once. Look for a really low rate -- or, even better, a 0% intro APR on new purchases. You'll want to explore all of your options first though, as it's often wiser to wait until you've saved enough money to pay upfront.
If you go with a 0% intro APR credit card, you could potentially finance the purchase without paying any interest at all. But it's crucial that you make sure you can pay off the balance before the introductory period ends.
Do a balance transfer to pay off debt more quickly. If you're trying to pay off debt with a high interest rate, you know firsthand how crippling those massive interest charges can be. Doing a balance transfer -- that is, transferring your existing debt to a credit card with a lower interest rate -- can significantly relieve that burden.
It will ensure that more of your monthly payment goes toward chipping away at that balance rather than paying interest fees. You can even opt for a balance transfer credit card with a 0% intro APR on balance transfers, but you'll want to make sure you can pay off the balance before your introductory period ends. But be sure to research your options first: If you can qualify for a low interest personal loan and use that to pay off your debt, you might save even more money.
Is a low interest card right for you?
Here are some examples of when a low interest credit card can be useful:
- You carry a balance often. If you tend to carry a balance on your credit card, getting a low interest credit card can help you save lots of money in interest.
- Your income fluctuates. People who have irregular income may benefit from having a low interest credit card to help cover expenses in periods when cash flow is particularly tight.
- You need emergency financing. Nothing beats having a few months of living expenses in your bank account. But having a low interest credit card as a backup source of financing can help you handle unforeseen large expenses (such as a car repair or a midnight call to a plumber) while minimizing the amount of interest you pay.
- You want to pay off debt. Whether you get a low interest credit card or a 0% into APR credit card, consolidating debt with a balance transfer can be an effective way to pay down debt quickly and save money on interest. Use our balance transfer calculator to see if a low-interest credit card is right for you.
While we'd never advise carrying a balance for long periods of time, a low interest credit card can be better than the alternatives. You would pay about $10 in interest every month on a $1,000 balance at a 12% APR. That's far better than paying a $35 overdraft fee or getting a loan shark rate from a payday loan store.
FAQs
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We think about credit cards and their APRs in two different ways. Some cards offer exceptionally low APRs for a certain period of time (0% intro APRs on purchases or balance transfers), while others offer persistently low APRs, generally for people who have excellent credit. These cards fit into two distinct categories because they are designed for very different purposes.
Intro APRs: If you need a low APR to help finance a purchase or pay down existing credit card debt with a balance transfer, a 0% intro APR is ideal. There are many credit cards that offer a 0% intro APR for as long as 20 months. The advantage to these cards is that they offer a super-low APR, although only for a short period of time.
Low-interest cards: Some cards offer consistently low APRs, usually to people who have excellent credit scores. (The credit card with the lowest interest rate will usually have an APR around 10% or so, which is in line with rates on two-year personal loans.)
A credit card with 0% intro APR is generally the better way to go, especially if you can pay off your entire balance before the introductory period expires. Cards with permanently low interest rates are still an expensive way to borrow money, especially with the emergence of the personal loan industry over the past few years.
It can be difficult to find a credit card with a permanently low interest rate, and it's typically a better idea to obtain a personal loan if you need to finance a large purchase over an extended period of time. These have fixed rates that are often superior to even the lowest permanent credit card APRs and allow you to repay your debt over a few years.
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It is sometimes possible to lower your credit card interest rate. If you've never missed a payment, or if you've diligently been paying off a balance for a while, your credit card issuer might be willing to reward you by decreasing your APR slightly. Give customer service a call and request a lower interest rate -- the worst that can happen is they'll say no. If that's the case, you can look into opening a low interest credit card instead.
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Credit card interest can be a little tricky, but once you understand how it works, it’s actually pretty simple.
The first thing you should understand is that credit cards show interest rates on an annual basis, but most credit cards charge interest on a daily basis. So if a credit card has an 18% APR, that means it actually carries an interest rate of about 0.049315% per day (18% ÷ 365 days = 0.049315%).
If you have a $5,000 balance, the next day the balance would grow to $5,002.70 at an 18% APR, assuming that no other purchases or payments are made. This interest calculation is made every day during a billing cycle. After 30 days, the $5,000 starting balance would grow to about $5,074.50 at an 18% APR.
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Given that most credit cards with 0% intro APR don't come with annual fees, it's not necessary to close the card when the introductory period ends. In fact, closing it could lower your credit score. Your credit utilization ratio -- that is, your overall debt divided by your overall credit limit -- plays a large part in calculating your credit score. The lower it is, the better. By keeping your credit card open after the 0% intro APR ends, and also not running up a balance, you'll be keeping your debt-to-credit ratio low. However, the key is not to run up a balance. If you can't trust yourself to keep the card open without falling into debt, it's best to close the card and remove the temptation.
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It makes sense to get a low interest credit card when you want a credit card on hand to use for everyday purchases or emergency expenses. The lower interest rate will help you save money if you ever need to carry a balance. Low interest credit cards can also make sense if you want to do a balance transfer to pay off debt. However, it's worth considering a balance transfer credit card with a 0% intro APR if you'll be able to pay off your balance during the intro period.
| Card | Rating | Great For |
|---|---|---|
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Rating image, 5.00 out of 5 stars.
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Great For: Balance transfers and purchases |
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Rating image, 4.50 out of 5 stars.
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Great For: Long intro 0% APR on purchases and balance transfers |
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|
Rating image, 4.50 out of 5 stars.
|
Great For: Long balance transfer and purchase offer |
|
|
Rating image, 5.00 out of 5 stars.
|
Great For: Balance transfers and cash back |
|
|
Rating image, 4.50 out of 5 stars.
|
Great For: Bonus cash back |
|
|
Rating image, 5.00 out of 5 stars.
|
Great For: Balance transfers and cash back |
|
|
Rating image, 4.50 out of 5 stars.
|
Great For: Long 0% intro APR for balance transfers and purchases |
|
|
Rating image, 4.50 out of 5 stars.
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Great For: Unlimited cash back |
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|
BEST OF 2022 |
Rating image, 5.00 out of 5 stars.
|
Great For: 0% intro APR for balance transfers and purchases |
About the Author
Co-founder and personal finance industry analyst for The Ascent by The Motley Fool, a new online publisher of the year award recipient in 2017. Prior to that, he was a Director for The Motley Fool. He has 15 years of finance experience under his belt and has published over 800 educational and research articles that have appeared on websites such as MSN, AOL, and Yahoo Finance. He holds an MBA in Finance from George Washington University.
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