Low Interest Credit Cards

To get a low interest credit card, start by checking your credit score and figuring out how long you expect to need a low interest rate for, in addition to why you need it. Low interest credit cards usually require good credit or better, and low rates are available for new purchases as well as balance transfers.

How to Get a Low Interest Credit Card

1. Check your credit score. To get a 0% APR credit card, whether for purchases or balance transfers, you’ll generally need good credit or better. And as a rule of thumb, the best credit scores get the lowest regular APRs.
2. Decide what you need to do with your low interest credit card. If you’re looking to finance a large future purchase, you’ll do best with a card offering 0% on purchases. A 0% APR balance transfer card will work better if you have existing debt. And a card with a low regular interest rate is best for people who don’t know when they’ll need to carry a balance but want a safety net that won’t break the bank in interest charges.
3. Apply for the card that best suits your credit score and your needs. Make sure you research (and meet) the card’s approval requirements before you apply.

Other Things to Consider When Shopping for a Low Interest Credit Card

You likely won’t know your regular interest rate until you’re approved. Most credit cards advertise their regular APRs as a range: 15% - 25% (V), for example. That means your assigned rate could be as low as 15%, as high as 25%, or somewhere in between. And the “(V)” indicates the rate could change over time as economic conditions evolve.

The exact interest rate you’re given (from within the advertised range) will depend on your credit history, income, and debt – your overall creditworthiness. Unless you apply for a card that has a set regular APR, rather than one advertised as a range, you won’t know exactly what regular APR you’ll get until your application is accepted. As a result, it’s best to consider both the high and low ends of the range when comparing credit card rates, even if you have good credit.

Using a 0% APR period to pay off debt is usually not free. If you have existing debt and need a break on interest to pay it down faster, the best option is usually a 0% balance transfer credit card. But most 0% APR balance transfer credit cards charge a balance transfer fee, which is a percentage of the amount you transfer. In this case, a balance transfer isn’t totally free. Cards with no balance transfer fee and 0% APR periods do exist, but they’re not common.

A 0% APR period will likely become a high regular rate. A no-annual-fee credit card with a 0% APR intro period on purchases is a great way to finance a big purchase for free. The intro period will allow you to pay off a hefty purchase without paying an extra dime, as long as you pay it off before the intro period ends. After that, the card’s regular interest rate will apply to any remaining balance, and regular rates tend to be pretty high on 0% intro APR cards.

Having a low interest credit card as a safety net isn’t a bad idea. If you want a low interest credit card just in case of emergency, look for a card with a low regular APR range or a single low rate listed.

Your existing APR may be open to negotiation. If you already have a high-APR credit card, and you don’t particularly need a 0% APR period, a better option might be to try calling your credit card company’s customer service line to ask for a lower regular rate. If you make a good case, citing your good and/or long history with your card and the company, you may get offered a lower interest rate. You will have better luck if your credit situation has improved since you applied for the card, too.

A good interest rate on a credit card is around 14%. That is roughly the average regular interest rate on credit cards for people with excellent credit. Even a relatively good interest rate on credit cards for people with lower scores is not all that low. For example, credit card users with good or fair credit could pay interest at an annual rate of 20%+ and still have a below-average APR. Better-than-average for a credit card overall isn’t much below 20%, either. That’s why the best interest rate on a credit card is 0%.

There are two ways to get the best possible credit card interest rate: 0%. For starters, lots of credit cards offer 0% APR periods as introductory perks for new customers. They can be a great help to people looking to finance a large purchase or transfer a debt to pay it off faster. But those intro periods are always temporary. Most (but not all) 0% APR credit cards require good credit or better, too.

The second way to avoid credit card interest altogether is to pay your full statement balance by the due date every billing period. Setting up automatic monthly bill payments from a bank account can be a big help with that. You can also try the Island Approach, which is a method of using multiple credit cards for different expenses. For example, you could use your lowest-rate card—maybe even a card with a 0% APR period—for things you’ll need to pay off over a period of time, and a rewards card for everyday purchases that you pay off every month. That way, you wouldn’t pay interest at all, no matter what rate you have on the rewards card.

There is also a number of things you can do to raise your credit score and, in turn, get a better shot at a good interest rate on your next credit card. Because if a low credit card APR is your objective, it truly pays to have an “excellent” credit score of 750 or higher.

The best low interest credit card for fair credit is the Petal® 2 Visa® Credit Card because it is possible to get an interest rate of 12.99% (V), depending on your overall creditworthiness. That is the low end of a range from 12.99% to 26.99% (V), however, so it might be optimistic to assume you’ll get a rate that low. The Petal 2 Card’s annual fee is $0.

It’s worth mentioning that when you have fair credit, getting a credit card with a low APR may not be the best option. Fair credit won’t qualify you for too many of the 0% APR deals offered by a lot of credit cards these days. And with a fair credit score, you probably won’t get the lowest APR available from the Petal 2 Card.

Store credit cards can offer deferred interest to people with fair credit. But you should be careful with deferred interest deals – if you don’t pay the full amount by the time the deferred interest period is over, you’ll owe your balance plus all the interest you would have accrued since you made the purchase.

The best low interest credit cards for excellent credit are the Costco Anywhere Visa Credit Card, the Amalgamated Bank of Chicago Union Strong Credit Card, and the Dollar Bank Low Rate Credit Card. They all have interest rates below 16%.

There are other credit cards with the possibility of lower interest rates for people with excellent credit, but the lowest rates offered in an interest rate range aren’t guaranteed. The credit cards listed above don’t have an interest rate range, which means a cardholder will know the rate they’ll get before they apply for the card.

It’s important to note, however, that the interest rates for these credit cards are variable, meaning that the rate can go up or down depending on changes to the index rate the card is attached to. The index rate usually fluctuates along with the Federal Reserve interest rate.

The best low interest credit cards for excellent credit:

• Costco Anywhere Visa: Regular APR of 15.24% (V). Excellent required. No intro APR period. $0 annual fee.
• Amalgamated Bank of Chicago Union Strong: Regular APR of 9.25% (V). Good required. Intro APR of 0% for 12 months on purchases and 0% for 18 months on balance transfers. $0 annual fee.
• Dollar Bank Low Rate: Regular APR of 9.24% (V). Excellent required. Intro APR of 0% for 6 months on purchases and 0% for 6 months on balance transfers. $0 annual fee.

When shopping for a low interest credit card, it’s worth considering credit cards with 0% APR periods, especially if you’re looking to make a big purchase and carry a balance for awhile. Many credit cards with 0% APR intro periods don’t even require excellent credit. But do keep in mind that many 0% APR credit cards have high regular interest rates, so make sure to pay off any carried balance before the intro APR period ends.

The best low interest credit card for bad credit is the Credit One Bank® Visa® Credit Card. The APR is 17.99% - 23.99% (V). While that’s still relatively high, it’s a lot cheaper than other unsecured credit cards for bad credit, which offer APRs of 24% - 36%.

The Credit One Bank Visa has no monthly or one-time fees. But the annual fee is $0 - $99. New cardholders start out with a $300 credit limit, and can earn 1% cash back on purchases in specific categories. However, you won’t know which categories are eligible for rewards until your application is approved.

Unfortunately, unsecured credit cards for bad credit with low interest rates are hard to come by. Plus, unsecured cards for bad credit will often come with excessive fees and low starting credit limits, regardless of their APRs.

Credit card interest rates are so high, averaging 18.24% for all new offers, because credit cards are unsecured and have no set timeframe for full repayment. Credit cards are riskier than other borrowing methods as a result, and issuers need to charge higher interest rates to compensate.

With mortgages and car loans, on the other hand, the house or car can be repossessed and resold by the lender when the balance is not paid off. But if a cardholder defaults on a credit card payment, there’s no guarantee that the lender will ever get their money back.

Legal caps on interest rates – or the lack thereof – also affect credit card APRs. In 1978, the Supreme Court ruled that card issuers could set their credit card interest rates based on the usury laws in the state they’re headquartered in. Usury laws put a legal cap on the interest rates that can be charged on a line of credit, but not all states have them. This means that banks can avoid usury laws by strategically choosing the location of their headquarters. They can then export high interest rates to states that normally wouldn’t allow them.

Finally, credit card interest rates are so high in part because people agree to pay them. Card issuers will continue offering these terms as long as consumers continue accepting them.

When comparing credit cards with low or 0% interest rates, it’s important to know both your credit score and how much you can afford to pay toward your debt each month. This will make it a lot easier to tell which low interest credit cards might be available to you and then compare them based on how much each is likely to cost you by the time you pay off your balance. It’s hard to tell whether you should go after a really long 0% APR period, a really low regular APR, or a card that is decent in both categories just by eyeballing your options. But by plugging the relevant rates and fees into a credit card payoff calculator, along with your budgeted monthly payment, it will quickly become clear which low interest or 0% APR credit card is best for you.

With that being said, it’s also important to note that the credit cards with the best rates typically have at least a couple key things in common. For example, they hardly ever charge annual fees. In addition, they usually require at least good credit for approval. Keep reading below to learn more about how to compare offers and get the best possible deal on credit card interest rates.

Financing a big purchase with a 0% APR card

If you’re financing a large purchase, a longer 0% interest period means lower monthly payments, which may help your monthly budget. But sometimes the longest 0% APR period is followed by a high regular APR, especially if you have less-than-perfect credit.

So if you plan on carrying a balance past the zero-interest period (or you think that might be a possibility), make sure to factor in each card’s regular APR when you’re comparing offers.

Transferring a balance to a 0% APR card

Those hoping to transfer an existing balance to a new credit card shouldn’t simply find the card with the longest 0% interest period on balance transfers. You’ll also want to consider the balance transfer fee, which is usually between 3% and 5%. It can end up being a significant expense, and it’s commonly overlooked.

That said, there are cards with both 0% APR on balance transfers and $0 balance transfer fees from time to time. They would be ideal for someone looking to transfer a balance, but such cards are only available to people with good credit or better.

A note about store cards and deferred interest

If you’re considering a store card, or a card from a specific retailer, make sure the 0% APR period is not, in fact, a deferred interest period. Deferred interest isn’t a true 0% interest offer—rather, the interest will accrue from the purchase date and will apply if you slip up. If you make a late payment, or have any portion of the balance remaining on the card at the end of the deferred interest period, you’ll pay every cent of interest that you would’ve paid from the start.

So beware of store cards, and read the fine print. Most of the time, you’re better off getting a regular credit card with a true 0% interest period.

Yes, there are some low interest balance transfer credit cards for life, though getting a low balance transfer interest rate permanently or for the life of a transferred balance often means sacrificing in other areas. The best low interest balance transfer credit cards for life are the Simmons Bank Visa®, the M&T Visa Credit Card, and the Saratoga's Community FCU VISA® Platinum Credit Card.

Some cards include both a low introductory APR on balance transfers and a low ongoing APR once the introductory rate expires. Others simply let the cardholder keep the same rate on balance transfers until the transferred balance is paid off.

Low interest balance transfer credit cards for life:

Saratoga's Community FCU VISA® Platinum Credit Card: Introductory balance transfer APR of 6.99% Until the balance is paid off. 9.9% regular APR. Balance transfer fee: $0.

American Heritage Federal Credit Union Platinum Preferred Mastercard: Introductory balance transfer APR of 3.99% Until the balance is paid off. 9.99% regular APR. Balance transfer fee: $0.

Simmons Bank Visa®: Introductory APR of 0% for 12 months on balance transfers. 8.25% (V) regular APR. Balance transfer fee: 3% (min $10).

M&T Visa Credit Card: Introductory APR of 0% for 12 months on balance transfers. 10.24% - 17.24% (V) regular APR. Balance transfer fee: 4% (min $10).

Simmons Bank Rewards Visa Signature: Introductory APR of 0% for 12 months on balance transfers. 10.25% (V) regular APR. Balance transfer fee: 3% (min $10).

Exactly how low of an ongoing APR you’ll get on your balance transfer credit card depends on your creditworthiness (credit score, payment history and more). Many cards express interest rates as a range, and the better your overall credit profile is, the better chance you’ll have of securing a low rate. Some cards only have a single regular APR for all cardholders, though.

In addition, the low interest on your balance transfer credit card may not always be for life. If your interest rate is variable, it will fluctuate along with changes in the economy. Also, how you use your card can make an impact. Late or missed payments, and payments less than the minimum amount due, can cancel your low interest rate and replace it with a higher APR. Finally, under the Credit CARD Act of 2009, an issuer can raise your interest rate, but they must provide advance notice.

The best low interest credit card with no annual fees is the Wells Fargo Platinum.

It offers 0% for 18 months on new purchases and 0% for 18 months on qualifying balance transfers on qualifying balance transfers - 6-7 months longer than average, depending on the type of transaction. The regular APR can be anywhere between 16.49% to 24.49% Variable, based on your creditworthiness.

Fixed low interest rate credit cards are basically extinct. And there’s a fairly simple reason for that. Credit card companies lost the ability to change interest rates whenever they want when the CARD Act took effect in February 2010. In fact, they can only raise rates on existing consumer-card balances when the accountholder becomes 60+ days delinquent. The law does not cover small business credit cards.

As a result, credit card companies now use variable interest rates, which change based on a benchmark such as the Prime Rate, to make sure their offers keep pace with the broader economic climate.

Of course, introductory interest rates are an obvious exception to this rule, since they have a set expiration date.