Best Low Interest Credit Cards of 2016

A low-interest credit card is a card that offers an introductory 0% APR or an ongoing APR of up to 10% for purchases and balance transfers. Introductory APRs are promotional teaser rates that last for a certain number of months before it changes to an ongoing APR (both rates must be disclosed in the card agreement).The APR for your credit card can vary depending on your credit scores -- the higher your credit scores, the lower your interest rates.

The APR for your credit card can vary depending on your credit scores -- the higher your credit scores, the lower your interest rates.

Given the complexity of the field, MyBankTracker picked from its trove of data and consumer reviews these low-interest cards:

1. Best 0% APR Balance Transfer Card to Pay Off Debt

Chase Slate is the best option to consolidate debt

For 18 months, you get a zero-percent interest rate on purchases and balance transfers while balance transfers don’t carry any transaction fee if they’re made in the first 60 days. Essentially, Chase Slate credit card provides a 18-month window to allow you to repay your credit card debt without interest charges.

How interest charges keep you in debt

With credit cards, interest is the culprit that holds you in debt. If you didn’t have those ever-mounting charges, you'd be able to pay down the balance faster. Credit cards that offer temporary 0% APR introductory periods -- usually ranging from 12 to 18 months as in the case of Chase Bank Slate -- can be used for balance transfers, which means you move the debt from one credit card to another credit card. Unlike purchases,

Unlike purchases, balance transfer can accrue interest immediately, with the addition of a fee of up to 3% of the transferred amount. Some credit cards will waive this fee during an introductory period, while a rare few such as Chase Slate will waive balance transfer fees altogether.

Credit scores needed for a balance transfer credit card

The ideal credit card for debt elimination includes a 0% APR introductory period and no balance transfer fees. This type of balance transfer credit card tends to require relatively good credit. A good credit score, as determined by the Fair Isaac Corp., better known as FICO -- the credit score provider accepted by most issuers -- ranges from 700 to 749 out of a perfect 850.

Good credit does not mean an absence of debt. If you have not defaulted on any loans, you can still score well. Even carrying a large debt load won't hurt your chances of approval. Keep your credit usage to less than 10 percent of your total credit card limit to keep your credit score at optimal levels.

According to FICO, more than 54 percent of U.S. consumers have a credit score of 700 to 850. Therefore, more than half of Americans can qualify for a great low-interest credit card to help them pay down debt.

Balance transfers can be initiated as soon as you qualify for the new credit card. The actual transfer takes 7 to 10 business days to complete. To ensure maximum effectiveness of a balance transfer, you should avoid making new purchases or cash advances on the credit card so that you can focus entirely on getting rid of the debt.

Tip: Balance transfers can be used to consolidate other kinds of debt (e.g., student loans, personal loans, etc.) in addition to credit card balances. Card issuers may periodically send balance transfer checks that can be used to pay off other debts with your credit card (you will still be subject to the 3% fee, which could negate the benefits of a balance transfer). Theoretically, you can continue to roll over your debt to new credit cards with balance transfers to extend the period of time that you can repay debt at a lower interest rate. Unfortunately, there aren’t many credit cards that offer a lengthy 0% introductory APR with no balance transfer fees.

2. Best Card With Excellent Credit

Simmons Bank Visa Platinum for the lowest APR

Not only does Simmons Bank Visa Platinum card not charge any annual fees or balance transfer fees, the card’s APR is a mere 7.50% -- among the lowest APRs that you’ll find anywhere. But you should note, the bank does not accept good credit, that is a score in the range of 650 to 750 as determined by FICO. It requires excellent credit, something 750 or higher. Simmons is a regional bank headquartered in Arkansas.

Roughly 38 percent of American consumers hold a credit rating at such a lofty level they are eligible for this elite card. Once obtained, the card provides multiple advantages -- among them no annual or transfer fees -- unlike most 0% credit cards which make up for lower interest charges with higher ancillary fees.

Rules that affect credit card APRs

Although there are no federal laws that limit credit card interest rates, state laws may cap the interest rates. Generally, you won’t find a credit card with an interest rate higher than 29.99% -- it also happens to be the rate commonly used as the penalty APR. The penalty APR is the interest rate on your credit card after you have missed a payment or exceeded the card’s assigned credit limit.

Under federal law, credit card companies must show the card’s APR within its terms and conditions document. Card applicants with high credit scores tend to qualify for the lower end of the APR range.

Low APR credit cards tend to charge less interest on balances carried over month-to-month, but they don’t usually offer rewards. Great rewards credit cards will have programs that offer cash back, points and miles, but their APRs will be a little higher.

To be considered a truly great low-interest credit card, the card should offer a potential APR of less than 10%.

3. Best Card With Bad Credit Score

First Progress Platinum Prestige has low APR on a secured card

The First Progress Platinum Prestige Secured Card doesn’t require outstanding credit, yet offers a respectable APR of 11.99%, lower than most other secured credit cards. Note: The card carries an annual fee of $44, such fees are not unusual for secured credit cards.

A credit score of 300 to 600 makes it difficult to get a regular, unsecured credit card. Roughly 22 percent of U.S. consumers fall under this credit bracket, according to FICO.

Secured credit cards with low interest rates for bad credit 

The alternative for people with bad credit is a secured credit card. The type of credit card represented by First Progress Platinum Prestige can be used for purchases in the same way as any other regular credit card except that it requires a security deposit as collateral. Normally, the amount of the security deposit is the amount of the card’s credit limit. Your credit limit, in addition to all activity with the secured credit card, is reported to the credit bureaus with the intention of helping you build or repair your credit.

Qualifications for secured credit cards are less reliant on your credit score. Indeed, your credit report may not even be pulled in your evaluation for these cards.

Tip: If you're ever denied credit, you have the right by law to see the credit score at the moment of application.
Tip: After six to 12 months of having any credit card, you may try to call the bank to negotiate a lower APR if you’ve shown responsible usage of the card along with on-time payments. Card issuers are more likely to decrease your interest rate if your credit scores improve significantly.

4. Best Card for College Students

BankAmericard for Students helps minimize interest payments

The BankAmericard for Students credit card, offered by Bank of America, carries no annual fee and offers an interest rate of 11.24% to 21.24%, among the lowest in the category. It is ideal for students, most of whom have little or no credit history, who want to focus on building credit without worrying about accumulating debt.

Low APRs keep students from too much debt

Students are often considered to be a high-risk borrower because they haven't built up good credit. Therefore, APRs are usually quite high.

As a student, what you probably don’t realize is that you begin to build your credit record the moment you take out a student loan. It may not count as excellent credit -- it's too early -- but it's something, and often enough to obtain a low-interest credit card. Even with zero credit history, you can still get credit cards designed for college students.

For students, the biggest hurdle to getting any credit card is the federal law that doesn’t allow a person under 21 to own a credit card unless he or she provides sufficient proof of income or has a cosigner. That income can be nothing more than a part-time job. But the income has to be something steady. A cosigner can be anyone who is willing to take on the debt in case you cannot repay your card balance.

How credit card interest is calculated

Even the lowest APRs on credit cards may appear high compared to the interest rates on other types of loans because credit cards are not tied to any form of collateral, unlike the homes and vehicles that are financed by mortgages and car loans.

The APR for your credit card can vary depending on your credit scores -- the higher your credit scores, the lower your interest rates.

It should also be noted the credit card interest rate that you end up with is calculated by the card company’s own formula. Most commonly, card companies start with The Wall Street Journal's Prime Rate. As of Jan. 8, 2016, the U.S. Prime Rate is 3.50%. Then, depending on your creditworthiness, card issuers adds a certain percentage to that rate -- the riskier you are as a borrower, the larger the amount that is added to the Prime Rate.

Using your credit card to raise your credit scores

Bad credit, excellent credit, no credit or digging out of debt: opening one of the above credit cards can be a perfect opportunity to building your credit. Keep some of these tips in mind:

1. Use credit cards like debit cards

Naturally, debit cards and credit cards differ in one basic way. With the former, you’re spending money you already have in your checking account. For the latter, the money you spend is not yours; it’s borrowed and must be repaid. The difference between how the two card types work is what causes credit card debt to get out of control. Sometimes, people forget how much they’ve charged to their credit card.

One solution is to treat your credit card as you would a debit card. Before swiping your credit card, ask yourself: “Would I be able to afford this purchase on my debit card without going overdraft?” Make a habit of this, and it keeps your credit card balance low, and easier to pay off. It also maintains a low credit-to-debt ratio, each of which reflects positively on your credit report.

2. Make smaller “micropayments” each month

Contrary to belief, there doesn’t have to be an all-or-nothing approach to paying off your credit card bill. Paying it off in full each due date is recommended. Making partial, late or zero payments isn’t ideal. One way to make your balance work to the benefit of your credit is to make smaller payments (also called micropayments) which can lower your debt utilization ratio while still keeping a healthy amount of active credit on your card.

This will also show up on your report as evidence that you’re using your credit card as a useful credit-building tool. Time your payments so that you’ve paid off your full balance by the end of the billing cycle.

3. Ask for more credit

Asking for a higher credit line does not necessarily result in more debt. While you’ll always want to keep your debt utilization on the lower end, increasing your credit utilization ratio (the amount of credit you use according to the amount of available credit) can help boost your credit score, since it shows your credit card provider that you can manage a higher balance. Plus, those low-interest rates stay where they are.

However, if you request an increase, the application process includes a hard check to your credit, which can ding your score -- not a good idea if your credit is low. If you’re confident that it’s in good shape, go for the higher credit limit; the good thing about it is that it not only can boost your credit, you’re not obligated to utilize all of it.

4. Stay predictable

Don’t go overboard with too many changes to your credit profile. Opening too many accounts, asking for too much credit, or radically changing up your payment schedule may make you look like a risky borrower to your lender.

Keep things predictable. While you shouldn’t open too many new accounts, don’t close any old ones. Don’t use one credit card exclusively and neglect others; instead, find an even balance between all your accounts. Despite the attractive interest rates and bonuses built into the cards above, it’s unwise to sign up, get your perks, and close out your card. That can make a bad impression on your card provider, but also your credit.

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Ask a Question

MyBankTracker
Wednesday, 06 Jul 2016 4:18 PM
<p>Yes, unless the credit card issuer says that there is no credit check, your credit reports will most likely be pulled during the approval process.</p>
MyBankTracker
Wednesday, 06 Jul 2016 4:13 PM
<p>angira, for your credit score range, you might consider the Barclaycard Ring MasterCard, which has an extremely low ongoing APR. Additionally, it doesn't ever charge balance transfer fees.</p>
Tuesday, 05 Jul 2016 7:34 PM
<p>Does no interest credit cards require hard credit score pull?</p>
Tuesday, 05 Jul 2016 7:18 PM
<p>Hello, I'm looking for low interest credit card that has the lowest ongoing APR, my credit score is 680.</p>
MyBankTracker
Monday, 02 May 2016 5:02 AM
<p>Ana, someone who has no credit is not considered the same type of borrower as someone who had bad credit card.</p><p>You are correct that the First Progress Platinum Prestige Secured Card does not have a rewards program.</p>
disqus_IYKrUxW1Xy
Thursday, 28 Apr 2016 6:47 PM
<p>I'm looking at various cards, for myself and my sister who just started college. And as she has no credit to speak of, I'm assuming her credit would be considered "bad"? According to this, the First Progress Platinum Prestige Secured Card does not offer any kind of user rewards, correct?</p>
MyBankTracker
Friday, 22 Apr 2016 4:00 PM
<p>Brenda, that's great news! How soon did you start to see improvements in your credit? Care to share how much your credit scores increased? Thanks!</p>
Friday, 22 Apr 2016 2:42 PM
<p>When we got out of our bankruptcy last year, we wanted to start rebuilding our credit ASAP, and signed up for the First Progress Platinum Prestige Secured Card. Very happy with this card, and we've had already had some bump ups in our credit, due to us paying our balances off quickly. Hopefully we can get an excellent rating sooner rather than later.</p>
MyBankTracker
Tuesday, 19 Apr 2016 10:31 PM
<p>To suggest the best card for you, can you share what you plan on doing with this 0% APR credit card? Is it for debt consolidation, a major purchase, or something else?</p>
MyBankTracker
Tuesday, 19 Apr 2016 10:04 PM
<p>Katie, your chances of being approved for the Chase Slate card will depend more on your credit scores, income and housing expenses. You shouldn't worry too much about opening a Chase checking account first.</p>
Tuesday, 19 Apr 2016 2:04 PM
<p>Hi I'm a Capital One bank customer, I'm looking for zero interest credit cards, any suggestions? Thanks!</p>
Tuesday, 19 Apr 2016 1:24 AM
<p>Hey Katie, I had same idea in the past, but it did not make any difference, I think it only matters when you are a private client and they can take a look at your all financials.</p>
Monday, 18 Apr 2016 9:53 PM
<p>Hi I'm not a Chase customer, but I would like to apply for Chase slate credit card - does it make any difference in application process if I would open a checking account with them first?</p>
MyBankTracker
Sunday, 17 Apr 2016 2:42 PM
<p>Mike, ideally, the card you want will have a combination of free balance transfers and a low APR -- not just one of them. If you're focused on eliminating debt in the near future, a balance transfer credit card with 0% APR is better. Otherwise, if you expect to carry a balance on a regular basis in the long run, a low-interest credit card is likely the better option.</p>
Saturday, 16 Apr 2016 8:07 PM
<p>Hi, I'm looking for low interest rate credit cards for balance transfer, should specifically for balance transfer credit cards or low interest is okay too?</p>
MyBankTracker
Wednesday, 06 Apr 2016 2:45 PM
<p>Trevor, to see more low interest rate credit cards, you can use our card comparison tool: <a href="http://www.mybanktracker.com/credit-cards/compare" rel="nofollow">http://www.mybanktracker.com/c...</a>. Just check off the "Low APR" filter.</p>
MyBankTracker
Wednesday, 06 Apr 2016 2:43 PM
<p>Jean, for the purpose of rebuilding credit, the First Progress Platinum Secured Credit Card is good choice if you expect to carry a balance because it has a very low interest rate for a secured credit card. Otherwise, you can look at our choices for the Best Secured Credit Cards for more suitable options: <a href="http://www.mybanktracker.com/credit-cards/secured/best" rel="nofollow">http://www.mybanktracker.com/c...</a>.</p>
Wednesday, 06 Apr 2016 12:45 PM
<p>I'd like to compare more - where else can I find more credit cards with low interest rates?</p>
Wednesday, 06 Apr 2016 12:41 PM
<p>What is the best for me with poor credit and trying to rebuild credit?</p>