Your idea of a great credit card doesn't have to be one that includes rewards and perks. Maybe you just want a simple low-interest credit card that minimizes the chances of falling to far in debt.
With hundreds of credit cards available to you, it can be quite a hassle to find the ones with the lowest APRs. Even then, they can differ in terms of other features.
In our opinion, these are best low-interest rate credit cards out there worth considering:
Best Low-Interest Credit Card For Paying Off Debt
If you're looking to consolidate your debt, the Chase Slate® credit card is a great option. With this card, you get a lengthy 0% introductory balance transfer APR. And, there's no balance transfer fee for a limited time (the first 60 days after account opening).
Lowest Interest Rate Credit Card For Excellent Credit Scores
There is one credit card at least that offers no balance transfer fees and has a low purchase interest rate. Plus, there's no annual fee. That's the Simmons Bank Visa® Platinum card.
But you should note, Simmons Bank only accepts applicants with excellent credit.
Best Secured Credit Card for Bad Credit Scores
If you don't have outstanding credit and want a low interest credit card, there is a great option for you. That's The First Progress Platinum Prestige MasterCard® Secured Card.
This is a secured card and therefore doesn’t require excellent credit. And it offers a respectable APR, lower than most other secured credit cards. It does, however, come with an annual fee of $44. This is not uncommon for a secured credit card.
What Credit Scores Are Needed for Lower Interest Rates
You're more likely to qualify for a lower interest rate if your have a good credit scores. With a FICO credit score of at least 700, you're in the best position to get lower APRs. So, if that's your goal, it's important to keep credit in pristine condition.
Good credit does not mean an absence of debt. If you have not defaulted on any loans, you can still score well. Even carrying large amounts of debt load may not hurt your chances of approval.
Tip: Keep your credit usage to less than 30% of your total credit card limit to keep your credit score high.
Secured credit cards with bad credit
The alternative for people with bad credit is a secured credit card. It's mostly the same as a 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. If you practice positive credit behavior, this will help you build or repair your credit.
Generally, if you have bad credit, it's not a good idea to carry any type of balance on a secured credit card. But, it's nice to know that you have a low APR if you ever can't pay off the entire card balance.
Improve Your Credit Score for Low Interest Rates
To be eligible for low interest rates, a higher credit score will help. Keep some of these tips in mind:
Spend what you can afford
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 one question. “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 these things reflects positively on your credit report.
Make smaller “micropayments” each month
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 throughout the month. These payments (also called micropayments) can lower your debt utilization ratio. At the same time, they keep 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 responsibly. Time your payments so that you’ve paid off your full balance by the end of the billing cycle.
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 limit can help boost your credit score. That's because 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 may include a hard check to your credit. This 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.
Balance Transfer Credit Cards for Low Interest Rates, Temporarily
Low-interest credit cards can have low APRs for many years to come. But, if you're trying to tackle your credit card debt right now, balance transfer credit cards may be more useful.
These cards might offer introductory balance transfer APRs that are as low as 0%. Balance transfers can be used to consolidate other kinds of debt (e.g., student loans, personal loans, etc.) in addition to credit card balances.
Tip: To ensure maximum effectiveness of a balance transfer, you should avoid making new purchases or cash advances on the credit card. Those will not only come at a different interest rate than the transfer, but they can also cause you to grow the balance you're trying to shrink.When you don't have to pay any interest on your balance, you can focus on reducing the debt. Plan out how much you have to pay every month in order to eliminate the transferred balance before the introductory period ends.
Note that many credit cards will charge a balance transfer fee. It often costs 3% to 5% of the amount transferred. Be sure to account for this cost.
How Credit Card Interest is Determined
Even the lowest APRs on credit cards may appear high compared to the interest rates on other types of loans. The reason is because credit cards are not tied to any form of collateral. (Unlike the homes and vehicles that are financed by mortgages and car loans that can be taken by the bank in case of default).
The APR for your credit card can vary depending on your credit score. The higher your credit score, 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 formula. Most commonly, card companies start with The Wall Street Journal's Prime Rate. 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.
Credit Cards for Low Interest
|Best Low Interest Credit Cards||Notable Feature||Who It's Best For|
|Chase Slate®||Introductory offer tends to include 0% APR on balance transfers for an extended period of time. Also, balance transfer fees are waived during the first 60 days||People who are trying to pay down their high-interest debt quickly through the use of debt consolidation.|
|Simmons Bank Visa® Platinum||An extremely low regular APR.||People want to minimize their interest charges and don't care about rewards.|
|First Progress Platinum Prestige||Low APR for a secured credit card.||People with bad credit who might carry a balance occasionally.|