The 7 Best Credit Cards With Low Interest Rates [2019]

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Credit cards are historically known for having high interest rates. The ease of accumulating a high balance and the associated high default rate compared to other types of credit results in credit card issuers charging higher rates.

Bankrate.com, a leading financial product comparison organization, states that credit card interest rates have crept up to an average of over 17% APR (annual percentage rate). If you carry over a monthly statement balance on your card, the resulting charges could sabotage any budget. If you make a late payment, you could incur even higher penalty interest rates that can reach nearly 30% APR.

However, all is not lost if you absolutely need to carry a balance on your credit card — you do have a few limited options, and that’s our topic today.

We’ll cover the following:

  • How to avoid credit card interest charges.
  • Credit cards that have lower than average interest rates.
  • How 0% APR offers can help.
  • How to compare credit card interest rates.

How to Avoid Paying Credit Card Interest

There are limited, but surefire, ways to avoid paying interest charges on a credit card.

  • The number 1 way to avoid paying credit card interest is simple — charge only what you can afford to pay off in full each statement period.
  • Use a credit card with a 0% APR period for a major purchase(s) and pay off the balance prior to the 0% APR period expiring.
  • Transfer high interest balances to a credit card with a 0% APR period and pay off the balances prior to the expiration of the 0% APR period.

Let’s first take a look at a few credit cards that carry a lower than average interest rate and then some alternative cards that have 0% APR periods when no interest charges are incurred.

Credit Cards With Low Interest Rates

Unexpected events can cause you to have to carry a balance on a credit card. Having a low interest credit card in your wallet can help you get through a real-life financial emergency scenario like:

  • Major appliance breakdown.
  • Tuition is due.
  • Medical emergency.
  • Unexpected major car repair.

While it’s never good to carry a balance on your credit cards, a credit card that charges a lower interest rate can be a welcome consolation should you need it.

The definition of “low interest rates” for the purposes of our article is that the card charges an annual APR of less than the current average of 17.67%.

Here are a few credit cards that could be good to have in your wallet should you temporarily need to carry a balance.

Low Interest Credit CardCurrent Interest RateAdditional Benefits
Blue Cash Preferred® Card from American Express
  • 14.74% – 25.74% APR variable (see rates & fees).
  • 0% APR on purchases and balance transfers for 15 months after card approval.
  • Welcome bonus, 6% cash-back on up to $6000 at supermarkets, 6% on streaming subscriptions, 3% cash-back on transit and gas stations, 1% all other purchases.
Capital One® VentureOne® Rewards card
  • 13.74% – 23.74% APR variable.
  • 0% APR on purchases for 12 months from card approval.
  • Welcome bonus worth hundreds of dollars, 1.25x miles on every purchase, 10x miles at hotels.com/venture until Jan. 2020, annual fee waived the first year.
Capital One® Quicksilver® card
  • 15.74% – 25.74% APR variable.
  • 0% APR on purchases and balance transfers for 15 months from card approval.
  • No annual fee, 1.5% cash-back on all purchases, welcome bonus.
Lake Michigan Credit Union Prime Platinum Visa Credit Card
  • 8.5% APR variable.
  • No annual fee, car rental insurance.

Bottom Line: Many credit cards offer interest rates that may be lower than average, but the interest rate you will be charged on a card with variable interest will depend on your creditworthiness as determined by the card issuer.

The 0% APR Alternative to a Low Interest Credit Card

If you need to finance a purchase (or purchases) and pay the balance back over time, securing a credit card that offers a 0% APR introductory period for purchases may be a viable alternative to a low interest credit card.

Carrying high balances on your credit cards can also be expensive. Cards that offer 0% APR for balance transfers can provide a window of interest-free repayment time.

Many 0% APR periods are introductory and are valid for a specified period from the date you are approved for the card — typically 12, 15, or 18 months.

For Purchases

If you need to make a large purchase (or purchases) that can’t be repaid in full when your next statement period ends, you may be able to secure a card that offers a 0% APR period and pay the balance back over time.

For Balance Transfers

If you currently have balances on your credit cards and are paying high interest rates, a card with a 0% APR period for balance transfers can offer the option to repay the balance without interest during the 0% APR period.

This process can only work successfully if you are able to pay off the entire balance on the new card before the 0% APR period expires. Also, be aware that 0% APR cards can charge a balance transfer fee.

Best 0% APR Credit Cards

0% APR Credit CardBest for0% APR Period for Purchases0% APR Period for Balance Transfers
Chase Slate® cardHigh interest credit card balance transfersN/A15 months
Chase Freedom Unlimited® cardLarge purchase(s)15 months15 months
Blue Cash Everyday® Card from American ExpressCash-back15 months15 months
VentureOne cardTravel rewards12 monthsN/A
Quicksilver cardStudent loan transfers15 months15 months

The Chase Slate card is one of the few credit cards that does not charge a balance transfer fee. Transfer fees can range between 3%-5% so there are significant savings when using the card to transfer high interest credit card balances. The card is not a rewards-earning credit card, but it is perfect for transferring high interest balances from other credit cards.

The Freedom Unlimited card earns 1.5% cash-back on every purchase you make. Use it for a large purchase, earn rewards, and pay the balance off over 15 months without interest charges.

The Blue Cash Everyday card earns 6% cash-back at grocery stores (up to $6,000 in purchases each year) and 2% at gas stations and at department stores.

Capital One is one of several credit card companies offering cards that earn rewards and allow student loan balances to be transferred to their cards. They do, however, charge a 3% transfer fee.

To learn more about 0% APR credit cards and how you can utilize these cards, check out our comprehensive guide.

Bottom Line: While low interest credit cards can help when you need to carry a balance short-term, a 0% APR credit card can eliminate interest rate charges entirely for a specified period of time. 

 

Credit Card Interest Rates
When applying for a credit card, check the rates and fees in the card’s Schumer Box. Image Credit: Amex

How to Compare Credit Card Interest Rates

By law, credit card issuers must disclose interest rates, fees, and other pricing in a standardized form. Above is an example of that form, called the Schumer Box, named after the senator who was responsible for the legislation.

Every credit card has an associated Schumer Box. It is usually found via a link near the area where you apply for a card, or on the application page itself. The link may be labeled “pricing and terms,” “terms and conditions,” “rates and fees,” or another similar title.

The Schumer Box is simple to read and will tell you everything you need to know about the credit card. You’ll find all the associated interest rates and any fees that could be possibly be charged on the card.

Some of the information you’ll find disclosed in a Schumer Box:

  • APR for cash advances.
  • APR for balance transfers.
  • APR for purchases.
  • Ongoing APR charged for balances carried over.
  • 0% APR period for purchases and/or balance transfers, if applicable.
  • Penalty APR for late payments.
  • Annual fee.
  • Other fees such as foreign transaction fees, cash advance fees, and late payment fees.
  • Additional user fee.

Comparing credit cards that have 0% APR periods can also be easily accomplished as terms and ongoing interest rates will be disclosed in the Schumer Box.

One thing to be aware of when comparing interest rates is that interest rates can be variable. You may see an APR of 14.72%-24.6%, for example. The interest rate you actually receive will depend on your creditworthiness which will be decided by the issuer.

Using the Schumer Box information on each card in which you’re interested will assist you in selecting a card that has the best pricing structure for your situation.

Bottom Line: Use the Schumer Box, which is a mandatory publication for each credit card, to help you compare and select the card that offers the best pricing for your situation. 

Final Thoughts

Credit card interest rates are high because issuers are in business to make money. If loaned money does not get repaid, the result is a cost to the business and this loss is passed on to credit card consumers.

If a credit card issuer chooses to loan money to a person who does not have a history of paying their bills on time, they can charge a higher interest rate to that person to cover their risk.

With that said, we all go through periods when our financial situation is less than perfect. We may have made poor credit decisions early on, lost our jobs, or had other situations that temporarily affected our ability to pay our obligations. Fortunately, there is always a way to improve your situation when it comes to credit.

If you carry a balance, you will pay interest charges on your credit card. Selecting a credit card that has both a 0% APR period and a subsequent ongoing (lower than average) interest rate can be a good combination. It could help you save on interest charges if you need to carry a temporary balance, make a large purchase, or have high interest credit card balances to transfer.


FAQ

Which is the best low interest credit card?

There is no single low interest credit card that is best for everyone.

The best low interest credit card for you would align with your spending habits and match your tolerance for paying, or not paying, an annual fee.

It may have a 0% APR period that allows you to make a large purchase or transfer high-interest credit card balances.

It will also allow you to carry over a balance from 1 statement period to another, on a short-term basis, without incurring high interest rate charges.

How does the 0% APR period work?

Some credit cards have a period of time when no interest is charged if you make a large purchase or transfer a balance from another credit card.

These 0% APR periods normally start on the date you are approved for the card and can last 12, 15, or even 18 months.

You must pay off your balance in full by the expiration date of the 0% APR period or you will incur normal interest rate charges.

You can find out the interest rate charges for any credit card by reviewing the Schumer Box. This disclosure box allows you to easily compare credit card interest rates, fees, and the terms of any 0% APR period.

What is a good credit card interest rate?

A good credit card interest rate would charge an APR that is less than the industry average. Current average APRs on credit cards are between 17%-18% APR.

The interest rate that you receive when you apply for a credit card, however, could be higher or lower depending on your creditworthiness as determined by the credit card issuer.

Are low interest credit cards worth it?

Low interest credit cards are only worth it if you carry a balance from 1 month to another. Even then, you will still incur a significant amount of interest.

The best way to avoid credit card interest rate charges is to pay off your balance each statement period. If you are able to do this, the interest rate that a credit card charges will not be an issue.

Another option is to utilize a 0% APR credit card which may allow you to pay off your debt over a specified period of time without incurring interest rate charges.

Christine Krzyszton

About Christine Krzyszton

Christine, who lives in Northern Michigan, travels about 300,000 miles a year despite her remote location. Her expertise is traveling the world on a weekend with no pre-determined destination in mind, letting the cost of the airfare determine where she will go. She has over four million flown miles and elite status on all three major domestic carriers.

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