The 6 Best Credit Cards With Low Interest Rates [2023]

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.

The 6 Best Credit Cards With Low Interest Rates — Overview

Let’s preview our list of low interest rate cards and see how the cards currently stack up against each other.

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.

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

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

The Amex Blue Cash Everyday card earns 3% cash-back at U.S supermarkets (up to $6,000 in purchases each year), 3% cash-back at U.S. gas stations (up to $6,000 in purchases each year), and 3% cash-back at U.S. online retailers (up to $6,000 in purchases each year).

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.

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. 

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 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.