Best low interest credit cards of July 2021
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In an ideal world you could pay off your credit card balance in full every month and not have to worry about interest that could accrue. But we know this isn't an ideal world and the reality is that sometimes you end up carrying a balance from one month to the next (or longer).
In those situations, it's nice to have a credit card in your wallet that offers a low interest rate or even an introductory 0% rate for a time before going to an ongoing low (relative to many cards) interest rate, which is exactly the case with these credit cards from our partners.
TOP LOW INTEREST CREDIT CARDS
- Simmons Visa® - Best Overall
- Citi® Diamond Preferred® Card - 0% intro APR Offer
- Citi® Double Cash Card - 18 month BT offer - With Rewards
- Green Dot primor® Visa® Gold Secured Credit Card - For Bad or Limited Credit
- Capital One VentureOne Rewards Credit Card - For Travel
- Ink Business Cash® Credit Card - For Businesses
Our real focus in this article is the cards that offer low ongoing interest rates. An introductory 0% period is great, but it's introductory. What if you need a low interest rate three years into your tenure as a card member? That's where these cards really come in handy.
You might think that a low interest rate automatically means minimal perks or no rewards, but you'd be wrong. There are a number of excellent choices that offer the full package: low interest rate, helpful extra perks/features, and even the opportunity to earn rewards.
(This card is not currently available on CardRatings)
Why We Like It: The Simmons Visa® doesn't have balance transfer or annual fees. Combine that with a perennially low APR and you get a credit card that allows you to quickly pay down your balance, especially if you're transferring from a high-interest card. It's also why this card routinely makes our "best credit cards of the year" list.
Annual Fee: None
Intro APR: NA
Ongoing Interest Rate: 8.25% variable
More Details:This card doesn't have a rewards program, but cards that do generally do not have such a low APR. It isn't completely no-frills though. Cardholders enjoy Visa benefits, including Visa auto insurance for rental cars. You're able to get collision and theft coverage on most rental cars and won't have to pay extra to the car rental company. The card also offers $1 million in travel accident insurance at no additional cost.
- Up to $1 million in travel accident insurance at no additional cost.
- Car rental coverage for damage, due to collision or theft, up to the actual cash value of most vehicles. And around-the-clock customer service.
- This card offers one of the lowest ongoing APR offers available, and it has no annual fee, making it a winner in our book.
- This card charges foreign transaction fees so it's not the best for traveling internationally with.
- This card isn't for everyone as you need excellent credit to qualify.
Read our full Simmons Visa® review.
Cards with the longest 0% intro APR periods are generally not the same cards that offer low ongoing interest rates. In the case of the cards below, the ongoing interest rates are relatively low as long as your credit score and history put you on the lower end of the APR range. If you happen to land on the upper end, these likely are not the cards for you. If you anticipate needing a low APR beyond what an intro period can offer you, you're likely better off focusing on cards that offer that low APR as their primary feature.
Why We Like It: If you need extra time to pay off a large purchase or a balance from an existing credit card, this card can gain you just that - a whopping 18 months, to be exact. Citi is a CardRatings advertiser.
Annual Fee: $0
Intro APR: Enjoy 0% intro APR for 18 months on balance transfers (from the date of first transfer), which is among the longest 0% intro APRs we know of, as well as 18 months intro 0% APR on purchases.
Ongoing Interest Rate: 13.74% - 23.74% Variable
More Details: This isn't a rewards card so you won't earn rewards on purchases and there's no welcome bonus to look forward to, however, the lengthy 0% intro APR offers and the potentially low ongoing APR makes this a solid card option.
- This card has a solid 18 months of intro 0% APR on new purchases, as well as 18 months on balance transfers from the date of first transfer. After the intro periods, regular 13.74% - 23.74% Variable APR applies.
- With Citi Entertainment you can enjoy special access to purchase tickets including concerts, sporting events, dining experiences, and more.
- Shop with confidence knowing that you have dependable protection benefits including $0 liability on unauthorized purchases and Citi® Identity Theft Solutions.
- This card does not offer ongoing rewards.
- There is no traditional welcome bonus offered with this card.
Read our full Citi® Diamond Preferred® Card review.
Why We Like It: This is a no-frills card meant for someone who wants to transfer a balance from a high-APR card. The card offers an introductory 0% APR on balance transfers for 12 months for transfers made by September 30, 2021; just be sure you pay off your balance within the 12-month period so that you take full advantage of that 0% intro APR. That said, the low end of the interest rate scale is quite low with this card, so if you land on that end of the range, you'll still end up paying less interest than you would with a higher interest card. Plus, you can earn a $100 statement credit after you spend $1,500 on purchases in the first 90 days. If you take advantage of this balance transfer, you will immediately be charged interest on all purchases made with your credit card unless you pay the entire account balance, including balance transfers, in full each month by the payment due date.
Annual Fee: $0
Intro APR: Introductory period of 12 months no interest on balance transfers made by September 30, 2021, subject to a balance transfer fee per transaction.
Ongoing Interest Rate: 7.49% to 17.99% Variable
More Details: You get a $100 statement credit after you spend $1,500 within the first 90 days. There are no annual fees or foreign transaction fees. Note that you'll need to be a PenFed Credit Union member in order to apply for this card. There are a number of ways to qualify for membership beyond military or government affiliation. Find out more on the Penfed Credit Union website.
- No annual fee. We're always happy when that's the case.
- This is a good card for transferring a balance as it offers 12 months of intro 0% APR on balance transfers made by September 30, 2021 (then 17.99% non-variable APR - balance transfers are subject to a fee).
- Enjoy a $100 statement credit once spending $1,500 with the card within the first 90 days of opening an account.
- You must be a PenFed Credit Union member in order to apply for this card. There are numerous ways to qualify for membership, but still, this is something to keep in mind.
- Your rewards do have an expiration date. Still, you have five years to redeem them.
Read our full PenFed Gold Visa® Card review.
Take note here that rewards credit cards are almost always going to have higher APRs than non-rewards cards, so the cards mentioned below have relatively low APRs, though certainly not the lowest on the market. A number of rewards cards feature wide-ranging APRs, which means that an excellent credit score and credit history could land you on the very low end of that range. In that situation, you could find yourself getting a sweet deal with a relatively low APR and the chance to earn rewards.
The caveat, of course, is you won't know where you'll fall on that APR range until after you apply for and are approved for the card. Consider carefully whether it's more important to your lifestyle and spending habits that you earn rewards or that you secure a low ongoing APR before you apply. If the low APR is more important, forgo the rewards in favor of one of the other cards on this list that features a lower APR and no rewards.
Why We Like It: This card gives you an easy opportunity to earn up to 2% cash back on every purchase you make - with no caps. Earning cash back is simple. You'll earn 1% when you make a purchase, plus another 1% once you pay for those purchases. Just make at least the minimum payment due on time to earn cash back.
Annual Fee: $0
Intro APR: Enjoy intro 0% APR on balance transfers for 18 months.
Ongoing Interest Rate: 13.99% – 23.99% (Variable)
More Details: Simplicity is sometimes the greatest reward of all. This card allows you to earn easy cash back with out a lot of thought. Each swipe will earn you rewards, and then each credit card payment will earn you some more. This system encourages responsible credit card use, which is always a good thing in our book.
- The chance to earn up to 2% cash back on every purchases is an excellent perk for a no-annual-fee card.
- This card offers a solid intro 0% APR offer on balance transfers so it's a great option if you need some extra time to pay off a large outstanding balance from another card.
- This card charges foreign transaction fees so it's not the best international travel companion.
- If you spend a lot on certain types of purchases, you could likely stand to earn more with a tiered or rotating-category rewards credit card.
Read our full Citi® Double Cash Card - 18 month BT offer review.
Why We Like It: This card gives cash back just for making regular purchases and offers generous perks for a card that doesn't charge an annual fee. It also gives you 15 months with no APR on purchases. Think of how much you could save if you didn't pay interest for 15 months.
Annual Fee: $0
Intro APR: Enjoy 15 months of no interest on purchases.
Ongoing Interest Rate: 15.49% - 25.49% (Variable)
More Details: Enjoy 1.5% cash back for every $1 spent and an introductory $200 cash bonus when you spend $500 in the first three months. This card also offers travel accident insurance, an auto rental collision damage waiver and no foreign transactions fees.
- This card doesn't charge a foreign transaction fee, which is somewhat rare for a no-annual-fee cash-back credit card.
- The 1.5% cash back earned on every purchase is great for a no-annual-fee card.
- This card has some of the best benefits on the market for a no-annual-fee card including a new cardmember bonus of $200 cash back earned after you spend $500 in the first three months from account opening.
- The straightforward cash back earning of 1.5% on every purchase is great for simple rewards, but there are cards on the market with higher rewards on specific categories that you could maximize your rewards earning with.
- Paying no annual fee is great, but if you plan to use your card often, choosing an annual fee card that offers higher rewards might be worth it. With regular use, offsetting the fee shouldn't be too difficult.
Why We Like It: This card offers an intro 12 months no interest on balance transfers made between now and September 30, 2021. Also, cardholders earn 1.5% cash back on all purchases and PenFed Honors Advantage Program members get 2% cash back. New cardholders can also earn a $100 statement credit when you spend $1,500 in the first 90 days. If you take advantage of this balance transfer, you will immediately be charged interest on all purchases made with your credit card unless you pay the entire account balance, including balance transfers, in full each month by the payment due date.
Annual Fee: $0
Intro APR: Enjoy 12 months of no interest on balance transfers made by September 30, 2021.
Ongoing Interest Rate: 14.99% to 17.99% Variable
More Details: You can use your cash rewards as a statement credit, put it into a PenFed account or transfer to another financial institution. Also note that you'll need to be a PenFed Credit Union member in order to apply for this card. There are a number of ways to qualify for membership beyond military or government affiliation. Find out more on the Penfed Credit Union website.
- Many of the pluses with this card come with the lack of fees. First, there's no annual fee. None.
- Secondly, there is no foreign transaction fee.
- Thirdly, no cash advance fee. That's pretty unusual, though standard for PenFed cards.
- You have to be a member of the Pentagon Federal Credit Union to get this credit card. And you can't be a member unless you're a current or former member of the military, U.S. government employees, employees of certain organizations, membership in particular organizations or associations. This restricts who is able to apply for this card.
- Alas, there's a 3% fee for each balance transfer, even those made during the introductory 0% APR period.
Read our full PenFed Power Cash Rewards Visa Signature® Card review.
Green Dot primor® Visa® Gold Secured Credit Card
(This card is not currently available on CardRatings)
Why We Like It: The Green Dot primor® Visa® Gold Secured Credit Card has no minimum credit score requirements, which can help you if you've had credit issues. Even more importantly, the card offers a fixed, low APR.
Annual Fee: $49
Intro APR: None
Ongoing Interest Rate: 9.99% (F)
More Details: As a secured card, the Green Dot primor® Visa® Gold Secured Credit Card is meant to help you reestablish credit, so there aren't many perks. Instead, use the card conservatively and make regular payments to help build your credit. Note that this is a secured card, so you'll need to provide a security deposit of at least $200 in order to establish your line of credit.
- No minimum credit score requirements,
- Helps strengthen your credit with responsible card use. Reports to three national bureaus.
- Fast, easy application process. Choose your credit line and open your Personal Savings Deposit Account to secure your line.
- It's a secured credit card - and you need to fork over an annual fee?
- Not a great choice for using abroad as it charges a foreign transaction fee.
Read our full Green Dot primor® Visa® Gold Secured Credit Card review.
Why We Like It: This card doesn't charge an APR on purchases for the first 12 months (then, 15.49% - 25.49% (Variable)), so you can take advantage of a nice introductory 0% period. Plus, the card offers a rewards program and multiple card perks including the chance to earn 20,000 bonus miles when you spend $500 within the first three months of card membership.
Annual Fee: $0
Intro APR: Enjoy 12 months no interest on purchases.
Ongoing Interest Rate: 15.49% - 25.49% (Variable)
More Details: The card doesn't charge foreign transaction fees and provides Visa Signature benefits, such as auto rental collision damage waiver and complimentary concierge service.
- No foreign transaction fee.
- Your miles won't expire - and there's no limit on the miles that you can earn.
- Miles can be redeemed towards almost any travel purchase so you aren't restricted to a certain airline or hotel brand.
- You'll get 1.25 miles per dollar on all purchases, which isn't bad, but it isn't spectacular. You will want to shop around and see if there's anything you like better before applying.
- The value of your rewards will be diminished if you want cash back instead of miles. Still, you're probably getting this as a travel card, and so maybe that's a minor quibble.
Read our full Capital One VentureOne Rewards Credit Card review.
Why We Like It: Business cards aren't known for their low interest rates nor do they typically have introductory 0% APR periods. This card checks both those boxes and throws in no annual fee plus solid rewards earning for good measure.
Annual Fee: $0
Intro APR: Take advantage of an intro 0% APR on purchases for 12 months.
Ongoing Interest Rate: 13.24% - 19.24% Variable
More Details: New cardholders can earn $750 cash back after spending $7,500 on purchases within the first three months. On an ongoing basis, earn 5% cash back on the first $25,000 you spend each account anniversary year on combined purchases at office supply stores and on internet, cable and phone services. Earn 2% cash back on the first $25,000 spent in an anniversary year on combined purchases at gas stations and restaurants. You earn 1% cash back on all your other purchases.
- No annual fee.
- The welcome bonus is really generous, especially for a no-annual-fee card.
- A lot of nice perks such as purchase protection, extended warranty protection and an auto rental collision damage waiver.
- There are some spending caps in bonus categories, so if you spend a lot in these areas, this could be prohibitive.
- This card charges foreign transaction fees, so it's not the best option to take along on international trips.
Read our full Ink Business Cash® Credit Card review.
HOW TO AVOID PAYING INTEREST ON CREDIT CARDS
Your credit card is convenient, but it can become costly if you are paying monthly interest charges.
There are two ways to avoid paying interest on your purchases and balances transfers:
- Pay off balances before the grace period expires: When you make a purchase with your card, there is a grace period before interest charges start accruing. The length of the grace period can vary by issuer, but they are typically 21 to 25 days. As long as you pay off a purchase within this time frame, you won't have to worry about paying interest. Note that grace periods do NOT typically apply for cash advances.
- Take advantage of a 0% intro APR credit card:If you can't pay off your balance by the end of the month or need to finance a large purchase, look for a 0% APR card. These cards don't charge interest for a specified introductory period, which can be as long as 18 months. You'll usually need to be a new cardholder to take advantage of the no-interest offer and be aware that balance transfers could still be subject to balance transfer fees.
WHAT IS THE DIFFERENCE BETWEEN INTEREST RATE AND APR?
When it comes to credit cards, there is no difference between the interest rate and the APR, which stands for Annual Percentage Rate.
Lenders have to show an APR which represents the total annual cost of a loan. With mortgages, for instance, the APR can include the interest rate, points and other fees. However, with credit cards, the APR only includes the interest rate. Items such as annual fees and balance transfer fees don't have to be included in the APR because not all cardholders may pay those costs each year.
HOW DO CREDIT CARD ISSUERS SET INTEREST RATES?
Most credit card issuers use the prime rate, which is based on the federal funds rate set by the Federal Reserve rate, as a starting point for their interest rates. The prime rate is generally what commercial banks charge their best customers.
For credit card customers, issuers take the prime rate and add an additional interest charge on top of it. The percentage used for that second layer can depend on the customer and may be related to factors such as:
- Credit score
- Economic conditions
Those with higher credit scores typically have access to the lowest interest rates since the card issuer feels more confident that they will be paid any balance owed. Meanwhile, companies may see those with poor credit scores as being more likely to default on their accounts; therefore, they charge a higher interest rate to offset that risk.
Credit card interest rates that are based on the prime rate are variable and change whenever the prime rate changes. Banks can also adjust that amount they charge on top of the prime rate, so you could see a rate change even if the Fed doesn't make a rate adjustment. Although less common, a few cards offer fixed rates.
HOW DO I SAVE MONEY WITH A LOW INTEREST CREDIT CARD?
Among credit cards assessing interest in 2020, the Federal Reserve reports the average rate was 16.28%. However, interest rates for cards currently available on the market can be as high as 36%. Some low interest credit cards, on the other hand, have regular rates lower than 10%.
Using these rates and CardRatings' credit card interest calculator, you can quickly see how much you save with a lower interest rate. You'd pay roughly the following in interest charges when paying off a $10,000 debt, assuming you pay $300 per month (note, that banks have a few different ways they can calculate your interest, so these examples may not be exact, but they are very close):
- 10% – $1,669
- 16.28% – $3,067
- 36% – $13,458
A low interest credit card can cut your interest charges nearly in half as compared to the average APR.
What's more, many – if not most – low interest cards also have 0% APR introductory offers for new customers. That means you could avoid paying interest on purchases or balance transfers altogether for many months.
HOW TO CHOOSE A LOW-INTEREST CREDIT CARD
Consider using one of these top low interest credit cards for balance transfers from a high-APR card or simply to pay lower interest on an ongoing basis. Which one is right for you will depend upon a number of factors including your own credit score/history, your financial needs/goals and more.
Some cards are no-frills without annual fees, while others feature rewards programs and card perks, but might charge an annual fee. There are cards that offer no interest charges for a period on all purchases and balance transfers, while others limit it to just one or the other. Keep in mind that the ongoing interest rates on these 0% intro cards are often considerably higher than among the cards listed above.
Weigh all the benefits and drawbacks when deciding on a low-interest credit card. Sure, one card may give you 12 months with no interest on a balance transfer, but the card may still charge a balance transfer fee and may have a higher ongoing APR than another card. So, make sure to compare cards to see which one would work best for your situation and in the long run.
Also, keep in mind that when a credit card has an APR range, you may be able to enjoy a low APR, but it depends on your credit history. Potential customers with excellent credit are more likely to get a rate on the lower end of the range.
One last note – If your card has a variable APR (versus a fixed APR), that means it will go up or down depending on the Federal Reserve. Keep that in mind when you're comparing cards.
HOW TO GET A LOW-INTEREST CREDIT CARD
As a general rule, the higher your credit score, the better chance you stand to qualify for lower interest on your credit card.
If you want a low-interest credit card, and you don't have a high credit score, you'll want to work on improving how you look to lenders. To start, make sure to closely monitor your credit report. The three major credit bureaus, Equifax, TransUnion and Experian offer a free report once a year. It's important to pay close attention to your history to make sure there aren't any serious errors, as this can sometimes happen. Creditors could mix up a Bill Jones from Alabama with Bill Jones from Oregon, and if Bill Jones from Oregon has a lot of missed and late payments, and those appear on Bill Jones from Alabama's credit history, you can see how Bill Jones from Alabama might not look like a trustworthy person to lend money to.
Beyond this, you'll want to make sure you're using any current credit cards you might have responsibly. Make sure you're paying your bills on time, not utilizing too much of your available credit, paying beyond the minimum payment each billing cycle, etc. Responsible credit card use is a great way to build your credit and get to that coveted "excellent" credit score position.
WHAT IS A GOOD INTEREST RATE ON A CREDIT CARD?
Not to sound too obvious, but the lower, the better. Many credit cards offer introductory APR offers, where you pay 0% intro APR on purchases and/or balance transfers, for a set period of time (most often, these offers last at least one year), which is a great way to start membership out, but what about the long run? After the intro period, APR can shoot up significantly, so be careful if choosing a card for this perk.
The lowest ongoing APR offers we've seen sit around 10%. This certainly isn't the norm though, and these offers are usually reserved for people with excellent credit. If you can qualify for an APR in the low teens though, you're doing quite well.
All of that said, keep in mind that your goal should be to pay off your credit card every month, so you aren't carrying a revolving balance. If you carry a revolving balance, that can hurt your credit, and if you take awhile to pay off the card, that just costs you more money.
You're smart to look for a credit card with a low interest rate, just in case you do end up carrying revolving debt, but that's the irony about a low-interest credit card. You want a credit card with a low interest rate - but other than maybe making a big purchase with a 0% APR introductory offer and taking a few months to pay it off, ideally, you're getting a low-interest credit card and not actually taking advantage of it.
Disclaimer: The information in this article is believed to be accurate as of the date it was written. Please keep in mind that credit card offers change frequently. Therefore, we cannot guarantee the accuracy of the information in this article. Reasonable efforts are made to maintain accurate information. See the online credit card application for full terms and conditions on offers and rewards. Please verify all terms and conditions of any credit card prior to applying.
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