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Credit Cards

How To Get A LowInterest Credit Card

By David Krug 8 minute read

Whoever claimed no-frills credit cards with low-interest rates was wrong. There are seven credit cards out there that can help you achieve your financial objectives. If you’ve got credit card debt, you need to get it under control as soon as possible. Using a credit card with a low-interest rate is the easiest method to do this. With a reduced interest rate, you will have more money available to pay off your debt.

A low-interest credit card doesn’t mean you have to sacrifice key benefits if you’re in the market for a new card. The points and perks offered by many of these credit cards are valuable without the need to pay an annual fee. We’ll go over seven credit cards that you might want to consider in this post.

The finest credit cards with low-interest rates

Best for balance transfers: Citi Diamond Preferred Credit Card

Transferring your credit card debt to one of the finest balance transfer credit cards is an excellent strategy to get out of debt. For the first 21 months, the Citi Diamond Preferred card provides a 0% APR on balance transfers. Among no-annual-fee credit cards, it boasts one of the longest intro APRs for balance transfers. Additionally, the promotional APR for balance transfers does not begin until the first transfer is made; it does not begin when the account is opened.

As soon as the promotional time ends, your balance transfer interest rate is set at 13.99 percent (variable) dependent on your creditworthiness, and will not change. Additionally, this card provides access to Citi Entertainment and a significant balance transfer bonus. Access to athletic events, eating experiences, and more is granted to cardholders.

Best for introductory APR on purchases: U.S. Bank Visa Platinum Card

A promotion on purchases allows you to buy now and pay later without incurring interest costs. On new purchases, the U.S. Bank Visa Platinum card offers a 0% intro APR for 20 billing cycles to cardholders.

To maintain the deal and avoid accruing interest, you must pay the minimum amount owed while making purchases. However, the bank will not charge you interest if you accept this offer because it gives you a long time to repay the money. You won’t be charged anything for using this purchasing deal, unlike when transferring balances. This card has no yearly charge. You’ll see a 14.74 percent to 24.74 percent (variable) increase in your purchase APR when the promotional period finishes, depending on your creditworthiness.

Best for flat-rate cash back: Citi Double Cash

To maximize cash back on every transaction, the Citi Double Cash card is a good choice. For every dollar you spend, you’ll get 1 percent back when you buy anything and another 1 percent when you pay it off with this no-interest cash rewards credit card. All you have to do is sign up and start earning cashback right away.

For the first 18 months, this credit card provides a 0% intro APR on debt transfers (varying from 14.24 to 24.24 percent). Even if you pay off the sum in full by the conclusion of the promotional period, Citibank will still charge interest on your purchases. As a result, if you’re taking advantage of the balance transfer offer, we don’t advocate utilizing this card to make purchases.

Best for cell phone protection: Chase Freedom Flex

However, the Chase Freedom Flex contains a number of features that may be of interest to readers. Auto rental damage waiver, purchase protection, extended warranty protection, and mobile phone protection are just a few of the added perks.

For the first 15 months, this introductory APR card gives a 0% APR on all transactions. If you have a good credit rating, you may expect your interest rate to rise to the typical variable APR of 14.99 percent to 23.74 percent (variable). For any claim, you’re insured up to $800 with the Chase Freedom Flex, and you’ve covered up to $1,000 annually. In addition, there is a $50 deductible and a two-claims-per-year restriction.

Best for cash back on gas: Costco Anywhere Visa Card by Citi

Cash-back credit cards for petrol purchases are among Costco’s most popular. 4 percent cash back on qualified gas expenditures (up to $7,000), 3 percent on restaurant and travel purchases, 2 percent on all other Costco purchases, and 1 percent on all other transactions are all included in this card’s benefits. You must be an existing Costco member to apply for this card, which has no annual fee and no international transaction fees.

A 15.49 percent (variable) interest rate for all cardholders, regardless of creditworthiness, drew us to this card. The prime rate is used to calculate your APR. In spite of the fact that some rival credit cards offer cheaper rates to certain cardholders, rates might go substantially higher if your credit criterion goes outside the bank’s optimum range of range.

Best for cash back on groceries: Blue Cash Everyday® Card from American Express

In addition to cash back on daily purchases, Amex Blue Cash Everyday cardholders are eligible for a variety of other benefits. 3% cashback at U.S. supermarkets, 2% cash back at U.S. petrol stations, and 1% cash back at select U.S. department shops are all available with this card. After spending $2,000 in the first six months, new cards will get a $200 statement credit.

For the first 15 months after establishing your account, Amex Blue Cash Everyday cardholders get a 0% introductory APR on all purchases. If you need it, you’ll have more time to pay for your goods now. As your creditworthiness improves, your purchase APR will rise from 14.24% to 24.244% (variable). The yearly charge for this card is similarly zero dollars.

Best for travel rewards: Chase Freedom Unlimited

To earn travel rewards, the Chase Freedom Unlimited card is an excellent low-interest credit card option. Although this card is marketed as a cashback rewards card, you are actually earning Chase Ultimate Rewards points for every dollar you spend. You may turn your points into cash, gift cards, or travel vouchers.

With the Chase Sapphire Preferred or Chase Ink Business Preferred you may get even more out of your points by transferring them to another Chase travel card. When you use your points from these cards to book a trip through the Chase travel site, they are worth 25 percent more. Extending the warranty period on qualifying goods is another great perk of this card.

You may get an additional 1.5% cashback on all purchases with the Chase Freedom Unlimited card (up to $20,000 in the first year). Purchases made with Chase Ultimate Rewards get you 5% back on travel, 3% back on dining, and 1% back on all other purchases.

What is the mechanism through which low-interest credit cards operate?

In order to entice clients who tend to hold balances, low-interest credit cards provide interest rates that are below the industry norm. Compared to a conventional rewards credit card, these cards often provide lower rewards and fewer advantages. These alterations aid in the reduction of expenses.

In order to get the most out of these credit cards, you’ll need to use them often. With a reduced interest rate, cardholders may pay off their balance more quickly and save money on interest. A low-interest rate credit card is a good option for persons like these:

  • With a 19.9 percent interest rate, Person A has a $10,000 credit card debt. The interest component of their payment will be eliminated if they choose one of the top balance transfer cards with a 0% intro APR. Their whole amount will be used to pay down their credit card balances. Even if they had to pay a 3% balance transfer charge, they will still come out ahead in the long term.
  • For Person B, the cost of a new air conditioning unit is expected to be $9,000.00. While they don’t know they have the funds to settle the entire bill, they expect to get a large tax refund at the end of the year. They may replace the air conditioner now and pay off the debt when they get their tax refund and before the intro, the APR period expires by utilizing a credit card with a 0% APR purchase deal.

Are there any credit cards with good interest rates?

Interest rates might be cheaper or higher depending on your credit history and can vary from one credit card to the next. Credit card providers may be more likely to offer you a reduced interest rate if you have good credit or exceptional credit than if you have bad credit or no credit. That stated, the interest rate on most credit cards is variable and fluctuates according to the prime rate of the bank issuing the card. Interest rates are now at record lows, which means that your credit card interest rate may possibly be lower than average.

Make sure that the interest rate on your chosen low-interest credit card falls below 14.52 percent (as of May 2020). If you ever need to carry a balance, this will save you money on interest.

The various types of credit card APRs and their meanings

It’s possible that you’ll come across some financial jargon when you’re researching your credit card alternatives. Here’s a short refresher on the meaning of these terms:

  • Balance transfers on a new account are eligible for an introductory APR of 0% for the first six months. There is usually a limited time period for customers to take advantage of this promotional deal. As soon as the promotional time ends, all unpaid debt will be subject to a regular interest rate.
  • Cardholders benefit from a reduced introductory interest rate on all purchases made while the offer is active. After the campaign ends, any outstanding purchases will be subject to the usual purchase APR. If you need to make a large purchase and pay it off over a period of time, these deals are ideal.
  • This is the interest rate you will be charged if you don’t pay your bill in full by the due date on your statement. An individual’s creditworthiness and payment history are often used to calculate the purchase APR.
  • Credit card balance transfer APR: Some credit cards enable customers to transfer balances at any time. The APR charged by the bank to the cardholder for transferring funds into the customer’s account is known as the balance transfer APR.
  • When you use your credit card to withdraw money from an ATM or a retail establishment, you’ll be charged a cash advance APR.

As the prime rate fluctuates, these APRs will change as well. For balance transfers and cash advances, some banks impose a fee and demand a minimum interest rate.

How to choose the best low-interest credit card

Low-interest credit cards come in a plethora of flavors, making it difficult to settle on just one. Think about what you want to accomplish right now and how this card can help you get there. In the case of a significant purchase, for example, one of these cards may be able to assist you.

In addition to the interest rate, fees, perks, and bonuses are all factors to consider when choosing a credit card. Is it crucial for you to have a credit card reward program? So, do you want a rewards card that gets the same benefits everywhere or one that gives you additional points when you spend the most money, such as at a petrol station or grocery shop, if that is your preference?

Knowing your credit score ahead of time will help you be accepted for a loan. AnnualCreditReport.com provides free access to your credit reports and scores. The COVID-19 pandemic usually allows you to check your reports for free just once a year, but now you may do so for free each week until the end of 2020 because of the pandemic.