Low Interest Credit Cards
All credit cards work in the same way, but they are usually divided into categories based on their primary use or features. Low interest credit cards are characterized by a low ongoing or initial interest rate. This type of card is a good choice for consumers who want to finance a large purchase or pay down debt while saving on interest charges.
Variable vs Fixed Low Interest Cards
When shopping for low interest credit cards, it's important to understand that there are several types of cards that fit this description. The most common low interest card has an ongoing variable low interest rate. This means the card has a rate below average, but the rate will change based on market conditions. These credit cards usually require very good to excellent credit. The most uncommon type of low interest card has a fixed low interest rate. Fixed interest credit cards are hard to find, but they are available.
0% Interest APR
Low interest cards can also have a very low or 0% interest rate that only lasts for an initial period. 0% intro APR credit cards are very popular and the zero interest term can last up to 21 months. During this promotional period, purchases and sometimes balance transfers will not accrue interest. This can make it easier to pay off a large purchase or transfer a balance and pay it down without paying interest charges.
Rewards and Other Perks
With some credit cards, the low interest rate is the biggest feature. Some credit cards offer other perks in addition to a great interest rate. Popular features and benefits include:
- Rewards. A rewards credit card offers points or cash back on purchases. It's important to remember that even with a low interest rate, carrying a balance for even one month will always cost more than the rewards that were earned. Always pay off the balance every month to take advantage of the rewards program.
- No balance transfer fees. Consumers who want to transfer a balance to a low interest card should consider any fees that may be charged. Most cards charge a balance transfer fee of 3%, but some cards have no balance transfer fee.
- No annual fee. For the greatest savings, some low interest cards have no annual fee.
- Sign up bonus. A few low interest credit cards have a sign-up bonus. This type of bonus requires meeting certain spending thresholds -- such as spending $1,000 during the first 3 months -- to qualify.
Top 5 Routes for "Low-Interest Credit Cards"
NerdWallet is a leading personal finance website that offers advice on many financial products like personal loans, mortgages, and credit cards. This article, which is updated frequently, is a well-researched list of the top low interest credit cards available. The list includes categories like low fees, rewards, sign-up bonuses, and 0% intro APRs.
- CreditCards.com This resource allows consumers to compare low interest credit card offers based on annual fees, introductory interest rates, ongoing rates, credit score needed, and other terms.
- Citi Bank Citi is a major credit card issuer with a full line of low interest credit cards. All Citi credit cards offer a range of benefits such as very few fees or a rewards program.
- Credit Karma This article offers advice for choosing a credit card. The step-by-step guide helps consumers consider their lifestyle, narrow down options based on their credit score, then research terms and conditions.
- Mastercard Mastercard is a leading international business that processes payments between merchants and card issuers who use Mastercard branded debit and credit cards. Mastercard is one of the world's biggest credit card issuers with several low interest cards available for good to excellent credit.