A third of all credit card users will regularly carry a balance on at least one of their credit cards. That was the conclusion of the most recent Gallup survey on American credit card usage. However, a low-interest credit card can help you spend less on interest charges over time, and give you more leverage to pay down your debt.
Unfortunately, finding a credit card with the lowest interest rate isn’t as easy as shopping for the lowest price for most goods. For instance, you can drive by a gas station and see on the sign the price for unleaded self-serve, and easily compare it to the station across the street. But with credit cards, you will often be presented with multiple rates or a range of different interest rates, one which will be assigned to you based on your creditworthiness, and then only after you have been approved for the card. At the same time, there are still some cards that offer a single, low interest rate, although typically these cards are only available to those with excellent credit.
Before you apply for a credit card, you may want to check your credit scores to see where you stand, and ensure that you meet the credit issuer’s general credit criteria for that card. There are many ways to get your credit scores for free, including through Credit.com, where you can also get some personalized tips to help you build your credit.
Choosing a Low-Interest Rate Card
If you’re looking for a card that has a low interest rate (here’s an expert guide to help you choose), know that reward credit cards typically carry higher interest rates than cards that do not offer rewards. Next, examine the standard purchase interest rate listed in the card’s terms and conditions. These rates are presented in a standard format — typically a Schumer Box, named after New York Senator Charles Schumer, who championed the provision mandating that credit card rates be presented in a clear, standard format free of any small print. This is also where you can find other key terms such as the annual fee, foreign transaction fee, as well as interest rates for other transactions such as balance transfers and cash advances.
Those with excellent credit can expect to receive the lowest possible rate, but even those with an imperfect credit history can still use the range of credit rates as a guide to finding the lowest possible rate. For instance, a card that has a range of 9.99% – 18.99% will likely offer you a lower rate than one that has a range of 11.99% -21.99%, even though the ranges overlap substantially. So for the purposes of our comparison in this month’s Best Credit Cards in America, we have looked at the lowest rate listed, which will only be offered to those with excellent credit.
Here are this year’s choices for best low-interest credit cards.
The Winner: Simmons Bank Visa Platinum
Why It Won: This card offers the lowest standard interest rate available.
The Rates: The standard interest rate for purchases and balance transfers is just 7.25% APR, and its cash advance rate is 11.25% This card offers a 25-day grace period, has a 3% cash advance fee, and a 2% foreign transaction fee.
The Features: Although this is mostly a no-frills card that doesn’t offer rewards, it does have a few basic features that are important, such as car rental insurance and emergency credit card replacement. In addition, this card now comes with an EMV smart chip to improve security and compatibility with the next generation of credit card terminals already being deployed.
1st Runner-Up: Barclaycard Ring
Why It Won: This card offers a single, low interest rate to all applicants.
The Rates: All cardholders will receive a standard interest rate of 8% that applies to new purchases, balance transfers and cash advances. There are no annual fees, balance transfer fees or foreign transaction fees, although there is a flat $3 fee for cash advances. Also, there is no penalty interest rate for this card.
The Features: This card is a unique product that is managed in partnership with its cardholders. Customers get to view the card’s financial performance, and vote on rates, fees and benefits. In addition, cardholders can interact online directly with Barclaycard’s product managers Jared and Jen, not just anonymous telephone representatives.
2nd Runner-Up: PenFed Promise
Why It Won: This card offers very low interest rates and has no fees.
The Rates: The interest rate for purchases and cash advances is 7.99% – 16.99% depending on your creditworthiness. This card is also offering a 4.99% promotional financing rate for 12 months. This card is unique in that it has no annual fee, foreign transaction fees, balance transfer fees, cash advance fees, late fees or penalty interest rate.
The Features: Although this is not a rewards card, new cardholders can earn a $100 statement credit when they spend $1,500 within the first 90 days of account opening. This card also features an EMV smart chip and is compatible with the Apple Pay mobile payment system. To apply, you must join the Pentagon Federal Credit Union, which you can do based on your employment with numerous government and defense organizations, or by paying a small, one-time fee to join a military support charity.
You can also compare these low-interest credit cards to others on Credit.com.
Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.
At publishing time, the Simmons Bank Visa Platinum, Barclaycard Ring and PenFed Promise are offered through Credit.com product pages, and Credit.com is compensated if our users apply for and ultimately sign up for any of these cards. However, this relationship does not result in any preferential editorial treatment.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.