If you're carrying balances on your credit cards, it is important to get your debt under control. The best way to do that is with a low-interest rate credit card. The lower rate reduces the amount of interest you pay, leaving you with more money to pay down your balance.
If you're in the market for a new card, choosing a low-interest credit card doesn't mean you have to miss out on valuable perks. Many of these credit cards earn rewards and offer useful benefits without an expensive annual fee. In this article, we'll share seven credit cards that may work for you.
The best low-interest credit cards
- Best for balance transfers: Citi Diamond Preferred Credit Card
- Best for introductory APR on purchases: U.S. Bank Visa Platinum Card
- Best for flat-rate cash back: Citi Double Cash
- Best for cell phone protection: Wells Fargo Platinum Card
- Best for cash back on gas: Costco Anywhere Visa Card by Citi
- Best for cash back on groceries: American Express Blue Cash Everyday
- Best for travel rewards: Chase Freedom Unlimited
|Card name||Best for||Why it’s special|
|Citi Diamond Preferred Credit Card||Balance transfers||0% APR (annual percentage rate) on balance transfers for 18 months|
|U.S. Bank Visa Platinum Card||Intro APR on purchases||0% intro APR for 20 months on new purchases|
|Citi Double Cash||Flat-rate cash back||Up to 2% cash back on all purchases: 1% as you buy and 1% as you pay|
|Wells Fargo Platinum Card||Cell phone protection||Cell phone coverage up to $600 per claim with a $25 deductible|
|Costco Anywhere Visa Card by Citi||Cash back on gas||4% cash back on eligible gas purchases (up to $7,000), 3% on restaurant and travel purchases, 2% on all other Costco purchases, and 1% on everything else|
|American Express Blue Cash Everyday||Cash back on groceries||3% cash back at U.S. supermarkets up to $6,000 a year, 2% cash back at U.S. gas stations and select U.S. department stores, 1% cash back on other purchases|
|Chase Freedom Unlimited||Travel rewards||5% on travel purchased through Chase Ultimate Rewards, 3% on dining and drugstore purchases, and 1.5% on all other purchases|
Citi Diamond Preferred Credit Card: Best for balance transfers
If you have high-interest credit card debt, transferring your balance to one of the best balance transfer credit cards is a great way to pay off what you owe. The Citi Diamond Preferred offers a 0% APR on balance transfers for 18 months. It has one of the longest intro APRs on balance transfers among no annual fee cards. Plus, the balance transfer promo APR doesn't start until the date of first transfer; it doesn’t begin on the date of account opening
After the promo period is over, your balance transfer APR will revert back to the regular APR of 14.74% to 24.74% (variable), based on your creditworthiness. In addition to a generous balance transfer offer, this card also comes with fun perks like access to Citi Entertainment. Cardholders get special access to sporting events, dining experiences, and more.
No annual fee and 0% intro APR
U.S. Bank Visa Platinum Card: Best for introductory APR on purchases
Promotional offers on purchases allow you to make purchases today, then pay them off over time without incurring any interest charges. The U.S. Bank Visa Platinum gives cardholders a 0% intro APR for 20 months on new purchases.
When you make purchases, you must pay the minimum due to keep the promotion active and waive the interest. But this offer will give you a long time to pay the money back without being charged interest by the bank. Unlike with balance transfers, there are no fees when you take advantage of this purchase promotion offer. There is a $0 annual fee with this card. After the promo period ends, your purchase APR will increase to 13.99% to 23.99% (variable), based on your creditworthiness.
0% introductory APR
U.S. Bank Visa Platinum Card
U.S. Bank Visa Platinum Card
- 0% intro APR on purchases and balance transfers
- Cell phone protection
- No annual fee
- No rewards program
- Balance transfer fee applies
Citi Double Cash: Best for flat-rate cash back
The Citi Double Cash credit card is ideal for someone who wants to maximize their cash back on every purchase. This low-interest credit card earns an unlimited up to 2% cash back on all purchases: 1% as you buy and 1% as you pay. There are no categories to track, a $0 annual fee, and you earn cash back automatically.
This credit card offers a 0% intro APR on balance transfers for 18 months. However, keep in mind that Citibank will charge interest on your purchases unless you pay off your entire balance by end of the intro APR period, including any balance transfers. Based on that, we don't recommend using this card to make purchases if you take advantage of the balance transfer offer.
Earn Cash Back Twice
Wells Fargo Platinum Card: Best for cell phone protection
Although the Wells Fargo Platinum does not earn rewards, it is packed with benefits that readers may find valuable. These benefits include an introductory APR offer, auto rental collision damage waiver, roadside dispatch, travel accident insurance, and cell phone protection.
This intro APR card offers a 0% APR on purchases for 18 months, and a 0% APR on balance transfers for 18 months. After the introductory period is over, your rate will increase to the standard variable APR, based on your creditworthiness.
When you pay your cell phone bill with the Wells Fargo Platinum Card, you're covered up to $600 per claim. Plus, the deductible is only $25. This is much lower than many other credit cards that offer this benefit.
Fast-track Your Way Out of Debt
Costco Anywhere Visa Card by Citi: Best for cash back on gas
The Costco Anywhere Visa Card is one of the best cashback credit cards for gasoline purchases. With this card, you get 4% cash back on eligible gas purchases (up to $7,000), 3% on restaurant and travel purchases, 2% on all other Costco purchases, and 1% on everything else. It also has a $0 annual fee and no foreign transaction fees to worry about, but you must be a current Costco member to apply.
We chose this card because all cardholders receive the same interest rate of 15.24% (variable), regardless of creditworthiness. The APR you receive is based on the prime rate. Although some competing credit cards offer lower rates to select cardholders, rates can go much higher if your credit criteria falls outside of the bank’s ideal range.
Earn up to 4% cash back
Costco Anywhere Visa Card
Costco Anywhere Visa Card
- Up to 4% cash back
- No annual fee
- No foreign transaction fees
- Must be a Costco member
- Cash back is only redeemed once a year
American Express Blue Cash Everyday: Best for cash back on groceries
The Amex Blue Cash Everyday rewards cardholders with valuable cash back. With this card, you get 3% cash back at U.S. supermarkets up to $6,000 a year, 2% cash back at U.S. gas stations and select U.S. department stores, 1% cash back on other purchases. New cardholders can also earn $150 cash back after spending $1,000 in the first 3 months.
Amex Blue Cash Everyday cardholders also get a 0% introductory APR on purchases for 15 months after opening your account. This gives you extra time to pay off your purchases if you need it. After that, your purchase APR will jump to 13.99% to 23.99% (variable), based on your creditworthiness.
A Simple Cashback Card for Day-to-Day
- $150 welcome bonus
- No annual fee
- 0% intro APR on purchases for 15 months
- 3% cash back at U.S. supermarkets
- Terms apply
- No travel rewards
- Grocery rewards are capped
- Rewards dollars can’t be used toward the minimum payment due
Chase Freedom Unlimited: Best for travel rewards
The Chase Freedom Unlimited is a solid low-interest credit card for people who want to earn travel rewards. While this card is classified as a cashback rewards card, you technically earn Chase Ultimate Rewards points from your spending. Points can be redeemed for cash back, gift cards, or travel. To get even more value, you can also transfer them to a Chase travel card like the Chase Sapphire Preferred or Chase Ink Business Preferred if you have one. When you transfer your points to these cards, they are worth 25% more when used to book trips in the Chase travel portal.
This card offers earn a $200 cash back bonus after spending $500 in the first 3 months of account opening and 5% on grocery store purchases (on up to $12,000 in spending in the first year). With this card, you also get 5% on travel purchased through Chase Ultimate Rewards, 3% on dining and drugstore purchases, and 1.5% on all other purchases.
Unlimited Cash Back
- $200 sign-up bonus
- 5% cash back grocery store purchases for the first year (up to $12k)
- Bonus rewards on travel, dining, and drugstores
- No annual fee
- 0% intro APR on purchases
- Has foreign transaction fee
How we chose these cards
We chose these top low-interest cards based primarily on their introductory APR offers for balance transfers and purchases, and standard APRs. In this case, low interest rate is defined as having a relatively low APR when compared with the average credit card interest rate of 14.52% (as of May 2020), or a lengthy intro APR offer that helps cardholders keep interest costs down.
When compiling our list, we also considered other factors like balance transfer fees, annual fees, and cardholder benefits. Our ideal low-interest rate credit cards offer low fees, a relatively low interest rate, and perks that add value for cardholders.
How do low-interest credit cards work?
Low-interest credit cards feature below-average interest rates to attract customers who carry balances. These credit cards typically earn fewer rewards and have reduced benefits compared to a standard rewards credit card. These adjustments help keep costs low.
These credit cards are best suited for people who carry a balance from month-to-month. The lower interest rate reduces the amount of interest the cardholder pays and helps them pay down their balance faster.
Here are two examples of people who could benefit from a low-interest rate credit card:
- Person A carries a $10,000 balance on a credit card with a 19.9% interest rate. By transferring this balance to a 0% APR balance transfer card, they'll eliminate the interest portion of their payment. This means that 100% of their payment will go toward reducing the debt. Even if they pay a 3% balance transfer fee, they'll still come out ahead in the long run.
- Person B needs to replace their air conditioning unit and the estimated cost is $9,000. They don't have the money to cover the full cost right now but are expecting a big tax refund later this year. By using a credit card with a 0% APR purchase promotion, they can replace the air conditioner now, then pay off the balance once the tax refund arrives and before the intro APR period ends.
What is a good interest rate on a credit card?
Interest rates vary from card to card and may be lower or higher based on your credit history. If you have good credit or excellent credit, credit card issuers may be more likely to offer you a lower interest rate than if you have poor credit or no credit.. That said, most credit cards have a variable interest rate that changes based on the bank's prime rate. Currently, interest rates are near historic lows, so your credit card interest rate could also be much lower than normal.
When choosing a low-interest credit card, look for one that is below the average credit card interest rate of 14.52% (as of May 2020). This will help you pay less interest if you ever need to carry a balance.
The different types of credit card APRs and what they mean
When reviewing your credit card options, you may encounter some unfamiliar financial terms. Here's a quick review of these terms and what they mean:
- Intro balance transfer APR: This is a limited time interest rate offered for balance transfers made on a new account. Cardholders typically have a limited window to request the balance transfer to be eligible for this introductory offer. Once the promotional period ends, any unpaid balance will revert to the standard balance transfer APR.
- Intro purchase APR: Cardholders receive a lower interest rate on all purchases made during the promotional period. Any unpaid purchases, once the promotion is over, will revert to the standard purchase APR. These offers are great if you need to make a big purchase and pay it off over time.
- Purchase APR: This is the standard interest rate charged on purchases if the statement balance is not paid in full. The purchase APR is typically determined based on the cardholder's creditworthiness and payment history.
- Balance transfer APR: Some credit cards allow cardholders to request balance transfers at any time. The balance transfer APR is what the bank charges the cardholder for balances that have been transferred into the customer's account.
- Cash advance APR: This is the interest rate charged when you withdraw cash from an ATM or retailer using your credit card.
Most of these APRs are based on the prime rate and will vary based on market conditions. Some banks have a minimum interest charge and fees for balance transfers and cash advances.
How to choose the best low-interest credit card
There are many choices when it comes to low-interest credit cards, so it can be hard to choose just one. Think about your immediate goals and how this card helps you achieve those goals. For example, if you have a large purchase coming up and need extra time to pay off the balance, one of these cards could help.
Beyond the interest rate, the fees it charges, the rewards it earns, and the benefits it offers are also important. Are cash back or rewards important to you? If so, do you want a flat-rate rewards card that earns the same rewards everywhere or one that offers bonus rewards at certain retailers where you spend the most, like a gas station or grocery store?
It pays to know your credit score before applying to increase your chances of getting approved. You can view your credit reports and score for free at AnnualCreditReport.com. Typically, you can view your reports for free once a year; however, due to the COVID-19 pandemic, you can now view them for free each week through the end of 2020.
Low APR credit cards serve a valuable purpose if you typically carry a credit card balance. A lower interest rate helps you pay off your balance faster while enjoying the additional perks your card provides. There are many options available for credit cards with low interest rates and no annual fees, so you can find one that offers rewards and other benefits that match your needs.
One last piece of advice if you're interested in a low interest card. Whichever option you choose, be sure to avoid late payments, as even one late payment can trigger a penalty APR. The goal is to avoid a higher interest rate and keep your costs low.