Best Low Interest Credit Cards 2019: Fixed Rate & Balance Transfer

Michelle Brooks

Michelle Brooks

Financial Advisor

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The credit card industry is booming; lenders are doing everything they can to try and entice consumers into taking on debt. Credit cards are a form of revolving credit, meaning they are unsecured and only have to be paid back if they are used. While this may sound great, it also means they have higher interest rates than traditional forms of credit.

In recent years, credit card companies have begun to enhance the rewards on offer through their credit cards – it has done wonders in getting consumers to sign up for high-interest cards. This has had consequences for those who are irresponsible spenders, as they have worked their way into a debt trap that is hard to escape.

But there are other types of cards on the market as well – low-interest cards. These cards don’t offer the same types of rewards as traditional credit cards, but they allow their users the peace-of-mind that they won’t be trapped by high-interest debt if they begin to carry a balance on their card. If you’re someone who regularly carries a credit card balance on their card, you may benefit from having a low-interest card.

It is very important to note that while these cards are ‘low-interest’, when compared to other forms of debt they are still high interest. This article will outline the various things to look for when deciding on a low-interest credit card. It will also provide the advantages and disadvantages of having a low interest credit card.

Best Low Interest Credit Cards

Topics Covered

What to Look For

When applying for a low interest credit card there are two primary factors that you should consider: interest rate, annual fee, and interest calculation method.

  • Interest Rate – It may seem intuitive but the primary factor in deciding on which low interest credit card to choose should be the interest rate on the card. Low interest credit cards typically have interest rates between 11-14%, although there are some recent cards that have advertised rates of below 10%. If your card has an interest rate about 15%, it isn’t low interest.
  • Annual Fee – People searching for a low interest credit card should consider it a card that saves costs at all opportunities. That’s why it’s important that your low interest credit card also has no annual fee. Many rewards cards charge high annual fees, but a low interest card should have no annual fee – which is another great way to save money. Don’t be enticed by low interest cards with annual fees, there are plenty without them.
  • Interest Calculation Method – Most card providers will charge interest to the remaining balance on your card after you’ve made your monthly payment. But others will calculate an average balance for the month if you don’t pay your bill in full. If you have a choice, go with a card that only charges you interest on your remaining balance, it normally turns out much more affordable.

Always read the fine print. You will find that there tend to be additional benefits and drawbacks when you look at the actual contract that you’re signing – you should be as aware as possible of what you’re agreeing to.

 

Advantages

The advantages lie in the cost saving that you benefit from when you have a low interest credit card. If you carry a balance on your credit card, this is especially true. People get lured into high interest cards because of various rewards schemes and offers, but it means that they end up paying large amounts of money back over time due to the cost of the interest payments. If you’re looking for the most affordable way to have a credit card, your best option is most definitely a low interest credit card.

 

Disadvantages

The primary disadvantage of a low interest credit card is simply the fact that you don’t get any rewards or benefits from holding the card. This is primarily true for people who pay off their balance in full, and therefore don’t end up paying interest. If you pay your balance off in full every month, it may be better to get a credit card that has a rewards program attached to it.

 

Build Your Credit

Having credit in the United States is extremely important. If you want to a buy a house, a car, or lease an apartment, you’ll have to have a good credit score. It’s often hard to get high-end credit cards without having a credit score. But low-interest credit cards have become a great way for individual to start building their credit. They’re typically easier to acquire and they also help you avoid getting into too much debt.

You’ll find that accumulating debt is much easier with a travel card or rewards card – it’s simply too easy to start racking up money when you have a high interest rate to pay on what you owe. If you want to start with something that gives you breathing room, definitely don’t go for one of those types of cards.

Some low-interest cards will allow you to make a deposit of your limit total. You can then be approved for the card automatically and be required to pay very little interest on what you owe. Should you default on the debt, the amount that you have put down as a deposit will cover what you owe. This is by far the easiest way to get a credit card if you have little to no credit. And it also gives you the peace-of-mind that you can pay off any debt that you accumulate. Of course, the downside is that you have to put money into the deposit – if you don’t have the money to cover the limit, then you can’t afford to get the card.

Interest-Free Period

Not all low-interest credit cards have an interest free period, but some of the best ones do. This is a great benefit that can help you save serious money – especially if you anticipate having some large costs in the near future. Many interest free periods last up to 18 months, which is a considerable amount of time. If you have trouble paying off your balance in full, this is another great way to ensure that you don’t get into a debt trap.

 

Other Features

As mentioned throughout this article, low-interest credit cards don’t typically come with too many added benefits. The fact that lenders don’t receive as much income from your debt means that they don’t give out as many benefits. But there are still some great features on offer from a few of the best interest-free credit cards. Below are three additional features you should look for when deciding on a low-interest card. These features are typically in the fine print, so you’ll have to do some looking if you want to find them.

 

Extended Warranty

Many low-interest credit cards offer extended warranties on products you purchase with the card. This is great if you’re trying to purchase expensive electronics or other items that you are worried might break. Some of these extended warranties extend your coverage for twice the length of the original warranty.

The problem is that many borrowers don’t even know that they have this coverage. Make sure that you read the fine print and find out if you have this feature – it could save you a lot of money if something breaks in the future.

 

Price Protection

This is another feature that has grown increasingly common with low-interest credit cards. Price protection will refund you the costs of a price change in a product that you purchase with the card during a certain time frame. If a product you have purchased reduces in price relatively close to the time that you purchased it, you’ll find that some card providers will refund you the difference. This is an awesome feature that can save you money if you remain aware of prices. You’ll need to be vigilant to take advantage of this benefit.

 

Zero-Liability

Zero-liability is an advantage that is shared by most major credit cards, not just low-interest cards. This benefit means that you will have no liability for any fraudulent charges that are placed on your card. This makes using a credit card a much safer option than a traditional debit card. This is especially true in the world of online shopping – your card details can easily be stolen and used for nefarious reasons.

If it is a debit card that you’re using, fraudsters can drain your bank account extremely quickly. It can then be very hard to get your money back. But credit cards use the banks money, and you can refuse to authorize a transaction that you didn’t make. It’s much smarter to shop with a credit card with the amount of online fraud that occurs in modern times.

 

Free Credit Updates

Another great feature that plenty of low-interest credit card offer is a free credit updates. Normally, you would have to pay to see your credit score by submitting a request through one of the credit reporting bodies. But a lot of the best low-interest credit cards offer free credit updates. You typically access your basic credit report through an app or website associated with the card. You can also set up alerts that will tell you if something suspicious is happening with your card. This can help you avoid fraud and maintain a solid score for future credit applications.

 

Process

Applying for a credit card used to be a real hassle. Typically, you would have to go into a bank branch and submit all your details. Lenders would then take considerable time trying to decide if you were a worthy applicant for the card. The entire process could leave a really bad taste in your mouth – as well as get you absolutely nowhere if you ended up being declined.

But now you can streamline the entire process. You don’t need to go into a bank anymore to apply for a card – although you still can if you prefer to. Most people now just use online applications for their credit card applications, which is much easier and way more painless. You don’t have to deal with massive head aches and waiting times to get things done. In a matter of ten minutes, you can input your personal information into an online portal and receive a decision.

Many credit card companies will send you paper applications in the mail to try an entice you to apply for their credit cards. You can fill out the form and return it in the mail for free – but we highly recommend that you don’t do this. One of the brilliant things about online applications is that it keeps your personal information away from prying eyes. Putting your SSN on a paper application in the mail is never a good idea. It can leave you open to identity fraud, amongst other things.

 

Verdict

Low interest credit cards are some of the best cards on the market. Considering the majority of American credit card holders carry balances on their cards, low-interest credit cards can save people serious money. If you do pay off your balance in full, you may want to consider a high interest rewards card as the added percentage will not impact you. Make sure to consider all the factors outlined in this article prior to deciding on the card to opt for.

Once you’ve decided on whether or not you’d like a low-interest credit card. Make sure to check out some of the ones that we recommend on our homepage. We’ve done extensive research to provide you with a comprehensive list of the best low-interest cards. You can click directly through to the application page, which can help you speed up the entire process.

If you find that you have limited income, or that you’ve struggled to pay off debt in the past, a low-interest credit card really is the best possible option for you. It provides you with the ability to build your credit without getting into a credit trap. Make sure to take advantage of any of the additional benefits the card might offer.

FAQ

General Low Interest Credit Card Questions

This section covers basic information about low-interest credit cards. Use it to help establish a foundation so you can save more on your credit card bill each month.

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What is a good interest rate on a credit card?

A good interest rate on a credit card is anything below the average interest rate. Currently, the average interest rate for a new credit card is about 16.6%.

What is the average interest rate on a credit card?

The interest rate you get will vary depending on many factors, but the average interest rate on new credit cards is about 16.6%.

What does interest mean on a credit card?

The interest rate on a credit card is how much you’re being charged to keep a balance on the card. That’s how a credit card company makes money.

How do no interest credit cards work?

No interest credit cards are usually an introductory offer that companies use to get you to sign up for a card. After a certain amount of time you’ll get interest charges if you have a balance.

Are there any credit cards with 0 interest?

There aren’t any 0 apr credit cards that have 0 interest forever. However, many credit cards have zero interest introductory periods as a way to get people to sign up.

Why do I get charged interest on my credit card?

You get charged interest on your credit card because you have a balance remaining on the card. The credit card company charges you for this balance, as it’s functionally a small loan. Interest rates are how they make a profit from their credit cards.

What is credit card interest rate?

A credit card interest rate is a percentage fee that you pay every month that you have a balance remaining on your card. The company charges you money to carry your debt.

Understanding Credit Card Interest Rates

Financial products and terms can be confusing. We’ll help you understand how credit card interest rates work in this section.

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How does credit card interest work?

Credit card interest works by accruing on any balance that remains on your card after your due date. The interest is charged according to the balance remaining, not the purchases you made.

How to figure out credit card interest rate?

You can figure out your credit card interest rate by checking your bill. It will show how much you’re being charged in interest as well as what the interest charges add up to.

How to find interest rate on credit card?

The easiest way to find the interest rate on your credit card is to look at your bill. Credit card company are required to explain why your bill is what it is, so they’ll have the rate listed.

How are credit card interest rates applied?

Credit card interest rates are applied to any standing balance that you have on the card after your card statement and due date. This charge is added to your next bill.

How do banks charge interest on credit card?

Banks charge interest on credit cards by adding the interest charges to your bill. This is why you should carefully review your bill so you can ensure it’s accurate.

What is APR interest rate for a credit card?

The APR is a number that explains how much you’ll pay per year for using the card. It includes fees and interest rates.

Is credit card interest monthly or yearly?

Credit card interest is charged monthly based on the balance that you’ve got remaining on the card. If you pay your balance in full, then there’s no interest charges.

Why is my credit card interest so high?

There are lots of reasons your interest rate could be so high. One of the most common reasons is that you have a variable rate interest card and the interest rates have gone up across the board. You may also have had your credit score drop, causing an increased interest rate.

How long before interest is charged on a credit card?

That depends on if you’re in an introductory period or not. Usually interest starts to accrue after your statement is released each month.

What is deferred interest on a credit card?

Deferred interest is an interest charge that doesn’t kick in until a certain period of time. If you pay the balance off before the deferred interest activates, then you won’t owe anything. However, if there’s any balance left on the card, then you’ll get hit with the interest charges from the entire deferred interest period.

How is credit card cash advance interest calculated?

Unlike interest on purchases, credit card cash advance interest starts accruing immediately when you get the cash advance. That means you’ll pay more in interest for cash advances on a credit card.

What is cash advance interest on a credit card?

Cash advance interest is the rate you pay to get cash out of an ATM with your credit card. It starts building immediately and usually comes at a higher rate.

How does credit card APR interest work?

APR is the amount of interest and fees you’ll pay every year relative to the balance you have on the card. It tells you what the overall cost of carrying a balance on the card will be.

How to calculate credit card interest per day?

The easiest way to calculate your credit card interest per day is to find the total interest charges you had in a month and divide it by the number of days in a month.

What is credit card interest free period?

An interest free period is an introductory offer where you can use the credit card without accruing interest charges. After the interest free period you’ll be charged the interest for any balance on the card.

What is a variable interest rate credit card?

A variable rate credit card is one where the interest rate is pegged to the prime market rate. That means when interest rates go up nationally, yours will also go up. The same thing happens if interest rates go down.

How does interest affect credit card purchases?

Interest rates affect credit card purchases by increasing the cost of the purchase from the interest charge if you don’t pay your bill in full every month.

When does credit card interest kick in?

Credit card interest kicks in after your due date. You have until that date to pay off any balance that you have on your card to avoid interest charges.

Do credit cards charge interest on every purchase?

Not exactly – credit cards charge interest on a carried balance. If you pay your bill off each month then you won’t have to deal with interest charges.

When is interest charged on a credit card?

Interest starts to accrue on any balance you have after your credit card’s due date each month. If you pay your balance off completely before the due date then you won’t have any interest charges.

Paying Credit Card Interest Rates

This section answers your questions about how paying your credit card bill relates to credit card interest.

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When does interest accrue on credit card?

Interest accrues on a credit card after your due date on any remaining balance that you have on the card.

Do credit cards charge interest if you pay the minimum?

Credit cards charge interest as long as you leave a balance on the card. The only way to stop interest from building is to pay the card off in full.

Do credit cards charge interest if you pay on time?

Yes, if there’s still a balance on the card. If you only make the minimum payments, then you will probably get a balance remaining that will accrue interest.

Is the minimum payment on a credit card the interest?

Not entirely. Credit card companies don’t set up minimum payments in such a way that you only pay down interest. However, your interest payment will make up the majority of a minimum payment.

Do credit cards charge interest if you pay in full?

No, if you pay off a balance in full then there’s no balance for a credit card company to charge interest on.

Specific Credit Card Interest Rates

This section covers the interest rate ranges for specific popular credit cards.

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What is the interest rate on Amazon credit card?

The current interest rate on an Amazon credit card is about 26.99%. It’s based on the Prime Rate, which means it’s a variable interest rate card.

What is Walmart credit card interest rate?

Both Walmart credit cards have an interest rate of 22.9% variable APR. That’s a bit more than the national average interest rate which is about 16.6%.

What are current credit card interest rates?

Interest rates on current credit cards range from very low, around 5%, all the way up to 30% or more. The average interest rate is 16.6%.

What is the interest rate on a Target credit card?

The Target credit card has a variable interest rate of 24.65%, which is substantially higher than the national average of 16.6% you see with other new credit cards.

Changing Credit Card Interest Rates

This section answers your questions about how to change your credit card interest rate.

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How to lower credit card interest rate?

There are a few ways you can lower your credit card interest rate. First, you can boost your credit score and ask for a lower rate. Second, you can find a competitive product with a lower rate and ask the company to match it. Finally, you can explain a situation for financial hardship and request a lower rate.

How to avoid interest on credit card?

The best way to avoid interest on a credit card is to pay off your balance in full every month. That will prevent interest from accruing and lower your bills.

How to reduce credit card interest?

You can reduce credit card interest by keeping your balance low. You only get charged interest on any remaining balance on your card. Paying off your balance will reduce the interest you pay.

How to negotiate lower credit card interest rate?

You can negotiate lower credit card interest rates by explaining why it’s in the company’s best interest to lower your rates. Some good reasons might be a competitor’s product, financial hardship that means you can’t pay your bills at the current rate, and a history of on-time payments or an improved credit score.

How to stop interest on credit card?

The best way to stop interest on a credit card is to pay the balance off in full every month. That way, there’s no balance on the card to be charged interest on.

How to get credit card company to lower interest rate?

The best way to get the credit card company to lower your interest rate is to come up with a compelling reason or series of reasons why they should. Point to an improved credit score, payment history, or low balance to get them to lower the rate.

Why did my credit card interest rate go up?

There are lots of reasons your rate could have gone up. You could have passed an introductory period, there may have been a change in your credit score, or you might have a variable rate APR that goes up when the market rate goes up.

Does closing a credit card stop interest?

It doesn’t stop interest from accumulating, it just prevents you from spending more on the card. Interest will continue to accrue on the existing balance every month until you pay off the balance.

Does cancelling a credit card stop the interest?

No, cancelling a credit card doesn’t stop the interest from building up on the balance you already owe, it just prevents you from spending more money on the card.

Other Credit Card Interest Rate Questions

We’ll cover questions about credit card interest rates that don’t fit into our other sections here.

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Is credit card interest tax deductible?

Not usually, however, tax law is very complex. You should contact a certified accountant or tax advisor to find out about your situation.

Can you write off credit card interest?

In most cases no. Credit card interest usually isn’t a tax deductible write-off. You should check with a tax professional to ensure that you’re getting the best deal on your taxes.

How to pay off high interest credit cards?

The best way to pay off high interest credit cards is to make extra payments on them. That will lower the overall balance and thus will reduce the amount of interest you pay.

Should you pay off high interest credit cards first?

In most cases, yes. The exception is if there’s a lower interest balance you can pay off quickly. Then, it might be better to pay that off first and put the money you’re using to pay that card toward your higher-interest bills.

Michelle Brooks

Michelle Brooks

Financial Advisor - Best.CreditCard

Michelle is part of our expert team of financial advisors with a proven track record in the credit card industry. After graduating with an Economics Degree focusing on Personal Finance, she got involved with several credit and debt counseling startups.