Best Low Interest Credit Cards of June 2021
Best Cards Summary
BankAmericard® credit card
Why this is one of the best low-interest credit cards: For the first 18 months of membership, cardholders receive a 0% introductory APR on all purchases balance transfers made within the first 60 days. There is no penalty APR for this card. See our full review.
Chase Freedom Flex℠
Why this is one of the best low-interest credit cards: The card’s 15-month 0% introductory annual percentage rate can be attractive when you need time to pay off a large purchase without accruing interest. Cardholders earn up to 5% cash back in select bonus categories pay no annual fee. See our full review.
Chase Freedom Unlimited®
Why this is one of the best low-interest credit cards: The Chase Freedom Unlimited card offers 0% APR on all purchases for the first 15 months. You’ll also earn 5% cash back when you use the Chase Ultimate Rewards portal to book hotel stays or make other travel purchases. You’ll receive 3% cash back on dining drugstore purchases 1.5% back on all other card purchases. See our full review.
Discover it® chrome
Why this is one of the best low-interest credit cards: Discover it chrome gives cardholders a 14-month 0% introductory APR for purchases balance transfers no annual fee. After that, there is a 11.99% to 22.99% variable APR. Gas restaurant purchases earn 2% cash back on up to $1,000 in combined purchases each quarter, 1% cash back on all other purchases. You’ll pay no annual fee for this card. See our full review.
Bank of America® Customized Cash Rewards credit card
Why this is one of the best low-interest credit cards: This card offers a 0% introductory APR for the first 15 months on balance transfers made within 60 days of acount opening earns you 2% back at grocery stores wholesale clubs on up to $2,500 each quarter. Also, gas purchases count as one of the six category choices that allow you to receive 3% back on purchases. See our full review.
Citi® Diamond Preferred® Card
Why this is one of the best low-interest credit cards: This card has real appeal for those looking to do a balance transfer. An 18-month 0% annual percentage rate for transfers made within four months of opening your account can help you pay off lingering balances. After that, there is a 14.74% to 24.74% (variable) APR. See our full review.
Citi Rewards+® Card
Why this is one of the best low-interest credit cards: The Citi Rewards+ Card comes with a 0% introductory annual percentage rate on balance transfers purchases for the first 15 months. After that, the variable APR will be 13.49% to 23.49% based on your creditworthiness. See our full review.
American Express Cash Magnet® Card
Why this is one of the best low-interest credit cards: Those looking for flat-rate cash back may like the 1.5% back on all purchases this card delivers. Good credit standing lets you access the lowest annual percentage rate offer, plus all new cardholders get 0% APR on purchases for 15 months. See our full review.
Blue Cash Everyday® Card from American Express
Why this is one of the best low-interest credit cards: The most creditworthy applicants will score a low annual percentage rate on this card, but it’s the best fit for consumers looking to earn cash back on everyday purchases. You’ll get 3% cash back on up to $6,000 annually at U.S. supermarkets then 1% back; 2% back at gas stations department stores; 1% back on other purchases. Cardholders receive a 20% statement credit back on Amazon.com purchases on the Card in the first 6 months of Card membership, up to $150 back. Plus, you’ll earn $100 back after you make $2,000 in purchases on your card within the first six months. See our full review.
Citi® Double Cash Card – 18 month BT offer
Why this is one of the best low-interest credit cards: The 18-month 0% introductory annual percentage rate on balance transfers is a top benefit. After that, there is a 13.99% to 23.99% (variable) APR. You’ll get 1% cash back when you make a card purchase 1% back when you pay your bill. Plus, if you carry the occasional balance, the APR is below average for a rewards credit card. See our full review.
Wells Fargo Visa Signature® Card
Why this is one of the best low-interest credit cards: Applicants with strong credit will get a low annual percentage rate on purchases, but the bonus cash back is the real draw of this card. You’ll earn five points per dollar on up to $12,500 spent on gas, grocery drugstore purchases in the first six months; all other purchases earn one point per dollar. See our full review.
What Are the Types of Low-Income Credit Cards?
Consumers will find many types of low-interest credit cards that share at least one thing in common: They charge below-average rates or come with a 0% introductory annual percentage rate on purchases or balance transfers. The average APR on a credit card is 15.91%, according to the most recent Federal Reserve data from spring 2021.
Issuers offer something for everyone, such as:
- Low-interest credit cards with rewards.
- Low-interest travel cards.
- Low-interest secured credit cards.
- Cards with ongoing low APRs.
- Low-interest cards for fair credit scores.
- Low-interest credit cards with 0% APR periods.
A low-interest card with a 0% introductory APR likely keeps that promotional rate for 12 to 18 months requires a balance transfer fee of 3% to 5%. If you plan to transfer a balance to pay off debt save on interest, remember to account for this fee when calculating your monthly payment to clear the charges during the introductory window.
Typically, you will need good credit – a FICO score of at least 670 – to qualify for the best low-interest credit cards. Card issuers will also look at your debt-to-income ratio review your credit report. If you have a bankruptcy or a history of late payments, you might not be approved for a low-interest credit card.
How to Make the Most of a Low-Interest Credit Card
All it takes is some simple math to figure out whether a low-interest credit card will save you money in the long run. Let’s look at one scenario to see how easy it can be to calculate your savings, or lack thereof.
If you use a low-interest credit card with no balance for a $2,500 purchase then put $150 toward it monthly, how much could you save? This chart compares a card that has a purchase APR of 18% with a low-interest card that has a purchase APR of 10%.
|Card Interest Savings|
|Both cards have a $2,500 balance with a $150 monthly payment.|
|Card With 18% Purchase APR||Card With 10% Purchase APR|
|Total amount paid||$2,898||$2,702|
Tips for saving money with a low-interest credit card:
- You will save money if you tend to carry balances but use a low-interest credit card.
- You can save money if you transfer a balance to a low-interest card with a 0% introductory APR but have a plan to pay off the balance before the interest-free period expires the regular rate applies. Also, make sure the balance transfer fee is less than the amount you will save in interest.
- You can try to ask your card issuer to lower your rate, your odds are best if you have a long positive payment history with the issuer.
How Can You Choose a Low-Interest Credit Card?
Here are six simple steps to find the right low-interest credit card.
1. Determine whether you need a low-interest credit card, a 0% APR card or both. A low-interest credit card is good to have in your wallet because sometimes life is unpredictably expensive. If you run into a financial emergency need to carry a balance for a few months, then you won’t rack up tons of interest charges.
On the other hand, a card with a 0% introductory APR offer is ideal for consumers who need to make a planned large purchase or pay off a balance during the interest-free period.
2. Compare APRs. Aim to find the card that fits your needs with the lowest available APR. Keep in mind that other factors, including balance transfer offers, annual fees other charges, may outweigh the benefit of having the absolute lowest APR.
3. Subtract annual fees. Some, but not all, credit cards charge annual fees. If you choose a card with an annual fee, be sure this charge is less than your interest savings. And if you transferred a balance to pay off debt, the annual fee should not slow your progress.
4. Understlate fees penalty APRs. Your issuer could charge up to $40 for each late payment apply a penalty rate that is significantly higher than your regular APR. You could even lose your introductory APR.
Don’t let this happen to you. Set up text or email reminders so you never miss payments.
5. Compare cardholder benefits. Many credit cards have benefits, including rental car insurance, cellphone protection extended warranty coverage. When you take advantage of these types of perks, you get extra value from the card.
6. Estimate rewards. Plenty of credit cards that earn cash back rewards, miles or points for purchases also offer balance transfer deals. But balance transfers usually don’t earn rewards. Try to wait until you pay off a transferred balance before you use your card for new purchases.
How to Reduce the Credit Card Interest You Pay
Here’s how you can spend less on credit card interest, which means more money stays in your pocket.
1. Pay off your balance. The best way to pay less credit card interest is to pay off your balance by the due date each month. If your card has a balance, you can save a lot in interest just by making more than the minimum payment.
The bigger the payment you make, the sooner you will eliminate your debt the more you will save. You can make multiple monthly payments if that is more manageable.
If you have debt to pay off on several credit cards, you can prioritize it either by APR, starting with the highest, or by balance, beginning with the lowest. Paying off cards from highest APR to lowest APR, though, will save the most money.
2. Ask your issuer to reduce your rate. Try calling customer service requesting a lower APR. Be polite, be prepared to hear, “No.” But don’t be afraid to call try again if you are rejected the first time.
Research what other comparable cards charge have those details on hwhen you call. Issuers don’t want to lose your business may be willing to match a competitor’s rate if you have been a good customer.
3. Consolidate debt with a 0% APR credit card. You can transfer credit card debt to a new card with a 0% APR period that buys you time to make interest-free payments. The length of this interest-free window depends on the card, but it could be 12 to 18 months. You may also be required to complete your balance transfers within a certain time frame.
Expect to pay a balance transfer fee of 3% to 5%. Even then, you can still knock out debt faster than you would otherwise because all of your payments during the interest-free period go toward your principal balance.
Plan to pay off your debt before the 0% introductory rate expires the issuer begins to charge the standard APR. Also, make sure you know that rate in case you have a balance remaining.
4. Get a low-interest card for future spending. You’ll have your pick of cards if your credit score is good. If you frequently carry a balance, look for a card with a low ongoing rate. A card with a 0% introductory APR might be better if you plan to carry a balance only in the short term.
Comparing Low-Interest Credit Cards
This at-a-glance look at two low-interest credit cards shows you their rates fees, as well as key features. You can do this exercise with any set of low-interest cards, jotting down APRs other highlights for comparison.
- 0% introductory APR: 18 billing cycles for purchases balance transfers made in the first 60 days
- Regular APR: 12.99% to 22.99% variable on purchases balance transfers
- Balance transfer fee: 3% of the amount transferred or a $10 minimum
- Annual fee: none
- Foreign transaction fee: 3%
- Rewards program: none
- Card benefits: free FICO score access, contactless payment, virtual card numbers for security when shopping online
- Minimum credit score: 670 FICO
Discover it chrome
0% introductory APR: 14 months for purchases balance transfers
Regular APR: 11.99% to 22.99% variable
Balance transfer fee: 3% introductory balance transfer fee up to 5% for future balance transfers
Annual fee: none
Foreign transaction fee: none
Rewards program: 2% cash back at gas stations restaurants on up to $1,000 in combined quarterly purchases; all other purchases earn unlimited 1% cash back
Card benefits: issuer matches all the cash back you earn at the end of your first year, redeem cash back anytime in any amount, free monthly FICO score access, free dark web alerts, freeze your account if your card is lost or stolen
Minimum credit score: 670