The Best Low Interest Rate Credit Cards
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The only thing more challenging than managing credit card debt is getting out of it. To accomplish this important goal you need a sound budget, plenty of discipline, and a credit card with the lowest possible interest rate. (See also: The Best 0% Balance Transfer Cards)
How to Find the Lowest Interest Rates
Every bank is legally required to clearly disclose each card's Annual Percentage Rate, or APR. This is the rate you will see in the black and white box when you click on the "terms and conditions" link. While you might think these disclosures make choosing the lowest APR an easy task, it is not that simple. Most banks will disclose a range of possible rates, with each applicant being offered a particular APR according to his or her credit rating. Therefore, the lowest rates available will be granted only to those applicants with the highest credit scores, with all other cardholders receiving higher rates.
Another important aspect of a credit card interest rate is that nearly all of them will have a variable rate. The good news is that the CARD Act of 2009 prevents banks from arbitrarily raising their rates on cardholders in good standing. What you will find is that nearly every card on the market will offer a variable APR that is based on the Prime Rate. This rate, determined in part by the Federal Government, has stood at a record low of 3.25% since December of 2008. Nevertheless, the variable interest rates quoted by the credit card issuers will rise when the Prime Rate does. For example, if the Prime were to rise to 8.25%, as it did in June of 2006, cardholders would see their interest rate rise by 5% from the current rates.
Finally, the best interest rates offered for a particular card can vary based on the link you use to apply for it. I have even seen different rates for the same card depending on which browser I used!
The Five Lowest APR Cards on the Market
These cards currently have the lowest interest rates.
BankAmericard® Credit Card
The BankAmericard® credit card offers a competitive 11.24%-21.24% variable APR on purchases and balance transfers, with a 0% intro APR for 18 billing cycles on balance transfers made in the first 60 days. This no-frills card does not offer any rewards, but it can be a worthwhile tradeoff for people who want a low-interest card in case they have to carry a balance from time to time. There is no annual fee. See terms.
Discover it® - 18 Month Balance Transfer Offer
The Discover it® - 18 Month Balance Transfer Offer not only comes with a great low interest rate, but it also comes with some great cash back rewards to boot. New cardholders will get to enjoy a 0% introductory APR on purchases (6 months) and balance transfers (18 months), and then a low 11.24%-23.24% variable APR will apply. Cardholders can also earn 5% cash back on purchases in bonus categories that change each quarter, up to $1500 per quarter when they sign up. Earn 1% cash back on all other purchases on the card. With Cashback Match™, an exclusive offer for new cardmembers, Discover will match all the cash back earned at the end of the first year — automatically. There is no annual fee.
Capital One® VentureOne® Rewards Credit Card
The Capital One® VentureOne® Rewards Credit Card offers a 0% intro APR on purchases for 12 months; after that, a variable APR of 12.24%-22.24% applies. Besides a great intro purchase rate, you'll also get unlimited 1.25 miles for every dollar you spend on purchases, which you redeem for travel purchases, statement credit, gift cards, and more. And if you spend $1,000 on purchases within the first 3 months, you'll earn a one-time 20,000 miles bonus — that's equal to $200 in travel. There is no annual fee.
With the Chase Slate®, you'll enjoy 0% intro APR for 15 months on both purchases and balance transfers, and the intro balance transfer fee is $0 when you transfer a balance during the first 60 days of account opening. After the introductory periods end, a variable APR of 13.24%-23.24% applies on balance transfers and purchases, and there will be a fee of either $5 or 5% of the amount of each transfer, whichever is greater. There is no penalty APR — paying late won't raise your interest rate. There is no annual fee, either.
Citi Simplicity® Card - No Late Fees Ever
The Citi Simplicity® Card - No Late Fees Ever offers 0% intro APR on purchases and balances for a whopping 21 months! After the intro period, the variable APR will be 13.24%-23.24%. While there is a balance transfer fee of $5 or 3% of the amount of each transfer (whichever is greater), there are no late fees, no penalty APR, and no annual fee. It doesn't get simpler than that.
Capital One® Quicksilver® Cash Rewards Credit Card
The Capital One® Quicksilver® Cash Rewards Credit Card has 0% intro APR on purchases and balance transfers for 9 months (a 3% fee applies to each balance transferred). After the intro period ends, a variable APR of 13.24%-23.24% kicks in. Besides low interest rates, this card also offers simple rewards: earn unlimited 1.5% cash back on every purchase, every day. Plus, get a one-time $100 cash bonus after you spend $500 on purchases within the first 3 months. And when you use this card to pay for Uber, every 10th ride is free (up to $15) through March 31, 2017.
Although the best way to use a credit card is to avoid paying interest, most Americans are unable live up to this ideal. If you do have to carry a balance, your primary goal should be finding a card with the lowest interest rate. Doing so will help you to minimize the amount of interest that you owe, making it easier to pay off your credit card debt as soon as possible.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any bank, card issuer, airline or hotel chain.