Although we generally advise against carrying a balance on your credit card, it can still happen to anyone. Whether you’re someone who often carries a balance month-to-month or wants to play safe in case an unexpected expense arises – you should look into the credit card’s APR before you apply for it. Some credit cards offer 0% APR introductory periods that usually last from 6 to 20 months. However, instead of applying for a new card with an intro offer every few months, it’s more convenient to choose one with a low ongoing APR. Pay attention to the range of the variable APR, as only those with good to excellent credit will get the lowest APR rates. Look through our list of best credit cards for low interest to find the right one for you. Some of them offer rewards too, but we recommend prioritizing low interest over earning rewards.
The Merit Platinum Card is an online shopping card for people with bad credit or no credit.
The card provides you with a merchandise credit line of $750*.
The Petal 2 Card has no fees of any kind and is designed to help you build credit.
The credit limit is from $500 - $10,000.
Grow your credit score with responsible spending and on-time payments.
Get 1% cash back right away. Earn up to 1.5% when you pay on time. Plus 2% - 10% bonus cash back at select merchants.
Freeze your card at any time to protect your account. And rest easy knowing your data is safe and encrypted.
The Upgrade Triple Cash Rewards Visa® Credit Card offers 3% Cash Back on home, auto and health purchase and 1% Cash Back on everything else.
Earn a $200 welcome bonus when you open a Rewards Checking account and make 3 debit card transactions (within 60 days of your Upgrade Card account opening).
The card's APR: 8.99% - 29.99% (Regular APR).
Apply online and get a credit line from $500 to $25,000 with your Card.
*To qualify for the $200 welcome bonus, you must open and fund a new Rewards Checking account and make 3 debit card transactions within 60 days of your Upgrade Card account opening. The bonus will be applied as a one-time credit to your account and will not otherwise reduce the amount of your regular monthly payments. The bonus credit will be posted to your Upgrade Card as a rewards credit within 1 - 2 billing periods following the third debit card transaction on your Rewards Checking account. Your Upgrade Card must be in good standing to receive a bonus.
The Upgrade Cash Rewards Visa® offers 1.5% Cash Back on payments.
Earn a $200 welcome bonus when you open a Rewards Checking account and make 3 debit card transactions (within 60 days of your Upgrade Card account opening).
The card's APR: 8.99% - 29.99% (Regular APR).
*To qualify for the $200 welcome bonus, you must open and fund a new Rewards Checking account and make 3 debit card transactions within 60 days of your Upgrade Card account opening. The bonus will be applied as a one-time credit to your account and will not otherwise reduce the amount of your regular monthly payments. The bonus credit will be posted to your Upgrade Card as a rewards credit within 1 - 2 billing periods following the third debit card transaction on your Rewards Checking account. Your Upgrade Card must be in good standing to receive a bonus.
The Unique Platinum Card is a good option for people with bad credit or no credit.
With the Unique Platinum Card you’ll also get $25 in Reward Dollars every month.
The Unique Platinum Card has an annual fee of $269.35 (in the first year), $239.4 (thereafter).
The card is valid only at My Unique Outlet.
The First Progress Platinum Prestige Mastercard® Secured Credit Card is a secured credit card for people with a limited credit history.
The First Progress Platinum Prestige Mastercard® doesn’t earn a welcome bonus.
The First Progress Platinum Prestige Mastercard® comes with an annual fee of $49. The card's APR: 12.24% (Variable for purchases), 21.24% (Variable for cash advances).
First Progress reports to all three major credit agencies, so even if you have bad credit, you’ll be able to improve on your credit standing provided you use your card responsibly.
The First Progress Platinum Select MasterCard® Secured is designed to help cardholders build credit with no credit check or minimum credit score required to apply.
The First Progress Platinum Select MasterCard® Secured doesn’t come with any welcome offers, sign-up bonuses or reward rates.
The card's APR: 16.24% (Variable for Purchases), 22.24% (Variable for Cash Advances).
The First Progress Platinum Select MasterCard® has an annual fee of $39. Plus, the card has a foreign transaction fee of 3%.
The Applied Bank® Secured Visa® features a fixed-rate 9.99% APR on purchases.
The Applied Bank® Gold Preferred® Secured Visa® Card charges several fees in addition to the $48 annual fee. Fees include an up to $38 late payment fee, an up to $38 returned payment fee, a $30 stop payment fee, a $12.95 fee for each optional payment, a $30 fee for additional or replacement cards a $50 reinstatement fee, and a 3% foreign transaction fee.
The Owner’s Rewards Card by M1 earns up to 10% Cash Back on purchases with eligible brands. All other spending earns 1.5% Cash Back.
Spend $4,000 with your new Owner’s Rewards credit card in the first 90 days and earn a $300 statement credit.
The Owner’s Rewards Card by M1 comes with a $95 annual fee (the fee is waived for Plus members).
The BlockFi Rewards Visa® Signature Credit Card allows you to earn crypto as a form of credit card rewards.
Earn 2% back in crypto on every purchase over $30,000 of annual spend*.
*See website for complete details
*See website for complete details
The Blue Cash Everyday® Credit Card from American Express® offers $200 back after you spend $2,000 in purchases on your new card within the first 6 months. You will receive the $200 back in the form of a statement credit. Plus, earn 3% Cash Back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%), 2% Cash Back at U.S. gas stations and at select U.S. department stores and 1% Cash Back on other purchases. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.
The Blue Cash Everyday® Credit Card from American Express® offers an introductory 0% APR on purchases for 15 months, followed by a variable APR of 15.49% to 25.49%.
Your Card gives you the option to carry a balance with interest or pay in full each month. So, whether you're managing your monthly expenses or making a large purchase, you can have the payment flexibility you need while continuing to earn rewards.
When you use your Card to reserve and pay for the Entire Rental and decline the collision damage waiver at the rental Company counter, you can be covered for Damage to or Theft of a Rental Vehicle in a Covered Territory.
Stay in the know with exclusive access to ticket presales and Card Member-only events in a city near you. Check out Broadway shows and concert tours, family and sporting events, and more.
The Discover it® Cash Back Credit Card offers 5% Cash Back on up to $1,500 spent each quarter on rotating bonus categories (then 1%) like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, each time you activate them. However, you’ll only receive 1% Cash Back on all other purchases. Instead of extending a traditional sign-up bonus to new cardholders, Discover will match all the Cash Back you earn during the first year.
The Discover it® Cash Back Credit Card has a generous introductory offer: 0% intro APR for 15 months on purchases and balance transfers, and then the ongoing APR of 11.99% - 22.99% Variable APR. The balance transfer fee is an introductory 3% of the amount transferred, but can be as high as 5% on future balance transfers (see terms). That's on par with other balance transfer cards.
The U.S. Bank Visa® Platinum Card is a good 0% intro APR and balance transfer card.
On any balances you transfer over within the first 60 days of opening your account, you will pay 0% intro APR for 20 billing cycles on Balance Transfers (then 14.49% - 24.49%). In order to qualify for 0% APR on balance transfers, they must be made in the first two months of receiving the card.
Cardholders who pay their cell phone bill every month with the U.S. Bank Visa® Platinum Card will receive this benefit. Cell Phone Protection covers two incidents of cell phone damage or theft, with limits of $600 per incident with a $25 deductible.
U.S. Bank allows you to choose your payment due date, and offers access to your TransUnion credit score for free if you enroll in online banking. The U.S. Bank Visa Platinum also comes with fraud protection in case of any unusual activity on your account.
The American Express® Cash Magnet® Credit Card is one of the best cash back credit cards. You’ll earn Cash Back on every purchase at a flat rate of 1.5 % back, no matter what you buy. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.
The card also carries a nice welcome bonus and no annual fee. Earn $200 Back after you spend $2,000 in purchases on your new Card within the first 6 months of Card Membership. You will receive the $200 cash back in the form of a statement credit.
The American Express® Cash Magnet® Credit Card offers an introductory 0% APR on purchases for 15 billing cycles, followed by a variable APR of 15.49% to 25.49%.
Whenever you travel more than 100 miles from home, Global Assist Hotline is available for 24/7 medical, legal, financial and other select emergency assistance and coordination services, such as medical and legal referrals, emergency cash wires, and missing luggage assistance. Card Members are responsible for the costs charged by third-party service providers.
Stay in the know with exclusive access to ticket presales and Card Member-only events in a city near you. Check out Broadway shows and concert tours, family and sporting events, and more.
The Chase Freedom Unlimited® Credit Card offers 0% introductory APR period (14.99% to 23.74% Variable after that) and a sign-up bonus that’s worth far more than most Cash-Back cards offer — all for an annual fee of $0.
The card offers 5% back on travel booked through Chase, 3% Cash Back on restaurants and drugstore purchases and 1.5% back on other purchases.
Earn a $200 bonus after you spend $500 on purchases in the first 3 months from account opening. And earn 5% cash back on gas station purchases on up to $6,000 spent in the first year.
The Citi Diamond Preferred® Card comes with 0% introductory APR offer for 12 months on purchases and 21 months on balance transfers (15.24% - 25.24% variable after that).
The Card charges no annual fee and gives cardholders with excellent credit a chance at a relatively low ongoing APR.
The Citi Rewards+ card has no annual fee and you may be eligible for a 0 percent introductory APR offer for 15 months on purchases from the date of account opening, plus 0 percent for 15 months from the date of your first transfer on balance transfers made in your first four months (after that, a 13.49 percent to 23.49 percent variable APR applies, with a 3 percent or $5 minimum balance transfer fee, whichever is greater).
You’ll also earn 20,000 ThankYou points after spending $1,500 within your first three months as a new cardholder.
The card has a 3 percent foreign transaction fee. And if you might miss a payment due date, be aware of the up to $40 late payment and returned payment fees.
The Bank of America® Customized Cash Rewards Credit Card earns 3% Cash Back in a selected purchase category. Additionally, you’ll earn 2% at supermarkets and wholesale clubs, and 1% everywhere else. If you really want to max out your Cash Back rewards, you’ll need to qualify for a Bank of America Preferred Rewards membership. As a Preferred Rewards member, you can unlock an additional 25% to 75% Cash Back on your purchases.
The Bank of America® Customized Cash Rewards Credit Card offers a modest $200 Cash-Back bonus after spending $1,000 on purchases within the first 90 days of account opening.
New cardholders also enjoy 0% APR on purchases and balance transfers for the first 15 billing cycles (13.99% - 23.99% thereafter). To qualify for 0% APR, balance transfers must be completed within 60 days of opening your new account.
The Bank of America® Customized Cash Rewards Credit Card might be the right card to help you earn some Cash Back on the kinds of purchases you make every week.
The Quicksilver Credit Card from Capital One® offers a flat 1.5% Cash Back on all purchases with a $0 annual fee. It also offers a 0% intro on purchases for 18 months, followed by the standard APR of 14.99% - 24.99% (Variable).
New cardholders will have the opportunity to earn a bonus: One-time $200 cash bonus after you spend $500 on purchases within 3 months from account opening.
The Capital One Quicksilver Credit Card maintains its simplicity with redeeming rewards, too. Customers can request cash back at any amount, redeemable as a check or statement credit. Cardholders also have the option of setting up automatic redemptions, beginning with a $25 minimum cashout. You can also link your rewards account with Amazon.com to apply rewards towards Amazon purchases at a penny a piece in value.
Cardholders can also redeem rewards for gift cards at variable rates. Like the Amazon option, you’d be better off buying the gift card you need instead of redeeming rewards directly.
You’ll be able to snag exclusive travel and entertainment opportunities like pre-sale tickets through Capital One Access. Plus, you can access a variety of 24/7 services like travel assistance, roadside assistance and complimentary concierge assistance.
The Capital One VentureOne Credit Card offers 1.25x miles per dollar on every purchase, plus 5x miles per dollar on hotels and rental cars booked through Capital One Travel.
Earn a bonus of 20,000 miles once you spend $500 on purchases within 3 months from account opening. The card also offers a 0% intro on purchases and balance transfers for 18 months, 14.99% - 24.99% variable APR applies after that.
You’ll be given either a Visa Platinum or Visa Signature version of this card. The version you get will depend on your credit limit when approved: Visa Platinum cards are for credit limits less than $5,000, and Visa Signature is for $5,000 and above. The credit limit you get will depend on your creditworthiness when you apply.
You can book hotels, flights and rental cars using your Capital One miles by logging into capitalone.com and visiting the reward center.
You can also use your card to book travel reservations through another service or website and then redeem your miles for a statement credit to cover a wide range of travel purchases that you’ve made over the past 90 days. Only purchases that fall under the travel merchant code will qualify, but generally, it includes airlines, hotels, rental cars, cruises, limo services, timeshares and more.
If you don’t want to redeem your miles for travel, you can also cash them out in the form of a statement credit, check, gift cards, Amazon.com or PayPal purchases and more.
The Chase Freedom Flex card offers Cash Back in a wide variety of categories.
You’ll earn 5% Cash Back on travel (through the Chase Ultimate Rewards travel service, and also for Lyft rides). Plus, earn 5% Cash Back on gas on up to $6,000 spent in the first year. You’ll also get 3% Cash Back on restaurant purchases, on drugstore purchases and 1% Cash Back on all other purchases.
Earn a $200 bonus after you spend $500 on purchases in the first 3 months from account opening.
The card offers a 15-month 0% annual percentage rate for purchases, after which the APR is 14.99% - 23.74% Variable. Unfortunately, the card does not offer an introductory APR on balance transfers. The card charges no annual fee but 5%, or a $5 minimum fee, on balance transfers.
The Citi® Double Cash Credit Card offers a few concrete ways in which you can better your financial situation, improve your credit card habits and enjoy cash back rewards without the fuss of tracking rotating categories.
Earn 2% Cash Back on every purchase with unlimited 1% Cash Back when you buy, plus an additional 1% as you pay for purchases.
The Citi® Double Cash offers a 0% percent (for 18-months) introductory APR offer on balance transfers (13.99 percent to 23.99 percent variable APR after).
The Citi Double Cash extends a myriad of security and fraud protections.
The Discover it® Miles Credit Card offers 0% Intro APR for 14 months on purchases and 10.99% APR for 14 months on balance transfers. Thereafter, the card’s standard purchase APR will apply (11.99% - 22.99% Variable).
Cardholders will automatically earn unlimited 1.5x miles per dollar spent on all purchases. There is no annual fee, no foreign transaction fees, no penalty APR and no first late payment fee (none the first time you pay late. After that, up to $40).
Discover will automatically match all the Miles you’ve earned at the end of your first year. For example, if you earn 35,000 Miles, you get 70,000 Miles.
The HSBC Gold Mastercard is a solid option for a credit card with 0 percent intro APR on purchases and balance transfers for the first 18 months (12.99% to 22.99% variable thereafter). This card also does not charge an annual fee, charges no penalty APR for missed payments and waives some late fees.
The HSBC Gold also provides fraud protection, extended warranties up to an additional year, and coverage on most purchases up to $1,000 against accidental damage or theft for 90 days after the purchase. Plus, price protection will refund the difference if you make a purchase and find it advertised for less within 60 days of your purchase. In addition, you can see one of your FICO 8 Credit Scores for free with this card. This is based on your Equifax credit report.
Because it is a Mastercard, you’ll benefit from Mastercard Airport Concierge. With this perk, you’ll get a 15% discount on Airport Meet and Greet services. Airport concierges are available to escort you through the terminal, and may make your trip through security or immigration faster.
| Name | Best for | Purchase APR | Balance Transfer APR | Rewards Rate | Apply |
|---|---|---|---|---|---|
Merit Platinum | None | Apply now On Meritplatinum‘s website | |||
WebBank Petal® 2 “Cash Back, No Fees” Visa® | Beginner, No history | 15.24% - 29.24% Variable | Apply now On WebBank‘s site | ||
Upgrade Triple Cash Rewards Visa® | 8.99% - 29.99% Regular | Apply now On Upgrade‘s website | |||
Upgrade Cash Rewards Visa® | Good credit score | 8.99% - 29.99% Regular | Apply now On Upgrade‘s website | ||
Unique Platinum | 0.00% Regular | Apply now On Uniquecardservices‘s website | |||
Synovus Bank First Progress Platinum Prestige Mastercard® Secured | 12.24% Variable | Apply now On First Progress’s site | |||
Synovus Bank First Progress Platinum Select Mastercard® Secured | 16.24% Variable | Apply now On First Progress’s site | |||
Applied Bank® Secured Visa® Gold Preferred® Credit Card | 18 year old | 9.99% Fixed | Apply now On Applied Bank®‘s site | ||
Celtic Bank The Owner’s Rewards Card by M1 | 14.99% - 24.99% Variable | Apply now On Celtic Bank‘s site | |||
Evolve Bank & Trust BlockFi Rewards Visa® Signature | 16.49% - 26.49% | Apply now On Evolve Bank & Trust‘s site | |||
American Express® Blue Cash Everyday® | Cash Back, Gas, 0 APR, No Annual Fee, Families, Shopping, Groceries | 15.49% - 25.49% Variable | Learn more | ||
Discover Bank Discover it® Cash Back | Cash Back, 0 APR, No Annual Fee, Young couples, Daily use | 11.99% - 22.99% Variable | 11.99% - 22.99% | Learn more | |
US bank Visa® Platinum | 0 APR, No Annual Fee | 14.49% - 24.49% Variable | 14.49% - 24.49% | Learn more | |
American Express® Cash Magnet® | Cash Back, 0 APR | 15.49% - 25.49% Variable | Learn more | ||
Chase Freedom Unlimited® | Cash Back, 0 APR, No Annual Fee, Daily use | 14.99% - 23.74% Variable | 14.99% - 23.74% | Learn more | |
Citi Diamond Preferred® | 0 APR, No Annual Fee | 15.24% - 25.24% Variable | 15.24% - 25.24% | Learn more | |
Citi Rewards+® | Cash Back, No Annual Fee | 13.49% - 23.49% Variable | 13.49% - 23.49% | Learn more | |
Bank of America Cash Rewards | Cash Back, No Annual Fee, Single mom | 13.99% - 23.99% Variable | 13.99% - 23.99% | Learn more | |
Capital One® Quicksilver | Cash Back, 0 APR, No Annual Fee, Daily use | 14.99% - 24.99% Variable | 14.99% - 24.99% | Learn more | |
Capital One® VentureOne Rewards | Rewards, No Annual Fee, Daily use | 14.99% - 24.99% Variable | 14.99% - 24.99% | Learn more | |
Chase Freedom Flex℠ | Cash Back, 0 APR, No Annual Fee, Daily use | 14.99% - 23.74% Variable | 14.99% - 23.74% | Learn more | |
Citi Double Cash | Cash Back, No Annual Fee, Daily use | 13.99% - 23.99% Variable | 13.99% - 23.99% | Learn more | |
Discover Bank Discover it® Miles | Low Interest, Daily use | 11.99% - 22.99% Variable APR | 10.99% - 22.99% | Learn more | |
HSBC Gold Mastercard® | 0 APR, Low Interest | 12.99% - 22.99% Variable | 12.99% - 22.99% | Learn more |
This card is truly a no-fee card, and you can qualify for it even with average credit. Although it's a card for beginners, there's no security deposit. The variable APR is 15.24% - 29.24%. You can also earn up to 1.5% cashback on all purchases.
Read more about WebBank Petal® 2 “Cash Back, No Fees” Visa®
The Blue Cash Everyday® from American Express® comes with a 15-month 0% APR offer on purchases, and the ongoing, variable APR is 15.49% - 25.49%. It’s for people who spend a lot on groceries and gas as it has high rewards rates for these categories.
Read more about American Express® Blue Cash Everyday®
This card offers the whole package and is the best one within this category. Not only the variable APR is low (11.99% - 22.99%), but also there is a 15-month 0% APR offer on purchases and balance transfers. A generous 5% rewards rate in quarterly rotating bonus categories (on up to $1,500 per quarter) is part of the deal too. Your cash back will be matched at the end of the first year. So, you’ll get a low interest and high rewards for a no annual fee.
Read more about Discover Bank Discover it® Cash Back
The US bank Visa® Platinum is the card with the longest 0% interest period – 20 billing cycles, and it's for both balance transfers and purchases. After the intro period ends, the variable APR is 14.49% - 24.49%, slightly higher than of the other cards on this list. But that won't make much difference if you manage to pay off most of your debt during the intro period.
Read more about US bank Visa® Platinum
The American Express® Cash Magnet® is a simple cash back credit card that also offers low-interest rates. If you have a big purchase coming, you can take advantage of its 15-month 0% APR offer. The ongoing, variable APR is 15.49% - 25.49%. The cash back rate is 1.5% on all purchases, and the Plan It® and Pay It® feature can help you manage your balance (it comes with a small monthly fee).
Read more about American Express® Cash Magnet®
This card offers new cardholders 0% APR on purchases and transfers for 15 months, and the variable APR is 14.99% - 23.74%. Additionally, it earns you 5% cash back on travel (if purchased through Chase Ultimate Rewards), 3% on dining and drugstores and an unlimited 1.5% cash back on all purchases. There's a $200 sign-up bonus too (after you spend $500 on purchases in the first 3 months).
Read more about Chase Freedom Unlimited®
If you’re looking for a low-interest card that is also good for a balance transfer, the Citi Diamond Preferred® is worth considering. It offers a lengthy interest-free period (12 months for purchases and 21 months for balance transfer). The variable APR after is 15.24% - 25.24%. If you want to monitor your credit score, this card gets you free access to it.
Read more about Citi Diamond Preferred®
If you want to earn rewards and transfer your balance to a low-interest card, you should opt for Citi Rewards+®. The 0% APR offer on balance transfers and purchases gives new cardholders a 15-month break from interest. After, they'll pay an ongoing variable APR of 13.49% - 23.49%. Regarding the rewards program, it'll earn you 2x points at supermarkets, and gas stations and 1x on everything else. It also includes a few other features that give your rewards a boost.
Read more about Citi Rewards+®
The Bank of America Cash Rewards Credit Card comes with a 0% intro APR offer for 15 billing cycles. The promotional offer is valid for balance transfers and purchases (a variable APR of 13.99% - 23.99% after). What's more, this card has a very flexible rewards program in which you can choose the bonus category that'll earn you 3% cash back. There's also 2% cash back at grocery stores and wholesale clubs and 1% on all other purchases. Purchases that earn you 2% and 3% have a combined spending limit of $2,500 for each quarter.
Read more about Bank of America Cash Rewards
The Capital One® Quicksilver can help you finance your next big purchase while earning you an unlimited 1.5% cash back on all purchases. The promo 0% interest offer lasts for 18 months after account opening and after the variable APR is 14.99% - 24.99%.
Read more about Capital One® Quicksilver
If you love traveling but hate high interest (who doesn't?!), you're going to like the Capital One® VentureOne Rewards, one of the top travel rewards cards. New cardholders can get the interest-free period for purchases and transfers (18 months), while the ongoing variable APR is 14.99% - 24.99%. As for the rewards, this card will earn you 20,000 bonus miles (once you spend $500 on purchases within the first 3 months from account opening), 5 miles on hotels and car rentals, 1.25 miles per dollar on all purchases, and there are several redemption options.
Read more about Capital One® VentureOne Rewards
Besides low interest, the Chase Freedom Flex℠ also offers great rewards. Its 15-month 0% APR on purchases and transfers is great if you're eyeing something pricey, like a new laptop. After that, you'll be charged a variable APR of 14.99% - 23.74%. There's a generous 5% cash back on travel purchased through Chase Ultimate Rewards, 5% cash back on up to $1,500 on combined purchases in bonus categories, 3% cash back at restaurants (including takeout and delivery) and drugstores, and 1% cash back on everything else.
Read more about Chase Freedom Flex℠
As its name says, Citi Double Cash earns you double cash back, 1% when you buy and 1% when you pay for the purchase. It has a great, 18-month 0% APR for balance transfers, while the ongoing APR is 13.99% - 23.99%. Based on their creditworthiness, some cardholders might be eligible for the Citi Flex Plan, with which you can pay off your purchases with fixed monthly payments, and you can also borrow from your credit line.
Read more about Citi Double Cash
The Discover it® Miles has two great offers, one for purchases and one for balance transfers. You will get a 14-month interest-free period for purchases, and a 14-month intro 10.99% APR for balance transfers. The regular, variable APR for both is 11.99% - 22.99%. You'll earn 1.5 miles per dollar spent, and Discover It will double them at the end of the first year.
Read more about Discover Bank Discover it® Miles
The HSBC Gold Mastercard® offers a lengthy zero-interest period on balance transfers and purchases. There's a 0% APR for 18 months, and after the variable, the ongoing rate is 12.99% - 22.99%. Another great thing about this card is that it has no penalty APR and you get one waived late fee per year. However, it lacks a rewards program, and its 4% balance transfer fee is slightly higher than the usual 3%.
Read more about HSBC Gold Mastercard®
Unless you pay your balance in full every month, credit card companies will charge you interest. This interest is usually expressed as the annual percentage rate (APR). This APR is variable, which means it will occasionally change based on the prime rate.
You will only be charged interest if you don't pay your balance on time, and the APR will be applied to the remaining, unpaid balance on your credit card. The credit card company will add that charge to your balance. So if you make a habit of carrying your balance month-to-month you'll end up paying interest on your interest. Things could easily get out of control, which is why you need to be careful even with low-interest credit cards.
You can notice that the first letter in APR stands for annual (percentage rate). However, if your APR is 18%, that's not the monthly interest rate you'll get charged on your balance. Instead, it's simply that rate divided by 12. So, you'll pay 18%/12 = 1.5% interest rate on your outstanding balance every month. You calculate your daily periodic rate in the same way, you just divide with 365, instead of 12. It will be 18%/365 = 0.049%.
Let’s go through a short example to better understand how APR works. John has a $2,000 balance on his credit card. He pays off his balance in equal installments, $60 each month. The APR he pays on his balance is 20.29% (current average APR in the U.S.). That is how the numbers of his credit card debt will look for the first month:
| Principal | $2,000 |
| Payment (2% of balance) | $60 |
| Monthly interest | ($2,000 x 20.29%)/12 months = $33.82 |
| Principal repayment | $60 - $33.82 = $26.18 |
| Remaining balance | $2,000 - $26.18 = $1,973.82 |
With this tempo, it will take John nearly four years to pay off his balance, assuming he doesn't add up to it in the meantime. He will pay $837 in interest during that period, which is almost half of his principal amount.
We mentioned above that the prime rate determines the APR, which is correct, but also your credit score will further define the interest rate you'll pay. Each credit company discloses a variable APR range, and which APR you get within that range will depend on your creditworthiness. Your creditworthiness is measured by your credit score.
Credit scores show companies how 'risky' you are, how likely it is that you're going to make all your payments on time if given new credit. A high credit score means that you've managed debt well in the past, and you will get an APR that’s closer to the lower range limit. On the other hand, a low credit score will signal banks that you might default on a loan. They will set a higher APR to compensate for the risk and get most of the loan back early on.
Usually, your FICO score will be taken into account when calculating your APR. A score above 670 is considered a good score, while a score above 740 is considered excellent. Credit card companies don't reveal the interest rate assigned for each credit score. You'll know that only after you apply for the card. Generally, you can expect to get a lower APR for a good credit score and a high one with a bad credit score.
If you're looking into low-interest credit cards, it means you want to save money, and you think you might carry a balance on your credit card. Or you just want to protect yourself from an unexpected cost, like your car breaking down or a medical bill. Whatever the reason, it’s important to find the right card that will be the best deal for you. We’ll give you a few tips on how to compare them:
To make the most out of your low-interest credit card, you should first take advantage of the 0% intro APR offer if it has one. Try to pay as much as you can during this period. After the period ends and if you are still carrying a balance, make an effort to pay well above your minimum payment. Of course, we advise you to pay at least the amount of the minimum payment each month to avoid late and penalty fees. In any case, carrying a balance on your credit card is never cheap, and you should manage it responsibly.
Let’s go through some popular myths involving APR and credit cards. We'll clarify them because believing false statements about APRs can end up costing you money.
We are sorry to be the ones telling you this – but your credit score matters. It's the greatest factor when the credit card company is deciding whether or not you'll get approved for the card, and later it also impacts the APR you will get. If you don't believe us, look at this table of effective interest rates that consumers with different credit scores have gotten.
| Credit score category | Effective interest rate |
|---|---|
| Deep Subprime (579 or lower) | 21.0% |
| Subprime (580 - 619) | 20.5% |
| Near Prime (620 - 659) | 19.0% |
| Prime (660 - 719) | 16.5% |
| Super Prime (720 or greater) | 13.6% |
| Overall | 15.7% |
Source: CFPB's Consumer Credit Card Market Report
Except that - it IS a big deal. First, it will affect your credit score, and we think you know how much damage a lower credit score can make. Then, let’s not forget about the penalty APR if your card has one, which is very probable that it will, as most credit cards do. The penalty APRs are much higher than the regular APRs and vary between 25% - 30%. So, if you forget or simply leave a balance hanging, you can find yourself buried in debts. Assume you have a $5,000 balance on a credit card that you're unable to pay off. Let's say that the penalty APR is 25%. If you trigger it, one year, you'll owe $6,250. Do you still believe missing payments is not a big deal? And we haven't even mentioned the late fees you could get charged with.