Best Interest Rate On Credit Card

How Do Credit Card Rewards Work

When you make a purchase on a rewards credit card, youll earn a percentage back on your spending as either cash back, points or miles depending on the type of card and what type of rewards its offering. Airline credit cards, for example, will typically earn miles, cash-back cards will earn you cash back and general purpose rewards cards may earn points that can be used for things like a statement credit or to redeem for travel, merchandise or other options.

Some rewards credit cards will earn the same flat rate back on all spending, like a card that earns 2% back on every purchase. Others have tiered rewards where a certain type of purchase, like gas or groceries, may earn at a higher reward rate than other types of purchases. Before choosing a rewards card, its important to consider your spending habits and the type of rewards you think youll get the most benefit from and then compare that to the various options available to you.

Best 0% Apr And Low Interest Credit Cards Of December 2022

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ALSO CONSIDER: Best credit cards of 2022 || Best balance transfer credit cards || Best low interest credit cards || Best cash back credit cards

A low interest credit card saves you money by reducing the cost of debt: When you’re paying less in interest, you can pay back what you’ve borrowed more quickly. A card with a 0% intro APR period will save you the most on interest in the short term. Look for one with an introductory interest-free period longer than a year. If you tend to carry a balance most months, a card with a low ongoing interest rate will work to your advantage in the long run.

Some of our selections for the best 0% and low interest credit cards can be applied for through NerdWallet, and some cannot. Below, you’ll find application links for the credit cards from our partners that are available through NerdWallet, followed by the full list of our picks.

ALSO CONSIDER: Best credit cards of 2022 || Best balance transfer credit cards || Best low interest credit cards || Best cash back credit cards

Average Credit Card Interest Rate By Credit Score

Higher credit scores have the potential to help you qualify for lower interest rates on credit cards, loans, and other types of financing. As a result, a good credit score has the potential to save you money.

Bad credit scores, on the other hand, indicate higher risk for the credit card company. This status tends to translate into higher APRs for you as a cardholder. Its not unheard of to encounter credit cards with APRs as high as 25% to 30%.

Exact interest rates on credit cards can differ from one company to another, and among individual cardholders as well. The type of credit card you open can play a role in your APR as well, with rewards credit cards often featuring higher interest rates than other types of credit card products.

Below is a look at the approximate APR range you might encounter on a general purpose credit card, according to your credit score. You should always check with the individual credit card issuer to confirm which rates are offered on any account youre considering.

As you can see above, your can also impact how long it takes you to pay down your credit card debt. A lower APR can make debt elimination faster and easier.

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Low Interest Credit Cards Vs 0% Intro Apr Credit Cards

Whats the difference between a low interest credit card and a 0% intro APR credit card? To put it simply, the former offers a low ongoing APR, while the latter offers an introductory period during which youll accrue no interest. Once the introductory period ends, interest will accrue at the regular APR for any balances you roll over from month to month.

If you know you can pay off your credit card debt within a specific time frame, a 0% intro APR credit card might be the best choice. When considering a 0% intro APR card, evaluate whether it offers an intro APR on purchases, balance transfers or both. Also determine how long of an intro period youll need and how much the balance transfer fee is if youre looking to move debt from another card.

However, if you arent looking to pay down a set amount of debt from a big purchase or a balance transfer within a specific time frame, a low interest credit card might be better for your needs. The regular APR for some 0% intro APR cards can be quite high once it kicks in, so if you have to unexpectedly roll over a balance once in a while, you could still end up facing expensive interest charges. By contrast, a card with a low regular APR can help you save money because any interest charges incurred are likely to be more affordable.

How To Calculate A Credit Cards Apr

When you apply for a credit card, youâll automatically be assigned an APR that will apply to purchases you donât pay off before your billâs due date. You may also be notified of any intro APR, balance transfer APR, cash advance APR, or penalty APR your card charges.

However, credit card interest actually accrues on your revolving balance on a daily basis and not an annual basis. Imagine you have an average daily balance of $2,000 on your credit card, and that your credit cardâs APR is currently 18%.

To figure out the monthly interest charges on your credit card based on your APR, you can use the following formula:

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Capital One Quicksilver Cash Rewards Credit Card: Best For 15

• What we love about the Capital One Quicksilver Cash Rewards card: This card is fairly well-rounded, with decent flat-rate rewards, a reasonable regular variable APR range and few fees. If you want a no-fuss card that earns steady cash back rewards on everyday purchases, the Quicksilver Cash Rewards is a notable consideration for your wallet.
• Who this card is good for: Consumers who want to earn solid flat-rate rewards on all purchases and have multiple options to redeem earnings.
• Alternatives: The Chase Freedom Flex Card is an excellent pick if you prefer to strategize and earn even more cash back by tracking and managing bonus categories.

Read our Capital One Quicksilver Cash Rewards Credit Card review or jump back to offer details.

First Federal Credit Union

Open to residents of certain counties in Iowa, First Federal Credit Union members can choose between two Visa cards with fixed interest rates.

The First Federal Credit Union Visa® Premium credit card offers a fixed interest rate as low as 6.99%, with no balance transfer fees and no annual fee. This is one of the lowest fixed-APR credit cards on the market, so if youre able to join this small credit union, its worth applying for.

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Become An Authorized User

One way a student can overcome a lack of credit is to become an of a parents credit card. As an authorized user, you get a credit card in your name, but the account number belongs to the primary cardowner.

The credit bureaus will establish a file for you when a cardholder makes you an authorized user. All reported card activity appears in the credit files of the cardowner and authorized users. Youll build credit as long as the monthly credit card payments are made on time and the card has a low balance relative to its limit.

Pnc Visa Business Credit Card

The PNC Visa® Business Credit Card comes with an intro APR on balance transfers and a reasonable ongoing APR for purchases.

On balance transfers, enjoy an intro 0% intro APR on balance transfers for 13 months, after which a 13.74% to 23.74% variable APR applies. After, a 13.74% to 23.74% variable APR applies. The balance transfer fee is either $5 or 3% of the amount of each balance transfer, whichever is greater.

Purchases dont come with an intro APR the regular purchase APR is 13.74% to 23.74% variable.

The cards annual fee is $0 .

The PNC Visa® Business Credit Card is best for small business owners looking to transfer debt from another card and enjoy a window of more than a year with no interest, or who just need a business card for purchases that comes with a reasonable ongoing APR.

Do note that the card is fairly no-frills, and doesnt offer rewards or a sign-up bonus.

• 0% intro APR on balance transfers for 13 months, after which a 13.74% to 23.74% variable APR applies
• Set spending limits on employee cards

About the card

The PNC Visa® Business Credit Card comes with an intro APR on balance transfers and a reasonable ongoing APR for purchases.

On balance transfers, enjoy an intro 0% intro APR on balance transfers for 13 months, after which a 13.74% to 23.74% variable APR applies. After, a 13.74% to 23.74% variable APR applies. The balance transfer fee is either $5 or 3% of the amount of each balance transfer, whichever is greater.

The cards annual fee is $0 .

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Glossary Of Apr Terms

• Purchase APR. This is the rate your card charges when you pay for things with the card. Most credit cards offer a grace period: If you pay your balance in full every month, you won’t have to pay interest on purchases. If you roll over debt from one month to the next, then interest will start adding up on a purchase as soon as you make it.

• Balance transfer APR. This is the rate on debt that you’ve moved to the card from somewhere else. To attract your business, card issuers often offer a low rate, even 0%, on transferred debt.

• Cash advance APR. This is the rate charged when you use your credit card to get cash from an ATM. Interest usually starts adding up on cash advances immediately. Grace periods don’t apply.

• Introductory APR. Sometimes called a “teaser rate,” this is a low interest rate offered when you first open your account. Many credit cards offer people with good credit an introductory rate of 0% on purchases for a year or more.

• Ongoing APR. This is the “regular” rate that goes into effect once any introductory APR period expires.

• Variable APR. Most credit card interest rates are tied to the prime rate. When the prime rate goes up , your credit card’s interest rate will usually go up an equal amount. “Variable APR” just means your current rate is not permanent and could change if the prime rate does.

How Do I Avoid Interest On A Credit Card

The simplest way to avoid interest charges on a credit card is to pay your balance in full by the due date. However, there’s an exception with 0% APR cards. During the length of the intro period, you are only required to make the minimum payments on your balance, and you won’t be charged interest on new purchases and/or balance transfers. Once the intro period ends, any lingering balances or new purchases and transfers will incur the regular APR.

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Bank Of America Customized Cash Rewards Credit Card: Best For Flexible Cash Back Categories

Why we picked it: This card comes with top-tier rewards and a $200 online cash rewards bonus . Theres also an introductory 0% interest period of 18 billing cycles for both balance transfers made within the first 60 days and purchases .

Pros: This card offers cash back rewards that are almost guaranteed to fit anyones spending: Earn 3% cash back in a category of your choice , 2% back at grocery stores and wholesale clubs with a $2,500 combined spending limit on 2% and 3% categories each quarter and 1% cash back on all other purchases.

Cons: A 3% fee applies to all balance transfers.

Who should apply? If you want a card with no annual fee, flexible rewards rate, decent sign-up bonus and lengthy balance transfer offer, the Bank of America Customized Cash Rewards card checks off all the boxes. Plus, existing Bank of America customers can maximize their potential rewards through card-linked offer programs such as BankAmeriDeals.

Who should skip? The limited rewards options may not win over travelers, and the quarterly $2,500 combined spending cap on 2% and 3% categories may not be the best fit for big spenders.

Read our review of the Bank of America® Customized Cash Rewards credit card.

How To Get A Low Interest Rate

There’s no surefire way to get a low interest rate, but there are actions you can take to increase your odds of receiving the best interest rates. Consumers with good or excellent credit have a greater chance of receiving interest rates toward the lower range compared to those with bad or fair credit.

For example, say two consumers apply for a card with a 14.99% to 24.99% variable APR. One has excellent credit and the other has bad credit. Chances are the consumer with excellent credit will receive an interest rate near 14.99%, while the consumer with bad credit will receive a higher rate closer to 24.99%.

That’s a 10% difference, and can add up to a big difference in interest charges if you wind up carrying a balance on your credit card.

For instance, assume that the bad credit consumer receives a 24.99% APR and the excellent consumer receives a 14.99% APR. Both consumers incur $5,000 in credit card debt and plan to pay it off after 12 months. Here’s roughly how much interest each cardholder would accrue during the 12-month period:

• Bad credit consumer: $702
• Excellent credit consumer: $415

The bad credit consumer would pay $287 more in interest charges, due to their higher interest rate.

As a result, it’s key to achieve a good or excellent credit score. In order to improve your credit, make all your bill payments on time and in full autopay can be a great asset. Also consider limiting new credit card applications as needed and using a small amount of your credit limit .

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Capital One Savorone Cash Rewards

15-month introductory rate, plus earn 3% cash back on food delivery

Why its great in one sentence: The no-annual-fee Capital One SavorOne card offers an introductory interest rate on purchases and balance transfers for 15 months, plus an outstanding 3% cash back on several everyday categories.

This card is right for: People who spend a significant amount on entertainment and dining including food delivery services but who also need a long introductory interest period on their purchases.

Highlights:

• 0% introductory APR on purchases and balance transfers for the first 15 months .
• Earn 3% cash back on dining, entertainment, streaming and at grocery stores.
• Extended warranty protection.
• No foreign transaction fee.

Sign-up bonus: Earn a $200 cash bonus after you spend $500 on purchases within the first three months after opening the account.

What we like most about the Capital One SavorOne: Even after youve taken advantage of its introductory interest rate period, having a card that earns 3% back on four highly important categories dining, entertainment, streaming and grocery stores means that it will remain a useful part of your card arsenal.

One thing that could be better: Theres no cell phone insurance on the Capital One SavorOne card, which is becoming a common feature even on some no-annual-fee credit cards. You can also find cards with somewhat longer introductory periods if you need extra time to carry debt.

Lake Michigan Credit Union Prime Platinum

If youre looking for a credit card with a low interest rate, the Lake Michigan Credit Union Prime Platinum is our top choice. It charges a $0 annual fee and offers the chance to qualify for one of the lowest interest rates weve found at a 10.00% 18.00% . Finally, while some credit unions have restrictive membership requirements, Lake Michigan Credit Union makes it easy for anyone to join.

A low interest credit card can help you save money if you sometimes carry a balance from month to month. While the interest rate on some credit cards can be over 20% or even close to 30%, weve rounded up several credit cards with interest rate ranges that start around or even below 10%.

Weve also rounded up a few credit cards with 0% intro APR periods, during which youre charged no interest at all. However, note that once your intro period ends, interest will accrue at the regular APR.

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How Your Credit Score Affects Your Interest Rate

The interest rate you pay on your credit card is heavily dependent on your credit history, which is summed up in your credit scores. Interest rates are how issuers put a price on risk:

• When you have a low credit score, lenders see a higher risk in lending you money. As a result, the interest rate charged by your credit card will be higher.

• When you have a high credit score, the risk is lower that you wont repay borrowed money. So the interest rate on your credit card will be lower.

If a card advertises a range of APRs, a lower score will put you toward the higher end of that range , while a high score will put you on the lower end of the range.

As a very general rule of thumb:

• If you have good or excellent credit , look for prime + less than 12 points.

• For average credit , you’ll likely see prime + 15 to 20 points.

• For bad credit , expect to find APRs more in the range of prime + more than 20 points.

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