When used carefully, credit cards offer convenience, security, and rewards. However, interest rates can be financial traps. If you’re interested in a low interest rate, you can find low interest rate credit cards with an online search right now.
In this article, we’ll explore what credit card interest is and how it works. We’ll also introduce you to some of the best low-interest credit cards available in 2023, helping you save more and stress less about those pesky interest charges.
What is Credit Card Interest?
Credit card interest, often expressed as APR, is a cost for borrowing money from the credit card company. Most cards have variable APRs tied to benchmarks like the prime rate. This rate fluctuates; for instance, if the prime rate is 4% and your card’s rate is prime rate + 12%, your APR is 16%. As of June 2023, the average credit card APR was 23.74%.1
You’re charged interest when you carry a balance by not paying your bill in full. The unpaid balance incurs interest and is added to your next bill, potentially causing compounding interest and balance growth.
How Credit Card Interest Works
When you carry a balance on your credit card, the card company calculates interest by multiplying your outstanding balance each day by a daily interest rate, which is your annual interest rate (APR) divided by 365. For instance, if your card carries a 16% APR, the daily interest rate is approximately 0.044%. If you had a $500 balance on Day One, you’d accrue around $0.22 in interest that day, bringing your total to $500.22 on Day Two.
This process continues throughout the month, accumulating interest on your balance. If you began the month with a $500 balance and made no additional charges, you’d see your balance grow to $506.60 by the month’s end, including the added interest.
Low Interest Rate Credit Cards
1. Discover It Cash Back: A Smart Choice
With the unique Unlimited Cashback Match offer, they double the cash back you earn in your first year, no matter how much you spend. This means $150 cash back becomes $300, and there are no limits. Activate 5% cash back on rotating categories like Amazon.com, grocery stores, restaurants, and gas stations every quarter (up to the quarterly maximum) – it’s automatic.2
Plus, get a steady 1% cash back on all other purchases. And the best part? No annual fee. Discover It Cash Back lets you redeem every dollar you earn, making your spending a smarter way to save.
2. Blue Cash Everyday Card from American Express: Your Daily Companion
The Blue Cash Everyday® Card from American Express stands out with its enticing 0% introductory APR for 15 months on both purchases and balance transfers, followed by an ongoing APR of 19.24%-29.99% Variable APR. What’s more, it rewards everyday spending.
You’ll get 3% cash back at U.S. supermarkets, U.S. gas stations, and on U.S. online retail purchases (up to $6,000 per year in each category), while other purchases earn 1% cash back. Alongside these benefits, there’s a generous welcome offer to sweeten the deal.3
3. Chase Slate Edge: Tackle Debt Efficiently
With an introductory 0% APR that lasts for 18 months on both purchases and balance transfers, you’ll have ample time to pay off existing debt without the burden of interest. Even beyond this, the Chase Slate Edge℠ card offers a variable ongoing APR ranging from 20.49% to 29.24%. What sets it apart is the opportunity to gradually reduce your APR and potentially boost your credit limit.
Cardholders are automatically evaluated for a 2% APR reduction each year when they consistently make on-time payments and spend a minimum of $1,000 by their account anniversary.
4. Wells Fargo Active Cash Card: Unlimited Cash Rewards with Low Interest
The Wells Fargo Active Cash® Card is a versatile financial tool that caters to both short-term and long-term financial goals. With a 0% introductory APR on purchases for 15 months, it’s perfect for financing that significant purchase or managing existing balances, accompanied by a 0% introductory APR on balance transfers for 15 months on qualifying balance transfers. Afterward, the variable APR falls within the range of 20.24%, 25.24%, or 29.99%.
However, what truly sets this card apart is its ongoing 2% cash back on all purchases, ensuring that you’re consistently rewarded for your spending. Plus, a generous sign-up bonus sweetens the deal. All this comes with the added benefit of no annual fee.
5. U.S. Bank Visa Platinum Card
With a generous 0% introductory APR on both purchases and balance transfers for 18 billing cycles, you have ample time to manage your finances without the burden of interest charges. After the introductory period, the variable APR ranges from 18.74% to 29.74%.
What’s more, this card offers up to $600 in cell phone protection (subject to a $25 deductible) for covered damage or theft when you pay your monthly cell phone bill using your U.S. Bank Visa Platinum Credit Card. With flexible payment due date options and no annual fee, this card is all about making life easier and more cost-effective for you.
Start Saving Money Today!
Low-interest credit cards are invaluable tools for managing your finances. They save you money on interest charges, making them an ideal choice if you need to carry a balance or consolidate debt. Whether you’re looking to consolidate debt, build credit, or simply enjoy a card with a lower APR, these options offer the potential to save more and stress less about those pesky interest charges.
To make the most informed choice, consider your financial priorities, creditworthiness, and spending habits. Start searching online and take the next step toward financial empowerment.
