What are Low Interest Credit Cards?

Credit card interest rates can be a key factor in deciding which credit card is best for you. Low interest credit cards are ideal for those who tend to carry a balance month to month as they charge lower interest rates. Unlike balance transfer cards, the interest rate doesn’t increase after a set period of time. Typically, low interest credit cards have an interest rate of 10% to 15%. This is significantly less than the 19.99% interest rate you can expect with a rewards card.

Low interest credit cards minimize the amount of interest you accumulate on outstanding debt. This can save you a significant amount of money.

For example, let’s say you have an outstanding balance of $1,000 on a credit card charging 19.99%. In order to pay off this debt within a year, you’ll need to make monthly payments of $92.63 and your total interest costs will add up to $111.56. If you were to use a low interest credit card charging 10% interest, your monthly payments will be $87.92 and your total interest costs will add up to $54.99. This will cut the total interest you pay by more than half.

Low interest credit cards can also be used to consolidate debt by taking multiple high interest cards and transferring them to one low interest credit card. In contrast to balance transfer cards, low interest rate credit cards don’t limit the interest rate to a certain time period. However, if you’re going to carry a large balance for more than a few months, a balance transfer card might be better option for you.

Here are two of our favourite low interest credit cards: