Credit cards are popular nowadays and people use them in different ways. There are different types of customers and the credit card providers offer a combination of characteristics in each credit card to attend a specific public. So, people are going to choose the credit card based on the fees, rewards, where can they use the card and the interest rate. In this article we are going to talk about the best 5 credit cards with the lower interest rate. But first let`s talk about the interest rate.
What is the interest rate and why is it important?
It is also called APR (Annual Percentage Rate) and it is the percentage that is going to be applied to your balance to calculate how much you have to pay for interest. So, if you spend $100 with your credit card and the interest rate is 5% then you will have to pay $105 = $100 (what you spent) + $5 (5% of $100). That interest is the cost you have to pay for borrowing money from a financial institution and it may be different depending on the credit card provider.
But the interest rate also represents the risk that the credit card provider is taking by lending money to you. So, if you have more chances to default (not paying on time or not paying) they will charge you a higher rate and they determine that based on your credit history and credit score.
But, if you have a good credit history and good credit score (you always pay on time and manage well your finances) then you will have a lower interest rate because you represent less risk to the financial institution that is issuing the credit card. So, that resumes the importance of the interest rate; now let`s see what are the best credit cards with low interest rate
Top 5 credit cards with lower interest rate
In first place we have Discover it Cash Back: This card does not have the lowest APR around but it has rewards that make it worthy. It has 13.74% to 24.74% APR (it is a variable rate) but this card gives you 0% APR on purchases for 14 months.
And it also gives you 1% cash back in every purchase you made and in some cases it could be 5% cash back. You have the benefits that Discover gives you the double of cash back in the first year with the card. So, the 0% APR for 14 months and the double cash back could be a great deal. Keep in mind that there are no annual fees with this card.
In second place we have Barclaycard Ring Mastercard: This card has 13.99% APR and that rate is variable. But one of the benefits of this card is that is has a community of users that will be sharing with you advices and financial tips to use your credit cards correctly. This card does not have an annual fee or a foreign transaction fee. You will also get 0% APR in the first 15 month with the credit card.
In third place we have the PenFed Promise Visa Card: This card has 9.74% to 17.99% APR and it is a variable rate. This is a free fees card so you will have to pay just the APR; there is no purchase fee, late fees, cash advances fees or annual fees. And you are still able to get a 4.99% APR in the first 12 months with the card.
There are some rewards with this card, for example, if you spend more than $1.500 during the first 90 days with the card then you will get a reward for $100 which is a sing – up bonus. And there are no many more Visa Credit Cards with that type of bonus.
In fourth place we have Wells Fargo Propel American Express Card: This card has 14.49% to 26.99% APR which is a variable rate. But you get 0% APR on purchases and balance transfers in the first 12 month with the card. You also get 0$ annual fee and foreign transaction fee. It gives you travel accident insurance, travel assistance, auto rental insurance and cellphone insurance.
And one of the most important things about this cards are the rewards; you will get 30K bonus points if you spend more than $3.000 during the first 3 months with the card. You also get rewards when you use the card in hotels, flights, gas stations, eating out and others.
Last, we have Citi Simplicity Card: With this card you will get from 15.24% to 25.24% APR and it is a variable rate. There is no annual or late fee but there is a balance transfer fee ($5 or 3% of the amount); cash advances also has a fee ($10 or 5%) and there is a fee for foreign transactions (3%).
But the real benefits of this card is the long period in the first months with 0% APR. In this case we are talking about 18 months with 0% APR for purchase and balance transfer. So that will let you have free credit for 18 months and that could be useful for most people.
In summary, there are many options in the market that are focused on low rates. So, if you are looking to get a credit card with low rates keep in mind that you should look for all the details of the card because there may be some hidden costs like annual fees or changes in the APR so make sure that you check all the info. In most cases, you will find the lowest APR in the first months with the card so it could be recommended to use it for the first months to take that benefit.