There are numerous benefits to having a credit card. These devices make it easy to make purchases you might not immediately have the funds for, and they’re convenient and simple to use. 

Credit cards can also protect the money you have in your bank account. That’s because it is more difficult for a credit card thief to connect a credit card to your bank account than it is to connect a debit card to a bank account.

However, credit cards may worsen your spending habits if you are in a serious amount of debt.

It is easy to forget that purchases made with credit are not free. If you spend a large sum of money and do not always make your monthly payments on time, this can cause you more money over time. This, in turn, will also damage your credit score and may even lead to you going into debt.

In order to take advantage of having a credit card without falling into the potential pitfalls these cards bring, it is important to use your credit card wisely. It is also important to look for credit cards that offer low interest rates.

Although a low interest rate will not prevent you from spending too much money, having a low interest rate can keep your debt at a manageable level if you carry a balance from one month to another. In fact, there are even ways you can use a low-interest credit card to help you get out of debt altogether.

What are low-interest credit cards?

To gain an understanding of how a low-interest credit card works, it is important that you understand interest and how it works.

When you sign up for a credit card, you’re approved to borrow a certain amount of money with that card. Then, when you make a purchase on a credit card, that amount gets withdrawn from your credit limit. A credit card statement will then show you the amount you have used and the amount of credit you have left.

The amount you have used is considered your credit debt balance. Each month, a certain amount of interest will be added to your statement, if you don’t pay off your credit debt balance before its due date for that month.

The size of the interest fee you’re responsible for paying will usually depend on:

  • The credit card company that issued your card. Credit card companies are responsible for determining the interest rate they will charge you for your card. 
  • The card you have. Certain credit card companies have cards that always come with high interest. Other cards come with lower rates.
  • What you use your card for. If you use your credit card for cash advances, for example, you might need to pay a different interest fee than you would if you were swiping your credit card in point-of-sale (POS) machines.

Some companies require annual fees as well, which you must pay in order to continue using the card. Every company will have annual percentage rates (APRs), which are interest rates calculated by year instead of by month.

APRs will vary significantly depending on the type of credit card you use, the benefits associated with the card, your credit score and more. For example, cards that offer cash back on certain purchases may have higher APRs. As a result, it is important to choose a card based on the features you find most valuable.

You may be able to avoid paying interest on a credit card altogether if you pay off your balance as soon as possible. This may be difficult to accomplish, especially if your total debt is equal to or more than 50 percent of your income.

Low-interest credit cards are, therefore, very valuable because they will allow you to pay the minimum amount in interest while making progress on your debt.

Why should I have a low-interest credit card?

Low-interest credit cards may have a variety of perks that can lower the amount you must pay each month. These are designed to incentivize you to apply for a new card. Some perks of applying for a new low-interest credit card include:

  • Interest rates that are lower than what you could find for any other card. A lower interest rate translates to fewer add-on costs. This is especially important if you need to carry a balance on your credit card from one month to another. If you have a good credit score and find a high-quality credit card company, then you may even qualify for an APR of 10 percent or lower.
  • Long promotional periods. Many low-interest cards offer long promotional periods, during which you will not have to pay any interest on a balance you carry on that carry. You must still make payments to reduce your balance, but you won’t have to pay any additional fees on that amount.

Is a low-interest credit card a good option for me?

For many people who have manageable amounts of credit card debt, low-interest credit cards are excellent tools to help them regain control of their finances.

Furthermore, if you plan to pay off your credit card bill each month, these low-interest credit cards can also be beneficial to you.

On the other hand, you may also consider getting a low-interest card if you cannot pay off everything immediately but are still willing to pay interest each month. Some low-interest credit cards are balance transfer cards, which will allow you to consolidate all your debt onto one card.

With a low-interest balance transfer card, you may receive better terms in your contract. These cards may also allow you to pay off your debt with 0 percent interest during a promotional period. If you have a plan to get out of debt and know how to pay off your balance before the promotional period ends, this can be an especially effective way to eliminate your credit card debt. 

How do I get a low-interest credit card?

Different credit card companies offer their own low-interest card options. Therefore, you need to familiarize yourself with the options that are available to you. First, be sure to research different credit card companies to determine which offer best suits your needs and your spending habits.

Then, contact the company online or by phone.Be sure to ask the provider about the lowest APR options available. Make sure you then read through the terms and conditions of the credit card before you apply. Depending on the card, you may be able to apply in person at a bank branch, or you may have the option to apply online. 

Credit Cards That Typically Have Low-Interest Rates