Low-Interest Cards

Updated: Sep 25, 2020
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Compare side by side, & apply online for Canadian Low Interest credit cards

If you are interested in saving money in the long run, then you should be interested in a low and high-interest credit card categorization.

The low interest cards category, as the name suggests, encompasses all credit cards with a regular APR below 15%. Generally speaking, any credit card with a regular APR ranging from 10 to 15% can be considered as a low interest card.

If you regularly use a credit card for purchases and you are uncertain whether you'll be able to make your payments in time, this type of a card is a viable option. Low-interest cards are a great financial product if you want to get rid of your debt. It can help you save cash and get control of your financial life.

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Editor's suggestion: Low-Interest Cards - Nov 28, 2020

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The same thing applies here as with any other credit card category – not all low-interest cards are created equal. You need to keep your eye open when you are shopping for one of these cards as some of the features can make or break your budget.

Annual Percentage Rate

The Annual Percentage Rate, or APR, in low interest cards is below 15%. It stands for the price you will have to pay for borrowing money. It’s a yearly rate you will be charged for carrying a balance. Every credit card company has a different APR. There are several different APR rates, including purchase, balance transfer, penalty, and cash advance APR.

Take a closer look at Terms and Conditions of a credit card to see exactly how much are the different APR rates for the card you are considering to apply for. Write down the APR rates for every card to make an informed decision.

Annual Fee

Low APR credit cards will also differ in terms of annual fees. If you are looking for a card that will help you save cash, you should always find out what’s the annual fee amount. Some of these cards have $0 annual fees, while others can come with annual fees as high as $100.

Introductory Annual Percentage Rate

Another important feature to look for is the introductory APR. Some credit card companies offer really attractive financial products with 0% intro rates. However, they may differ in terms of the zero introductory APR period. Usually, the 0% intro rates are valid for the first 15 to 20 months.

Open the Terms and Conditions of a credit card to look for the information about introductory APR. While you are at it, see whether it applies to purchases, balance transfers, or both.

If you plan on doing a balance transfer look for a low interest card with 0% intro APR with a grace period as long as possible. It will enable you to pay off your debt without paying any interest at all.

Transfer Fee

Many people choose these cards so they can transfer debt from another lender. The transfer fee is a percentage of the total amount transferred. It typically ranges from 3% to 5%, and you should take it into account when you are card shopping.

Rewards Rates and Bonuses

A low interest card doesn’t typically offer additional perks such as cashback on purchases. However, the competition is harsh, and some card companies have introduced cashback rewards on their low-interest financial products. Rewards rates usually range from 1 to 2 points per $1 spent, and they are often capped at anywhere from 15,000 to 60,000 points.

Low Interest Cards Pros

You are probably wondering what you stand to gain from using this type of card. Here are the most noteworthy benefits.

Low Annual Fee

Unlike some reward and low requirement cards, low interest cards come with a low annual fee. In fact, some of them come with no annual fee at all. Considering that some credit cards can come with the $150 annual fee, this is great news. You can use this money to pay off your debt and even more reduce the interest fee.

Spend Less on Interest Payments

One of the biggest advantages of using these cards is, of course, a low interest rate. Monthly interest payments can significantly add to your debt if you don’t make your monthly payments on time. If you frequently carry your balance from month to month, you stand to save a lot.

Pay Off Your Loan More Efficiently

Interest rates are often completely neglected by consumers, at least until they start carrying a debt. Once the interest fees start piling up, consumers can easily end up with a huge debt breathing down their neck. These cards offer an easy way to get rid of your debt and once again gain control over your finances.

They typically come with a 0% introductory APR and a low balance transfer fee. You can transfer your entire debt from another card, and pay it off entirely during the introductory period interest-free.

Low Interest Cards Cons

Pay attention to the following cons to know what awaits you should you decide to apply for one.

Limited to No Rewards

Rewards and additional perks are often found with cards in the rewards credit card category. Low interest cards usually don’t come with extra perks to help you earn money while spending it. There are some products on the market with limited rewards, but they are nothing compared to the perks offered by rewards cards.

Transfer Fee

The transfer fee is a downside that goes hand in hand with the perk of being able to transfer your debt and pay it during the 0% introductory period. In low interest cards, the transfer fee usually ranges from 3% to 5%. If your debt is significant, you will have to pay this fee to transfer it from your previous lender.

High Interest Rate on Cache Advance

If you are looking to make cache advances with your low interest card, we have some bad news. It’s definitely not a type of the card you should use for cache advances. The interest rates are simply too high for a cache balance to pay off.

You Can Easily Rack Up Your Debt

Owning a low interest card can easily trick you into letting your guard down. You can easily start thinking that you can skip the next month’s payment and make it up with the next month. Low interest is still an interest, and the fees will add up to your debt nevertheless. Pay your monthly balances in time and use this perk only when you absolutely need to.

Should You Use Low Interest Cards

If you have racked up debt on a high interest card, you should definitely consider transferring it onto a low interest card. These cards are quite useful in terms of saving money and getting your financial life back on track.

The Bottom Line

Low interest credit cards are a viable option for anyone who wants to improve financial habits and pay off debts without adding up huge interest fees to their balance. The low to none annual fee, 0% introductory APR, and 15% or less regular APR make up for a solid credit card you can use to build credit, pay your debt, and plan your budget accordingly.

Low Interest Card Offers Recap

Low Interest Cards FAQs. What People Ask About Low Interest Offers

What is a three zeroes card offer?2020-09-02T09:56:03-07:00

The 3 Zeroes card offer is such cards that have all of below:

Such cards are usually available for Excellent Credit holders only. However, sometimes Good Credit holders can get approved for a 3 zeros card, too.

Can I use a low interest card to build credit?2020-07-30T02:24:24-07:00

If you are interested in building your credit, a low interest card is as viable as any other card out there. The only thing that you need to pay attention to is the issuer’s reporting policy. As long as the issuer reports to all major credit bureaus you are good.

However, to build your credit, you need to showcase responsible financial behaviour. Even with a low interest card in your hands, make sure to pay your entire monthly balance in time. It’s a strong signal for bureaus, and you will be able to see your credit improving.

Is balance transfer possible on a low interest card?2020-07-30T01:26:08-07:00

These cards are perfect for balance transfers. They commonly come with a fixed balance transfer fee and 0% introductory APR. You can use these perks to transfer your debt from a lender and pay it entirely during the introductory period avoiding interest rate fees altogether.

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How does 0% introductory APR work?2020-07-30T01:28:06-07:00

0% introductory APR means that you will not have to pay interest fees during the disclosed period. The only thing that you need to pay attention to is what the 0% introductory APR applies to. It can apply to purchases you make with the card, balance transfer, or both.

How old do I need to be to get a low interest credit card?2020-07-30T01:27:14-07:00

Most of the credit cards are available to consumers that are at least 18 years old. The same applies to low interest cards. You can check this in the issuer’s Terms and Conditions just to make sure before applying.

Do I need excellent credit to be eligible for low interest cards?2020-07-30T01:23:29-07:00

Every company that issues a low interest card has different Terms and Conditions, Application, and Approval requirements. Yes, there are some issuers that approve only consumers with excellent credit scores.

However, there are also those that will approve you if you have a limited history, fair, or even bad credit. It’s important to do research on a specific credit card before applying to make sure you meet the requirements.

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