4 min read

Low interest credit cards

Lucy Burgess
9 February 2017

Learn more about low interest credit cards and whether they're right for you.

What are low rate credit cards?

Low interest credit cards offer a long-term low level of interest. Low interest rate cards can be as low as 6.4% APR*.

This is in comparison to 0% interest deals on purchases and balance transfers, where the low interest rate is usually for a set promotional period.

When the promotional period of a 0% interest card ends, the interest rate will go up to a standard rate. However, with low interest credit cards, the rate is usually set for the lifetime of the card.

What are the advantages of a low interest card?

  • Flexibility — if you usually pay off your bill in full every month, but think you might occasionally make a big purchase and carry a balance, you can have peace of mind knowing the level of interest will be relatively low

  • The rate is set for the lifetime of the card, making budgeting more straightforward

  • You don’t have to keep switching cards to take advantage of various 0% deals, and can avoid paying balance transfer fees

  • Low interest cards tend to carry a significantly lower annual fee than regular cards – sometimes there’s no annual fee at all

See credit cards best suited to your credit profile on ClearScore

What should I be aware of?

  • If you have a large balance you want to pay off, a 0% balance transfer card could be of more use to you, so that you can substantially lower your balance without paying any interest

  • If you’re accepted for a low interest card, you may not automatically qualify for the advertised rate. Many lenders will assess your individual circumstances when you apply and will offer the lowest rates to those with better credit ratings. Read the paperwork carefully so you’re not caught out.

  • Avoid using them for taking out cash. The low interest is usually only for purchases, not cash advances.

How likely am I to be approved?

This will depend on your credit report and the lender’s individual criteria. You can find out your eligibility rating for various different credit products in the 'Offers' section of your ClearScore account.

If your credit score is too low at present to qualify you for a low interest card, don’t give up. You just have to play a slightly longer game – look at our 10 steps to a great credit score article for small changes you can make to improve your score.

In a nutshell:
  • Low interest cards offer long-term low interest rates compared to other cards on the market

  • They’re ideal if you usually pay your balance in full but may occasionally make a big purchase and carry a balance over

  • The rate may not be the one the lender advertised because lenders tailor the interest rate to your personal circumstances

  • The yearly fee on these cards is generally low or non-existent

  • Try not to use these cards to take out cash because the interest rate on cash is still high

by Lucy Burgess

Lucy has a background in law. Having spent a considerable amount of time researching personal finance, she's one of our in-house experts. 

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