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Low interest credit cards

What are low interest credit cards? What are the pros and cons? How likely are you to be approved? Learn about low interest credit cards here


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What are low interest credit cards?

Low interest credit cards offer a low rate of interest over a long (usually fixed) period of time. APR on low interest credit cards can be as low as 6.4%*.

Usually when credit cards offer a low or 0% interest rate this only lasts for a set promotional period. After that, the interest rate will go up to a standard rate. With low interest credit cards, the rate is usually set for the lifetime of the card.

Short on time? Skip to the end for a quick video summarising this article.

What are the advantages of a low interest credit card?

  • 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

  • If you usually pay off your bill in full every month, but think you might occasionally make a big purchase and need to carry over a balance, the level of interest you'll be charged will be relatively low

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, as it will give you the opportunity to start pay off your balance, not just the interest.

  • If you’re accepted for a low interest card, you may not automatically qualify for the advertised rate (often shown as 'Representative APR)'. 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.

  • Try to avoid using a low interest card 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.

Key highlights

  1. Low interest cards offer long-term low interest rates compared to other cards on the market
  2. They’re ideal if you usually pay your balance in full but may occasionally make a big purchase and carry a balance over
  3. The rate may not be the one the lender advertised because lenders tailor the interest rate to your personal circumstances
  4. The yearly fee on these cards is generally low or non-existent
  5. Try not to use these cards to take out cash because the interest rate on cash is still high

Frankie takes the often confusing world of finance and makes it clear and simple, to help you get your money sorted.