Find out if a credit card that offers a consistently low interest rate for borrowing could be for you, or if you’d be better off with a 0% deal

Who should use a low-interest credit card?

With a low-interest card, you get a low rate for life. This means you get a consistent cheap deal and there’s less pressure to pay off your balance within a set period.

It can be easier to budget, and you won’t have to switch around regularly to avoid interest rate hikes as you do with 0% promotional offers, which have a time limit that can catch you out.

Credit card deals with 0% on balance transfers  and 0% on purchases  are cheaper than a low-interest credit card.

But if you’re not likely to pay off the total you spend before the end of the promotional period, which can last up to to 35 months, you can get stung with an average rate of 23% APR.

So, if you’d prefer to have a low standard rate on borrowing for more certainty about the rate you will pay a low-interest credit card could be for you.

Best low-interest credit card deals

Below we’ve picked out some of the top low-interest deals for purchases and balance transfers.

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of a credit card provider before committing to any financial products.

Card name Standard balance transfer interest p.a Standard balance transfer fee Standard purchase interest p.a Representative APR
The Co-operative Bank 3 Year Fixed Rate Visa 8.9% 0% 8.9% 8.9%
Representative example: assumed borrowing of £1,200 for one year, at a purchase rate of 8.9% (variable), representative 8.9% APR (variable). Credit available subject to status. Terms apply.
Tesco Bank Clubcard Credit Card with Low APR Mastercard
10.36% 3.99% 9.94% 9.9%
Representative example: assumed borrowing of £1,200 for one year, at a purchase rate of 9.9% (variable), representative 9.9% APR (variable). Credit available subject to status. Terms apply.

Data correct as of 1 April 2022.

Who are the best low-interest credit card providers?

When searching for a low-interest credit card deal it can be difficult to differentiate between offers, so you might find our credit card company reviews handy in your research.

Which low-interest credit card is right for me?

With a credit card there are four main types of transactions you can do. You can:

  • make a new purchase;
  • make a balance transfer from another card (usually for a one-off fee);
  • make a money transfer to a current account (with a one-off fee);
  • or make a cash withdrawal.

Some low-interest credit card providers have a uniform rate for all three types of transactions, but others vary the interest they charge.

Make sure you are getting a card that offers the cheapest deal for what you want to use it for.

Even if you’re accepted for a credit card, you won’t always end up with the advertised rate.

Legally, providers only have to offer their headline rates to 51% of those that apply so you could be part of the 49% that get a worse deal.

Lenders will assess your application based on your individual circumstances. Those with a better credit profile and score are more likely to be offered the best deal.

Should I get a low-interest rate credit card?

There are different types of low-rate credit cards, so the best low-rate credit card for you will depend on your circumstances.

 

Also, remember that those with better credit ratings are more likely to be offered a lower annual percentage rate (APR), so if you have poor credit, you may not get the super-cheap deal you’ve seen advertised.

On the best low-rate credit cards, you can expect to pay around 9.9% on outstanding balances, but some come with rates that are higher.

Low-interest credit cards – pros and cons

Still weighing up whether you should go for a low-interest credit card? Check out the pros and cons to help you decide.

Pros

Peace of mind – there are usually no annual fees on low-rate credit cards and what’s more, the rate is usually set for the life of the card. so you won’t have to worry about the cost of your debt ramping up later on.

Easier to budget –  because you usually get a rate for life it’s easier to budget as there’ll be no unexpected rate increases, and you won’t have to switch your cards regularly.

No pressure – with a low-interest card there’s no pressure to pay off your balance within a set time.

Cons

Not the cheapest way to borrow – if you’re looking to transfer a balance or make an expensive purchase, you could be better off with a 0% purchase or balance transfer deal, providing you can repay the debt within the promotional period.

Low-rate might not be for everything – the low-interest credit card you get might offer a good deal for purchases but might have a different rate for other types of transactions like balance transfers or cash withdrawals.

Low-interest credit cards FAQs

Have a query about low-rate credit cards? See if you can find the answer in our Q&A below:

 

How high is the limit on a low-interest credit card?

The credit limit you get on a low-interest credit card will depend on a lender’s assessment of your individual circumstances.

Do low-interest cards come with low-rate cash withdrawals?

Some providers will offer the same low interest they have on offer for purchases as they do for balance transfers and cash withdrawals – but some don’t.

It’s important to check the rate applied to the type of transaction you want to do.

Should I consolidate debts onto a low-interest credit card?

Low-interest credit cards do allow you to transfer balances from other credit and store cards, as well as transfer money to your bank account, which could be used to pay off debts. You will pay a fee to transfer a balance or withdraw cash.

A low-interest credit could be a solution to consolidate debts, but you’ll need to weigh up other options, such as a personal loan or a 0% balance transfer deal.

If you have less than £5,000 of debt, using a credit card may be a better option. The cheapest loan rates tend to be on offer for loans of £5,000 and upwards.

The advantage of either a loan or a 0% balance transfer deal is that you have a fixed period to repay your debt – you take a loan out for a fixed term, while a 0% balance transfer deal lasts for a set period, before a higher interest rate is charged on your debt.

If you’re looking to pay off your debts, it may be more helpful to have a period of time set to keep you focused on clearing what you’ve borrowed.

A low-interest rate credit card, however, rarely has an introductory deal – meaning it could be easier to leave debt hanging around for longer.

Can I get a low-interest credit card for bad credit?

As we’ve said earlier in the guide, the best low-interest credit card rates tend to be on offer for those who have the best credit health.

If your credit history is patchy, you may still be accepted for one of these cards, but might not get the super-low rate advertised.

People with bad credit, or no credit history, are unlikely to qualify for one of these cards, and if they do, may get a significantly higher rate (often above 20%) to reflect the fact that they are a higher-risk customer because of their past.