Best low-interest credit cards for January 2025

A low-interest credit card is defined by its annual percentage rate (APR), which can be variable or fixed. If the low end of the variable percentage is around 18 percent, it generally qualifies as a low-interest card. This is useful, considering that over half of American adults have credit card balances, and 60 percent have carried a balance for more than a year, according to Bankrate’s 2024 Credit Card Debt Report.

Often, cards from popular issuers reserve their lowest interest rates for people with excellent credit. Credit unions offer cards with much lower rates than standard banks but require memberships and may only be local to specific states or statuses, such as military veterans. While credit experts agree that paying your balance on time and in full every month is the best way to avoid interest, if you need to carry a balance, a low-interest card could help you pay less interest over time.

Comparing credit card interest charges

The best way to analyze your options is to use your actual spending or balances. You might be surprised how much low-interest credit cards can save you compared to a rewards card or cash back card with a high APR.

Here are two of the best low-interest cards compared with a rewards card using average credit card debt statistics from 2023:

*Using each card’s lowest possible Variable APR. 

Still unsure if a low-interest credit card is right for you? Check out our Credit Card Spender Type Tool to get personalized credit card recommendations based on your credit score, spending habits and daily needs.

As inflation remains a concern, many people online are looking for a low-interest credit card. While big-name issuers dominate the market, credit unions are the go-to recommendation for finding a low-interest credit card. Credit union cards typically don’t have flashy rewards, but their business model allows them to pass savings back to customers at lower rates. But if you want the lowest interest rate possible, be prepared to give up rewards.

“You’ll have good luck by searching credit unions near you. Big corporate banks will offer 0% APR intros only for the most part. They’re promotional. Remember, banks are in this business to make money,” one Redditor said in r/CreditCards. “Credit [u]nions however operate differently and seek to help their communities and they work for you.”

Even Bankrate writer Garrett Yarbrough keeps his credit union card because its interest rate is lower than many other cards’ rates.

“Its greatest strength is one of the main reasons to have a credit union card: the interest rate is far less than the typical APR on a card from a major issuer. I still try to avoid carrying a balance since I don’t want to owe interest or hurt my credit score. However, that low-interest card came in handy when I was just starting out on my own and I needed an extra week or two before I could pay off big, unexpected expenses like moving costs.”

— Garrett Yarbrough, Writer, Credit Cards

Although online users and Bankrate experts recommend always paying in full and taking advantage of your credit card’s grace period to avoid interest altogether, the right low-interest card can mitigate unavoidable charges.

Luckily for cardholders, interest rates could continue to decrease slightly thanks to the second rate cut (and projected future cuts) after the Federal Reserve began dropping rates in September. Credit card APRs will still be high since these recent cuts are the start of an incremental process, but these small improvements can slightly alleviate the pressure Americans have felt for the past year under rate hikes.

These rate cuts might not make a massive difference if you’re currently carrying a balance, so you may still want to consider paying off your debt with a balance transfer if you can.

*The quotes and citations included on this page have been verified by our editorial team and are accurate as of the posting date. Be sure to check the issuer's website/terms and conditions for all up to date content. Outlinked content may contain views and opinions that do not reflect the views and opinions of Bankrate.

Debt drove trends in 2024, with half of American cardholders carrying credit card debt. Because financial strain is so common, it may have led to approval rates for low-interest cards dropping steadily for most of the year.

We dug into our data and looked at the average approval ratings for Bankrate users applying for credit cards on our site. According to our proprietary data, Bankrate user approval rates for the low-interest credit cards on our site started around 64 percent in January 2024 but steadily declined as banks reported tightening standards on credit card products in Q2.

The most significant approval dips were in spring and summer: 57 percent of users were approved in March and only 49 percent in May. These trends closely follow data from the Federal Reserve Bank of New York’s June 2024 SCE Credit Access Survey, which shows that 16.5 percent and 21.7 percent of credit card applicants were rejected in February and June 2024, respectively.

However, approval rates on our site increased from 54 percent in June to 56 percent in August, which suggests that approvals may be rising again.

If you want to know which low-interest cards you have the best chance of being approved for, check out Bankrate’s CardMatch tool to get a better idea of your approval odds or see if the issuer offers preapproval for the card you want. 

When evaluating the best balance transfer and low-interest cards, we consider a mix of factors, including how cards score in our proprietary card rating system and whether cards offer features that fit the priorities of a diverse group of cardholders. 

This includes users who need to carry a balance long term, need as much time as possible to chip away at debt or are looking for maximum long-term value via rewards.

We analyzed over 100 of the most popular balance transfer and low-interest cards and scored each based on its introductory APR, intro APR period length, ongoing APR, balance transfer fee, perks and more to determine whether it belonged in this month’s roundup.

Here’s a quick look at how our rating methodology breaks down for low-interest cards: