Editorial Policy

Editor’s Pick: Best Low Interest Credit Cards 2010

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By Eva Norlyk Smith, Ph.D.
June 14, 2010

When applying for a credit card, one of the first things to consider is whether you will be carrying a balance on the card. While rewards credit cards or cash back credit cards may look like they offer the best credit card deals, these cards generally come with higher interest rates, which tend to more than outweigh rewards earnings for people who carry a credit card balance. For this reason, consumers looking to apply for a credit card they can use to pay purchases or expenditures off over time are better served by a low interest credit card.

Here are our picks for the best low interest credit cards currently available to consumers. Please note that with the exception of the IberiaBank credit card discussed below, low interest credit cards generally require excellent credit; consumers with average or poor credit unfortunately often are stuck having to pay higher interest rates. Also please note that all new credit card applicants initially will start out with a fairly low credit limit for all these cards, but the credit line will increase over time with regular payments.

Simmons First Visa Platinum. The Simmons First Visa Platinum card offers one of the lowest ongoing credit card interest rates in the nation, with a variable APR of 7.25 percent. There is no annual fee, and like all Visa cards, the Simmons card is accepted globally. Additional benefits include travel insurance, emergency cash and credit card replacement, plus a car rental loss/damage waiver covering collision, theft and vandalism. Simmons credit cards score high in any credit card comparison, and the bank has received national recognition for consistently offering credit cards with some of the lowest interest rates in the United States.

PenFed Promise VISA Card. Like most credit cards issued by credit unions, the PenFed Promise Visa Card clearly puts consumer interests in the driver’s seat. The card sports a low-interest 9.99 APR variable rate, one of the lowest available. In addition, cardholders can take out a fee-free balance transfer with a 7.49 percent variable APR for 36 months, essentially giving new cardholders a 3-year, low-interest loan.

Further, the credit card terms of the PenFed card read like they were taken straight out of a consumer wish list for the ideal credit card. The card carries no annual fees, no fees on cash advances, no late payment fees, no returned payment fee, no foreign transaction fees, and no penalty APR. Of course, cardholders who don’t abide by the terms, instead of penalty fees, might find their account closed or credit limit severely cut back.

Only members of the Pentagon Federal Credit Union and apply for PenFed credit cards. To qualify for membership, you have to be a government employee, member of the U.S. Military and Uniformed Services, employee or volunteer of the American Red Cross, or a family member/housemate of a current PenFed member. If none of these fit, join the National Military Family Association as a civilian member. The $20 annual membership qualifies you to join the Pentagon Federal Credit Union as well as for discounts on numerous other products and services.

IBERIABANK Visa® Classic Card. With tiered interest rates based on credit worthiness, the IberiaBank Visa Classic card is a rare example of a low interest credit union card, which even people who don’t have excellent credit may still be approved for. The card features a 3-tier interest rate targeting people in three different credit score ranges. Credit card applicants with excellent credit will qualify for a low variable APR of 7.25 percent, while those with average or not so great credit may find themselves paying a 10.25 percent or 13.25 percent variable APR. The card comes with a 1.99 percent intro APR for the first six months. In addition, unlike most other credit cards issued to people with less than perfect credit, the IberiaBank Visa carries no annual fees.

Those with excellent credit may prefer the IberiaBank Visa Select, which comes with both a 0 APR introductory rate on purchases for 12 months, and a 1.99 percent balance transfer rate of 1.99% for the first 12 billing cycles.

To qualify for IberiaBank credit cards, applicants must have been employed with their current employer for at last six months, and have a credit history free of delinquencies, bankruptcy, or collections. Credit card applicants will also be required to provide proof of income.