Editorial Policy

Editor’s Pick: Best Low-Interest Credit Cards 2012

Eva Norlyk Smith Ph.D.

July 9, 2012

Low-interest credit cards can seem like a rare species. Many cards have annual percentage rates (APRs) hovering above 20 percent. And, although most cards sporting the “low-interest” label advertise rates starting at 10.99 percent or 12.99 percent,  even they might be out of reach unless your credit score is in the very top tier.

“Those low range interest rates are only offered to people with top credit scores,” says Bruce McClary, media relations director at ClearPoint Credit Counseling. “The rate you actually get awarded could be in the higher range of 22.99 percent or even 24.99 percent, depending on your credit score.”

The good news is that there are still low-interest credit cards out there with rates below 10 percent and no uncertainty about the interest rate you’ll actually end up with — if you qualify for the card, you get the advertised rate. Here are CreditCardGuide.com’s picks for the best low-interest credit cards with rates below 10 percent.

PenFed Promise Visa card: If you don’t mind jumping through a few hoops to qualify, the PenFed Promise Visa Card is one of the best low-interest credit cards out there. First, you don’t have to worry about which interest rate you’ll end up with. New cardholders get a 7.49 percent APR on purchases for 36 months. After that, the interest rate varies with the prime rate, which is currently 9.99 percent, — one of the lowest available.

The PenFed Visa regularly offers promotions on balance transfers as well, so if you’re not in a hurry, keep an eye out for  them. The current promotion offers a 4.99 interest rate for the life of the loan on balance transfers made through August 31, 2012.

The terms of the PenFed card are favorable too: 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 might find their account closed or credit limit severely cut back.

The catch? Only members of the Pentagon Federal Credit Union can apply for PenFed credit cards. In general, membership is limited to members of the U.S. Military and Uniformed Services, government employees or a family member or housemate of current PenFed members. If you don’t fall into any of these categories, there’s another way to qualify. Simply join the National Military Family Association as a civilian member. The $20 annual membership qualifies you to join the Pentagon Federal Credit Union and could get you discounts on numerous other products and services.

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 rental car insurance coverage. 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.

The catch? To get a decent credit limit with the Simmons First, you have to work your way up. Expect to start with a limit as low as $500 to $1,000. With regular use and prompt payments (preferably in full), you can work your way up to higher limits over time. To speed up the process, call the card issuer every nine to 12 months to ask if you’re eligible for a limit increase. If you’re the patient type, this can be a great way to build up a low-interest credit line you can draw on at any time should the need arise.

IBERIABANK Visa Classic:  The IBERIABANK Visa Classic features three tiers of interest rates at 7.25 percent, 10.25 percent or 13.25 percent variable APR. The rate  you’ll get is based on creditworthiness. Unfortunately, the issuer is mum on where the credit score cut-off points are.

The card also features a 1.99 percent intro APR for the first six months with a 2 percent balance transfer fee. It carries no annual fees.

The catch? Be prepared to go through close scrutiny when applying. The card issuer requires that applicants to have been with their current employer for at least six months, and to have excellent credit — no derogatory information, delinquencies, bankruptcies or accounts in collections. The card issuer also requires proof of income, and may require proof of employment and identity as well.