Best Low Interest Credit Cards

In today's day and age Rewards credit cards are a hot topic. However, your failure or success with them depends on one critical aspect: your capacity to pay off the balance each month. If you fail to do so, you will be charged interest that can dilute any rewards benefits in a blink of an eye.

Rewards vs Low-Interest Credit Cards

These rewards credit cards are an ideal option for those who have a habit of cleaning their credit card slates each month, but are not recommended for those who tend to carry their balance in the next month. Luckily, there is another type of credit that is more suitable for people like these, and that is a low-interest credit card. When talking about the best low-interest credit card, we look for an interest rate that is way lower than your average rate offered by credit cards, along with other benefits for a minimal fee.

Our Picks for The Best Low-Interest Credit Cards in 2018

We featured 3 of the best low-interest credit cards in 2018 so you can easily compare them and choose the perfect fit for you.

1. American Express Essential Credit Card

This credit card is an excellent place to get started if you are looking to enjoy a low rate of interest. With the help of this card, you will have to pay just 8.99% on any purchases that you make that are not paid off even after the 21-days grace period.

In addition to that, you will also have the chance to benefit from a special rate of balance transfer i.e. 1.99% for 6 months, and 8.99% after that time has elapsed. These two features make this credit card an excellent option for anyone who wants to get serious about completely paying off their credit card accruals in 2018.

To apply for the American Express Essential credit card, you need to be a permanent Canadian resident and be earning a minimum income of $15,000 each year. When you are shopping with this card, you will be able to avail an extended warranty, zero liability coverage, and purchase assurance. Lastly, when you use this card for travel expenses, you will also be able to benefit from travel insurance.

2. MBNA Platinum Plus by MasterCard

If you have a store card, line of credit card loan, or a credit card already, then the MBNA MasterCard can assist you in cutting, consolidating and reducing your arrears with Canada's top standing balance transfer deal of zero percent for one year, with zero annual charges.

You will also have the option of consolidating all your credit or store cards to the MBNA card at 0% for a year - zero interest, one payment. There are zero yearly card fees, but you are required to pay 1% transfer charges on each transfer, which is still quite low when compared to some that go as high as 3%.

On the other hand, MBNA also enables you to transfer cash in your account at 0% for a year also. You can utilize that 0% money for practically any reason - just like cash. It is initially a 0% cash deposit in another term.

Whether you are looking to avoid high interest on credit card loan, pay for a new purchase, or carry a small balance once in a while, low-interest credit cards are your best bet - way better in comparison with a personal loan or another line of credit - and much better than a rewards credit card.

After comparing all the low-interest credit cards present today in the Canadian market, we were able to deduce that some cards might offer lower or the same rate of interest for a short-term promotional periods, while others for a yearly fee, and others with a changing interest rate, and still others with risk-based Annual Percentage Rate.

No one beat zero annual charges 5.99% fixed rates for brand new purchases, no one beat zero percent for one-year balance transfers, and no one beat zero percent for a year cash advances left in your checking account.

With zero yearly fees combined with Canada's best interest rates, the aforementioned credit cards are a must-have. Not one of these cards comes with a yearly charge, which means there is no cost involved as long as carrying them as your backup is concerned.

Best Low-Interest Credit Cards - All You Need to Know

If you are someone who carries a balance into the next month, keeping a rewards credit card doesn't make sense at all. You will only be wasting away around 20% in interest every year, to save perhaps 2% in rewards, which isn't a sensible deal. Even if you succeed in carrying the balance for two statement periods, it'll end up costing you more than 3.5% in terms of accumulated interest.

If you are aware of the fact that you sporadically do not pay down your whole credit card bill, then the ideal option is to get a low-interest and no-fee credit card. Just keep it in your wallet as a safety net for rainy days - it costs you absolutely nothing but will help you save a ton of money.

For whatever reason, the majority of banks do not offer fixed interest rates as low 5.99% - 9.99% without yearly fees. BMO, CIBC, Scotia, and RBC offer you low-interest cards with rates as cheap as 11.99%; however, they do come with an annual fee of $20 to $29. TD and RBC have low prime plus credit cards of 1.25% - 12.75% or 4.99% - 8.99%. You are not aware if you will get a 7.69% rate or 15.45% prior to applying. The drawback is, even if you are dissatisfied with the rate offered to you; you will still have to pay the yearly fees if you get approved.

With an increasing number of personal loans available in the market today, though they promote their rates as minimal as 5.9%, they end up averaging higher than the 12% range. In addition to that, they ask you to send evidence of your identity and income for verification. Maybe it is way more efficient as compared to visiting the branch for the application of a line of credit, but it surely not simpler than applying online.

For that reason, we are fans of the American Express Essential card. There are no yearly fees involved, making it an affordable option to have whether you require it sooner or later. Plus, it has a fixed rate of 8.99% - this helps you be aware of what you are getting into before the application.

MBNA's zero percent for one year rate is also incomparable in the Canadian market. Whether you are seeking to move your high-interest credit card loan or you are trying to access cash at zero percent, no other issuers at present day offer the same rate.

Keep in mind that you shouldn't make any brand new purchases on your balance card - only use it exclusively for balance transfers. You will be paying 22% in interest on new purchases, and when you try paying off the high-interest balance, only part of your repayment will contribute to your new purchase. The remaining amount will go towards your present balance - and you do not get to choose. The result will be that your new high-interest rate balance will be there until your low-interest rate balance gets completely paid off.

So, why should you make use of a personal loan or credit line to clear off your credit card accruals when you can easily have access to 0% rates? Doesn't make much sense to do otherwise. We suggest balance transfers as the best technique to clear your higher-interest store cards, credit card or fixed-payment debts that you may have accrued.

You can't always pay the balance on your credit card every month because there are always unexpected things that come up in life. If you are likely to carry a balance on your credit card, getting a Low Interest Credit Card could help you.  Compare and find the best Low Interest Credit Card that helps you pay off your principal balance quicker and also save on hefty interest charges. 




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Interest Rate

11.99%

Annual Fee

$29

Balance Transfer: 1.99% for 6 Mnths

Cash Advance: 11.99%

Sign-up Bonus

Special 1.99% introductory interest rate on Balance transfers for the first six months†

Interest Rate

16.99%

Annual Fee

No Annual Fee

Balance Transfer: 16.99%

Cash Advance: 16.99%

Sign-up Bonus

3.99% Introductory interest rate on Balance Transfers for the first six months†

Interest Rate

19.95%

Annual Fee

No Annual Fee

Balance Transfer: 1.95% of amount transferred**

Cash Advance: 19.95%

Sign-up Bonus

1.95% Balance Transfer & Earn 2% Money-Back Rewards on purchases

Interest Rate

Prime + 1.5%

Annual Fee

No Annual Fee

Balance Transfer: Prime + 1.5%

Cash Advance: Prime + 1.5%

Sign-up Bonus

N/A

Interest Rate

11.99%

Annual Fee

$20

Balance Transfer: 11.99%

Cash Advance: 11.99%

Sign-up Bonus

N/A

Interest Rate

3.60% to 9.60%

Annual Fee

$0

Balance Transfer:

Cash Advance:

Sign-up Bonus

N/A

Interest Rate

11.9%

Annual Fee

$20

Balance Transfer:

Cash Advance: 11.9%

Sign-up Bonus

N/A

Interest Rate

0%

Annual Fee

$6.95

Balance Transfer:

Cash Advance:

Sign-up Bonus

N/A

Interest Rate

13.99%

Annual Fee

$29

Balance Transfer:

Cash Advance: 13.99%

Sign-up Bonus

N/A

Interest Rate

19.99%

Annual Fee

$35 USD

Balance Transfer:

Cash Advance: 22.99%

Sign-up Bonus

N/A

Low-Interest Rate Credit Cards Canada

If you typically carry balances on your credit card, you need a Low-Interest rate credit card. Such cards allow you to minimize the charges on your balances and pay back the money you owe quicker with the lowest interest among all credit cards. Here’s everything you need to know

Low-Interest Rate Credit Cards Explained

Should you opt for the Low-Interest rate credit cards, you’ll find that you incur a lower rate of interest on the purchases you charge to your credit card. For instance, in Australia, you can expect to pay standard variable rates of 10% per year on Low-Interest rate credit cards. However, the interest rate on most other credit cards can range from 15% to 24% per year. You may also receive promotional offers on Low-Interest rate credit cards that allow you to make purchases at 0% interest rates for a fixed time frame.

 

Kinds of Low-Interest Rate Credit Cards Available

  • Standard Low-Interest Rate: These cards allow you to make purchases at variable interest rates of less than 15% per year. While you can expect to pay a low annual fee, you may not receive many perks or added benefits.
  • Low-Interest Rate with Balance Transfer: You'll pay a Low-Interest rate on the purchases you make on these cards. You can also transfer an existing balance from another credit card you might have, and you'll probably pay 0% interest for a particular time.
  • Low-Interest Rate with Introductory 0% Purchase Rate: For the initial promotional period that may extend for a few months, you can make purchases on this card at 0% interest rate. Once the promotional period is complete, you’ll pay the regular interest rate on all purchases.
  • Premium Low-Interest Rate: Some companies offer you gold and platinum cards that allow you to make purchases at Low-Interest rates in addition to other benefits that may include concierge services and complimentary travel insurance. However, because of the added features, you can expect to pay a higher than the standard annual fee for using these cards.

Expected Savings on Low-Interest Rate Credit Cards

Every added percentage point in the interest rates can help you save money. Here’s how:

Say you have a debt of $2,000 on your credit card that you’ll pay off over 6 months. At interest rates of 20% per year, you’ll incur a charge of $118.3. However, if the interest rates were 12% per year as in Low-Interest rate credit cards, you’ll only incur a charge of $70.6. Accordingly, you’ll save $47.70.

Choosing the Best Low-Interest Rate Credit Card    

When choosing the best Low-Interest rate credit card that is well suited for your needs, keep these important factors in mind.

  • Applicable interest rates: Credit card companies charge you an interest rate on your balances by calculating it daily. You’ll see the total charge on your monthly credit card statement. If the interest rates are low, you’ll pay a lesser amount in interest.
  • Interest-free days: Credit card providers may offer you interest-free intervals where they won't levy a charge on your purchases. You can make purchases free of interest as long as the time period But, if you haven't paid off the balance by the due date on your credit card statement, you'll incur the entire applicable interest.
  • Cash Advances: The interest rate applicable on cash advances such as the ATM cash withdrawals, gambling, and foreign currency purchases you make is typically higher than when you buy other items using your credit card. Such transactions do not have interest-free intervals.
  • Revert Rate: Credit card companies may offer you the facility of 0% rate of interest on your purchases or balance transfer offer. However, this offer may only last as long as the promotional period. Once this period ends, you’ll pay interest according to the revert rate. This revert rate may be high or equivalent to cash advance rates. It is advisable to assess these rates when making your choice.
  • Applicable Fees and Charges: The annual fees on credit cards may range between $0 on basic cards to $250 or higher on platinum and gold cards. While the $0 interest rate cards may seem attractive, you might have to pay high base rates on your purchases.
  • Added Fees and Charges: You may have to pay fees for ATM transactions, international transactions, or overdrafts on your credit limit. Check for the various charges you may have to pay when making your choice especially if you travel frequently.

Positives and Negatives of Low-Interest Rate Credit Cards

Positives:

  • You’ll incur low rates of interest on your purchases so managing credit card debts will be easier.
  • You can look for Low-Interest rate credit cards with affordable annual fees.
  • Some low rate cards allow you added benefits like no charge on foreign transactions and balance transfers.
  • If you regularly have high balances on your credit card, Low-Interest rate credit cards can help you repay your debt and save on added charges and fees.
  • Such cards may carry beneficial features such as complimentary offers, annual fees, and introductory Choose the card that matches your requirements.

Negatives:

  • Some Low-Interest rate credit cards may not offer you benefits and reward points.
  • You may have to evaluate the fees and charges on all credit cards before opting for the one that best matches your requirements.
  • You may need to show that you have a good credit history to qualify for these cards.

 

Why Should You Opt for the Low-Interest Rate Credit Card

Opting for the Low-Interest rate credit card can have several benefits:

  • Users that have a mortgage can consolidate their debt and opt for refinancing to a lower rate of the mortgage.
  • You can use it to pay off a large balance on your credit card.
  • You can use the card for everyday expenses or as an emergency source of funds since you’ll pay Low-Interest rates on them.
  • This card is beneficial for users who regularly carry high balances on their credit cards.
  • Although not advisable, you can use the card for cash advances.
  • You can transfer all the balances from your various credit cards into one Low-Interest rate credit card. In this way, you can make monthly payments on a single card and pay Low-Interest rates.

 

Low Interest Credit Cards vs. No Annual Fee Credit Cards 

There are a few factors to keep in mind when choosing a low-interest card: interest rates, the length of low-interest rate, special conditions for the low-interest rate, annual fees. Just like a regular credit card, low-interest cards will have competitive rates. Compare the different rates offered by the other benefits you will receive.

With some cards, the low interest is only for a promotion, meaning it will be temporary. So figure out how long the promotional low interest will last and decide if that fits with your financial goals. Next, you will want to make sure there aren't any sneaky "special conditions" that must be met to qualify for a low-interest balance. One example would be needing to meet a minimum dollar amount spent on a monthly basis. You would want to avoid this kind of card unless the other perks of the card will benefit you.

Next, you will want to make sure there aren't any sneaky "special conditions" that must be met to qualify for a low-interest balance. One example would be needing to meet a minimum dollar amount spent on a monthly basis. You would want to avoid this kind of card unless the other perks of the card will benefit you.

And lastly, you will want to check for annual fees. Most low-interest cards won't have these fees because of the type of customer they are catering too. But when it comes to your credit you want to make sure you are doing your due diligence. Sometimes getting a credit card with no annual fees would end up saving you more in the long run.

Compare Low Interest Credit Cards in Canada

Most credit cards will have average interest rates of 19.99% and up! However, a low-interest card is exactly what it sounds like: a credit card with a much lower interest rate. These cards typically have rates between 5% and 15%. A low-interest card will usually offer lower rates on other services such as balance transfers and cash advances. If these are transactions you need to make, you will know that a regular card will usually have an extra high rate for them. If that wasn't enough savings, you'll be happy knowing these cards typically do not have an annual fee, saving you another $100 or more a year. 

If these are transactions you need to make, you will know that a regular card will usually have an extra high rate for them. If that wasn't enough savings, you'll be happy knowing these cards typically do not have an annual fee, saving you another $100 or more a year. 

Whether you are paying for a vacation or having an online shopping spree, the assurance of having a reasonable interest rate on your credit card will help you enjoy these things more. In addition to the peace of mind when carrying a balance, using a low-interest card for everyday purchases or when those emergency situations arise is a great way to build credit while knowing you will be paying reasonable interest rates.

In addition to the peace of mind when carrying a balance, using a low-interest card for everyday purchases or when those emergency situations arise is a great way to build credit while knowing you will be paying reasonable interest rates.

Cash advances, while not generally advised, sometimes cannot be avoided. The lower fee that you will pay for cash advances with a low-interest credit card will make that decision a little bit easier and safer. A great time to use your low-interest card is when you have multiple cards. You can transfer the higher interest balances onto your low-interest card. Not only will it bring your monthly payments down to one, but you will be paying a fraction of the interest on that payment.

A great time to use your low-interest card is when you have multiple cards. You can transfer the higher interest balances onto your low-interest card. Not only will it bring your monthly payments down to one, but you will be paying a fraction of the interest on that payment.

Whether you are looking for a rewards credit card or a low-interest credit card, we help you compare and find the best credit card providers in Canada.

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