A credit card is a very important financial tool to manage your finances. However, a credit card with a high interest rate can push you into the debt cycle by accumulating debt especially if you carry a balance. Then credit cards with low interest come into the picture. These credit cards are specifically designed to minimize the cost of borrowing. They are a great way to manage your finances effectively. Many credit card providers offer credit cards with low interest rates tailored to the needs of the cardholders. These credit cards can save you money even if you are planning a big-ticket purchase, debt consolidation, or simply need a card for day-to-day expenses. Usually, these credit cards have an interest rate of 1.5% to 2.99%.
Top 5 Low-Interest Credit Cards
- SBI SimplySAVE Credit Card: The SBI SimplySAVE Credit Card is one of the best entry-level credit cards. With a joining fee of 499, this card offers you cashback on every transaction. This card has an interest rate of 3.50% p.m. which is 42% p.a. It also charges a cash advance fee of 2.5% on cash withdrawals.
- HDFC Regalia Credit Card: With a joining fee of just Rs. 2500 + applicable Taxes. This card is an interesting choice for new cardholders as well as people who want to maximize benefits. This card comes with an interest rate of 3.6% p.m. and a 2.5% cash advance fee.
- HDFC Infinia Credit Card: HDFC Infinia Credit Card is a premium, invite-only credit card. It is good for people who want to earn rewards on their purchases specifically travelers. HDFC Bank Infinia Credit Card offers flexible payment options. Cardholders enjoy low interest rates on their revolving credit. Which can help you manage your finances efficiently.
- Axis Bank Magnus Credit Card: It is a premium credit card designed for high-net-worth individuals. This card offers amazing benefits with a joining fee of ₹12,500. It offers a low Forex markup fee and no cash withdrawal charges (interest charges apply).
- HDFC Diners Club Privilege Credit Card: It is a premium card that offers great rewards and travel benefits. Cardholders enjoy up to 50 days of interest-free period. The bank only charges a nominal fee of 3.5% foreign currency markup on all the foreign currency spent.
Who Can Apply for A Low-Interest Rate Credit Card?
These credit cards are only available to some people. They have specific criteria for applying for these credit cards. A good credit score is a must to apply for a credit card specifically for a low-interest credit card. Typically, an applicant with a credit score of 700 or more can easily get any desirable credit card. A strong credit history shows timely bill payments and responsible borrowing. It is easy for existing customers to get a low-interest credit card. Students or individuals without a regular income can also apply for low-interest secured credit cards or add-on credit cards.
Also Read: 5 Credit Cards You Can Get with Low Credit Scores in 2024
Should You Get a Low-Interest Credit Card?
Usually, low-interest credit cards don’t offer many perks like rewards or cashback. They’re best for people who want to pay off their balance quickly and save on interest. So these cards are best for you if you make big purchases and carry an outstanding balance. They sacrifice other perks for the low interest rate. You should also remember that low-interest credit cards are not the solution to your debt. They offer you temporary relief by reducing the interest amount.
Key Factors for Choosing a Low-Interest Credit Card
Low APR: APR in this stands for the Annual Percentage Rate. The primary benefit of these cards is the low annual percentage rate (APR). So go with the card that offers the lowest APR.
Minimal Fees: Select the card with low or no annual fees, as well as reasonable charges for balance transfers and cash advances.
Credit Score Requirements: Most of these cards require a good credit score. So check before applying for a credit card with a low APR.
Flexible Payment Options: Also check for options like balance transfers and EMI facilities for easier repayment.
Extended Grace Periods: A longer grace period allows you more time to pay your bill without interest. Pay the full balance before the due date to save money.
Who Should Get a Low-Interest Credit Card?
Carry a balance: If you frequently carry a balance on your credit card then a low-interest card can help you save money by reducing the amount you pay on interest.
Consolidating debt: You can transfer high-interest debt to a low-interest credit card to pay it off more quickly. This will help you save money.
Making large purchases: For big-ticket items like furniture, electronics, or home improvements then a low-interest credit card can help you manage your finances effectively by breaking it into manageable monthly payments.
FAQs
1. What is a low-interest credit card?
A low-interest credit card charges a lower interest rate on purchases and balance transfers compared to traditional credit cards. This can benefit individuals who carry a balance on their credit cards for an extended period.
2. Are there any drawbacks to low-interest credit cards?
Low-interest credit cards offer significant benefits, but they often come with fewer rewards and perks compared to traditional credit cards. Because of this, you may miss out on cashback, travel miles, or other incentives.
3. What is APR on credit cards?
APR in credit cards stands for Annual Percentage Rate. The annual interest rate charged on your credit card balance. This includes the interest rate and other additional fees associated to your credit card. A lower interest rate results in less payable interest on your outstanding balance.
4. How can I maximise the benefits of a low-interest credit card?
To maximise the benefits of a low-interest credit card:
- Create a budget: Plan your spending to avoid unnecessary debt.
- Pay on time: on-time payments can help improve your credit score.
- Avoid cash advances: Cash advances often come with higher fees and interest rates.
- Consider a balance transfer: Transfer high-interest debt to your low-interest card to save on interest charges.
5. What is a balance transfer fee?
A balance transfer fee is a fee you pay to the bank or credit card companies when you transfer existing debt from one credit card to another. Cardholders do it to take advantage of a lower interest rate or a promotional 0% APR offer. Balance transfer is a popular way to save money on interest payments, especially if you have high-interest debt on other credit cards. This fee ranges from 2% to 5% of the amount transferred or a fixed amount. A balance transfer can help you consolidate debt, lower monthly payments, and save on interest.
