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Best Low Interest Credit Cards

Forbes Staff, Editor

Updated: Jul 12, 2022, 8:07pm

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If you like to use a credit card to manage your everyday spending and often carry a small balance, a card with one low rate, rather than a 0% introductory rate, could be a good fit. Some even offer perks when you shop or travel.

During our research (July 2022), we identified the top low-rate credit card offers on the market. Just bear in mind that the terms of the deal can vary according to your credit score and personal circumstances – using an eligibility checker is useful in that it will show you the chances of being accepted for a card without leaving evidence on your credit file.

Find The Best Credit Card

Best Low-Rate Credit Cards

TSB Advance Mastercard

Representative APR

9.9% (variable)

Perks/ Benefits

0% on purchases/ BTs for 3 months

Availability

Not available to existing TSB cardholders

Representative Example

At an assumed credit limit of £1,200, at a purchase rate of 9.95% p.a. (variable), the representative APR is 9.9% (variable). Credit available subject to status.

Representative APR

9.9% (variable)

Perks/ Benefits

0% on purchases/ BTs for 3 months

Availability

Not available to existing TSB cardholders

Representative Example

At an assumed credit limit of £1,200, at a purchase rate of 9.95% p.a. (variable), the representative APR is 9.9% (variable). Credit available subject to status.

Why We Picked It

The low rate of 9.9% (variable) on this TSB card is top of the market. But it’s also a ‘headline’ rate which means that some applicants will be offered higher APR of either 13.95% or 16.95% APR (variable).

The card also offers 3 months’ interest free on both balance transfers and new purchases.

Make a balance transfer from another credit card during the 3-month introductory offer period and there’s no balance transfer fee to pay, but a 3% fee applies from month 4 onwards.

The card’s 2.95% non-sterling transaction fee means it’s probably not the best card to use overseas, especially as there are other low rate cards that don’t charge for spending abroad.

Pros & Cons

Competitive low rate
0% on purchases and balance transfers for 3 months
No balance transfer fee for first 3 months

You could be offered a higher APR than 9.90%
Not available to existing TSB cardholders
Foreign use fees apply

Tesco Bank Low APR Credit Card

Representative APR

9.9% (variable)

Perks/ Benefits

Earn bonus Clubcard points

Availability

Cannot hold more than one other Tesco Bank credit card

Representative Example

At an assumed credit limit of £1,200, at a purchase rate of 9.9% p.a. (variable), the representative APR is 9.9% (variable). Credit available subject to status.

Representative APR

9.9% (variable)

Perks/ Benefits

Earn bonus Clubcard points

Availability

Cannot hold more than one other Tesco Bank credit card

Representative Example

At an assumed credit limit of £1,200, at a purchase rate of 9.9% p.a. (variable), the representative APR is 9.9% (variable). Credit available subject to status.

Why We Picked It

In the best case scenario, this card charges 9.9% APR (variable) and will earn you Tesco Clubcard points wherever you use it.

But, depending on your personal circumstances, you could be offered a rate of up to 16.9% APR (variable).

If you’re looking to move a balance from another card, APRs are higher still (up to 18.26%, variable) while there’s a 3.99% handling fee, too.

As with all of Tesco Bank’s cards, there are benefits for shoppers and the card itself doubles as your Clubcard. Use the card in Tesco stores or fuel stations and you’ll earn 5 additional Clubcard points for every £4 you spend – and that’s on top of the points you’d usually earn.

To put that in context, a weekly shop of £60 would earn you around additional 300 points in a month, which are worth £3 in store.

Outside of Tesco, you’ll earn one point for every £8 you put on the card.

Pros & Cons

Competitive, low rate
Bonus Clubcard points on spending

You could be offered a APR of 16.9% (variable)
3.99% balance transfer fee

Lloyds Bank Platinum Low Rate Credit Card

Representative APR

9.9% (variable)

Perks/ Benefits

None

Availability

New and existing customers

Representative Example

At an assumed credit limit of £1,200 and a purchase rate of 9.94% p.a. (variable), the representative APR is 9.9% (variable). Credit available subject to status.

Representative APR

9.9% (variable)

Perks/ Benefits

None

Availability

New and existing customers

Representative Example

At an assumed credit limit of £1,200 and a purchase rate of 9.94% p.a. (variable), the representative APR is 9.9% (variable). Credit available subject to status.

Why We Picked It

The Lloyds Platinum Low Rate Credit Card offers a competitive, low representative rate of 9.9% APR (variable) with the same low rate applying to any balance transfers (although the transfer fee is higher than average transfer fee at 5%).

This is a straightforward low rate card with no promotional, interest-free periods on spending or balance transfers. If you use it outside of the UK you’ll pay a charge equal to 2.95% of the transaction.

If you are keen to avoid a card that comes with a sudden rate hike in store, this could be a good option. Even so, be aware that rates are variable and liable to change with the Bank of England base rate (at Lloyds Bank’s discretion).

Pros & Cons

Competitive, low rate
Same low rate on balance transfers

5% balance transfer fee
2.95% foreign transaction fee

Co-operative Bank Three-Year Fixed Rate Card

Representative APR

8.9% (fixed) reverting to 18.2% (variable)

Benefits/ Perks

None

Availability

Must be a Co-operative Bank customer

Representative Example

At an assumed credit limit of £1,200 and a purchase rate of 18.2% p.a. (variable), the representative APR will be 18.2% (variable). Credit available subject to status.

Representative APR

8.9% (fixed) reverting to 18.2% (variable)

Benefits/ Perks

None

Availability

Must be a Co-operative Bank customer

Representative Example

At an assumed credit limit of £1,200 and a purchase rate of 18.2% p.a. (variable), the representative APR will be 18.2% (variable). Credit available subject to status.

Why We Picked It

The rate on Co-operative Bank’s Low Rate Credit Card is competitive – but temporary.

The card charges a representative 8.9% APR (fixed) on purchases and balance transfers for the first three years, but the rate reverts to 18.2% (variable) for both once you’re into year four.

If you really want to take advantage of this card however, you’ll need to clear your balance before the three years is up, else the interest charged on it will more than double overnight.

There’s no annual fee for holding the card though, and no fee to pay if you’re transferring a balance.

With a 2.75% conversion charge when making payments overseas, it’s probably not the best one to take on holiday either.

Pros & Cons

Low fixed rate on purchases and balance transfers
No annual fee
No balance transfer fee

Low rate only applies for three years
Only available to Co-operative Bank customers
Need to earn minimum £10k a year to qualify

The NatWest Credit Card

Representative APR

12.90% (variable)

Benefits/ Perks

No foreign transaction/ BT fees

Availability

NatWest customers only

Representative Example

At an assumed credit limit of £1,200, at a purchase rate of 12.9% p.a. (variable), the representative APR is 12.9% (variable). Credit available subject to status.

Representative APR

12.90% (variable)

Benefits/ Perks

No foreign transaction/ BT fees

Availability

NatWest customers only

Representative Example

At an assumed credit limit of £1,200, at a purchase rate of 12.9% p.a. (variable), the representative APR is 12.9% (variable). Credit available subject to status.

Why We Picked It

This straightforward and transparent card from NatWest is also available from Royal Bank of Scotland and Ulster Bank (all part of the NatWest Group plc).

There’s no annual fee, no balance transfer fee, and one low representative APR of 12.9% on both purchases and balance transfers. And if you take the card overseas with you, there’s no foreign transaction fees either.

But there are a few catches, too. You’ll need to be an existing NatWest, RBS (or Ulster Bank) customer earning at least £10,000 a year to qualify for each card. And depending on your credit score and circumstances, you could be offered an APR of 15.9% or 19.9% (variable), which takes the offer out of the ‘low rate’ arena.

Pros & Cons

No annual fees or fees for balance transfers or use abroad
Consistent low APR (variable and representative)

Could be offered 15.9% or 19.9% APR
Only available to NatWest/RBS customers
Need to earn minimum £10k a year to qualify

What methodology did we use?

To rank the low-rate credit cards, we assessed the following criteria in order of importance:

Interest rate on purchases: as measured by representative APR (variable)
Any perks or benefits: such as 0% promotional periods of rewards
Availability: whether cards are available to everyone or just existing customers
Interest rate on balance transfers: as measured by representative APR (variable)
Customer service: according to Fairer Finance ratings

Why choose a low-rate credit card?

The average annual percentage rate (APR) charged on a credit card is around 21% (variable), according to figures from the Bank of England.

And, while there are many credit cards that charge 0% interest on purchases and/or balance transfers, these interest-free periods are promotional and temporary. They revert to more typical rates of interest after the stated number of months.

This means that, unless you clear any balance or transfer it to a card from a different provider (a process also likely to involve a transfer fee), the cost of your debt will suddenly shoot up.

Low-rate credit cards present one viable alternative. While they charge interest, rates are low and don’t revert to a higher, post-promotion rate.

This means there’s no need to juggle cards to keep costs down and – if you do run up a small balance, it shouldn’t feel like the end of the world in terms of the interest you’ll be charged.

What should you consider before applying for a low APR credit card?

Your credit score will go a long way towards determining whether your application for a credit card will be accepted. There are various services online that allow you to check your score for free.

If your credit score isn’t up to scratch, there are a number of steps you can take to improve it, including:

checking you’re registered on the electoral roll
correcting any errors on your report
spacing out applications by at least three months, ideally six
paying your bills on time.

When comparing low APR credit cards you may want to consider whether a card that offers interest-free spending or balance transfers for a few months first would be beneficial – this could be particularly helpful if you’re paying for a holiday, for example, or if you’re looking to consolidate existing debt. But remember that more competitive 0% credit cards are available.

Alternatively, you may want to look for a card that also offers rewards such as cashback or fee-free transactions when you travel abroad.

What are the advantages of a low rate credit card?

If you have a balance on your credit card and/or don’t pay off purchases within an agreed period (typically 56 days) a low-rate credit card will mean you don’t accrue too much interest. In fact, APRs on low-rate credit card are typically under half charged by a regular credit card.

Another big bonus is that you won’t be faced with the choice of either chasing temporary promotional rates or paying sky-high interest on your balance overnight.

What are the disadvantages of a low rate credit card?

Some low-rate credit cards also charge fees if you are transferring a balance or if you use them abroad, which can add to the cost further.

There is also usually a fee to pay if you withdraw cash on your credit card, and keep in mind that interest will be charged from the date of the withdrawal, even if you clear your balance in full that month.

A fee will also be charged if you’re late making a monthly payment or if you miss it completely, and your credit rating will be affected too. To make sure you remember to pay on time, it’s worth setting up a monthly direct debit.

Frequently Asked Questions

What is a low-rate credit card?

Low-rate credit cards charge a consistently low rate of interest indefinitely, with no temporary promotional rates. Rates are usually variable, which means they can change in line with the Bank of England base rate at the issuers’ discretion. That said, they are very unlikely to suddenly jump into line with the average credit card rate.

Who are they suitable for?

Low APR credit cards can be an alternative option if you are struggling to get accepted for an interest-free credit card. They are also worth considering if you would prefer not to have the pressure of clearing your balance within a set timeframe – as you would with a 0% credit card.

You can typically use a low interest credit card for purchases, balance transfers, money transfers, and even cash withdrawals. However, it’s best to check whether the low rate covers all of these transactions first as interest rates may vary.

Will I get the low rate advertised?

It’s important to note that the ‘headline rates’ advertised by card issuers won’t be available to all who apply. In fact, representative APRs must only be offered to 51% of successful applicants.

This means you could be offered a much higher APR – and in some cases beyond what could be considered a ‘low-rate card’.

The credit limit you are given will also depend on your circumstances. Credit limits are usually a few hundred or a few thousand pounds but depending on what you plan to use your credit card for, this limit may not be sufficient to meet your needs.

Avoid the temptation to go over your credit limit as you will be charged a fee, and this can also affect your credit score.

Will I need a good credit score?

Your credit score doesn’t need to be immaculate to get a low-rate credit card, but those with ‘bad credit’ may find themselves shut out. If your application for a card is accepted, an under-par credit score could also mean you are offered a higher rate. In some cases, this could be up to double the APR you see advertised.

What credit limit will I get on a low rate credit card?

As is the case with any other type of credit card, the credit limit you are allocated with a low rate deal will depend on your income, credit score and circumstances.

Typically, you won’t find out what your credit limit is until you are accepted for the card, or even once you receive it through the mail.

Bear in mind that advertised representative APRs are based on a credit limit of £1,200. They assume you spend the full £1,200 on the first day and then pay it back in equal, regular instalments over the course of a year without spending anything else.

Do low rate credit cards come with low rate cash withdrawals?

Just because theses cards offer a low rate of interest on purchases, doesn’t mean the same low rate applies to cash withdrawals.

In fact, if you use the card to withdraw cash from an ATM, a much higher APR is likely to apply. This could be 25% (variable) or more, for example.

This interest is also usually charged with immediate effect, rather than after 56 days as is often the case when you make a purchase.

A cash withdrawal of ‘handling’ fee is also likely to apply to cash withdrawals too, of around 3% of the amount withdrawn.

In short, cash withdrawals are almost always best avoided with any kind of credit card.

What are the alternatives to a low rate credit card?

A low APR credit card isn’t necessarily the cheapest way to borrow and you may be better off with a credit card that offers interest-free purchases, balance transfers or money transfers for a number of months.

However, remember – a 0% credit card will only work out cheaper if you manage to clear the balance before the interest-free deal ends.

It depends on what you need a credit card for. If you’re planning on making a major purchase and want to spread the cost over time, it’s worth looking at a 0% purchase or 0% money transfer card first.

And if you have debt on a card that you want help paying down, a 0% balance transfer card could be a better fit for you.

Depending on how much you want to borrow, you may find that a personal loan works out cheaper overall – plus your monthly payments are fixed for the term and won’t change with the base rate.

Find The Best Credit Card

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Mark Hooson Forbes Staff

Staff writer Mark Hooson has been a journalist within the personal finance, consumer affairs and fraud sectors for more than 10 years. He is also Forbes Advisor UK’s resident tech expert. Mark says he thrives on making ‘complicated and dry topics easier to digest’.

Laura Howard Editor

I've been involved in personal finance and property journalism for the past 20 years, editing websites and writing for national newspapers. My objective has always been to offer no-nonsense information to readers that either saves or earns them cash.