NEW YORK (MainStreet) — Rewards cards, while certainly enticing, aren’t for everyone. People who plan on carrying a balance should forgo signing up for swanky points programs since these cards tend to carry higher interest rates (as well as annual fees) that can quickly negate their incentives.
Instead, those types of cardholders are better off applying for a credit card that carries low interest rates. Of course, just how low they should expect these rates to go is a bit relative. Annual percentage rates have inched higher during the past six months with the national average currently holding at 14.95%, according to a weekly survey from CreditCards.com, and low interest cards are currently touting an APR of around 10.4%.
According to Curtis Arnold, founder of CardRatings.com, to score a card with that kind of rate or lower, people typically need a credit score of 740 or higher. They also have to be willing to patronize smaller banks or credit unions.
“The big [banks] don’t want to deal with the low-interest market, because they have to do more underwriting and they have to be more selective,” he explains.
When it comes to major issuers, “anything under the national average is great,” says Tim Chen, CEO of credit card ranking site NerdWallet.
To help people who aren’t looking to pay through the nose for their credit card purchases, MainStreet asked experts to recommend some of the best low-interest cards on the market.
Simmons First Visa Platinum
This card offers a super-low 7.25% variable APR on purchases. It also has a low 11.25% variable APR on cash advances and doesn’t charge a fee for balance transfers or an annual fee. Cardholders are charged an amount equal to the past due payment or $25 for late payments.
Variable-rate cards change based off of the interest rate the government charges to banks. For the Simmons card, the APR is the prime rate plus 4%. If the prime rate increases, your APR will as well.