Because of excellent wetting and mechanical properties, SnAgCu solder alloys have been regarded as the most promising Pb-free substitutes for the SnPb solder. The Sn-3.8Ag-0.7Cu solder has garnered attention because of its creep resistance. However, under the drives of increasingly finer pitch design and severe service conditions, novel lead-free solders with higher creep performance may be needed. Adding a surface-active element to an alloy is an effective way to improve the high-temperature performance of the solder. The present work focuses on the effect of rare earth (RE) on the physical properties, spreading property, and mechanical properties of SnAgCu solder. Results show that the creep-rupture life of SnAgCu solder joints at room temperature could be notably increased by adding a minute amount of RE, up to 7 times more than that of SnAgCu solder joints when containing 1.0wt.%RE. The differential scanning calorimetry (DSC) curves indicated that the melting temperature of SnAgCu solder with RE increased a little, and no lower melting-temperature, eutectic endothermal peak appears on the DSC curve. The electrical conductivity of the solder decreased slightly, but it is still superior to the SnPb eutectic solder. Compared to that of SnPb solder, the coefficient of thermal expansion (CTE) of SnAgCu (RE) is closer to copper, which usually serves as the substrate of printed circuit boards (PCBs). It is assumed that this will comparably reduce the thermal stress derived from thermal mismatch between the solder and the PCBs. The RE had no apparent effect on the spreading property, but when RE added up to 1.0 wt.%, the spreading area of the solder on the copper substrate decreased, obviously, because of mass oxide. The RE improved the ultimate tensile strength little, but it increased the elongation up to 30%. However, as the content of the RE increases, the elongation of the solder gradually decreased to the level of SnAgCu when the RE exceeds 0.25 wt.%. Additionally, RE made the elastic modulus of SnAgCu solder increase, so the resistance to elastic deformation of the solder is enhanced. The microstructure of SnAgCuRE led to a refining trend as the RE content increased. The RE compounds appeared in the solder when RE was 0.1 wt.%. This deteriorates the mechanical properties of the solder. The fractography of the tensile specimen containing 0.1 wt.% indicated a superior ductility to Sn-3.8Ag-0.7Cu bulk solder. However, as RE is increased to 1.0 wt.%, the fractography shows less ductile characteristics, which is believed to serve as the reason that the elongation of solder degrades as RE increases. Summarily, the most suitable content of RE is within 0.05–0.5 wt.% and is inadvisable beyond 1.0 wt.%.