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What is a Good APR on a Credit Card?

Michelle Brooks

Michelle Brooks

Financial Advisor

If you’re in the market for a new credit card, you’re probably looking at a variety of different interest rates. Credit cards are a form of unsecured debt – they typically have much higher interest rates than traditional loans or mortgages. If you’re a responsible borrower, you’ll understand the importance of shopping around for a good interest rate. It’s important to find a card that has a solid rate that won’t allow you to rack up a lot of debt.


While many people may see news about all-time low-interest rates, much of these savings haven’t been passed on to credit card consumers. While you may get next to no interest on your savings, you’ll still have to pay considerable interest on revolving credit – such as credit cards or lines of credit. While it may seem unfair, it’s the harsh reality of borrowing on credit cards in the United States.

In this article, we’ll explore credit card APRs and why they’re important for borrowers. We’ll also explore what you should look for in a credit card APR. It’s important to enter the credit card shopping process with an understanding of the best card available. Not doing so will damage your ability to find a good deal. We’re dedicated to educating our readers on everything they should know about their next credit card.

What is a Good APR on a Credit Card?

Why Credit Card APRs Matter

What does APR mean for credit cards? It’s the annual interest rate you’re charged on your credit card debt. It may surprise you, but many people don’t look at credit card APRs when they obtain a new credit card. Many credit card lenders distract borrowers with credit card benefits and features to avoid focusing on the APR of the card. For example, a rewards card advertisement will typically focus on the rewards available for the card, rather than the APR.

If you want to avoid accruing interest, it’s important to understand that low APRs are much more affordable. Over the course of a year, even a few percentage points can add up to a lot of lost money. You don’t want to get lazy and forget to consider the potential loss of earnings you may experience. Below we will analyze how APR impacts the two primary forms of borrowers – make sure to assess which group you are in. So, what’s a good credit card APR? Check it out below!

Carrying a Balance

Many credit card holders carry a balance from one month to the next. If you’re one of these people, you typically pay interest every month on the amount that you haven’t paid. If you do carry a balance, APR is extremely important. It will dictate how much money you pay to your lender. If you find yourself in this group, it’s more important than ever to ensure you understand the APR on your credit card – don’t waste money if you don’t have to.

Not Carrying a Balance

If you pay your balance in full each month, you won’t have to worry as much about the APR on your credit card. This is because you don’t need to pay interest on the money that you spend. This being said, it’s important to consider that you may end up having to carry a balance on your card in case of an emergency, so keeping your balance low is typically the best option – and finding a card with a low APR also helps.

Good APR Depends on Credit Card Type

There are tons of different types of credit cards on the market – you can’t expect to pay the same APR on credit cards with different benefits. Some credit cards are built specifically for low APRs, while others offer additional benefits but come with higher APRs. In this section of our article, we’ll take a look at good APRs for different types of credit cards.

Low-Interest Credit Cards

If you’re looking to carry a balance, the best type of credit to apply for is a low-interest card. You don’t want to work with a high-interest credit card if you’re going to have to pay a lot of interest on your balance. Even if rewards are offered, this typically isn’t a good idea. So, what kind of interest rate can you expect from a low-interest credit card?

So, what is the average APR for a credit card like this? If you’re looking for a reasonable low-interest card, you should be targeting interest rates between 12-15%. You’ll need to have a solid credit score if you want to secure one of these cards otherwise you can look at credit card offers for fair credit. These cards typically offer little-to-no additional benefits, but if you carry a balance it is definitely worth the lack of rewards.

Rewards Cards

Rewards cards are the crowned jewel of the credit card game. Plenty of lenders provide rewards cards to try and entice credit card customers to sign up for their cards. There are a variety of different types of rewards cards, the most popular reward you with frequent flyer miles or cash-back benefits. Take a look at the best airline rewards credit cards or the best cash back rewards credit card. In many instances, rewards cards also offer additional insurances and sign-up bonuses that can help customers reap serious benefits when they first sign up for the cards.

The only problem with rewards cards is that they carry high interest rates. If you think you’ll carry a balance on your card, the amount of interest you will pay on the card may outweigh the benefits that you receive. Don’t get tempted by promises of large rewards if you believe you may end up having to pay significant amounts of interest. Compare the best cash back credit card with the lowest interest.

What is a good APR on a credit card like this? Rewards cards typically fall between 16-26%, depending on the interest rate that you receive. As you can see, some of these cards may carry an interest rate about twice as high as a low-interest credit card.

Low Credit Score Credit Cards

If you don’t have a solid credit score, it can often be hard to get a new credit card. You typically won’t be eligible for rewards cards or low-interest cards. Instead, you’ll need to apply for a card that is easier to obtain. The reality is that many low credit score credit cards have high interest rates. Lenders need to compensate for the fact that they are lending to less reputable borrowers.

What is the average APR for a credit card like this? In the case of low credit score credit cards, you may find interest rates between 20-36%. As you can tell, the rates are much higher than with other cards. If you want to reduce these rates, the best thing to apply for the best secured credit card for bad credit. With secured credit cards, you put a deposit on the card that can be used if you default on the payments. It’s the best way to ensure you don’t have too high of a rate. This option will only be available if you have the cash to secure the card with.

What is a Good APR on a Credit Card?

Balance Transfer Cards

Balance transfer cards are a who new ball game. If you’re going to transfer the balance of your credit card to a new credit card to save on interest, you’ll want to make sure there isn’t a high-interest rate on the card. Most of these cards will not have rewards attached to them.

The primary benefit of a balance transfer card tends to be the interest-free period included at the start of the card. This means that you may benefit from a prolonged period of no interest – it can help you pay back the balance you transfer without accruing extra costs. Some balance transfer periods are quite short, while others are about 18 months long. You should shop around the longest period you can find.

Remember, you still need to pay attention to APR with a balance transfer card – you don’t want to only look at the interest-free period. If you ignore APR, you may find a nasty surprise when the balance transfer period is over. Look for the 0 balance transfer fee credit cards.

Things to Look Out For

While the raw APR card is the most essential components of a new card, there are some other important things to look out for when you’re shopping for a new credit card. In this section of our article, we’re going to take a deeper look at some of the other things you need to pay attention to when you apply for a new credit card – they also impact the overall cost of the card.

Different Rates for Different Borrowing

There are different rates depending on the type of money you are borrowing. For example, a normal credit card charge may have a different APR than a cash advance. If you want to withdraw money from an ATM using your credit card, you will most likely pay a much higher interest rate. This may seem unfair, but credit card providers want you to use your card for traditional purchases, not cash withdrawals.

Some credit cards may also have a limit on the amount of cash advance you can use. You may also have to pay a withdrawal fee. In some cases, personal payments that are similar to deposits may count as cash withdrawals – make sure to be aware of this.

Annual Fees

Another critical component to be aware of is the annual fee. Credit cards sometimes carry high annual fees that help increase the cost of the borrowing. For example, you may get a set APR, but the annual fee will charge every year regardless of how much you spend – even if you don’t use the card. There are many credit cards that don’t have an annual fee, but most rewards cards do carry a significant annual fee – especially if there is a large sign-up bonus associated with the card.

Also, you need to understand that some annual fees are so high that they diminish the value of the card. Many annual fees for premium cards can be up to $500. Some cards waive the annual fee for the first year of card ownership.

The Importance of Credit Scores

When you start applying for a new credit card, you may notice that the APR on the application portal is issued in a range – the differences in scores available may even be up to 10%. This is because many lenders offer APRs based on your current credit score – the better your credit score, the better your rate will be. As mentioned previously, lenders prefer to give better rates to people with better scores. This is usually how you get the best 0 apr credit cards too.

For this reason, it’s very important to keep your score in the best condition possible – not doing so will cost you serious money. If you want to take advantage of an APR on the lower spectrum with the best credit card offer, make sure to do so by having a good credit score.

Prepare for Your Application

Before you apply for a credit card, it’s important to get your credit score to where it needs to be. It might sound like tough work, but it’s actually quite easy to give your credit score a quick boost before you apply for your next card. Because credit utilization is one of the biggest components of your credit score, paying down any current debt can help you improve your score dramatically.

You can also find mistake and errors on your credit report by giving it a thorough check – more people than you realize have errors on their credit reports. You can also use a credit repair team to fight on your behalf against credit reporting bodies. While this might cost money up front, it helps you reduce your interest rates and improves your chances of being approved for a credit card. Remember, apply for a credit card you believe you can obtain – there’s no point getting rejected for a credit card if you don’t have to.

Verdict: Focus on APR

Now you should know what is a good APR for a credit card. Don’t get caught up in the glitz and glam of rewards cards. While they do offer considerable benefits, it’s important to remember the most essential part of any new credit card – the APR. This is especially true for people that want to save money on interest while they carry balances.

Make sure to check out some of the other information mentioned in this article to fully understand the total cost of your new credit card. While APR does reign supreme, it’s not the only important part!


Credit Card APR Basics

Knowing the APR on your credit card is vital, as it will determine how much you will pay for your purchases. This section provides a list of commonly asked questions that will enable you to decide what credit card to apply for.

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What is a good APR for a credit card?

The average rate for what is considered a good APR on a credit card is around 10%. But you can also find other credit cards that can offer substantially lower than that (though you need above-average credit to qualify for this type of card).

How does credit card APR work?

APR stands for annual percentage rate. It refers to the interest rate placed on your credit card on a yearly basis, based on your actual spending and money habits.

What does APR mean on a credit card?

The APR or annual percentage rate is the charge that is placed on your account for the convenience of spending through your card. Depending on your type of credit card, it can either be calculated daily or on an annual basis.

Is credit card APR charged monthly?

APR is an annual percentage rate; hence, it means that the APR is calculated annually. It is, however, charged to your card on a monthly basis.

How to find credit card APR?

To find your credit card APR, you must determine your average daily periodic rate (usually found at the bottom of your statement of account). Multiply that amount by 365 (according to the number of days in a year). Round up the number to get your APR.

When are you charged APR on a credit card?

You are given typically 21 days from the time you used a credit card to make a purchase. If you can make payment prior to that 21-day grace period, your interest charge will be waived off. If not, the interest rate will be charged on your purchases and added to your monthly billing.

What does regular APR mean for credit cards?

The APR represents the interest rate that is charged on your credit card account. This APR is variable and will be determined based on your credit score and spending habits on your card.

What is APR variable rate credit card?

Variable APR is when the interest rate placed on your credit card is not fixed. It can change over time based on a number of factors that are put in place by the credit card company. The floating or variable interest rate could be implemented without prior notice.

Can I ask credit card to lower APR?

Yes. Some credit card companies are open to negotiate a lower APR on your credit card if you can provide proof of good payment record and have above-average credit.

How to find current APR on credit card?

You can check at the bottom of your monthly credit card statement. There, you will find the current APR on your credit card.

Will credit card companies lower APR?

Yes. Most credit card companies are open to negotiate with lowering APR on credit card accounts based on the credit rating and payment history of the account holder.

What does representative APR mean for credit cards?

Representative APR refers to the advertised rate that a certain percentage of credit card holders will have to pay.  But it is still variable as credit card companies must take into account other fees (such as annual charges or late fees), as well as the income and credit rating of the credit card holder.

How to avoid APR on credit card?

Unfortunately, there is no way to avoid APR on credit card, except only if you have an introductory 0% rate on your card. The APR is imposed by credit card companies to mitigate risks from missed or late payments on credit card purchases.

How to check APR on credit card?

There are several ways to find your credit card APR. One of these options is to check your account online – the APR (usually represented as percentage) is shown on your statement details. You can also contact your credit card company directly to ask about your APR.

What does purchase APR on a credit card mean?

The Purchase APR is the interest rate that is placed on your credit card based on the remaining balance from the purchases you have made. If you are able to pay the purchases in full before the due date, you will be charged 0 purchase APR.

How to avoid paying APR on credit cards?

If you want to avoid paying APR, you need to fully pay the remaining balance on your credit card each month following the purchase.

What is prime APR for credit cards?

The Prime APR is set by the Federal Reserve. It is designed to curb inflation and spur the economy, if needed. The Prime APR rate that is set currently is at 3.25%.

What is a penalty APR for credit cards?

A penalty APR is charged on your credit card if you are late on your payments for 60 days.

How does APR on secured credit card work?

Secured credit cards tend to have a higher interest rate (or APR) than unsecured credit cards. Hence, you cannot expect to find competitive interest rates if you are looking for secured credit cards.

Calculating APR

Get some insight into how APR for credit cards is calculated. You can find a list of commonly asked questions regarding factors that will impact the APR on credit cards.

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What can increase your credit card's APR?

The APR is the price you pay for borrowing money with the use of your credit card. Several factors can cause the APR to increase such as paying only the minimum or missing your payments. Other factors can come into play but it can vary according to your credit card company.

How to calculate APR on credit card?

The APR is calculated on a daily or yearly basis. To determine the APR on your account, you must calculate your average daily rate based on the daily periodic rate. Using these two data, you can calculate your interest for each month.

How to lower APR on credit card?

To lower your APR, you must start with your oldest credit card account. Some credit card companies might be open to negotiation if you can show proof of loyalty. A good credit score can also help during the negotiation.

How do credit card companies determine their APRs?

There are several factors that will determine the APR on a credit card and it varies from one credit card company to another. APR is calculated on the borrower’s credit history, type of card, and more. It is based on your “credit-worthiness” as a buyer. The lower your credit score, the higher your credit card APR.

What is APR for cash advances on credit cards?

The average APR on cash advances on your credit card is around 24 percent. This is higher than the APR on consumer credit cards.

How to calculate APR on credit card balance?

The daily APR is calculated based on the current daily balance on your credit card. You can avoid the APR fees if you pay your balance in full each month.

Is credit card APR yearly or monthly?

The APR on most credit cards is expressed as a yearly rate. This annual rate is used to calculate the monthly charges placed on any purchases made on the credit card on a monthly basis.

How to calculate credit card monthly payments with APR?

To determine your monthly payments on your credit card (while taking into account the APR), you must divide the APR by the number of days within a year. Multiply that number with the daily rate so you can determine the daily interest charge. This is done for the daily balance throughout the month so you can determine how much should be paid by the end of each month.

How to negotiate APR on credit cards?

Negotiation is acceptable when it comes to your credit card APR. You need to provide them with proof of your good credit standing, as well as a good payment history on your credit card. There is no guarantee that you can lower your APR but it is worth a shot.

What is the APR for transfers on a credit card?

A balance APR is the interest rate placed on the balance that you transfer to another credit card. Some credit card companies guarantee 0% APR for a limited time. When you transfer balances to another card, make sure that you pay it within the introductory period to avoid paying the APR.

Comparing APRs

When deciding which credit card to apply for, it is best to compare the APR. Here are some of the frequently asked questions concerning APRs from various credit card companies.

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What is the average APR on a credit card?

The national average annual percentage rate on most credit cards is at 14.9 percent. Cash back credit cards have a higher average at 15.26 percent. If your credit score is lower then the APR could be higher. If that's the case then check out average credit score credit cards.

What is the lowest APR on a credit card?

Depending on the credit card company, the APR could vary largely. But you can find credit cards with as low as 5 to 7 percent in APR. This APR is offered only for credit card holders with excellent credit. Take a look at more credit cards with low interest rates.

What is a high APR for a credit card?

The highest historical rate on a credit card is at 79%. Currently, a high APR would mean anywhere from 29 to 36%. This will will depend on a number of factors of course such as how much credit history you have. For example, if you're in college then you may want to look at the best student credit cards 2020 has to offer rather than the other card categories. Also take a look at unsecured credit cards for 600 credit score or higher.

What is a good APR rate for a credit card?

If you can find a credit card with an APR of 13% or less, that is considered a ‘good’ APR rate. Also read: What is the best travel credit card?

What is 24 APR on a credit card?

A 24 APR credit card is quite high in the standard and current credit cards. However, this APR is quite reasonable for an unsecured line of credit.

What is a good APR for a first credit card?

The ideal first credit card is one that has 0% introductory rate. If not, you need to find a credit card with an APR ranging from 12 to 26%.

What is a standard APR for credit cards?

The national average on credit card APR is at 13%. If you can get an APR from 10% to 26%, you have a good rate on hand.

How to negotiate a lower APR on a credit card?

If you have a good credit standing, you can negotiate with a credit card company to lower your APR. It is also important to have a good paying record – meaning, no late or missed payments.

Is 14 APR good on a credit card?

Yes. The national average annual percentage rate is at 13%. An APR of 14 is therefore reasonable.

What is the APR on a Discover credit card?

The average APR on a Discover credit card (for standard purchase and balance transfer cards) is at 14.99 to 22.99%. For cash cards, the APR is at 26.99%. This rate could vary based on credit-worthiness and a few other factors to be determined by the credit card company.

What is the APR on Capital One credit card?

Capital One credit cards have variable APR. But for the standard credit card, the APR could average 34%.

Is 18 APR high for a credit card?

An APR of 18% is relatively good. With APR ranging from 13% to 26%, this is a favorable rate.

What credit card has the lowest fixed APR?

Discover credit cards have some of the lowest APRs starting at 13%. Other cards with a low starting APR include Bank America and Wells Fargo.

What is the maximum APR for a credit card?

The maximum recorded APR for any credit card is at 79%.

What is my Wells Fargo credit card APR?

The APR on Wells Fargo credit cards, or any other types of credit cards, will vary from one customer to another. The APR for most credit cards from Wells Fargo range from 17.49% to 26.99%.

Is 16.99 APR good for a credit card?

Yes. An APR that is below 20% is considered good. This is within the average APR among various credit cards.

What is the APR on Amazon credit card?

Amazon credit card does not have an introductory rate. The APR will range from 15.49% to 23.49%.

What is Walmart credit card APR?

The current APR rate for Walmart credit card is 22.9%. This is higher than the average credit card rate, which is why you need to pay off your balance as soon as you are able to when you own a Walmart credit card.

What is the APR on Victoria’s Secret credit card?

The annual percentage rate on Victoria’s Secret credit cards is currently at 25.24%. This could be higher or lower, depending on your credit-worthiness.

Is 36 APR high for a credit card?

Yes. The average APR is from 13% to 26%. Anything beyond that is considered quite high. This could be an interest rate seen on credit cards for bad credit. Take a look at credit cards for bad credit with no deposit.

Michelle Brooks

Michelle Brooks

Financial Advisor -

Michelle is part of our expert team of financial advisors with a proven track record in the credit card industry. After graduating with an Economics Degree focusing on Personal Finance, she got involved with several credit and debt counseling startups.