What is a Good Credit Card APR?
Key takeaways
- A good credit card APR is one that’s at, or below, the national average.
- The national average credit card APR is nearly 25%.
- Credit scores and APRs tend to be inversely related. A high credit score typically yields a lower APR, while a low credit score yields a high APR.
There’s no single answer to “what is a good APR?” The APR — the yearly interest rate you’ll pay if you carry a balance on your credit card — depends on your credit score and the type of credit card you’re applying for. If you have excellent credit and are applying for a barebones credit card, you might find APRs as low as 11.50%. However, if you have a lower credit score or have a credit card that offers a variety of perks, you’ll be lucky to find an APR under 25%.
This guide explains what a good APR for a credit card is, how to compare interest rates and how to avoid paying interest on your card altogether.
What is a good APR?
A good credit card APR is one that falls below the average APR for credit cards. Likewise, anything above the average credit card APR is high. However, the criteria for a good APR varies widely, depending on the card category.
A 22% APR is good for a general cash back credit card, since it’s below the current average interest rate. However, that same rate isn’t good for a low-interest credit card.
In the table below, we list the current average APRs by card type, including minimum and maximum APR. You can refer to this to see whether the APR for particular card is above or below average:
| Category | Minimum APR | Maximum APR | Average | Previous month |
|---|---|---|---|---|
| Average APR for all new card offers | 21.16% | 28.06% | 24.61% | 24.72% |
| 0% balance transfer cards | 18.59% | 27.74% | 23.17% | 23.32% |
| No-annual-fee cards | 20.65% | 27.61% | 24.13% | 24.27% |
| Rewards cards | 20.90% | 28.16% | 24.53% | 24.64% |
| Cash back cards | 21.48% | 28.09% | 24.79% | 24.92% |
| Travel rewards cards | 20.58% | 28.75% | 24.67% | 24.74% |
| Airline credit cards | 20.80% | 29.17% | 24.98% | 25.00% |
| Hotel credit cards | 20.69% | 28.99% | 24.84% | 24.84% |
| Low-interest credit cards | 13.64% | 22.47% | 18.05% | 17.64% |
| Grocery rewards cards | 20.60% | 28.31% | 24.46% | 24.55% |
| Gas rewards cards | 21.12% | 28.12% | 24.62% | 24.74% |
| Dining rewards cards | 20.44% | 28.36% | 24.40% | 24.47% |
| Student credit cards | 18.79% | 28.34% | 23.57% | 23.64% |
| Secured credit cards | 27.06% | 27.06% | 27.06% | 27.23% |
You’ll notice that credit cards that offer rewards have somewhat higher APRs than those focused on low interest rates and 0% interest rates on balance transfers.
Types of credit card APRs
When we talk about a credit card’s APR, we generally mean the interest rate that you’ll pay for new purchases with your card. But actually, credit cards can come with several types of APRs. By understanding their differences, you may be able to avoid paying interest charges altogether.
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- Purchase APR. This is the interest rate you’ll be charged for new purchases made on your credit card if you don’t pay your balance in full by the due date each month.
- Balance transfer APR. When you transfer a balance to a credit card, this interest rate is charged on the transferred amount.
- Introductory APR. If you’re applying for a new credit card, you may see an introductory APR listed alongside the card’s purchase APR, balance transfer APR or both. Depending on the credit card, the intro APR may be as low as 0% and may last anywhere from six to 21 months. Any balance that remains once this promotional period is over will be subject to interest charges at the standard APR.
- Cash advance APR. The interest you’re charged when you withdraw cash from your credit card’s line of credit is known as the cash advance APR. Because this rate is usually significantly higher than the purchase and balance transfer APRs, and because cash advances typically come with an additional fee and no grace period, we recommend that you avoid cash advances.
- Penalty APR. If you miss a payment or pay late, many credit cards will charge a penalty APR that is higher than standard interest rate. This may also void any introductory
APRs on your account and negatively impact your credit score. If you continue to pay late, be aware that the penalty rate may be applied to your account indefinitely.
Why is APR important?
Browse and compare our top picks for the best credit cards in 2024.
Cards with low APRs vs. high APRs
APRs can vary vastly. In fact, LendingTree found that minimum APRs started around 11.5% (variable) and maximum APRs topped off at 36%. That’s why it’s important to know a credit card’s range before applying.
You can usually find a card’s interest rate on a card’s product page by clicking on a link labeled:
- Pricing & terms
- Rates and fees
- See terms
- Or similar wording
Let’s examine how two very different credit scores translate into interest charges. Let’s say, card user A has a 650 score and gets a secured credit card like the Discover it® Secured Credit Card, which has a pretty high 27.74% Variable APR. Card user B has a credit score of 750 and gets the Capital One Savor Cash Rewards Credit Card, which has a 19.74% - 29.74% (Variable) APR (see rates & fees). Card user B’s good credit qualifies them for the lower interest rate.
The table below shows how the cards compare and how much interest each person would pay on a $7,000 credit card balance at their respective interest rates.
| Discover it® Secured Credit Card | Capital One Savor Cash Rewards Credit Card (see rates & fees) | |
|---|---|---|
| APR | 27.74% Variable APR | 19.74% - 29.74% (Variable) (calculations based on the lower APR) |
| Interest paid on a $7,000 balance with a $250 monthly payment | $4,561 interest over 46 months | $2,506 interest over 38 months |
| Pros | $0 annual fee Cash back on all purchases Path to an unsecured card | Generous welcome offer Elevated cash back in popular spending categories like dining, entertainment, grocery stores and hotels Introductory APR on purchases |
| Cons | High APR Possibly low credit limit Requires a security deposit | Requires good / excellent credit Earns 1% cash back on regular purchases Target and Walmart are excluded from higher grocery store cash back earning rate |
As you can see, paying an APR that’s nearly 10% percentage points higher APR will cause you to pay almost double the amount of interest and cause you to stay in debt for eight months more.
In addition to having a better interest rate, credit cards for good to excellent credit also tend to give higher amounts of cash back and introductory APRs on new purchases and/or balance transfers. The Capital One Savor Cash Rewards Credit Card, for example, offers higher rates of cash back in several categories, whereas the Discover it® Secured Credit Card offers elevated rewards in two categories.
The Capital One Savor Cash Rewards Credit Card also comes with an introductory APR, so you could easily finance a large purchase (see rates & fees). On the other end of the spectrum, the Discover it® Secured Credit Card requires a security deposit that acts as your line of credit until you’re able to upgrade to an unsecured credit card, like the Discover it® Cash Back.
What are the best credit cards with a low APR?
The best low APR credit cards are those that have a 0% introductory APR. These no-interest offers may apply to balance transfers, purchases or both. By law, the minimum 0% intro APR period is six months. Offer periods vary by card, but the longest offers are just under two years. And when the introductory period expires, any unpaid balance reverts to the standard rate.
Best credit card options for. . .
Should you get a credit card with a high APR?
If you prefer credit cards with rewards, or if you have a low credit score, you’ll likely have to get a credit card with an APR that’s higher than average.
For example, the Wells Fargo Active Cash® Card lets cardholders earn unlimited 2% cash rewards on purchases and has a 19.49%, 24.49%, or 29.49% Variable APR. Meanwhile, the Capital One Platinum Secured Credit Card, which is designed for those with limited / poor credit, has a 29.99% (Variable) APR (see rates & fees).
Even if your credit card has a high APR, you can avoid interest charges by paying off your balance in full each month. Only use your credit card for any purchases you know you can pay for — one good habit is to pay off your weekly purchases to avoid your balance getting too high.
“I use my Navyist Rewards Mastercard® from Old Navy to help keep clothing costs low. On a recent shopping trip, I used my card’s discount to purchase 15 items for less than $65. The card has a very high interest rate — 34.99% (variable) APR — so I pay my balance in full to ensure I don’t pay interest.”
Charlotte Zhang, credit cards writer
How to get a good APR
The higher your credit score is, the better your chances are of receiving a lower credit card interest rate. Therefore, it’s important to practice good credit habits and take steps to improve your credit score, including the following:
- Pay on time. It’s important to pay your bills on time, since payment history makes up 35% of your total credit score. To help avoid missing payments (which can quickly bring down your credit score), you can set up due-date reminders and automatic payments.
- Lower your credit utilization ratio. Your credit utilization ratio is the amount of credit you use compared to your total credit limit, which makes up 30% of your credit score. The lower your utilization ratio is, the better your score will be — most experts recommend keeping this rate below 30%.
- Keep no-annual-fee cards open to build your average age of credit. Your length of credit history accounts for 15% of your credit score. To increase the average length of credit history, avoid closing credit card accounts (especially no-annual-fee card accounts) whenever possible. You should also make regular small charges on older accounts to prevent the issuer from closing them due to inactivity.
- Limit applications for new credit. New credit makes up 10% of your credit score. Each time you apply for a new credit card, mortgage or loan, a hard inquiry appears on your credit score and reduces it by a few points. Therefore, it’s best to only apply for new credit when necessary.
- Become an authorized user. You can build off of another person’s good credit by becoming an authorized user on one of their credit cards.
You can also get a good APR on your credit card by taking advantage of introductory 0% APRs on purchases or balance transfers. This allows you to pay off a purchase or existing balance without paying interest during the promotional period.
How to avoid paying any APR
You can avoid paying interest by paying your monthly credit card bill in full before the due date. You can pay in one lump sum or make multiple payments throughout the month.
Most credit cards offer a grace period for interest. The grace period is the time between the statement date and the due date. As long as you pay your bill in full by the end of the month, you won’t owe interest on charges made during your card’s grace period.
Other transactions, like balance transfers and cash advances, don’t offer grace periods. To avoid paying interest, only make these transactions if they qualify for a special promotion. For example, a balance transfer credit card may offer a 0% introductory APR for 12 months.
Frequently asked questions
A high APR for a credit card is one that’s above the national average. Currently, the average APR is around 25%, so an APR that exceeds that is considered high.
A variable APR is a type of interest rate that’s subject to change. Most credit card interest rates are based on the prime rate, which fluctuates when the Federal Reserve changes interest rates.
A good credit card APR is below the national average interest rate. However, rates vary based on the type of card you have. Credit cards that target consumers with bad credit often have the highest APRs.
A bad APR for a credit card is one that’s high. However, what constitutes as “bad” will depend on your credit score and the type of card you’re applying for. For example, a 27% APR might be considered very high for a rewards card geared for people with good credit, but is near the average rate for secured credit cards. It’s most important to avoid a high or bad APR if you carry a balance from month to month.
Yes, an APR of 18% is a good credit card interest rate. However, you should still pay off your balance in full each month to avoid paying interest. If you are carrying a balance, consider a debt consolidation loan or a balance transfer offer.
Yes, a 24% APR is high for a credit card. While many credit cards offer a range of interest rates, you’ll qualify for lower rates with a higher credit score. Improving your credit score is a simple path to getting lower rates on your credit card.
No, a 26.99% APR is a high interest rate. Credit card interest rates are often based on your creditworthiness. If you’re paying 26.99%, you should work on improving your credit score to qualify for a lower interest rate.
For Capital One products listed on this page, some of the above benefits are provided by third parties such as Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as certain terms, conditions, and exclusions apply.
The information related to the Discover it® Secured Credit Card, Discover it® Cash Back, Wells Fargo Active Cash® Card, Navyist Rewards Mastercard®, BankAmericard® credit card, Discover it® Miles and Discover it® Student Cash Back has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.
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