What is a good APR for a credit card?
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BLUEPRINT
Updated 11:02 a.m. UTC Nov. 14, 2023
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When you don’t pay your credit card balance in full by the end of the billing statement period, you’ll most likely be assessed interest charges on any remaining unpaid balance. Your credit card’s ongoing interest rate, or APR, is assigned to you after you are approved for a card — and legally must be disclosed to the cardholder. You can find your card’s APR listed on your credit card billing statement or via your card’s online portal or credit card agreement.
A “good” APR for a credit card is one that is under the current national average for cards that assess interest, which was 22.16% in May of 2023, according the Federal Reserve’s most recent Consumer Credit report. Understanding your card’s APR and how it works can help you avoid more costly interest charges in the future.
Wells Fargo Active Cash® Card
What is an APR?
Your credit card’s annual percentage rate or APR refers to the interest rate you’ll pay when you carry a balance. Most credit cards come with a variable APR, which means your APR will fluctuate whenever the prime rate increases or decreases in connection with the Fed’s target level of the federal funds rate.
Few credit cards come with fixed APRs anymore, although they do exist. A fixed APR means the interest rate will not change for at least the first year and unless the issuer provides a 45-day notice notifying you of an APR change.
The APR you are assigned when you are approved for a credit card will depend on the credit card issuer’s review of your creditworthiness within the advertised range of APRs for that particular card. Typically, the higher your credit score, the lower the APR, but that’s not necessarily guaranteed.
Credit cards can also have different APRs depending on how you use the card. For example, a credit card may have different APRs for:
- Purchases.
- Balance transfers.
- Introductory APR offers.
- Cash advances.
- Penalty APR for late bill payments of over 60 days.
When researching credit cards to apply for, you’ll generally see an APR range, such as 20.49% – 27.49% variable. You won’t know whether you’ll be approved at the low or high end of that range until the issuer reviews your credit profile and application. Once you are approved for the card, the issuer will let you know what your ongoing purchase APR will be.
Certain other APRs associated with the card, like the penalty APR or cash advance APR, are not dependent on your credit profile and are standard for every cardholder. What is a good APR for a credit card?
A good APR is generally one that is below the average APR. Federal Reserve data reveals that the average credit card interest rate in the U.S. has hovered roughly between 16% and 20% since 2019 (on accounts incurring interest charges). The average interest rate for credit card accounts that charge interest during the fourth quarter of 2022 was 20.40%.
The higher the APR, the more you will be charged if you carry a balance on your credit card from month to month. The easiest way to avoid interest charges is to pay your card’s full balance by the due date every month.
To give you an idea of how much you’d pay in interest charges on a $1,000 balance that you plan to pay off over a six-month period between two different card APRs, see the estimate below:
Notice that the lower the APR, the less you’ll have to plunk down in monthly payments over that six-month period as well.
How to compare credit card APRs
There are a few credit cards that offer the same APR to all approved cardholders. However, most credit cards feature an APR range. Comparing credit card APRs can be difficult because you won’t know what APR you will receive until you’re approved.
When researching credit cards to apply for, look for the APRs listed on the card’s marketing materials or on the card issuer’s page advertising the card. Online, you may have to click on the card’s “rates and fees” link to see the breakdown of all the different APRs (including cash advance, penalty APR, etc.).
Know that certain types of cards may carry lower APRs, such as credit union credit cards, and other types of cards carry higher APRs, such as store credit cards or those marketed toward consumers with lower credit scores. Rewards cards can carry higher APRs than non-rewards cards. And some cards offer intro APR rates of 0% for a specified period of time on purchases, balance transfers, or both. But once that intro period expires, any balances that remain will be subject to the card’s ongoing APR.
But again, unless a credit card is advertising a fixed APR, you won’t know what your APR will be until you’ve been approved.
About credit cards with low APRs
The best option for a low APR is a card that offers a 0% introductory APR. These cards come with intro APR offers of 0% APR for a predetermined period of time on purchases, balance transfers, or both. Once the introductory period expires, your regular APR will apply.
Besides 0% intro APR cards, look for credit cards with an APR range that starts lower than the average. Low-interest credit cards typically require good-to-excellent credit. A long history of timely payments and responsible card use can help you score a lower rate.
For example, the Wells Fargo Reflect® Card * The information for the Wells Fargo Reflect® Card has been collected independently by Blueprint. The card details on this page have not been reviewed or provided by the card issuer. offers a 0% intro APR for 21 months from account opening on purchases and on balance transfers made within the first 120 days, afterwards a 18.24%, 24.74%, or 29.99% variable APR applies. There’s a balance transfer fee of 5% with a $5 minimum. The card has a $0 annual fee.
If you belong to a credit union, such as USAA or Navy Federal, you may want to take a look at their credit card options. For example, the Navy Federal Credit Union Visa Signature® Flagship Rewards Credit Card * The information for the Navy Federal Credit Union Visa Signature® Flagship Rewards Credit Card has been collected independently by Blueprint. The card details on this page have not been reviewed or provided by the card issuer. boasts a 15.24% to 18.00% variable APR on purchases and balance transfers. And the USAA Rate Advantage Visa® Platinum Credit Card * The information for the USAA Rate Advantage Visa® Platinum Credit Card has been collected independently by Blueprint. The card details on this page have not been reviewed or provided by the card issuer. offers a 0% introductory APR for 15 months on balance transfers and convenience checks that post to the account within 90 days of account opening. After that a variable APR of 12.15% to 29.15% applies on both balance transfers and purchases. There is a fee of 5% of each balance transfer and convenience check.
About credit cards with high APRs
Some credit cards come with higher APR ranges, especially those that offer more benefits and perks. Travel rewards credit cards and cash-back cards often feature higher APR ranges. With high-APR cards, you will likely have a higher-than-average APR regardless of your credit profile, which is why it’s so important to avoid carrying a balance on those cards
Not all high-APR cards earn rewards. Others are geared toward individuals with poor credit or who are considered lending risks. These types of cards rarely earn rewards or come with coveted card perks.
Paying off your credit card bill can be more difficult if your card has a high APR. Card debt can quickly escalate, especially if you only make monthly minimum payments and keep adding new purchases to the card. Paying more than the minimum amount due can help you make a more significant dent in your credit card debt.
Another option is to transfer your high APR card balance to a balance transfer card, which offers 0% intro APR for an extended period. Using a balance transfer card can help you avoid interest charges while you pay down your debt. Most balance transfer cards charge a balance transfer fee for this service between 3% and 5% of each amount transferred. Compare the interest you would pay on your current high-APR card against the transfer fee to determine if a balance transfer would save you money.
How to qualify for a credit card with a good APR
Lenders look at several factors within your credit profile to set rates. One of the most significant factors that could affect your APR is payment history, which makes up 35% of FICO credit scores. Lenders prefer to lend to applicants with a long history of paying bills on time.
Your credit utilization ratio can also play a significant role in your APR. Credit utilization ratio is the total amounts owed compared to your total available credit limit. Experts generally recommend keeping your credit utilization well below 30% across all accounts and individual credit accounts. Keeping your credit utilization low can help boost your credit score and improve your chances of card approval and a lower APR.
Sometimes, you can negotiate a lower APR directly with a card issuer. If that’s an option, you’ll need to show that you’re a responsible borrower, that you’ve improved your credit score and built a history of on-time payments. There’s no guarantee the credit card company will say yes, but it never hurts to ask.
An acceptable credit card APR is whatever you’re willing to pay when you carry a balance over from month to month. A good-to-excellent credit score (670 to 850 per FICO) may help you qualify for an APR on the lower end of an APR range advertised by the issuer.
According to Federal Reserve data, the average interest rate on all U.S. credit card accounts that assess interest was 20.40% in the fourth quarter of 2022.
Credit cards with variable APRs mean that the issuer retains the right to increase or decrease a card’s APR in tandem with prime rate hikes or decreases. Fixed credit card APRs mean that the interest rate shouldn’t change in connection with an index such as the prime rate. However, that doesn’t mean your APR on a fixed-rate card can never increase.
That fixed APR can change after a year if the issuer provides you with a 45-day notice of the change or if you are more than 60 days late in making a payment. Any APR increase will apply to any new purchases after 14 days of sending that 45-day advance notice.
A high APR is one that exceeds the national average of 20.40% on credit cards that charge interest (that average is from Federal Reserve data for the fourth quarter of 2022).
Know that most rewards cards have APR ranges exceeding the national average. However, you can avoid interest charges entirely by paying the balance in full every billing statement period.
*The information for the Navy Federal Credit Union Visa Signature® Flagship Rewards Credit Card, USAA Rate Advantage Visa® Platinum Credit Card and Wells Fargo Reflect® Card has been collected independently by Blueprint. The card details on this page have not been reviewed or provided by the card issuer.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
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