What Is a Good APR for a Credit Card?

Having a Good Credit Card APR Can Save You Money

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When you’re shopping for a new credit card, one of the most important numbers to consider is the APR. A credit card’s APR, or "annual percentage rate," is the interest rate applied to balances you carry beyond the grace period. The lower your card’s APR, the less interest you pay on your credit card balance.

Even if you plan to pay your statement balance in full every month and avoid interest charges, knowing what’s considered a good APR for a credit card can be helpful. That way, you understand whether you’re getting a good deal or whether you need to switch to a new credit card to save money on the purchases you charge.

Types of Credit Card APRs

Credit cards may have several different APRs, each applied to a different type of balance. Purchases and balance transfers often have the same ongoing APR, while cash advances tend to carry a slightly higher APR. If you’re late on your credit card payments by more than 60 days, a penalty APR may also apply to your credit card balance until you’ve made six consecutive payments on time.

You can find the APRs for a credit card listed on the credit card issuer’s website. If you’re looking for the APR on your existing card, you can find it by logging into your account on the issuer’s website or mobile app.

Tip

When researching credit card costs, look for phrases such as “Terms and Conditions,” “Rates and Fees,” or “Pricing.” These sections will give you a much closer look at the details of the card.

What’s a Good Credit Card APR?

Credit card APRs may change over time, so what counts as a “good” APR for a credit card also changes over time. The type of card also matters when it comes to APRs. Those with higher rates tend to include rewards credit cards, store credit cards, and secured credit cards. Issuers tend to charge higher rates on these cards to cover the cost of paying out card benefits or recovering losses from people who don’t make payments.

According to data gathered by The Balance, the average credit card APR in September 2021 was 20.35%, the highest average APR since March 2020. This average is for all types of cards, though. The different types of credit cards all have their own average APRs, too. Data from The Balance found that business credit cards had the lowest average APR in September 2021 (17.26%), while store credit cards had the highest (24.28%). Again, these are averages, which means that a good APR would likely be one that is lower than the average.

Credit cards often come with a range of APRs, like 16.99% to 26.99%. The higher your credit score, the more likely you are to get approved for an APR on the lower end of the range.

Credit card APRs also can change as federal interest rates change. Most credit cards have a variable APR, which means the APR is tied to another interest rate and changes based on the underlying rate. For example, many variable APRs are tied to the prime rate, which is the rate at which banks lend to their best customers.

Whenever federal interest rates change, so does the prime rate, and credit card interest rates change shortly after. Independent of external rate changes, credit card issuers frequently adjust their credit card pricing, so your card’s APR could change often.

Regardless of what the average credit card APR is at any given time, when it comes to the interest rate on your debt, seek out the lowest rate possible. In the end, finding a good APR depends on your credit score and the kinds of cards you apply for.

It’s rare, but not impossible, to find and qualify for a card with a single-digit APR. These cards may have few—if any—perks besides their low rates. Credit cards offered by credit unions also tend to carry lower interest rates, but you need to be a member of the credit union to apply. For example, Navy Federal Credit Union offers a cashRewards credit card with a variable APR of 9.65% to 18%.

How to Qualify for a Good Credit Card Interest Rate

Credit cards often have a range of rates. The rate you qualify for depends on your credit score. The most creditworthy applicants—those with higher credit scores—usually qualify for the lowest APR a credit card offers. For example, The Balance found that credit cards marketed to individuals with good or excellent credit scores offered an average purchase APR of 19.35%. On the other hand, cards that were marketed to consumers with fair or poor credit (669 or lower) had an average APR of 23.69%.

You can see the range of APRs a credit card offers, but you won’t know the exact APR you qualify for until your credit card application is approved. At that time, the credit card issuer will let you know the terms you were approved for, including the interest rate and the credit limit. You can improve your chances of qualifying for a lower interest rate by improving your credit score.

Compare Credit Card APRs

You can get a feel for a good credit card APR by looking at the terms of several different credit cards and comparing them to each other

Tip

Make sure you’re looking at the same types of credit cards to get a fair comparison. Compare cash rewards credit cards to other cash rewards credit cards, travel credit cards to other travel credit cards, and like with like.

Keep in mind that the credit card APR matters most if you plan to carry a balance on your credit card from month to month. Paying off your full balance each month allows you to avoid paying interest altogether, which is a good habit, especially if you can’t qualify for the lowest rates. Make sure you’re not spending more than you can afford, to ensure that you can pay off your balance each month.

While you can avoid interest by paying your balance in full each month, it’s helpful to choose a credit card with a good APR, just in case you have to carry a balance. Making a point to pay off your full balances saves money on interest, but if you can't afford to pay in full, try to make the minimum payment or whatever you can afford. That will help you work toward being free of credit card debt.

Frequently Asked Questions (FAQs)

What is a good APR for a student credit card?

Data gathered and analyzed by The Balance found that the average APR for a student credit card in September 2021 was 20.02%, so anything lower than that may be considered good. Student credit cards often have above-average APRs, since they are meant for people who are building their credit. Students might not have a long credit history or high credit score, either, which could mean a higher interest rate.

What is a good APR for a secured credit card?

The Balance found that the average APR for a secured credit card in September 2021 was 20.19%. Secured cards require a deposit that is usually equal to the credit limit. Since these cards are designed to help people with poor credit or no credit history improve their situation, even the best secured cards may have higher interest rates.

Article Sources

  1. PNC Bank. "Pricing Information Addendum for PNC Bank Consumer Credit Card Agreement # K-10554." Accessed Nov. 9, 2021.

  2. Consumer Financial Protection Bureau. "What Is the Difference Between a Fixed APR and a Variable APR?" Accessed Nov. 9, 2021.

  3. Navy Federal Credit Union. "Credit Cards." Accessed Nov. 9, 2021.