Updated
Fact Checked
Ashley Maready
Credit card APR is your card's finance charge expressed annually. This number is typically the biggest deciding factor in how much it will cost you to carry a balance on your credit card, making it important to know and understand.
It depends on several factors, including your credit score and the type of credit card. The average credit card interest rate -- usually expressed as the annual percentage rate or APR -- for cardholders carrying a balance is more than 24%, according to LendingTree.
But what is a good interest rate? Read on to find out what your credit card interest rates should look like and how to get them lower.
What is a good credit card APR?
Credit card APRs are usually variable, and are directly tied to the Federal Reserve's benchmark interest rates. So, a "good" APR depends on the overall financial conditions at any given time.
Having said that, as of mid 2023, you could consider a good APR for a credit card to be anything below the average of 24.24% -- if you have good credit.
If you have excellent credit, you could qualify for an even better rate, but according to the same LendingTree report, the lowest APRs on new credit card offers is 13.82%.
But that's on cards whose focus is low interest. The lowest APR on rewards cards as of July 2023 is about 20.6%, and the lowest on cards offering 0% intro APR balance transfers is about 18.5%, just for context.
If you have bad credit, the best credit card APR available to you could be well above 25%. Secured credit cards for building credit have a credit card APR of about 27% on average.
What type of cards have the highest APRs?
The highest credit card interest rates are usually found on:
Credit card comparison
We recommend comparing options to ensure the card you're selecting is the best fit for you. To make your search easier, here's a short list of standout credit cards.
| Offer | Our Rating | Welcome Offer | Rewards Program | APR | Learn More |
|---|---|---|---|---|---|
|
Rating image, 5.00 out of 5 stars.
5.00/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
Discover will match all the cash back you've earned at the end of your first year. N/A | 1% - 5% Cashback Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases—automatically. |
Intro: Purchases: 0%, 15 months Balance Transfers: 0%, 15 months Regular: 17.24% - 28.24% Variable APR |
|
|
Rating image, 5.00 out of 5 stars.
5.00/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
Up to $300 cash back Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) — worth up to $300 cash back. That's 6.5% on travel purchased through Chase Travel, 4.5% on dining and drugstores, and 3% on all other purchases. | 1.5% - 5% cash back Enjoy 5% cash back on travel purchased through Chase Travel, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases |
Intro: 0% Intro APR on Purchases and Balance Transfers for 15 months Purchases: 0% Intro APR on Purchases, 15 months Balance Transfers: 0% Intro APR on Balance Transfers, 15 months Regular: 20.49% - 29.24% Variable |
Apply Now for Chase Freedom Unlimited®
On Chase's Secure Website. |
|
Apply Now for Chase Sapphire Preferred® Card
On Chase's Secure Website. |
Rating image, 4.50 out of 5 stars.
4.50/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
75,000 bonus points Earn 75,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's over $900 when you redeem through Chase Travel℠. | 5x on travel purchased through Chase Travel℠, 3x on dining and 2x on all other travel purchases Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases, $50 Annual Chase Travel Hotel Credit, plus more. |
Intro: N/A Purchases: N/A Balance Transfers: N/A Regular: 21.49%-28.49% Variable |
Apply Now for Chase Sapphire Preferred® Card
On Chase's Secure Website. |
What type of cards have the lowest APRs?
Those with the lowest APRs tend to be low-interest credit cards and credit cards from credit unions. Some of the best low interest credit cards have a credit card APR range starting at about 14%. Many popular credit unions offer credit cards with interest rates that start significantly lower for their most creditworthy members.
For context, the average credit card APR across all credit card types ranges from 18.11% to 25.34% as of July 2023. Credit cards usually offer an APR range, rather than a single across-the-board rate for all transaction types.
A good way to improve your chances of getting approved for a low-interest credit card is to improve your credit score. Only consumers with an excellent credit score qualify for credit cards with the lowest credit card APR.
How much does APR affect my payments?
To give you a sense of just how much difference a few percentage points can make when it comes to paying off credit card debt, the table below shows you what it looks like to pay off $10,000 of credit card debt in $350 monthly installments with three different interest rates.
| Metric | 27% APR | 24% APR | 20% APR |
|---|---|---|---|
| Time to pay off debt | 3 years, 11 months | 3 years, 9 months | 3 years, 2 months |
| Total interest paid | $6,197 | $4,976 | $3,156 |
| Total amount paid | $16,197 | $14,976 | $13,156 |
Source: Author's Calculations.
As you can see, having a 27% APR instead of an 20% APR tacks on nine extra months to your monthly payments and costs you more than $3,000 in additional interest.
There is no one answer to what a good interest rate for a credit card is -- it depends largely on your credit score and how you want to use the credit card. However, the national average for a low-interest credit card is sitting at 13.82% at the time of this writing.
How to get a credit card with a low interest rate
There are many ways to get a card with a low interest rate. If you're currently paying off debt or plan to carry a balance, lowering your interest rate is one of the most effective ways to save money. Whether it's working with your current issuer or opening a new credit card, you have a number of options.
Here are some steps you can take to get approved for a low-interest credit card:
Negotiate with your bank
Almost everything is negotiable, including your credit card APR. If you've demonstrated that you can pay your bills on time, call your bank and ask if you qualify for a lower interest rate. This is especially effective if your credit score has gone up since you originally got the card. Be sure to mention your good credit score and history of on-time payments.
Apply for a low-interest credit card
If calling your bank doesn't work, shop around for a different credit card. There are plenty of great low-interest credit cards out there. These are good to have on hand if you ever have to carry a balance.
Just make sure you qualify before you apply. And be aware that credit cards that focus on low interest rates tend to not be the best cash back or rewards cards.
Get a 0% intro APR credit card
If you already have credit card debt and are paying a high interest rate on it (think 20% or more), consider a balance transfer credit card. These credit cards offer a 0% intro APR on balance transfers for a limited period of time, allowing you to pay off your debt interest free.
Keep in mind that most of these cards do charge a balance transfer fee. Also, if you don't pay off your balance before the intro period ends, you might end up with a higher credit card APR than you had before.
Join a credit union
Sometimes credit unions offer interest rates even lower than those that come with low-interest credit cards from major banks. That's because credit unions are not-for-profit organizations that pass off their profits to members in the form of low fees and better interest rates on savings accounts and credit cards. You do have to qualify to be a member, but often, joining a credit union is as simple as paying a small annual fee or living in a certain area.
Don't carry a balance
The best solution to avoid paying high interest fees is to avoid carrying a balance at all. Paying off your credit card bill in full every month will ensure that you don't waste a cent on interest fees.
Still have questions?
Here are some other questions we've answered:
FAQs
-
There's no set definition of what a good credit card APR is. It depends on factors such as your credit history, income, and the specific card product. As of August 2023, the average credit card interest rate is around 24% in the United States, and an APR of 20% would be on the lower end.
-
Credit card APRs are variable and are directly linked to the Federal Reserve's benchmark rates. So, when those rates are high, credit card APRs get higher, too. As of August 2023, a 24% APR would be very close to the average and wouldn't be considered high (for a credit card).
Our Credit Cards Experts
Elizabeth is a personal finance writer specializing in credit cards, debt repayment, and small business. Her work has appeared on The Motley Fool, MSN Money, Yahoo! Finance, and Business Insider. She’s an avid credit card points collector and perpetual traveler currently living in Costa Rica.
Matt is a Certified Financial Planner™ and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.
Fact Checked
Ashley Maready
Ashley Maready is a former history museum professional who made the leap to digital content writing and editing in 2021. She has a BA in History and Philosophy from Hood College and an MA in Applied History from Shippensburg University. Ashley loves creating content for the public and learning new things so she can teach others, whether it's information about salt mining, canal mules, or personal finance.
Share This Page
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
The Motley Fool has a disclosure policy.