What APR Is Considered Good? APR Ranges Explained
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Your credit card’s APR (annual percentage rate) indicates how much interest your issuer will charge you when you roll a balance over from one month to the next.
Unless you’re applying for a card with a fixed interest rate, you won’t know what your APR will be until after you’re approved, as the issuer evaluates your credit history and profile.
In general, a good credit score may improve your odds of being approved for a lower APR, but that’s not always the case. Plus, the type of card you’re applying for will also affect your APR. If you’re applying for a luxury rewards card or a card designed to help you rebuild credit, for example, those tend to come with higher interest rates.
“It’s not unusual for cards aimed at folks with very good to excellent credit to still have high APRs,” said Matt Schulz, chief credit analyst at LendingTree. “For example, the Chase Sapphire Reserve®’s purchase APR is 16.99%-23.99% Variable, and the Marriott Bonvoy Brilliant™ American Express® Card‘s purchase APR is 15.74%-24.74% Variable.”
For some financial products, such as mortgages and loans, there’s a difference between your APR and your interest rate. But when it comes to credit cards, your APR and your interest rate are the same thing.
What is a good credit card APR?
Many credit cards are advertised as having an APR range, and you won’t know your rate until you’re approved. Note that when discussing credit card APR, the rate that’s typically referenced is the regular purchase APR — the rate that applies to purchases on the card.
You may also read about a card’s balance transfer APR, which is the rate that applies when moving debt from one card to another. If you take out a cash advance with your card, that will be subject to a higher cash advance APR. Finally, if you pay late, your issuer can raise your rate immediately to a penalty APR.
A recent analysis by LendingTree found that the average APR among all current credit card accounts is 14.52%, and for cards accruing interest it’s 15.78%. For new credit card offers, the average APR is 19.30%.
Because your APR is influenced by your credit profile, it’s smart to check your credit score before applying for a new card. For applicants with really good credit, the average APR offered on a new card is 15.69%. But for applicants with much worse credit, it’s 22.90%, according to LendingTree statistics.
“The last thing you want to do is apply for a card thinking that you’ll get a 15% APR and end up with a 24% APR because your credit wasn’t good enough,” Schulz said. “That can be a really unpleasant surprise.”
How to evaluate credit card APRs
When considering a new card, it’s important to shop around and compare rates, Schulz said.
“There really are differences among cards and among issuers,” he said. “Watch for offers in your snail mail. Consider making a call to your current credit card issuer. Do your homework before you apply.”
If you’re looking at a card on an issuer’s website, look for the “terms and conditions” section. That’s where you should be able to find the card’s APR details.
Notably, store cards and cards for people with bad credit are two types of credit cards that are likely to have very high APRs.
Below, we’ll examine how to evaluate a card’s APR in a couple different scenarios.
If you pay your card off in full
Most credit cards offer a grace period, which is the time between when your billing cycle ends and when your bill is due, and by paying your balance off in full before the grace period ends you can avoid incurring interest charges. In this situation, a credit card that offers cash back, points or miles is the way to go, because any rewards you earn won’t be negated by interest charges you’ll accrue if you revolve a balance.
However, since rewards cards typically have higher APRs than non-rewards cards, it’s crucial that you stick to a budget that allows you to regularly pay your card off in full.
Through a review of cards available on LendingTree, as well as from top issuers, we’ve compiled a list of some of the best rewards cards around and their APRs:
- The Blue Cash Preferred® Card from American Express comes with a regular purchase APR of 13.99%-23.99% Variable. Earn 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 6% Cash Back on select U.S. streaming subscriptions, 3% Cash Back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more), 1% Cash Back on other purchases. To see rates & fees for Blue Cash Preferred® Card from American Express please click here.
- The Chase Freedom Flex℠ offers a regular purchase APR of 14.99% - 23.74% Variable. Earn 5% cash back on eligible purchases in rotating categories, 5% on travel purchased through Chase, 3% on dining and drugstores, and 1% on all other purchases.
- The Citi® Double Cash Card – 18 month BT offer offers a regular purchase APR of 13.99% – 23.99% (Variable). Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
- The Discover it® Cash Back comes with a regular purchase APR of 11.99% - 22.99% Variable APR. Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate, 1% unlimited cash back on all other purchases - automatically.
- The Wells Fargo Propel American Express® card, with a regular purchase APR of 14.49%-24.99% (Variable). Earn 3X points on eating out, ordering in and popular streaming services, 3X points on gas stations, rideshares and transit, and 3X points on travel including flights, hotels, homestays and car rentals. Earn 1X points on other purchases.
If you need to carry a balance
When carrying a balance, you’ll either want a card with an introductory 0% APR period or a card with a low ongoing APR, depending on how quickly you’ll be able to pay down the debt.
Intro APR periods typically last from 12 to 18 months, so if you can pay off the balance in full within that time frame, a card with an intro 0% APR can allow you to avoid paying interest at all.
But if you need more time to pay off your credit card debt, you’ll end up incurring interest charges — and in that situation, a card with a low ongoing APR may be the best way to pay as little in interest charges as possible. Cards from credit unions often have lower APRs than cards from banks, because there’s a cap on how high interest rates can go on cards from federally chartered credit unions.
“They can’t go higher than 18%, which is a really big deal,” Schulz said. “There is no rule limiting what rates banks can charge on a credit card, so rates can vary really widely.”
Many credit unions have membership requirements based on where you live or work. However, some make it possible for anyone to join — such as Lake Michigan Credit Union and Digital Federal Credit Union, both of which offer low interest credit cards.
Through a review of cards available on LendingTree, as well as from top issuers, we’ve compiled some of the best cards with intro 0% APR periods and low ongoing APRs.
For intro 0% APR offers on purchases
- The Citi® Diamond Preferred® Card offers an intro APR of 0% for 18 months on Purchases. After, a 14.74% - 24.74% (Variable) APR applies.
- The HSBC Gold Mastercard® credit card offers a 0% Introductory APR on credit card purchases for the first 18 months from account opening. A Variable APR of 13.99% - 23.99% will apply after the Introductory Period.
- The U.S. Bank Visa® Platinum Card offers a 0% intro APR for 20 billing cycles on Purchases*. After, a 14.49% - 24.49%* (Variable) APR applies.
For low ongoing APRs
- The DCU Visa® Platinum Credit Card has a regular purchase APR of 8.50% - 18.00% variable.
- The Lake Michigan Prime Platinum Visa Credit Card comes with a regular purchase APR starting at 6.25% variable.
- The USAA® Rate Advantage Visa Platinum® Card has a regular purchase APR of 6.90% - 23.90% variable.
Qualifying for a good credit card APR
Though your credit card APR is up to the card issuer, and is in many ways outside your control, following best practices to improve your credit score can help you qualify for a lower rate.
Ways to build a good credit score include:
- Lowering your credit utilization. Experts in the personal finance world recommend using no more than 30% of your credit limit. For example, on a credit card with a $500 limit, spend no more than $150. Utilization accounts for 30% of your credit score, so if your credit cards are currently maxed out, paying them down can improve your score.
- Avoiding frequent credit applications. New credit accounts for 10% of your credit score, and length of credit history makes up 15%. Apply for credit cards and loans only as needed, as frequent applications can make you look like a risk to lenders.
- Keeping old accounts open. As mentioned above, length of credit history makes up 15% of your score. This means that even if you’re not using your oldest cards regularly, it can be worth keeping them open and putting a small charge on them once in a while.
The key point people should understand is that building credit is a marathon rather than a sprint, Schulz emphasized.
“Pay your bills on time every time, keep your balances low and don’t apply for too much credit too often and you’ll be fine,” he said.
You can also try calling your credit card issuer and negotiating for a lower APR. A study by LendingTree found that 81% of those who asked for a lower rate were successful, but only one in five cardholders made the attempt.