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What APR Is Considered Good? APR Ranges Explained

What APR Is Considered Good? APR Ranges Explained

*Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated Aug 31, 2020. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

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 CompareCards. “For example, the Chase Sapphire Reserve®’s purchase APR is 16.99%-23.99% variable and the Marriott Bonvoy Brilliant™ American Express® Card’s is 15.74% to 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.

Understanding the different types of credit card APRs

A recent analysis by CompareCards 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 CompareCards 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 CompareCards, 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, 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 and 1% Cash Back on other purchases. 3% Cash Back on U.S. gas stations and transit (e.g., taxis/rideshare, parking, tolls, trains, buses and more). 

    To see rates & fees for Blue Cash Preferred® Card from American Express please click here.

  • The Chase Freedom®, with a regular purchase APR of 14.99% to 23.74% variable. Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases.
  • The Citi® Double Cash Card – 18 month BT offer, with 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, with a regular purchase APR of 11.99% - 22.99% variable. 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. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • The Wells Fargo Propel American Express® card, with a regular purchase APR of 14.49% to 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.

  • 0% for 14 months on purchases and Balance Transfers, then 11.99% - 22.99% Variable.

  • 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. Plus, earn unlimited 1% cash back on all other purchases – automatically. *

  • Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically*

Highlights
  • INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
  • 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.
  • Plus, earn unlimited 1% cash back on all other purchases - automatically.
  • Redeem cash back in any amount, any time. Rewards never expire.
  • Use your rewards at Amazon.com checkout.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • No annual fee.
  • Discover is accepted nationwide by 99% of the places that take credit cards.
  • See Rates & Fees

See additional details for Discover it® Cash Back

More Info

  • $300 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.*

  • 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 and 1% Cash Back on other purchases.

  • 1% back on other purchases*

Highlights
  • Limited Time Offer: Earn a $300 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months. Offer Expires 12/10/2020
  • Limited Time Offer: $0 introductory annual fee for one year, then $95. Offer Expires 12/10/2020
  • 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.
  • Plan It® gives the option to select purchases of $100 or more to split up into monthly payments with a fixed fee and no interest.
  • Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit.
  • Terms Apply.
  • See Rates & Fees

See additional details for Blue Cash Preferred® Card from American Express

More Info

  • Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.

  • 0% for 18 months on Balance Transfers

  • 13.99% – 23.99% (Variable)

Highlights
  • Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
  • To earn cash back, pay at least the minimum due on time.
  • Balance Transfer Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 13.99% – 23.99%, based on your creditworthiness.
  • Balance Transfers do not earn cash back.
  • If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
  • There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
  • The standard variable APR for Citi Flex Plan is 13.99% – 23.99% based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.

See additional details for Citi® Double Cash Card – 18 month BT offer

More Info

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 CompareCards, 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, which offers 0% for 18 months on purchases. After, a 14.74% - 24.74% (variable) APR applies.
  • The HSBC Gold Mastercard® credit card, which offers a 0% Introductory APR on credit card purchases for the first 18 months from account opening. A Variable APR of 12.99% - 22.99% will apply after the Introductory Period.
  • The U.S. Bank Visa® Platinum Card, which offers a 0%* intro APR for 20 billing cycles on Purchases*. After, a 13.99% - 23.99%* (variable) applies

  • 0% for 18 months on Purchases

  • 0% for 18 months on Balance Transfers

  • 14.74% - 24.74% (Variable)

Highlights
  • 0% Intro APR for 18 months on purchases from date of account opening and 0% Intro APR for 18 months on balance transfers from date of first transfer. After that the variable APR will be 14.74% - 24.74%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
  • There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater
  • Get free access to your FICO® Score online.
  • With Citi Entertainment®, get special access to purchase tickets to thousands of events, including concerts, sporting events, dining experiences and more.
  • Shop with confidence knowing that you have dependable protection benefits, including $0 Liability on Unauthorized Purchases and Citi® Identity Theft Solutions.
  • The standard variable APR for Citi Flex Plan is 14.74% - 24.74%, based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.

See additional details for Citi® Diamond Preferred® Card

More Info

For low ongoing APRs:

  • The DCU Visa® Platinum Credit Card, with a regular purchase APR of 8.50% - 18.00% variable.
  • The Lake Michigan Prime Platinum Visa Credit Card, with a regular purchase APR starting at 6.25% variable.
  • The USAA® Rate Advantage Visa Platinum® Card, with a regular purchase APR of 6.90% to 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 CompareCards found that 81% of those who asked for a lower rate were successful, but only one in five cardholders made the attempt.


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