Key takeaways
- A good credit card APR is a rate that’s at or below the national average, which currently sits just below 20%.
- While there are credit cards with APRs below 10%, they’re most often found at credit unions or small local banks.
- If you don’t have good credit, you’re likely to receive a higher APR.
A credit card’s annual percentage rate (APR) is the fee you’ll pay for borrowing money with your card. If you carry a balance beyond your credit card’s grace period, your APR determines the amount of interest the card issuer can charge on that balance. Other transactions, like cash advances and late payments, are subject to their own APRs that might be higher than your regular rate.
Find out how credit card interest works to help you choose the credit card that is likely to offer the best APR rates.
What’s a good credit card APR?
While there are different types of credit card APRs, the most common rate people tend to look at is the purchase APR — the interest rate you pay on purchases when carried as a balance.
If the card’s purchase APR is below the national average, that’s generally considered a good APR. The average credit card APR is currently just below 20%.
Even a credit card at the national average can be considered a decent option, especially if you’re looking at one of today’s best credit cards that comes with rewards, bonuses and perks that can help offset any fees.
However, while a 20% APR might be a good rate because it matches the current national average, you still want to try for APRs below that. Credit card interest is notoriously higher than that of other means of credit. Definitely try to avoid cards with APRs significantly above the national average. If you carry a balance on those cards, you could end up paying a lot of money in interest.
Different types of APR on a credit card
The purchase APR is just one type of interest rate you’ll need to consider with your credit card. You’ll also want to pay attention to the other APRs that could impact your credit card to determine a good APR for your credit card.
| Cash advance APR | This is the interest rate you’ll pay to get cash from your credit card. It’s often much higher than your purchase APR, typically around 29.99%. |
| Balance transfer APR | This is a temporary APR that spans the length of your balance transfer period before reverting to the standard variable APR. It only applies to any balances you’ve transferred, assuming you meet the issuer’s criteria, and may be revoked if you do not make on-time payments. |
| Introductory APR | This is an APR that only applies during a limited time before reverting to a standard variable purchase APR. This could be as low as 0% and can apply to purchases, balance transfers or both. |
| Penalty APR | A penalty APR only applies if you’ve made a late payment or have defaulted on your credit card. It’s typically the highest possible interest rate (around 29.99%). |
| Buy Now, Pay Later APR | This is a specialty APR for credit cards that offer this type of payment plan. Issuers like Chase, Citi and American Express each have their own version of this. It may be a fixed introductory APR for a short period or a variable APR specified in your credit card terms. |
How are APRs determined?
When you apply for a credit card, the card issuer runs a hard inquiry on your credit report. The details of your credit history and the information you provided in your credit application inform what APR you are approved for.
Credit card issuers set their APRs by adding their profit margin (usually about 12% to 13%) to the prime rate. For context, the current prime rate is just under 7%. Much like other financing options, a good to excellent credit score will often secure a lower APR for a credit card than bad credit.
How to calculate your APR
If you aren’t sure what the interest rate is for each of these different types of APRs on your card, one of the easiest ways to confirm your APR is by reviewing your credit card’s rates and fees document. When you open your account, your purchase APR, along with the cash advance and penalty APRs, should be listed in the Schumer box of the card’s terms and conditions.
You can also review your monthly card statement, call your issuer directly using the customer service number or check your card’s mobile app or website and look for account details.
How to calculate your card balance’s interest
Use this formula to calculate the interest applied to your account during a given billing cycle:
[daily rate] x [average daily balance] x [days in billing cycle] = credit card interest
Spending example:
Imagine you’ve completed a 31-day billing cycle, and you’re carrying an unpaid balance of $1,000 at an APR of 18%.
To find your daily rate, you’d first divide your APR by 365.
18% / 365 = .049%
To find your average daily balance, you’d then add the balance of your card after each day in the billing cycle and divide your balance by the number of days in the billing cycle. To keep it simple for this example, we’ll assume your balance was a flat $1,000 every day for the entire 31-day month:
$31,000 / 31 = $1,000
Finally, you’ll multiply your average daily balance of $1,000 by your daily rate of .049% and then the number of days in the billing cycle.
$1,000 x .049% x 31 = $15.19
In this scenario, you’d pay about $15.19 in interest for that billing cycle — but the longer it takes you to pay, the more interest will add up.
Good APRs for your credit bracket
Depending on where your credit score stands, you might not always be able to avoid cards with high APRs. Data from the 2025 Consumer Financial Protection Bureau (CFPB) consumer credit card market report shows that new cardholders with lower credit scores had higher credit card APRs than those with higher credit scores.
| Credit score range | Average APR for new cardholders in 2024 |
| 760 and above | 25.8% |
| 740 to 759 | 27.3% |
| 660 to 719 | 29.0% |
| 620 to 659 | 29.7% |
| 619 and under | 30.0% |
| Overall | 27.5% |
In many cases, cards with high APRs can still offer value for cardholders. Store and retail credit cards are a good example. They’re easier to qualify for than standard rewards credit cards and feature rewards opportunities that are specific to certain brands and stores as opposed to general spending categories.
How to qualify for a good credit card APR
Your card’s APR depends on many factors, such as:
- Credit score
- Prior relationship with the issuer
- Federal Reserve’s prime rate
- Your age (if you’re under 21 years of age, you are more likely to face higher APRs on your credit cards)
Ultimately, however, getting a good purchase APR will depend most on your credit score. People with below-average credit scores tend to be offered higher interest rates than people with good or excellent credit.
If you want the best credit card APR possible, work on improving your credit score first, such as making sure you:
- Pay your credit card statement’s minimum payment on time, every time. Your payment history makes up 35% of your credit score, so make sure it’s positive.
- Don’t max out your credit cards. Keeping your balances low can improve your credit utilization ratio, which affects your credit score.
- Pay off as much of your outstanding balances as possible. When you prioritize paying down existing debts, you avoid unnecessary interest, fees and penalties.
- As your credit score improves, look for credit cards with low interest rates that you can qualify for. And don’t hesitate to reach out to your existing card issuer to negotiate a lower interest rate if you see an improvement in your credit score.
How to compare credit card APRs
When comparing credit cards, it’s important to weigh factors that can save you money or make using the card more expensive, starting with each card’s APR range. However, a good APR for a credit card alone shouldn’t be the only consideration. While looking for a card with a low APR is a great approach, you might want to consider a card with a higher APR that comes with rewards that fit your lifestyle.
For example, let’s compare two of the best cash back credit cards:
| Card name | APR | Rewards |
| Wells Fargo Active Cash® Card | 18.49%, 24.49%, or 28.49% Variable APR |
|
| Citi Double Cash® Card | 17.49% – 27.49% (Variable) |
|
While the Citi Double Cash offers a slightly lower regular APR, it doesn’t offer an introductory APR on purchases — only balance transfers. And unlike the Wells Fargo Active Cash, which will give you 2% cash back upfront, the Citi Double Cash will only give you 2% cash back total after you pay off your purchases.
The Wells Fargo Active Cash’s higher APR might be worth taking advantage of the card’s simplified 2% cash back rewards rate and 12-month 0% intro APR period on both purchases and balance transfers (followed by a 18.49%, 24.49%, or 28.49% Variable APR).
If you’re planning to do a balance transfer and need a longer payoff period, however, you could benefit from the Citi Double Cash’s lengthier introductory APR balance transfer period in addition to its lower variable APR, especially if you plan on paying your bills in full each month.
And be aware of the penalty APR that may be applied if you miss a credit card payment. The Citi Double Cash charges a penalty APR of up to 29.99% (Variable) that applies if you pay late or your payment is returned. The Wells Fargo Active Cash, however, doesn’t have a penalty APR (although you could be charged a fee of up to $40 for a late payment).
The bottom line
Generally, a good APR for a credit card is at or below the national average. But the APR you ultimately get depends on your creditworthiness and credit history.
Work on improving your score to as high a number as possible to unlock access to credit cards with lower interest rates. A balance transfer credit card can help you pay down your old balances interest-free — but the best way to avoid credit card interest is to not carry a balance at all.
Frequently asked questions about good credit card APR
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A fixed APR rarely changes, except in the case of a late payment or when an introductory offer expires. The benefit of a fixed rate is that your rate is locked in for a period of time.
More often than not, your credit card has a variable APR expressed as a range — such as 17.24% to 29.99%. A variable APR changes according to the prime rate, a benchmark lenders use to determine interest rates on credit cards as well as other credit accounts, such as loans and mortgages. While a variable rate may not offer the predictability of a fixed rate, it offers the possibility of paying less.
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Yes. In the case of credit cards, the interest rate and APR are the same. Lenders are required to disclose their interest rates as APRs as part of the Truth in Lending Act (TILA). However, the interest rate and APR may not be the same on other financial products, such as mortgages and personal loans, where the two figures are calculated differently.
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Yes, if you don’t have a balance and pay your credit card bill in full and on time (or early), you won’t be subject to a card’s APR.
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