Credit card interest rates are rising lately, a consequence of the Federal Reserve raising rates to combat rampant inflation. You’ll see this in the form of APRs — or annual percentage rates — increasing on your credit card bills.
In general, a credit card’s APR dictates how much interest you pay on charges that aren’t paid in full when your statement is due, also known as revolving balances. The APR represents the amount of interest you would pay over a full year on your balance. So, if you had a 20% APR, you would pay $200 on a $1,000 balance over the span of one year. There are multiple types of credit card APRs (for purchases or balance transfers, for example) and you might have different APRs for different cards.
Low APRs are better for your wallet and easier to obtain if you have good credit. High APRs can trap people into credit card debt, costing them thousands of dollars each year. It’s especially hard if you have bad credit and you’re trapped by sky-high interest rates.
How do you know what’s a reasonable APR, and can it be negotiated? When shopping for a new credit card, it’s important to compare rates so you don’t find yourself accumulating too much debt from unpaid balances.
Types of credit card APRs
Before you begin, let’s explain the different types of annual percentage rates for credit cards.
Purchase APR: A purchase APR — the standard APR you’ll most often hear about without the word “purchase” in front of it — is for any new purchases made on your credit card. The purchase APR applies to your balance that’s carried into the next billing cycle.
Introductory APR: Also called a promotional APR, this is a special offer often used to entice new cardholders. 0% introductory APRs are typically restricted to a certain period of time after account opening, such as 12 or 18 months.
Cash Advance APR: Most credit cards allow you to withdraw money against your card’s line of credit in the form of a short-term loan, but issuers will usually charge a cash advance fee. On top of that fee, cash advances carry a separate, and often higher, interest rate than purchase APRs.
Balance transfer APR: If you want to transfer the balance from one credit card to another card, a balance transfer APR applies.
Penalty APR: Penalty APRs typically apply to late payments. While charges vary, some penalty APRs are as high as 30% for payments later than 60 days.
Before you commit to a credit card, be sure to consider APRs in their entirety, especially which APRs come into effect after the promotional period ends. From here on, we’ll be discussing the most common rate credit card users deal with: purchase APRs.
What is the average purchase APR on a credit card?
Data from the Federal Reserve and LendingTree shows that the average APR on new credit card offers is currently 21.40%, but ranges from 17.89% to 24.91% based on creditworthiness, card genre and other factors. While the average minimum has gone up roughly 5% in the last few months, the upper limit has stayed relatively flat. The average APR for open credit accounts is 15.13%.
How to qualify for a good credit card APR
It pays to know how you might qualify for a lower credit card APR for everyday purchases. Credit card issuers most often look to your FICO credit score to determine how likely you are to make full payments on what you spend.
“To qualify for a good APR, you’ll need a good credit score,” says John Li, co-founder and CTO of the financial lending company Fig Loans. “With good behavior, your credit score will start to push upward in about six months.”
FICO Credit Score
|
Credit score |
Type of credit |
|
300-579 |
Poor |
|
580-669 |
Fair |
|
670-739 |
Good |
|
740-799 |
Very Good |
|
800-850 |
Exceptional |
Credit cards with the lowest APRs
LendingTree’s 2022 survey found credit cards with the lowest average APR:
Credit cards with the highest APRs, compared
| Type of card | Average APR | Minimum APR | Maximum APR |
|---|---|---|---|
| Secured cards | 23.43% | 23.43% | 23.43% |
| Airline cards | 22.31% | 18.19% | 26.43% |
| Hotel cards | 21.91% | 17.26% | 26.55% |
| Gas cards | 21.51% | 17.87% | 25.14% |
| Travel cards | 21.62% | 17.78% | 25.45% |
These are some of the credit cards our financial experts recommend.
Intro OfferN/A
APR16.74% – 26.74% (Variable)
Intro Purchase APR0% for 20 billing cycles on purchases
Recommended Credit Good/Excellent
Reward RatesN/A
Annual Fee$0
Intro Balance Transfer APR0% for 20 billing cycles on balance transfers
Balance Transfer APR16.74% – 26.74% (Variable)
Balance Transfer Fee Either 3% of the amount of each transfer or $5 minimum, whichever is greater
Foreign Transaction Fees 2% of each foreign purchase transaction or foreign ATM advance transaction in U.S. Dollars. 3% of each foreign purchase transaction or foreign ATM advance transaction in a Foreign Currency
Our Take
With a 0% introductory APR offer on purchases and balance transfers for 20 billing cycles (16.74% to 26.74% variable APR thereafter), this card offers one of the longest 0% intro APR periods of any credit cards with no annual fee on the market.
See our full review of the U.S. Bank Visa Platinum for more details.
Discover it® Cash Back
Intro OfferIntro 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. You could turn $150 cash back into $300.
APR14.24% – 25.24% Variable
Intro Purchase APR0% for 15 months
Recommended Credit Good/Excellent
- 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.
- Earn 1% unlimited cash back on all other purchases – automatically.
Annual Fee$0
Intro Balance Transfer APR0% for 15 months
Balance Transfer APR14.24% – 25.24% Variable
Balance Transfer Fee 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
Late Payment Fee None the first time you pay late. After that, up to $41.
Foreign Transaction Fees None
- 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.
- Earn 1% unlimited cash back on all other purchases – automatically.
Our Take
For a low APR over time, the Discover it® Cash Back offers a variable APR as low as 14.24% for eligible cardholders, trumping industry averages.
For more information, see our full review of the Discover it Cash Back.
Gold Visa® Card
Intro Offer$100 Bonus Offer Statement Creditƚ when you spend $1,500 in first 90 days
APR11.49% – 17.99% Variable
Intro Purchase APRN/A
Recommended Credit Good, Excellent
Reward RatesN/A
Annual Fee$0
Balance Transfer APR17.99%
Balance Transfer Fee 3% fee applies to each transfer
Penalty APR See Terms
Our Take
If you have excellent credit, you may be able to score a variable purchase APR as low as 11.49%, or a maximum of 17.99%, with this card.
Navy Federal Credit Union Platinum Credit Card
Intro OfferN/A
APR6.74% – 18.00% Variable
Intro Purchase APRN/A
Recommended Credit N/A
Reward RatesN/A
Annual FeeNone
Intro Balance Transfer APR0% intro APR for 12 months on balance transfers
Balance Transfer APR6.74% – 18.00% Variable
Foreign Transaction Fees None
Penalty APR 18.00%
Our Take
You have to be a member of the armed forces, a veteran, Department of Defense employee or immediate family member to join the Navy Federal Credit Union. As a member, you can get a potentially low purchase variable APR of 6.74% or up to 18.00%, depending on your credit.
Credit cards with the highest APRs
In 2010, First Premier Bank offered an astonishing 79.9% APR on its credit card. That’s just another reason to review your options carefully before you choose a credit card. Several have APRs that can quickly put you in debt you can’t climb out of.
Higher APRs tend to come with credit cards associated with perks like points, miles and cash back. Bruce Garner of Card Curator explains: “These cards are promoted widely everywhere. Lower APRs tend to be found where there are fewer perks, such as 0% balance transfers and at credit unions.”
Most expensive types of credit cards by APR
Though APRs fluctuate regularly, these are the credit cards with the highest APRs, according to LendingTree data:
Credit cards with the highest APRs, compared
| Type of card | Average APR | Minimum APR | Maximum APR |
|---|---|---|---|
| Secured cards | 23.43% | 23.43% | 23.43% |
| Airline cards | 22.31% | 18.19% | 26.43% |
| Hotel cards | 21.91% | 17.26% | 26.55% |
| Gas cards | 21.51% | 17.87% | 25.14% |
| Travel cards | 21.62% | 17.78% | 25.45% |
Tips for securing a lower APR on your credit card
If you don’t qualify for the rate you want, our advice is to work on improving your credit score. The best way to do this is by paying off your balances in full each month, or working toward this step by paying balances down as much as possible each pay period.
This can take time, however, so there are a few short- and long-term solutions to consider if you need to reduce your APR now.
- Consider 0% introductory APR credit cards: If you need to finance a purchase or transfer a high APR balance, and can pay the amount back the next 12 to 20 months, a 0% introductory APR card can help. Just be sure you can repay the balance in full before the introductory period expires and the APR kicks in. You also want to watch out for balance transfer fees, which can add up if you’re moving a large balance.
- Talk to your credit card provider: In some cases, you can negotiate your current card’s APR, particularly if you have a strong history of making on-time payments.
- Apply for debt consolidation or home equity loans: Personal and home equity loans typically carry lower interest rates than credit cards and might be worth considering if you need more time (two years or longer) to repay your debt.
*All information about Discover it Cash Back, PenFed Gold Visa Card and Navy Federal Credit Union Platinum Card has been collected independently by CNET and has not been reviewed by the issuer.
The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.