What’s a Good APR for a Credit Card?

APR stands for annual percentage rate, and it refers, in part, to the amount of interest you’ll pay if you carry a balance on your credit card. It is calculated by combining the interest rate and fees against the amount borrowed over a one-year period. ^[1]

Knowing the average APR can help you recognize a good offer, the average APR on new credit cards is 21.52% (as of February 2026).^[2] The APR you may qualify for depends, often largely, on your credit score.

While you may see offers for 0% APR credit cards, this rate is often only for an introductory period, so make sure to understand its stipulations and the card’s APR once the promotional period is over. We’ll explain the different types of credit card APRs, how APR is calculated and what you can do to reduce your APR and avoid paying interest on your credit cards.

Table of contents

• What is a good APR?
• High-APR vs. low-APR credit cards
• How is APR determined?
• Types of credit card APRs
• How to avoid paying APR
• How to qualify for a good credit card APR
• How to lower your credit card APR
• Navigating credit card APR

Key points

• Knowing the average APR can help you recognize a good offer, the average APR on new credit cards is around 21%
• APR is primarily determined by credit history and debt-to-income ratio, with borrowers considered lower risk typically charged a smaller margin above the Prime Rate.
• Paying the full statement balance by the due date each month means interest charges are not assessed on purchases.

What is a good APR?

A good APR is anything lower than the national average, but the lower the better. According to the Federal Reserve, the national average APR is 21.52% (as of February 2026) ^[2] and according to the U.S. News database, the average APR for credit cards is between 16.92% and 23.09%.^[3]The APR you may qualify for can be determined by your credit history and debt-to-income ratio.^[4]

If your credit score is high, and debt-to-income ratio is low, you may qualify for cards with APR lower than the national average. Similarly, if you’re trying to build your credit for the first time or you’re trying to repair your credit, then you may not qualify for a low-APR card.

High-APR vs. low-APR credit cards

High-APR and low-APR cards differ not only in the amount of interest they charge on credit card balances but also in qualification requirements and perks.

High-APR credit cards

Credit cards that offer rewards in the form of points, miles or cashback may have higher APRs than similar cards that don’t offer rewards. However, other cards, called “subprime cards” have higher APRs because they are designed for applicants with lower credit scores.^[5]

Rewards cards with high APRs may help you earn cash back or other perks with purchases, but if you carry a balance, you can end up owing a lot in interest on those purchases. The same is true for subprime cards. While they may be easier to qualify for, you can still get charged a lot of interest for purchases if you carry a balance.

Low-APR credit cards

Just like any credit product, when you apply for a credit card, your credit score can affect the terms your lender will offer you. Typically, the better your score the lower APR you may be offered. Even with perks and rewards cards, a better score may get you a lower APR. You may find lower APRs with other financial institutions as well, such as cards from credit unions.

Although some cards may offer promotions of 0% APR anywhere from six to 21 months, these offers are typically limited in time and scope. A promotional offer that gives you a lower or 0% APR on purchases for a promotional period of time may then charge interest on your balance at the APR you previously qualified for when the promotional period ends.

Additionally, since the promotion may have been only on purchases, any balance transfers or cash advances you made may be charged interest immediately. You may also see promotional, low-interest or 0% interest offers that allow you to transfer high-interest debt to a new card. However, if you can’t pay your transferred debt off in time, you can end up adding interest to your debt after the promotion runs out, and you could be charged interest on new purchases or cash advances within the promotional period.^[6]

Although promotional offers may work well if you’re making a purchase or balance transfer that you can pay off within the promotional period, understand the terms so that you pay it off before you incur interest charges. If you don’t pay the balance before the promotion ends, you could end up paying high interest rates

How is APR determined?

The APR you are eligible for is largely based on your creditworthiness at the time of application, though the specific factors each issuer considers can vary. Factors that may be taken into account include your credit score, credit history, payment history, and debt-to-income ratio, among others. Generally, the stronger your credit history, the lower the interest rate you may be offered. ^{[7] [8]}

Credit card issuers also reserve the right to change your interest rate under certain circumstances, such as if your minimum payment is more than 60 days late or a temporary rate expires. In most cases they must give you 45 days notice before increasing your rate. ^{[7] [8]}

Types of credit card APRs

Your credit history, as well as the credit card type and the Prime Rate, can all play key roles in determining your APR. However, credit cards can have different types of APR, and understanding how each type works may help you avoid adding unnecessary interest charges. The different types of APRs include:

• Introductory: Many cards will offer a low introductory rate to incentivize consumers to open a new account or transfer existing balances onto a new card. These rates may be as low as 0%, but they can be time-sensitive, often expiring within 21 months. At the end of the introductory period, the APR on any remaining balance will often increase significantly, any remaining balance will revert to the standard purchase APR agreed when you opened the card, which can be significantly higher.^[3]
• Cash advance: A cash advance means that you have used your credit card to withdraw cash from an ATM or you’ve cashed a credit card check. Unlike purchases, which, if you don’t carry a balance, typically have a grace period before you are charged interest, cash advances do not invoke a grace period. In addition, the interest rate tends to be higher on cash advances than on other charges on a credit card. A cash advance fee, in addition to interest, may apply.^[3]
• Balance transfer: A balance transfer allows you to move your credit card debt from a higher-APR card to a lower-APR card. You can also use a balance transfer to consolidate credit cards and even some loan debts onto a single low-interest card. Many credit card companies offer a 0% introductory APR for balance transfers, although, as noted above, standard interest rates can kick in on any balances that remain when the introductory period expires.^[3]
• Variable: A variable rate, not surprisingly, is one that can change over time. It’s usually based on the Prime Rate or some other benchmark, plus a specific amount determined by the lender.^[3]
• Fixed: A fixed-rate is one in which the APR is determined at the time that you open your account. A fixed APR will not change, even if the Prime Rate decreases or your credit score changes. Credit cards typically do not have fixed rates.^[3]
• Purchase: The purchase APR is the standard APR that is applied when you make purchases and carry a balance from month-to-month. These tend to be lower than the interest rate for non-standard charges such as cash advances.^[3]
• Penalty: If you’ve fallen behind on your credit card payments for 60 days or longer, or if you’ve had a returned payment, then you may be subject to a penalty APR. This means that you will be required to pay a higher APR than your original purchase APR. Once a penalty rate is imposed your credit card issuer is required to re-evaluate your account every six months to determine if the penalty APR should remain in effect or if you can return to a lower APR.^[3]

How to avoid paying APR

APR only applies when a balance is carried from one billing cycle to the next. Paying the full statement balance by the due date each month means interest charges are not assessed on purchases. Most credit cards offer a grace period of at least 21 days from the statement date during which the full balance can be paid without incurring interest. If even a small balance is carried from one month to the next, the grace period on new purchases may be lost, meaning new purchases begin accruing interest immediately. ^[6]

For those who carry a balance, making multiple payments within a billing cycle may help reduce the average daily balance and the amount of interest that accrues. Using a budgeting tool to track spending and payment habits may also support consistent on-time payments. ^[6]

How to qualify for a good credit card APR

While the Prime Rate and other benchmarks are outside a consumer's control, credit history can be a key factor in determining APR eligibility. Making payments on time and reducing existing debt may help improve the debt-to-income ratio (the percentage of your monthly debt payment in relation to your monthly income) as well as the credit utilization ratio (CUR).

Typically, when applying for a mortgage, a debt-to-income (DTI) ratio of less than 36% shows that you’re responsible for your debt.^[9] Your credit utilization ratio calculates the percentage of credit used based on your credit limit. FICO suggests maintaining a CUR of under 10%. ^[10]

How to lower your credit card APR

If you're looking to lower your credit card APR, there are several options that may be available.

1. Build credit before applying. An improvement in your credit score may result in access to lower APR products. Steps that may help include making payments on time, keeping balances low, and maintaining a low overall credit utilization ratio. ^[11]
2. Consider a balance transfer. Applying for a credit card with a lower promotional rate on balance transfers may reduce the interest being paid on existing balances. Note that opening a new card may impact your credit score and a balance transfer fee may apply. ^[11]
3. Pay off your balance. Paying off your balance in full removes the cycle of accruing interest charges and may put you in a stronger position when negotiating a lower APR with your issuer. ^[11]
4. Contact the credit card issuer. Cardholders may be able to negotiate a lower rate by contacting their issuer directly. Prioritizing the card with the longest account history and strongest on-time payment record may improve the likelihood of a successful request. If an issuer declines initially, contacting them again after three to six months is an option, particularly if payment history has continued to improve. ^[12]

Navigating credit card APR

Understanding APR isn’t always easy, but it is essential. A low APR can save you thousands of dollars in interest. The key to a good APR, though, is finding the right card, negotiating the best rate, and keeping your debt low and credit score high.

Sources

1. Consumer Financial Protection Bureau. “What Is a Credit Card Interest Rate? What Does APR Mean?” https://www.consumerfinance.gov/ask-cfpb/what-is-a-credit-card-interest-rate-what-does-apr-mean-en-44/. Accessed on May 21, 2026.
2. The Federal Reserve. “Consumer Credit - G.19,” https://www.federalreserve.gov/releases/g19/current/. Accessed on May 2, 2022.
3. U.S. News and World Report. “Average Credit Card APR,” https://money.usnews.com/credit-cards/articles/average-apr. Accessed on April 26, 2022.
4. Forbes Advisor. “What is the Average Credit Card Interest Rate?” https://www.forbes.com/advisor/credit-cards/average-credit-card-interest-rate/. Accessed on April 26. 2022.
5. Business Insider. “The average credit card interest rate by credit score and card,” https://www.businessinsider.com/personal-finance/average-credit-card-interest-rate. Accessed on September 19, 2022.
6. Experian. “How to Avoid Paying Credit Card Interest,” https://www.experian.com/blogs/ask-experian/do-you-pay-apr-if-you-pay-in-full/. Accessed on April 26, 2022.
7. Consumer Financial Protection Bureau. "When Does a Credit Card Company Decide What Interest Rate to Offer Me on a Credit Card?" https://www.consumerfinance.gov/ask-cfpb/when-does-a-credit-card-company-decide-what-interest-rate-to-offer-me-on-a-credit-card-en-9/. Accessed June 11, 2026.
8. Chase. "How Do Credit Card Companies Determine APR?" https://www.chase.com/personal/credit-cards/education/interest-apr/how-do-credit-card-companies-determine-apr. Accessed June 11, 2026.
9. Investopedia. “28/36 Rule,” https://www.investopedia.com/terms/t/twenty-eight-thirty-six-rule.asp. Accessed on May 2, 2022.
10. FICO. “What Should My Credit Utilization Ratio Be?” https://www.myfico.com/credit-education/blog/credit-utilization-be. Accessed on September 19, 2022.
11. Chase: JPMorgan Chase Bank, N.A. "Tips to Get a Lower Interest Rate on a Credit Card," https://www.chase.com/personal/credit-cards/education/interest-apr/how-to-score-lower-interest-rate-on-credit-card. Accessed on May 22, 2026.
12. Experian: Experian. "How to Negotiate a Lower Interest Rate on Your Credit Card," https://www.experian.com/blogs/ask-experian/can-i-negotiate-a-lower-interest-rate-on-my-credit-card/. Accessed on May 22, 2026.

About the author

Ana Gonzalez-Ribeiro, MBA, AFC® is an Accredited Financial Counselor® and a Bilingual Personal Finance Writer and Educator dedicated to helping populations that need financial literacy and counseling. Her informative articles have been published in various news outlets and websites including Huffington Post, Fidelity, Fox Business News, MSN and Yahoo Finance. She also founded the personal financial and motivational site www.AcetheJourney.com and translated into Spanish the book, Financial Advice for Blue Collar America by Kathryn B. Hauer, CFP. Ana teaches Spanish or English personal finance courses on behalf of the W!SE (Working In Support of Education) program has taught workshops for nonprofits in NYC.

About the author

Becca has over 10 years of experience as a content writer, working across various industries including finance, digital marketing, education, travel, and technology. Her work has been featured in publications including Forbes, Business Insider, AOL, Yahoo, GOBankingRates, and more.