What Is A Good APR for A Credit Card?

By Aaron Sarentino Reviewed by Nima Vahdat Updated Nov 01, 2023
What Is A Good APR for A Credit Card?

A good Annual Percentage Rate (APR) for a credit card is a rate that’s below the current average credit card interest rate.

You’ve probably encountered the term “APR” frequently in the realm of credit when you’re researching credit cards or various loans. 

So, what constitutes a favorable APR for a credit card? 

As you’ll discover below, there is no industry standard for what’s considered a good APR for a credit card. But we’ve found the “sweet spot” for what’s acceptable to many people. 


  • Credit Card APR Defined – APR, or Annual Percentage Rate, represents the cost of borrowing on a credit card, expressed as an annual interest rate.
  • Ideal APR Range – A good APR for a credit card typically falls between 12-20 percent. However, your unique financial situation and creditworthiness play a significant role in determining the “good” rate for you.
  • Debt Relief Solutions – For those seeking effective ways to manage or reduce credit card debt, Americor offers tailored debt relief, settlement, and consolidation services to help regain control of your financial journey.

What is a Good APR for a Credit Card?

In simple terms, APR, or annual percentage rate, is “the price you pay for borrowing money.” It represents the interest rate applied to various credit-related activities, such as:

  • Carrying a credit card balance from month to month.
  • Transferring a balance from another account to your credit card.
  • Making late payments.

APR rates are often notably high, and even a seemingly low APR can have significant financial consequences when you’re already in debt.

Determining what constitutes a “good” APR for a credit card can be subjective. 

Most of the popular credit cards available offer interest rates that hover above 16%. More commonly, you can expect to encounter interest rates around 20%, regardless of whether you possess an excellent credit score. 

This is particularly true when applying for some of the best rewards credit cards.

As of August 2023—the Federal Reserve’s most recent available data—the national average APR was 21.19 percent.

When evaluating a credit card’s APR, considering how it stacks up against the national average can be a helpful step in determining what constitutes a good APR for your specific needs. 

This means that a credit card offering an APR lower than 21.19 percent would be considered a good APR for the average borrower.

While a general guideline suggests an APR range of 18-25%, your financial circumstances and credit history ultimately influence the ideal rate for you. 

Evaluating Credit Card APRs

Various factors contribute to the specific interest rate offered when you open a credit card. 

Some of these factors are linked to your credit profile, while others are influenced by external variables beyond your control. 

As a result, you won’t have knowledge of your exact rate until after you’ve successfully obtained the card.

The bank evaluates several elements to determine your interest rate…

The Current Federal Prime Rate: The majority of credit cards utilize a variable interest rate structure, which means that their rates are linked to a specific index rate, often the prime rate. 

The prime rate, in turn, is closely connected to the federal funds rate, representing the rate at which banks lend money to one another. Credit card issuers establish their card’s APRs by adding a predetermined margin to the prime rate. For example, as of October 2023, the current U.S. federal Prime Rate is 8.5%. If the bank’s set margin is 10%, the resulting APR would be 18.5%.

Your Creditworthiness: Depending on the evaluation of your creditworthiness (how likely you are to pay back a line of credit), your interest rate may significantly surpass the prime rate. Higher credit scores often lead to lower APRs, offering access to better credit card deals. If the bank identifies any aspects of your credit history that it perceives as risky, it may add extra percentage points to mitigate its risk and enhance its profitability.

Predetermined APR ranges: Each credit card features its own set range of interest rates. Your account’s assigned APR will fall within this predefined range.

Introductory vs. Standard APR: Many credit cards offer introductory 0% APRs for a limited period, followed by a standard rate. Analyze both rates to understand the long-term cost of the card.

Card Type: Different credit card types, such as rewards cards, balance transfer cards, and secured cards, may have varying APR structures. Secured and store credit cards tend to have high APRs, while credit cards from credit unions typically have low APRs. 

Transaction: It’s essential to recognize that the APR you encounter varies based on the type of transaction you perform. For example, the APR for maintaining a monthly balance might differ from the APR associated with cash advances, balance transfers, or penalty APRs triggered by late payments.

Comparing Credit Card Interest Rates

When comparing credit card interest rates, it’s crucial to understand that your decision to open a credit card should not hinge solely on the card’s APR. 

If you anticipate incurring interest charges because you won’t be paying your balances in full each month, it’s advisable to limit your use of these cards. 

The interest payments will likely offset any rewards you might accrue from everyday spending. Without caution, excessive interest charges can lead to a challenging debt situation.

Nonetheless, comparing interest rates is a straightforward process. APR ranges are typically prominently displayed on a credit card’s application page, sparing you the need to delve deep into the pricing and terms of each card for the information you seek.

If you’re examining credit cards issued by the same bank, you might come across a “card comparison” tool that enables you to conveniently view the key features of each card side by side. 

When comparing cards from different banks, the process may be slightly more time-consuming but still manageable. 

It’s important to remember that you should evaluate not only the purchase APR but also other factors such as balance transfer, cash advance, penalty, and introductory APR.

Credit Cards with Low APRs: What to Expect

Credit cards with low APRs offer several benefits including:

  • Cost Savings – Low APRs translate to reduced interest charges if you carry a balance.
  • Financial Flexibility – A low APR allows for effective budget management, especially if you anticipate occasional balance carrying.
  • Debt Management – Low APRs are particularly beneficial when consolidating high-interest debt from other cards.

Credit Cards with High APRs: What to Expect

Credit cards with high APRs may offer perks such as frequent flier miles, cash back, or transferable points.

However, they may not be the best choice if you anticipate carrying a balance. 

Here’s what to consider:

  • Increased Interest Costs – High APRs lead to substantial interest charges, significantly affecting your overall card expenses.
  • Potential Debt Accumulation – Without diligent balance repayment, high APRs can result in mounting debt.

How to Qualify for a Lower Credit Card APR

Improving your creditworthiness is the key to qualifying for a better credit card APR. And it can be done in a few simple steps…

Maintain Excellent Credit Habits: Consistently make on-time payments, keep credit utilization low, and avoid excessive debt.

Boost Your Credit Score: Monitor your credit report for errors and work on increasing your credit score through responsible financial management.

Prequalification: Some credit card issuers offer prequalification tools that can help identify cards that you’re likely to be approved for.

Conclusion: Your Ideal APR Awaits You!

In summary, APR is the yearly cost of borrowing funds from your card issuer.

A “good” APR for your credit card depends on your unique financial situation and goals. 

By carefully evaluating credit card offers based on your credit score, card type, and financial habits, you can find the perfect APR tailored to your needs. 

At Americor, we understand the importance of managing your finances wisely. 

As America’s trusted source for debt relief solutions, we aim to empower you with financial knowledge that can lead to informed decisions, whether it’s about savings, investments, or managing debt.

If high-interest debts are impacting your savings, investments, and financial well-being, explore our debt relief solutions, including debt settlement and debt consolidation, to regain control of your financial future.

If your debt has become unmanageable and you have difficulty making your debt payments each month, then you should consider a free consultation call with one of our certified Debt Consultants, who can provide personalized advice tailored to your specific needs.

By taking proactive steps today, you can put an end to your financial stress and work towards a brighter financial future. 

Remember, there is always hope for debt relief, and our team of experienced professionals are ready to guide you on your journey to regaining control of your finances.

For more information on Americor’s debt relief services, contact us today to see how we can help you eliminate your debts, and get on the fast-track to becoming completely debt-free!


Aaron Sarentino

Aaron oversees executive, administrative and management functions for the firm. Aaron has a Bachelors in Business Administration from Pepperdine University. He is responsible for helping customers at every stage of the debt settlement process and focused on building loyalty to ensure long-term client retention by addressing customer issues. Aaron plays a pivotal role in the upliftment of the Americor team to ensure the best possible customer experience for clients.