The interest rate is the price you pay to borrow money. For credit cards, the interest rate is usually expressed as an annual rate called the annual rate (APR). This number depends on several factors, including card type, credit score, income, and payment history.
If you aim to pay off your balance in full every month, you can save: Save time by avoiding additional interest costs. Still, knowing your APR and choosing a card with a lower APR can save you money if you need to maintain a balance.
Average credit card interest rate
APR varies by card type and risk profile. Higher credit usually means access to better (lower) APRs. Rewards credit cards are a bit different from other cards in that they offer more value to the cardholder than a basic credit card and therefore generally have higher interest rates.
As of December 14, 2022, the average APR Bankrate for credit cards is 19.42%. Credit card APRs have risen in tandem with the recent series of federal funds rate hikes by the Federal Reserve that began in March.
|Dec. December 14, 2022||19.42%|
|December 14 November 7, 2022||19.40%|
|7 Nov 30 Nov 2022||19.20%|
|30 Nov 2022 November 23, 2022||19.20%|
|November 23, 2022 November 16, 2022||19.14%|
|Nov 16 Nov 9, 2022||19.04%|
|November 9 Oct 2, 2022||18.77%|
|Oct 2 Feb 26, 2022||18.73%|
|10 Month Oct 19, 2022||18.68%|
|Oct 19 Dec 12, 2022||18.67%|
|October 12th September 5th 2022||18.45%|
|September 2022 September 28||18.38%|
|September 28 September 21, 2022||18.16%|
|September 14, 2022||18.10%|
|Aug 31 Aug 24, 2022||17.85%|
|August 17, 2022||17.67%|
|August 10, 2022||17.58%|
|Aug 10 Jul 3, 2022||17.42%|
|July 27, 2022||17.35%|
|July 20, 2022||17.25%|
Comparison of credit card interest rates and APR
Borrowing money interest rate is not necessarily the same as the annual interest rate. Interest rate represents the cost of borrowing money from a lender. Expressed as a percentage of the loan principal. For credit cards, it will be the total card balance. APR shows the big picture.
APR includes not only interest rates, but also other costs such as lender fees, closing costs, and insurance. Luckily, credit cards don't usually charge this kind of fee, so the interest rate and his APR will probably be about the same. The difference between APR and interest rate is usually more pronounced for loans such as mortgages.
Nevertheless, I recommend checking out the Schumer Box. This is a table that your credit card issuer should include in your fine print, providing the necessary information about your credit card's major rates and fees.
Credit card APR types
APR can be can be classified into different buckets. Here's an overview of some different APR types you should know about:
- Fixed APR. Card issuers do not change APRs based on prime rates. A prime rate is an interest rate that banks use as a basis for setting rates for various types of loans and lines of credit. This does not mean that the rate can never change. For example, late payments can result in a higher APR, but the issuer should notify us first.
- Variable APRVariable APR means that your APR can fluctuate based on various events such as unpaid payments, expiring referral offers, declining credit scores, and changes in prime rates. However, the issuer must give at least his 45 days' notice of the price increase.
- Buy APR. The rate applied to your purchase. This only applies to balances that carry forward each month. No interest will be charged if the balance of the statement is paid in full by the due date.
- Balance Transfer APR.The rate applied to balances transferred from a loan or other credit card to the applicable credit card.
- First year APR. Many credit card issuers offer new cardholders 0% first-year APR or lower first-year APR offers for purchases or balance transfers for a limited time after account opening .
- Cache Advance APR. This rate applies when you use your credit card to withdraw money from an ATM or bank.
- Penalty APRThis rate may replace the regular APR if the deadline is missed. This rate is significantly higher than the regular APR (sometimes as high as 29.99%) and can be reduced to the standard rate after timely payments for 6 months.
Tips for lower annual rates
Getting a lower APR generally requires good credit.But even if you don't fit into that category, there are a few ways you can get a lender's favor. If you are unable to automatically qualify for a lower APR, consider the following steps.
- Compare cards in advance. Pay close attention to the fine print on your card and choose a card with a low APR. This can save you a lot in the long run. So think carefully before settling on a particular card.
- Improve your credit score. By gradually reducing your balance and consistently paying your bills on time, you can improve your score and qualify for a lower APR.
- Take advantage of her APR referral offer of 0%. Consider transferring your credit card balance to a card with a 0% first year APR offer. This allows you to save interest when paying your balance.
- Negotiate with the issuer. Requesting a lower APR can go a long way if you don't already qualify. Call your credit card issuer and ask. To keep you as a customer, we may agree to lower your interest rate.
Frequently Asked Questions about Credit Card Interest
- What score do you need to get the lowest possible APR?
< A credit is considered “prime” if the p>FICO score exceeds the 670 mark. This means good or better. This means that you will be able to take advantage of some of the lowest interest rates. As your score rises into the very good (740-799) and very good (800-850) ranges, you are more likely to receive a good offer from a lender on his APR for credit his card.
- What is considered good APR?
A rate below the average credit card rate.
- Which card has the lowest APR?
Here are some of the best low interest credit recommendations
- What score do you need to get the lowest possible APR?