Credit Card APR Guide

Annual percentage rate (APR) is the estimated yearly cost of borrowing money, expressed as a percentage of the total amount borrowed. It includes the interest rate as well as any additional fees or costs associated with the loan or credit product. The APR provides a more comprehensive picture of the total cost of borrowing than just the interest rate alone.

Here's What Makes Up The APR

1. Interest Rate: This is the percentage of the loan amount...

The APR on a credit card is the cost of borrowing over the course of a year, while the interest rate on a credit card determines how much interest you owe each day. APR stands for “annual percentage rate,” and the terms “APR” and “interest rate” are often used interchangeably for credit cards. They work a bit differently, though.

For example, if your credit card has a 15% APR, your daily interest rate is...

The different types of credit card interest rates are the purchase APR, balance transfer APR, cash advance APR, penalty APR, and introductory APR. It’s important to understand how each type of credit card interest rate works and which balances it applies to, so you can take steps to minimize your costs and maximize your savings. Below, you’ll find an explanation of all the different interest rates you need to know about.

Types of Credit...

When a credit card APR is on a range (e.g. 10.9% - 25.9%), it means the rate you are given, if approved for an account, can be anywhere within that range, depending on your credit history and disposable income. Basically, those with an excellent credit score may qualify for the lower end of the range, while those with lower credit scores may receive a higher APR within the range.

It's important that you carefully review the...

Regular APR (Annual Percentage Rate) is the ongoing, standard interest rate applied to the outstanding balance on a credit card or loan after any introductory or promotional periods have expired. Depending on the type of credit or loan, the regular APR may be fixed or variable. A fixed APR remains constant throughout the loan term, while a variable APR can change based on fluctuations in an underlying interest rate index.

It's important for consumers to be...

To find the interest rate on your credit card, look at your cardmember agreement and your monthly credit card statements. Your interest rate will be there in the form of an annual percentage rate (APR). But as “annual” implies, an APR is the cumulative interest rate for a whole year, which isn’t all that helpful for calculating actual interest charges from day to day or month to month.

How to Calculate Your Daily Interest Rate

Credit card companies determine their APRs based on your credit standing – or how much risk you pose as a borrower – as well as broader factors, like the health of the economy. The credit standing is based on criteria such as an applicant’s credit history, income, and the total debt owed. Other considerations include age, monthly housing payments, and employment status.

So, if a credit card company advertises a card’s APR as a...

APR is yearly, not monthly. More specifically, the APR (annual percentage rate) is the estimated yearly cost of borrowing with a credit card or a loan. The APR includes the interest charges that will apply to your balance, as well as any related fees.

APR on Credit Cards

When you carry a balance on a credit card, the APR is accumulated on a daily basis. But you will not incur interest on purchases...

To calculate the annual percentage rate for a loan, take the sum of the loan’s interest charges and fees, divide that by the loan amount, and then divide the result by the number of days in the loan term. Next, multiply by 365 to get the annual rate, then multiply by 100 to get the rate in the form of a percentage.

Loan APR Calculation Example

Let’s say you have a $10,000 loan...

You don’t have to pay interest if you pay your credit card bill in full and on time every month, as the APR only applies to outstanding balances carried from one billing period to the next. Most cards have a grace period, so interest won't apply between when your monthly statement is generated and when your bill is due.

To take advantage of a grace period, you need to pay in full every single billing...

Credit card interest is calculated by dividing the card’s APR by 365 to get the “daily periodic rate,” then multiplying it by the card’s average daily balance to get the interest accrued in one day. Finally, multiply by the number of days in the billing period to get the monthly interest. 

Fortunately, you will not owe interest if your credit card has a grace period and you pay the bill in full by the due...

The highest credit card interest rate in recent memory was 79.9% on a card offered by First Premier Bank in 2010 but that offer’s not available anymore. The current highest credit card interest rate is 36% on the First PREMIER® Bank Mastercard Credit Card.

The next highest credit card interest rate seems to be 35.99%, charged by the Total Visa® Card and the Milestone® Mastercard®. These rates are very high when you consider that the average interest rate is only around 22.76%.

The bank with the lowest credit card interest rates is Citi because it offers many credit cards with long 0% introductory APRs. The best low-interest Citi card is the Citi Simplicity® Card, which offers an introductory APR of 0% for 21 months on qualifying balance transfers. The card also has an offer of 0% for 12 months intro APR on purchases and a regular APR of 17.99% - 28.74% (V).

Most major banks don’t tend to offer low regular APRs on credit cards. However, there are a...

The best low interest rate credit card with rewards is the Wells Fargo Active Cash® Card. This card offers an intro APR of 0% for 12 months from account opening on both new purchases and qualifying balance transfers. Note that transfers are subject to a fee of 3% intro for 120 days, then up to 5% (min $5). The card’s regular APR is 18.99%, 23.99%, or 28.99% Variable. Plus, Wells Fargo Active Cash gives an initial bonus of $200 cash rewards after spending $500 on purchases in the first 3 months and 2% cash rewards on purchases.

Some of the Best Low Interest Credit Cards with Rewards

Your regular interest rate for these cards will depend...

The best low interest credit card with airline miles is The New United Gateway℠ Card because it offers an intro APR of 0% for 12 months on purchases. Cardholders also earn 1 - 2 miles per $1 spent on purchases and an initial bonus of 30,000 miles for spending $1,000 in the first 3 months.

The card’s regular APR is 20.49% - 28.99% (V), and it will take effect when the intro APR ends. In addition, the United Gateway Card has a $0 annual fee as well as a $0 foreign fee, and it requires good credit or better for...

The best low APR secured credit card is the Amazon Secured Credit Card because its regular APR of 10% is among the lowest rates available to people with bad credit. The Amazon Secured Credit Card has a $0 annual fee, and cardholders need to put down a security deposit of $100+.

Best Low APR Secured Credit Cards of 2025

It’s worth pointing out that carrying a balance on a secured card doesn’t make much sense. You can’t...

A credit card interest rate below 13 percent is considered low because it's less than what credit cards for people with excellent credit traditionally charge. Credit cards with APRs below 10 percent are fairly rare but may be offered by some credit unions or local banks.

If you have fair or bad credit, your interest rate will likely be significantly higher than the average rate. As a result, the best approach is to pay...

Yes, a 25% APR is high for a credit card, as it is above the average APR for new credit card offers. Credit card APRs can be much lower, and some cards offer an introductory 0% APR for a certain number of months, which can save you a lot of money.

Keep in mind that your 25% APR should apply only when you carry a balance from month to month. If you pay off your full balance...

A low APR for a credit card is below 17.68% if you have excellent credit. For people with lower credit scores, credit cards with good low APRs may charge interest at a rate closer to 20% after any low-interest introductory periods end.

In general, you want a regular APR below the market average for your credit standing. Here are the current averages for each credit tier, according to WalletHub’s latest Credit Card Landscape Report:

• Excellent...

A 0% APR means that you pay no interest on new purchases, balance transfers or both for a certain period of time after you open the credit card account. The best 0% APR credit cards on the market currently give 15-21 months without interest. The average 0% APR intro period is about 11 months for cards offering 0% on purchases, according to WalletHub’s Credit Card Landscape Report, and around 13 months for the average card with 0% on transfers.

A 0% APR...

You can get 0% on a credit card if you apply for the right credit card and you have fair to excellent credit, or you're a student. You may be able to get credit cards with 0% interest promotions for purchases, balance transfers, or both, lasting for 6 to 21 months. The best offers are mainly reserved for new applicants with good credit or better (700+ credit score).

Credit card issuers will sometimes extend...

No 0% APR for purchases means that you will pay interest on purchases at your credit card’s regular APR if you carry a balance from month to month, rather than paying in full by the due date. A credit card with a 0% APR does not charge interest for a specified period as long as you make minimum monthly payments.

Even a credit card that has 0% APR for purchases only offers the rate...

One of the best credit cards for 0% APR on purchases is the Wells Fargo Reflect® Card. This card has an introductory APR of 0% for 21 months from account opening. The card also has a $0 annual fee. The card’s regular APR is 16.99%, 23.49%, or 28.74% Variable.

Some of the best 0% APR credit cards for purchases come with offers of 0% APR for 15-21 months and have no annual fee. Some also offer 0% on balance transfers in addition to purchases.

Some of...

The U.S. Bank Shield™ Visa® Card has the longest 0% APR, offering an introductory APR of 0% for 24 months on purchases and qualifying balance transfers - subject to a fee of 5% (min $5). The card’s regular APR is 17.49% - 28.49% (V), and it has a $0 annual fee.

Longest 0% Intro APR Credit Card Offers

• U.S. Bank Shield™ Visa® Card: 0% for 24 months
• Wells Fargo Reflect® Card: 0% for 21 months from account opening
• Chase Slate Edge® credit card: 0% for 18 months
• BankAmericard® credit card: 0% for 18 billing cycles
• Fifth Third 1% Cash/Back Card: 0% for 15 months
• Citi Simplicity® Card: 0% for 21 months
• Citi® Diamond Preferred® Card: 0% for 21 months on balance transfers

These cards benefit from $0 annual fees and require good credit or better (a credit score of 700+) for good odds of approval. Most of them don’t offer any kind of rewards, but they’re meant for financing rather than regular spending.

Credit Cards with the Longest 0% APRs Compared

Store Credit Cards With 0% Intro APRs

It’s important to note that some store cards may offer 0% interest for longer than 21 months, but they use deferred interest. This means there's no interest only if you pay off the item fully by the end of the promotional period. Otherwise, interest will be applied to your entire original purchase amount, as if it had been there from the start. So, you should only consider this type of card if you're sure you'll pay down your full balance before the interest-free period ends.

The JCPenney Credit Card is one example, offering 18 months of deferred interest. But these cards are best avoided, due to the potentially high interest rate. Instead, you should check out...

One of the best 0% APR credit cards you can get with a high limit is the Wells Fargo Reflect® Card because it offers an introductory rate of 0% for 21 months from account opening on purchases and 0% for 21 months from account opening on qualifying balance transfers. Some cardholders have reportedly received credit limits of $10,000+ upon approval.

After the intro APR offer concludes, the card’s regular APR will go into effect - 16.99%, 23.49%, or 28.74% Variable. There is also a balance transfer fee of 5% (min $5).

Notable 0% APR Credit Cards with High...

When a 0% APR period ends, the credit card’s regular APR will kick in. That rate will apply to any unpaid balance remaining on the credit card as well as any new purchases made from that point on. The regular APR that applies when a 0% APR period expires tends to be very high, so it’s best not to leave much of a balance for it to affect.

The only exception to this rule...

You can potentially extend a 0% APR on a credit card by calling the credit card company and asking them if they can extend the promotion. Success could depend on which credit card company it is, your relationship with them, your current account balance, and other factors that the credit card company won’t publicly disclose. There is no exact science to getting an extension on a 0% APR period, and it’s unlikely to work. So...

The best credit card with a 0% APR for 21 months is the Wells Fargo Reflect® Card. It offers an intro APR of 0% for 21 months from account opening on both purchases and qualifying balance transfers, and there’s no annual fee. The Wells Fargo Reflect Card’s regular APR is 16.99%, 23.49%, or 28.74% Variable, and the balance transfer fee is 5% (min $5) of the amount transferred.

It’s worth noting that credit cards offering a 0% intro APR for 21 months aren’t that common. However, there are several good 0%...

You generally need a good or excellent credit score of 700 to 750 or higher to get a 0% APR credit card in most cases. The higher your credit score is and the more income you have, the better your odds of approval for a 0% APR credit card will be.

Students with limited credit history and people with fair credit may qualify for certain cards from time to time, but they won't have...

A 0% APR is not good for your credit if you overspend, as high credit utilization and missed payments hurt your credit score. After the 0% period ends, any remaining balance will accrue interest at a high rate, making it more difficult to pay off debt and stay current on payments, which can further damage your credit. Applying for a new 0% APR credit card will also hurt your credit score temporarily.

Why a...

A good APR for a first credit card is anything below 20%. Most first-timers have no credit history, so they need to prove themselves as responsible borrowers before getting a really low APR. However, there are some exceptions. Student cards also give lower rates, but you have to be a student to get one. Another way to get a good APR for a first credit card is to apply for a secured card.

It’s worth pointing out...

A 15% APR is good for credit cards and personal loans, as it’s cheaper than average. On the other hand, a 15% APR is not good for mortgages, student loans, or auto loans, as it’s far higher than what most borrowers should expect to pay.

15% Is a Good APR For:

Credit cards

A 15% APR is good for a credit card. The average APR on a credit card is 22.76%.

...

A 5% APR is good for pretty much all types of borrowing, except for mortgages. On personal loans, credit cards, student loans, and auto loans, 5% is much cheaper than the average rate. You probably won’t be able to get a rate this low unless you have excellent credit, though – and it’s unlikely to even be offered in the case of credit cards.

5% Is a Good APR For:

Credit cards

...

A 0% APR is good for your credit if you take advantage of the introductory period to pay off your debt in full. While credit card APRs don't directly affect your credit scores, you can bring down a large balance faster if you don't have to pay interest, which will ultimately help your credit score. Using a 0% APR credit card irresponsibly, however, can have the opposite effect.

With a 0% APR credit card, you don't pay...

One of the best low APR credit cards for no credit is the Applied Bank® Secured Visa® Gold Preferred® Credit Card, which offers a 9.99% APR on purchases and charges a $48 annual fee. It also requires a security deposit of at least $200, which serves as your credit limit.

Secured cards like the Applied Bank Secured Gold Card tend to have low interest rates but don’t really allow you to borrow money, since your spending limit equals the amount of your deposit. But these...

Yes, it is good to have a low APR on a credit card if you plan on carrying a balance as it can save you a lot of money on interest charges. On the other hand, if you plan on paying in full every month, a good rewards card with a high APR would be better than a credit card with a low APR and no rewards. Interest won’t apply if you always pay in full.

To get a low interest credit card, start by checking your credit score and figuring out how long you expect to need a low interest rate for, in addition to why you need it. Low interest credit cards usually require good credit or better, and low rates are available for new purchases as well as balance transfers.

How to Get a Low Interest Credit Card

1. Check your credit score. To get a 0% APR credit card, whether for...

Yes, it is good to have a low APR on a credit card if you plan on carrying a balance as it can save you a lot of money on interest charges. On the other hand, if you plan on paying in full every month, a good rewards card with a high APR would be better than a credit card with a low APR and no rewards. Interest won’t apply if you always pay in full.

A low APR means that you will pay less in interest on purchases or balance transfers than the average regular APR for a credit card. The best low APR credit cards offer 0% interest on both purchases and balance transfers for a set number of months. Not all low APR offers have 0% introductory rates, though – there are also cards with regular rates below the market average for new credit card offers (22.76%).

...

Most credit card companies are likely to lower your credit card’s interest rate if you ask, including Capital One, American Express, Chase, and Bank of America, according to reviews online. However, if you’re trying to get a better APR on your credit card, don’t take this list to be exhaustive.

Theoretically, you can call any credit card company to ask for a lower interest rate. The worst that could happen is they’ll say no. Every card issuer goes by its...

There is no maximum number of times you should ask for a lower APR on your credit card. As a matter of fact, persistence is key. Your request may not be granted after the first call. There’s no guarantee, but it shouldn’t hurt to call back later, and to ask to speak with a supervisor. Before doing so, though, make sure they won't do a hard pull to consider your request. Also, keep in mind that you will need...

Hi! Yes! It is definitely worth calling and asking them. You may need to make more than one call until you get a person who has the authority to make that change, but it can't hurt to call and ask. I'd do a bit of research first to see what the interest ranges are that the credit card company operates in so that you know where you might fall. You could also send an email...