What is a Good Interest Rate for Credit Cards?

When applying for a credit card, it’s important to review the APR. The APR is your annual percentage rate or interest rate when you carry a balance on your credit card. Your APR depends on several factors, including your credit score and the type of credit card you apply for, so what constitutes a good interest rate for a credit card?

Interest rates for credit cards are primarily determined by your credit score. If you have an excellent credit score, you can qualify for an interest rate of less than 10%. If you have a good credit score, anything below 14% is ideal. On the other hand, if you have a bad credit score, an interest rate above 20% could be a reality.

Credit cards with the lowest APRs are usually cards and credit cards issued by credit unions. These cards have APRs ranging from 4% to 14%. Credit unions will also often offer credit cards with interest rates as low as 6%.

However, high-interest-rate cards are much more plentiful. The highest credit card interest rates can be found in unsecured credit cards, credit cards for bad credit, (department) store credit cards, lucrative travel reward cards, and cash back credit cards. While these cards can be great for particular expenses or emergencies, they’re not ideal for everyday shopping (or carrying any balances). 

If you’re interested in applying for a credit card, the best way to get the biggest benefit and the best APR is to improve your credit score BEFORE applying. Raising your credit score by 5-10 points can make a substantial difference in credit card APR.

If you are rebuilding your credit, it’s important to organize and strategize a plan before you start applying for new credit cards. The credit counselors at Consumer Alliance Processing Company can help you evaluate your financial situation, budget your money, and improve your credit score so that you can get the best possible APRs on future credit cards. Please contact us at 888-960-5774 to speak with a credit help representative.

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