What is the average credit card interest rate?

Whether you're looking to apply for a new credit card or wondering if your current card is giving you a good rate, you might be wondering about the average credit card interest rate and how to make sure you’re getting a good interest rate on your credit card. After all, getting a good APR can save you hundreds if not thousands of dollars in credit card interest.

Average interest rate by credit card category

Credit card interest rates are not the same across the board. Different kinds of credit cards tend to have higher or lower interest rates than the average interest rate on a credit card. You might find that rewards cards have more perks but more credit card interest than a 0% intro APR credit card.

However, while national trends and average credit card interest rates are useful guidelines, remember that the APR of a given cardholder will depend on their creditworthiness, and not just the average interest rate on a credit card. Read on for more tips about how to lower your APR.

What are the different types of credit card interest rates?

Your credit card interest rate might not be one single number. Instead, it might depend on the different ways you use your credit card.

Here are different types of credit card interest rates that are important to understand.

  • New purchase intro APR: This is an interest rate that you can get as an introductory offer for a limited time when applying to some new credit cards. It offers a period of time with a low interest on new purchases.
  • Balance transfer intro APR: Much like the new purchase intro APR, this is an introductory period of low interest on new cards for balance transfers. However, even cards with a low intro APR balance transfer offer may require a balance transfer fee.
  • Penalty APR: Penalty APR is a rate that appears when minimum payments are missed. It is typically higher than a card’s normal APR, and you can even encounter a penalty APR if you miss a payment during an introductory APR period.
  • Cash advance APR: You might be able to withdraw money from your credit card as a cash advance. This would incur the cash advance APR, which begins as soon as you withdraw money and can be a distinct credit card interest rate.
  • Fixed APR: A fixed APR is an APR that will stay at the same value over time.
  • Variable APR: Many credit cards have a variable APR. That means that their interest rate can increase or decrease depending on an index rate, which is tied to larger economic variations. There will be a range within which a credit card has a variable APR.

3 steps that may get you a card with a lower interest rate

1. Improve your credit score

Working on your credit is a great way to enhance your creditworthiness and lower the APRs you get offered from credit card issuers. If you have revolving credit card debt, paying down that debt will help your credit by lowering your credit utilization ratio. Other ways to work on your credit can involve looking for errors in your credit report, increasing your credit limit on existing cards, and continuing to build a history of timely payments.

2. Compare credit cards

Credit cards are offered at a variety of rates. Some credit cards (can use most if there is substantiation) offer a range of variable rates, based on creditworthiness.

3. Take advantage of 0% intro APR

Taking advantage of 0% intro APRs for new purchases and balance transfers is the best credit card interest rate you can find — although, of course, it comes with an expiration date. This is a great option, just be aware of when the intro period ends.

Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.

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