Credit card interest rates are among the most confusing and potentially costly elements of credit card use. Many people don’t know exactly when credit card interest rates apply, how many different rates a single account can have, or how interest charges are calculated. Below, you can learn about all that and more, so you’ll be able to manage your credit card accounts more strategically and save money overall.
- What Are Credit Card Interest Rates?
- What Is the APR on a Credit Card?
- What Is a Good APR for a Credit Card?
- How Does Credit Card Interest Work?
- Types of Credit Card Interest Rates
- Current Credit Card Interest Rates
- Credit Card Interest Rates by Company
- Best Low Interest Credit Cards
- When Credit Card Interest Rates Can Change
- How to Lower the APR on a Credit Card
- How to Calculate the APR on a Credit Card
- Ask The Experts
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This content is not provided or commissioned by any issuer, and has not been reviewed, approved or otherwise endorsed by an issuer.
What Are Credit Card Interest Rates?
Credit card interest rates tell you how much it will cost to borrow money from a credit card company, by carrying a balance from month to month. For example, if your interest rate is 20% and you carry a $500 balance, you would owe roughly $100 in interest after a year.
You can learn more from the FAQs below.
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What Is the APR on a Credit Card?
The APR on a credit card represents the annual cost of carrying a balance with that credit card. The APR, or annual percentage rate, takes into account both a card’s daily interest rate and daily compounding, which is when interest applies to both the principal balance and previously assessed interest.
Learn more about the difference between a credit card APR and a credit card interest rate.
What Is a Good APR for a Credit Card?
A good APR for a credit card is below 13%, as that is roughly the average regular purchase APR among credit card offers for people with excellent credit. But the best credit card interest rate is one that never applies, which is achievable if you pay off everyday purchases in full each month and use 0% APR credit cards for financing.
Learn more about what currently qualifies as a good credit card APR.
How Does Credit Card Interest Work?
Credit card interest rates won’t apply if you pay your full statement balance by the due date each billing period. But if you don’t pay in full or you perform a transaction such as a cash advance, interest will begin to accrue daily.
The rate at which interest accrues each day is the APR divided by 365. You can then multiply that by your balance to find the amount of interest you owe per day. It’s not always quite that simple, though.
All credit card interest rates compound daily. That means that each day you owe interest both on your original balance and on any other interest you’ve already accrued. So the amount of interest you owe each day will slowly increase. That’s why it’s vital to always make a plan to pay off your debt.
You can find more information about how credit card rates work in the FAQs below.
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Types of Credit Card Interest Rates
- Credit Card Purchase APR: The interest rate on things you buy with a credit card that applies when you don’t pay your statement balance in full every billing period.
- Credit Card Balance Transfer APR: The interest rate you owe on balances you move from other credit cards or loans to your card. Typically, you get a low rate (even 0%) for a certain number of months, and then switch over to the regular APR.
- Credit Card Introductory APR: This is a temporary promotional rate that some credit cards offer to new applicants for a certain period of time after account opening. It is lower than the normal APR, often 0%. The average credit card with a 0% introductory APR on purchases gives you more than 12 months without interest. Balance transfer intro APRs last 13 months on average.
- Cash Advance APR: Withdrawing money from an ATM or bank branch using your credit card triggers this rate. The average credit card cash advance APR is 24.5%.
- Penalty APR: This rate may apply after you miss a due date. And whether it applies to future purchases or an existing balance, too, depends on how far behind you get. The average penalty APR on a credit card is 27.29%.
You can learn more from our Q&A on the different types of credit card interest rates.
Below, you can find a breakdown of average credit card interest rates for key segments of the market, along with additional information about how credit card interest works and how to avoid it.
Current Credit Card Interest Rates
| Category | Current Average | 6 Months Ago |
|---|---|---|
| Excellent Credit | 17.1% | 17.7% |
| Good Credit | 23.23% | 23.95% |
| Fair Credit | 26.5% | 27.5% |
| Secured Credit Cards | 21.76% | 22.43% |
| Student Credit Cards | 19.04% | 19.48% |
| Business Credit Cards | 20.94% | 21.54% |
| Store Credit Cards | 33.09% | 33.1% |
| All New Offers | 22.08% | 22.77% |
| All Existing Accounts | 20.97% | 21.39% |
Note: The current averages shown reflect regular APRs for new credit card offers in March 2026, except for the average for all existing accounts, which is from November 2025 due to data limitations.
Learn more about the current credit card landscape, including average credit card interest rates.
You can also check out our historical credit card interest rates page if you’re interested in seeing how current rates compare to rates from the past.
Credit Card Interest Rates by Company
| Credit Card Company | Interest Rate Range |
|---|---|
| American Express | 16.74% (V) - 28.49% (V) |
| Bank of America | 14.99% (V) - 27.49% (V) |
| Barclays | 17.49% (V) - 33.24% (V) |
| Capital One | 16.74% (V) - 28.49% (V) |
| Chase | 16.74% (V) - 27.99% (V) |
| Citi | 16.49% (V) - 29.49% (V) |
| Discover | 16.49% (V) - 26.49% (V) |
| U.S. Bank | 17.49% (V) - 28.49% (V) |
| Wells Fargo | 17.49% (V) - 28.49% (V) |
*(V) stands for Variable Rates
For some added context and commentary, check out the Q&As listed below.
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Best Low Interest Credit Cards
- Wells Fargo Reflect® Card: Winner
- Citi Simplicity® Card: Low Intro Rate for Balance Transfers
- Wells Fargo Active Cash® Card: Low Intro Rate with Cash Rewards
- Discover it® Miles: Low Intro Rate with Travel Rewards
- CoreFirst Bank & Trust Visa Platinum Card: Low Interest Rate (Ongoing)
- First Federal Community Bank Business Zero+ Card: Business
You can check out our review of the best low interest credit cards to learn more.
When Credit Card Interest Rates Can Change
There are four main cases in which your credit card interest rate might change. You have control over some of them, but others are totally out of your hands. Here are the cases in which they can change:
- Your introductory rate expires. It’s great to get a low introductory APR, especially if it’s 0%. But these rates only last a certain number of months, usually 6-24, before the regular APR kicks in.
- You have a variable rate. This means your rate is tied to an index, usually the prime rate that banks use to lend to their most creditworthy customers. As the market fluctuates and that rate changes, so will your card’s interest rate. You’ll know your card’s rate is variable if you see a (V) next to it. Most cards have variable rates, but some have fixed rates not tied to an index.
- You trigger the penalty APR. The penalty APR is higher than your regular APR and can be applied when you miss a payment. It can apply to future purchases after. You can only regain your regular APR on existing balances by paying on time for six months. Your issuer may or may not ever lower your APR on new purchases.
- Your issuer changes the rate. A credit card company can change your interest rate for future purchases at pretty much any time, for pretty much any reason. They’re required by law to give you 45-days’ notice, though.
How to Lower the APR on a Credit Card
The best way to get a lower credit card APR is to get a new credit card with a lower rate than your current card. If you already owe a balance on your current credit card, you could transfer that balance to a card with a low introductory balance transfer APR. Or, if you’re planning a big purchase, you could get a new card with a 0% intro APR on purchases.
Low interest credit cards usually require good or excellent credit for approval, however. If you have a lower score, you should focus on improving it before you apply.
Learn more about how to get a lower credit card interest rate.
How to Calculate the APR on a Credit Card
A credit card’s APR will be listed on your online account and monthly statements, so you won’t have to calculate the rate itself. If you want to calculate the interest charges you may incur on a credit card, use a free credit card interest calculator.
You can also find more information in the following FAQs.
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Ask the Experts
WalletHub invited a panel of experts to share their thoughts on the following questions about credit card interest rates. You can see who they are and what advice they had to share below. Just click “Read More” under an expert’s name and title to check out their comments.
1. Do you have any tips for avoiding interest charges on credit cards? 2. How high could credit card interest rates get? 3. Why do store credit cards have such high interest rates?
Asghar Sabbaghi Ph.D., Alyce DeCosta and Walter E. Heller Professor of Finance and Information Systems - Heller College of Business - Roosevelt University
Lynda Palmer Practitioner Instructor of Marketing and Director of Education to Business (E2B) Program – Pepperdine University, Graziadio Business School
H. Kent Baker Ph.D., University Professor of Finance – American University, Kogod School of Business
Beth Hunsaker MS, AFC®, Associate Director, Financial Wellness Center, Associate Instructor, Family and Consumer Studies, University of Utah
Eren Cifci Assistant Professor of Finance, Department of Accounting, Finance, and Economics - College of Business - Austin Peay State University
Tammie Lang Ed.D. – Adjunct Faculty – Nebraska Wesleyan University
More Experts
