What is a Good Interest Rate on a Credit Card?

Tricia Christensen
Tricia Christensen

It’s very difficult to define a good interest rate on a credit card because there are so many factors that can determine the value of any one card. In the United States, there are rates that range between approximately 6% APR to nearly 40% APR. It might help to know that most department store cards have slightly less than 20% APR. Other countries may pay much higher interest rate amounts; Mexico may charge rates of between 30-50%, especially for store issued cards. As a result, defining “good” may be partly based upon a person’s location in the world.

Credit card offers tend to offer lower introductory rates.
Credit card offers tend to offer lower introductory rates.

In the US, the lowest rates that are not introductory offers usually sit at about 6%, and these are often offered to people with secured credit. This means that credit is usually backed by equity in homes or businesses. People looking for unsecured credit may be able to find cards with a rate of about 10%, though this is subject to change. These rates are not expected when people’s credit is less than perfect. Even with imperfect credit, many people can get cards that loan at about a 20% rate, and it probably isn’t a good idea to accept a card that charges more than that.

Sometimes credit cards with higher rates provide benefits like frequent flier miles.
Sometimes credit cards with higher rates provide benefits like frequent flier miles.

This doesn’t include introductory rates, which may be offered at 0% or a much lower fixed rate than is average. A 0% interest rate may apply to balance transfers or new purchases only, and these offers are usually time sensitive. People tempted by offers with no to low interest need to evaluate the actual rate once the introductory period is over.

Interest rates alone don’t determine a good credit card. Sometimes, a credit card with a higher rate allows people to accumulate lots of frequent flier miles, or gives cash back on purchases. It’s occasionally worth it to have a slightly higher rate if there are benefits that compensate for it, though this should be weighed carefully.

Not all low rates mean that people are getting superior cards. Consumers need to check for hidden fees, including those charged if the card isn’t used enough, for overuse of the card, additional charges for withdrawing cash, and exorbitant late payment amounts. Exceeding the credit limit may also kick fees into high gear.

When people always pay their cards off at the end of the month, a few points in interest rate, provided there is a grace period, really don’t matter. This figure becomes considerably more important when a person maintains a balance on a card. Higher balances do translate to greater cost to borrow money. Those with poor credit will typically pay higher rates, and they may have more trouble paying off balances. It may still be possible, if credit is imperfect, to get a slightly lower rate by scanning through credit offers and looking online.

Tricia Christensen
Tricia Christensen

Tricia has a Literature degree from Sonoma State University and has been a frequent wiseGEEK contributor for many years. She is especially passionate about reading and writing, although her other interests include medicine, art, film, history, politics, ethics, and religion. Tricia lives in Northern California and is currently working on her first novel.

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Discussion Comments


I have a credit card that has 0.00 percent interest. It was an introductory rate that has never changed. I've had the card for maybe 10 years and never paid any interest. I absolutely carry balances from month to month. My max credit is $15k. I think the most I've carried was about $5k - it took maybe a year to pay that down. Other than no interest rate, it has no other perks.

How is this possible? I'm afraid to ask them.


I have an American Express credit card with 10 percent interest that gives me rewards that I can use towards travel, credits on my statement, or gift cards.


Credit unions are often very easy to join. Some credit unions only require that you, or a family member, are faculty, staff, or a student at a certain school or school district. Others require that you, or a family member, are a state employee or resident of a certain state.

Many credit unions also form networks with other credit unions across the country, allowing members to access basic services free at network locations.

I have credit cards from a credit union and the interest rates and services are great.


@ ValleyFiah- Credit unions are a great place to get credit. Many credit unions have adjustable rate cards that change with the prime rate. This usually works in favor of the members because the rates stay as low as possible.

Many credit unions may offer rates as low as prime plus the margin, and cap their rates at 20%. The reason that they do this is because credit unions are cooperatives, owned by their members. Their business structure is designed to benefit the members, in turn offering them the best services for the lowest rates.

Fees and interest rates are normally less than for profit banks. Credit unions are also more involved in local community, and often offer things like scholarships and favorable loan terms for their members.


I am a full time student and I have fair to good credit. My credit is not perfect by any means, but I have an unsecured visa platinum with an 8% interest rate. The credit Union also caps my maximum APR at 18%, far less than the 29% + allowed under current federal law. I also have no annual fees and my credit limit is eligible for yearly review. The secret is credit unions.

My card is not a rewards card, but if it were, my terms would be the same except for a 10% interest rate. The reason I do not have a rewards card is that I carry a 30-40% balance, so the two percent increase in interest would negate the one percent gain from the rewards program.

I also have my vehicle loan through the same credit union and I was able to get a rate that was 6 points less than the big national and multinational banks.

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