What is a good APR on credit cards?

Credit card APRs are the interest rates that you’ll pay on your balance. The higher the APR, the more expensive your credit card will be. If you’re looking to build or rebuild credit, a low APR is essential to keeping costs low and increasing your score over time. Eligible individuals can get a credit card with a low introductory APR rate (and corresponding monthly payments), but that rate will go up after the first few months of use. The good news is that many cards offer an even lower ongoing APR as an incentive for continued usage. When comparing cards, look for one with an introductory 0% APR period and an introductory balance transfer fee of zero; having a longer introductory period means less risk of increasing costs before getting another card if you’re not able to pay off your balance when the new card’s promotion expires; a lower balance transfer fee means potentially saving money if you plan on transferring debt from another credit card in order to qualify for rewards or sign up for other incentives

Basics of APR and credit card payments

APRs - When you apply for a credit card, you’re essentially borrowing money from the card’s issuing bank and agreeing to make monthly payments on that amount until the debt is repaid. The amount you’ll pay each month will depend on two factors: how much you borrowed and your credit card’s APR. The APR is the interest rate you’ll pay on that balance each month. Credit card payments - Credit card payments are due in full each month, but you do have the option of making a partial payment. If you only pay the minimum amount due, it could take years to pay off your debt, significantly damaging your credit score in the process.

Best APR credit cards for good credit

First Premier Credit Card APR: 26.8% (variable) For people looking to rebuild their credit, this is a good choice. First Premier offers a credit card with a very low minimum credit requirement and a reasonable APR. This credit card also has no annual fee and a simple application process. First Premier has a bad reputation with some online review sites, so proceed with caution. Citi Simplicity Credit Card APR: 9.99% (fixed) This card offers a low ongoing APR and a reasonable, fixed balance transfer fee for borrowers with good credit. It has no annual fee and, as with many of Citi’s products, has a useful tool that allows you to track your monthly spending. The Simplicity card is also notably easy to get, requiring credit scores as low as 690.

Best APR credit card for bad credit

Capitol One Credit Card APR: 34.74% (variable) This card is a good pick for individuals looking to rebuild credit who have a low score. The Capitol One Secured Credit Card requires a deposit between $50 and $200 and has a low ongoing APR. It has no annual fee, a simple application process, and an easy way to track your spending. Capital One also has a bad reputation with some online review sites, so proceed with caution.

How to find the best APR credit card for you

First, look for the lowest APR. This is the rate that you’ll pay on your balance each month. Be aware that the lowest APR will often come with a higher minimum payment and a smaller credit limit. Next, find one with a lengthy introductory 0% APR period. This is the rate that you’ll pay during the card’s first few months of use. Once that rate ends, you’ll be charged the card’s ongoing APR, so the longer the free period, the better. Finally, decide whether you want a rewards card or a balance transfer card. Rewards cards tend to come with higher APRs, but they can be a good source of ongoing savings. Balance transfer cards typically have lower APRs and are a great way to transfer debt without paying interest.

Consider a Credit line

Sometimes the best option is to get a credit line such as the Gauss line.

Pay off any credit card balance using your low interest credit line from Gauss, both on-demand and automatically. Your cards get lower APR, and you pay off balances much faster. Keep using your current cards and watch your savings go up.

Bottom line

Credit card APRs are the interest rates that you’ll pay on your balance, and they’re one of the most important factors when comparing cards. The higher the APR, the more expensive your credit card will be. When comparing cards, look for one with a low APR. A lengthy introductory 0% APR period is even better.

November, 5 / 2022
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