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What Is a ‘Good’ Credit Card APR?

NEW YORK (MainStreet) — One of the advantages of having a great credit score is being eligible for the lowest annual percentage rates that credit card issuers have to offer, but with the industry average hovering close to 15%, how low (or high) do APRs currently go? MainStreet breaks down the typical APR ranges, based on the type of credit card you have.

What’s a Great APR?

Generally speaking, low-interest rate cards hover around 10%, but there are a few products on the market that advertise rates substantially lower. The Simmons First Visa Platinum, for instance, features an ultra-low 7.25% variable APR, but you’re going to need well above average credit to qualify for that card.

You could potentially score a similarly low APR with a lower credit score if you elect to go with a product from a credit union. Atlanta-based Associated Credit Union, which allows new members to apply online, offers its Visa Platinum Preferred with a 9.9% APR to members with a FICO score higher than 680. (It awards a 12% APR to members with a FICO score of 600.)

APRs for Rewards Cards

Credit cards for major issuers have ranges that skew higher, especially when the card has a rewards program attached to it. According to Beverly Harzog, a credit card expert for Credit.com, Discover tends to feature the lowest rates and has a range of 10.99% to 19.99% on its More card. Meanwhile, Chase features an 11.99% to 22.99% of its popular Freedom card.

The thing to keep in mind here is that because these cards require good to excellent credit just to qualify, the low end of these ranges is going to be reserved for those with perfect credit scores.

Harzog says you can probably get the card if your score is around a 720, but your APR is going to be in the highest part of that range.

As such, those looking to get a rewards card should commit themselves to not carrying a balance, since doing so would simply negate any dollars, frequent-flier miles or experiential rewards you managed to earn off of your purchases.

What’s a Bad APR?

There are cards that carry APRs well above the 22.99% mark. First Premier Bank, for instance, has a product that currently carries a 36% APR. (Incidentally, at one point this card featured a 79.9% APR.)  High interest-rate cards like this are generally marketed to people who have less-than-stellar credit scores of around 650 or below, but even these customers should refrain from opting for a sky-high interest rate.

“Once you get above 22.99%, you’re better off getting a secured card,” Harzog says. Secured cards require customers to put down a sum of money upfront to cover the line of credit and thereby minimize the risk of default. Their APRs fall anywhere from between 8.99% – again, more likely to be found at a credit union – and 22.99%, but the idea is to use the card to build your credit back up so you can score a better rate on a traditional product. 

An astronomical APR isn’t the only sign a credit card is skewing more toward a predatory product. Here are seven more ways you can spot a bad credit card!

—Jeanine Skowronski is staff reporter for MainStreet. You can reach her by email at Skowronski.jeanine@thestreet.com, or follow her on Twitter at @JeanineSko.

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