Whether you're considering a new credit card or looking at your current statements, one of the most important numbers to understand is the annual percentage rate (APR). This figure varies widely, and a high-interest-rate credit card can cost you significantly over time.

Key Considerations

The average credit card APR on all credit card accounts was 22.25% as of May 2025. So, a rate that is at or significantly above this current national average—like 25% or more—is generally considered high. Much like other financing options, a good to excellent credit score will often secure a lower APR—and in turn, help keep your monthly payments low on carried balances.

What does APR mean on a credit card?

APR on a credit card is the cost of carrying a balance on the card. It is expressed as a percentage.

With loans, an APR includes the interest rate and fees. With credit cards, APRs and interest rates are typically the same amount. APRs are set when you’re approved for the card and will vary by issuer and cardholder. Factors such as your credit scores, market rates, and other considerations determine your credit card APR.

What is considered a high APR for credit cards?

Any APR significantly above the national average—roughly 22%—is considered high. What is deemed a good credit card APR depends on the national average rates and your individual creditworthiness. But, generally, an APR that’s in the mid-teens is an especially good rate for credit cards.

Your credit score has a significant impact on the APR you're offered. Data from the Consumer Financial Protection Bureau (CFPB) consumer credit card market report shows that cardholders with lower credit scores have credit card APRs above the national average.

Credit score range	Average credit card APR
800 and above	1.56% lower than average
720 to 799	0.74% higher than average
660 to 719	2.64% higher than average
620 to 659	3.44% higher than average
619 and under	3.94% higher than average

Why do some credit cards have high APRs? 

Even with good credit, your APR might be high due to factors like fluctuations in the Federal Reserve’s prime rate and the type of card you have. Several factors can drive up your credit card APR, including:

Your credit score: Lower scores at the time of application signal more risk to lenders, leading to higher APRs.
The prime rate: As the Fed raises rates, credit card APRs usually follow (along with most other borrowing costs).
The type of card: Rewards cards with extensive perks, retail cards, or cards with flexible approval requirements often come with higher APRs.
Unsecured debt: Credit cards are unsecured, so issuers offset risk with higher, variable APRs.

The good news is you can often negotiate a lower rate by calling your credit card company, especially if your payment history is strong.

What do rising credit card APRs mean for your monthly payment? 

When credit card APRs rise, it directly affects the amount of interest you pay each month on a carried balance. For example, if you have a balance of $40,000 on a credit card with a 15% APR, your interest charges will be lower than if that same balance had a 25% APR.

As rates go up, your minimum monthly payment might go up by a small amount, but more importantly, a larger portion of that payment will go toward interest rather than the principal balance. This makes it harder to pay down your debt over time.

What are the risks of a high APR?

The biggest risk of a high-interest-rate credit card is compounding debt. When you don’t pay your full balance each month, interest accrues and compounds on what remains, adding to your total debt—and making it harder to catch up.

For example, if you have a 24% APR, your debt will double in just 3 years if unpaid, according to the “Rule of 72”—a formula for estimating how long it takes for your balance to double due to compound interest.

High APRs also eat into your monthly cash flow and delay your progress toward financial goals. If you rely on credit to cover expenses, rising interest charges can create a dangerous cycle of debt, potentially leading to financial stress and a higher credit utilization ratio, which can harm your credit score.

How can you lower your APR?

You can take steps to reduce APR on credit cards, including negotiating a lower rate. Start by calling your credit card issuer and asking for a lower APR. Be ready to explain why you deserve a better rate—such as an improved credit score or a strong payment history. Sometimes, they’ll offer a temporary or permanent reduction.

But if that doesn’t work—or you want a more lasting solution—consolidate high-interest credit card debt into a fixed-rate personal loan. With this approach, you take out a single, new loan to pay off multiple credit cards, usually at a lower rate.

A key benefit of a personal loan is that it often comes with a fixed rate. While credit card rates can ebb and flow with economic factors, a fixed-rate personal loan offers a stable, usually more affordable APR. According to the Federal Reserve, two-year personal loans average 11.57%, compared to average credit card APR rates that currently hover at more than 22%.

	Credit card refinancing	Personal loan
APR	Variable	Fixed, often lower
Monthly payment	Depends on usage and minimums	Predictable and consistent
Repayment timeline	Flexible, but interest compounds monthly on unpaid balances	Fixed term (up to 10 years^1,2with BHG)
Flexibility	Can reuse credit after payoff	One-time lump sum; no revolving credit
Credit impact	Improves utilization when cards are paid off	Can improve mix of credit types and help build positive payment history

FYI: BHG Financial offers personal loans with lower rates than most credit cards and higher loan amounts than many competitors (up to $250,000¹). Our flexible repayment terms up to 10 years^1,2 help keep monthly payments low, making it easier to manage your debt and work toward financial wellbeing.

Ready to see what’s possible? Use our quick and easy payment estimator to get your personalized loan offer in just seconds.

High credit card APRs FAQ

Is a 25% APR high for a credit card?

Rates above 22% exceed current averages, so an APR of 25% is high for a credit card. While it may be close to the average for someone with a lower credit score, it's well above the national average. If you have an APR this high and carry a balance, you will likely be paying a significant amount in interest charges, making it difficult to pay off your debt.

Can you avoid paying monthly interest on a credit card balance?

Yes, you can avoid paying interest on credit card purchases by paying off your full balance each month before the due date. Most credit cards offer a "grace period," which is the time between the end of a billing cycle and the payment due date. By paying in full during this period, you can avoid interest charges entirely.

How often does the APR change on a credit card?

Variable APRs can change whenever the prime rate changes, which the Fed typically adjusts several times a year. Average credit card APRs have risen from 14.6% in 2016 to 22.25% as of May 2025, according to Federal Reserve data. Issuers may also raise your rate after missed payments, changes in creditworthiness, or once promotional offers expire.

Does APR apply to all credit card transactions?

Not always. Many credit cards have different APRs for different types of transactions. For example, a cash advance APR is often higher than a purchase APR and begins to accrue interest immediately, without a grace period. Your card may also have an introductory or promotional APR for a limited time, or a penalty APR if you miss payments. Always check your card terms for the specific rates that apply.

Can you negotiate your credit card APR?

Yes. Many credit card issuers are willing to work with responsible customers. You’ll need to call each issuer and ask for a lower APR—if you receive a reduction, it may be temporary. Your chances of success are better if you have a history of making on-time payments, and it helps if you've recently improved your credit score.

Not all solutions, loan amounts, rates or terms are available in all states.

¹ Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile. 

² Personal Loan Repayment Example: A $59,755 personal loan with a 7-year term and an APR of 17.2% would require 84 monthly payments of $1,228.

³ This is not a guaranteed offer of credit and is subject to credit approval.

Consumer loans funded by Pinnacle Bank, a Tennessee bank, or County Bank. Equal Housing Lenders.

No application fees, commitment, or impact on personal credit to estimate your payment.

For California Residents: BHG Financial loans made or arranged pursuant to a California Financing Law license - Number 603G493.