Credit Building > What Is a Good APR Rate for Credit Cards?

What Is a Good APR Rate for Credit Cards?

Wollit Team2 minute read · Updated 9th October 2025

When shopping for a credit card, one of the most important numbers you'll encounter is the APR. But what exactly does this mean, and how do you know if you're getting a good deal? Understanding credit card APR can help you make smarter financial choices and avoid paying unnecessary interest.

What Is APR?

APR stands for Annual Percentage Rate, which represents the yearly cost of borrowing money on your credit card. Think of it as the price you pay for carrying a balance from month to month. The higher the APR, the more you'll pay in interest charges if you don't pay off your full balance.

Most credit cards calculate interest daily based on your APR, so any money you owe will grow each day until you pay it off. This is why understanding what is apr becomes crucial when choosing the right card for your needs.

Current APR Rates in the UK

The average credit card APR UK currently sits around 24%, but rates can vary dramatically depending on the card type and your credit profile.

Standard credit cards usually offer APRs between 18% and 35%. Reward cards and premium cards often carry higher rates, sometimes exceeding 25%. Store cards typically have the highest APRs, often above 30%.

However, many cards offer promotional 0% APR periods for new customers, lasting anywhere from 6 to 29 months. These deals can provide excellent value if you plan to make a large purchase or transfer existing debt.

What Makes a Good APR Rate

A good APR depends largely on your credit score. Generally speaking, anything below 20% APR represents a competitive rate for those with excellent credit. If you have good credit, rates between 20% and 25% are reasonable, whilst those with fair credit might expect rates between 25% and 30%.

The best credit card APR often comes with those promotional 0% offers. These introductory rates give you breathing room to pay off balances without accumulating interest.

Factors That Affect Your APR

Your credit score plays the biggest role - higher scores typically qualify for lower rates.

If you're working to improve credit score, you might start with higher APRs but qualify for better rates over time. The type of card you choose also matters, with basic cards usually offering lower APRs than rewards cards.

How to Find Low Interest Credit Cards

Shopping around remains the best strategy for finding competitive rates. Look for cards specifically marketed as low interest credit cards, which prioritise competitive rates over rewards or perks.

Consider credit cards to build credit if you're new to credit or rebuilding your score. While these might carry higher initial APRs, they can help establish the payment history needed for better rates later.

When APR Doesn't Matter

Interestingly, your card's APR becomes irrelevant if you pay off your full balance every month. Credit card interest only applies to balances carried from month to month, so disciplined users can benefit from rewards cards regardless of their APR.

Making the Right Choice

When comparing credit card offers, don't focus solely on APR. Consider your spending habits, whether you typically carry balances, and what additional benefits matter to you.

For those who occasionally carry balances, prioritise finding cards with promotional 0% APR periods or consistently low standard rates.

Understanding what constitutes a good APR empowers you to make informed decisions about credit cards. While securing low rates remains important, your usage patterns and financial discipline matter more than the numbers on paper. Focus on finding a card that matches your needs and always aim to pay balances in full when possible.