What Is a Typical Annual Interest Rate for Purchases on a Credit Card in August 2025?

According to recent data, the average APR on outstanding credit card balances in the U.S was about 21.95%, while advertised purchase APRs typically fall around 23.99%. Your actual rate will depend on factors like your credit score, the card type, and the issuer’s policies. Those with excellent credit might snag rates around 15%–18%, while others could see rates pushing 30% or more.

Suppose you’re currently carrying a balance or considering using a credit card to cover everyday expenses or an emergency. In that case, it’s important to understand how much that interest can add up over time. High APRs can quickly turn a small purchase into long-term credit card debt if you’re only making minimum credit card payments. If you need financing but don’t qualify for low-interest credit cards, exploring personal loan options or promotional 0% APR cards might be a smarter way to manage your costs. 

What Are Different Types of Credit Card APRs?

There are several types of APRs, including purchase APR, balance transfer APR, cash advance APR, and penalty APR, each applying to different transactions and situations.

• Purchase APR: Usually, based on your credit score, card features, and issuer policies.
• Balance Transfer APR: Often similar to purchase APR (15%–25%), but can be as low as 0% for an intro period on some promotional offers.
• Cash Advance APR: Typically 25%–29%, often with no grace period, meaning interest starts accruing immediately.
• Penalty APR: Can exceed twenty-nine percent, triggered by late or missed payments, or other violations of card terms.

When you use a credit card, the APR (Annual Percentage Rate) reflects the yearly cost of borrowing money on that account. Credit card interest rates are essentially the interest rate you’ll pay if you carry a balance, expressed as a yearly figure. What many cardholders don’t realize is that most cards don’t have just one APR; they have multiple rates that apply to different types of transactions. Understanding these differences can help you avoid unnecessary interest charges.

The most common is the purchase APR, which applies to everyday purchases when you don’t pay your balance in full by the due date. There’s also the balance transfer APR, which is charged on credit card debt moved from another card, and it may be lower, sometimes even 0%, during an introductory period. 

The cash advance APR usually sits much higher and applies when you withdraw cash using your credit card, often with no grace period. Finally, the penalty APR is the steepest rate and can kick in if you miss payments or violate your card’s terms.

Credit cards can have more than one APR, with each rate applying to a specific type of transaction, such as purchases, balance transfers, cash advances, or penalties for missed payments.

Type of Credit Card APR	What It Means	When You Pay It	Typical Interest Rate	Important Notes
Purchase APR	Credit Card Interest charged on regular purchases	When you carry a balance past the due date	~15%–25%	Avoidable if you pay your statement balance in full each month.
Balance Transfer APR	Interest on debt moved from another card	From the day you transfer the balance	0%–20% (0% promo for 6–21 months possible)	May include a transfer fee of 3–5%; promo rates expire.
Cash Advance APR	Interest on cash withdrawn using a credit card	Immediately after the cash advance	~25%–30%	No grace period; extra cash advance fee applies.
Penalty APR	Higher interest rate for missed payments or violations	After a late payment or breach of terms	Up to 29.99%+	Can last indefinitely; harder to reverse once applied.

What Are The Factors That Influence Your APR in the U.S?

The main factors that influence credit card interest rates in 2025 and your APR include your credit card profile, the economy, your card issuer’s policies, and your account management habits. Financial institutions evaluate your credit score, history, and overall financial health to determine your risk level. 

Excellent credit holders often secure rates around 15%–18%, those with average credit usually fall in the low-to-mid twenty percent range, and subprime or fair-credit borrowers can face APRs in the high twenties, with penalty APRs sometimes exceeding 29%.

• Factors that affect your APR:

• Credit Card Profile – Credit score, history, and financial health
• Economy & Market – Changes in the prime rate or Fed policy
• Card Issuer Policies – Each lender sets its own risk and pricing strategy
• Account Management & Behavior – Payment history, balance habits, and limit use

How to Find Your Credit Card APR?

To find out your credit card’s APR, check your monthly credit card statement, log in to your online account, or contact your credit card issuer directly. The APR is typically listed in a section labeled “Interest Rates and Interest Charges.” Reviewing your credit card APR regularly is important so you know exactly what interest rate is being charged on any outstanding balances. Comparing APRs across different credit cards can also help you find the best option for your financial needs and potentially save money on interest.

Credit card issuers are legally required to disclose your APR and related fees under the Truth in Lending Act (TILA). This law ensures that consumers can easily compare rates and understand the cost of borrowing. The APR must be presented in a standardized format, along with any conditions, such as whether it’s a fixed or variable rate, so that you can make an informed decision. 

How to Lower Your Credit Card APR?

To lower your credit card APR, start by contacting your card issuer to request a better rate, improving your credit score, transferring your balance to a lower-interest card, and taking advantage of introductory offers. Many credit card companies are willing to negotiate your APR, especially if you have a good payment history and a strong credit profile.

Improving your credit score by paying bills on time, reducing credit card debt, and correcting errors on your credit report can qualify you for lower rates over time.

What Are the Current Average Interest Rates by State?

In mid-2025, average U.S. credit card APRs were in the low‑20% range (about 21.16% on all accounts and 22.25% on carried balances, per the Fed’s May 2025 report). Experian notes that any APR below the roughly 21.47% national average (as of Nov. 2024) is considered “good”. 

June 2025 data shows the average APR for new credit-card applicants (assuming a 700 FICO) is about 20.12%

State / DC	Estimated Avg APR (%)
Alabama	16.06
Alaska	18.46
Arizona	17.83
Arkansas	16.36
California	18.99
Colorado	17.01
Connecticut	18.92
Delaware	17.12
District of Columbia	18.41
Florida	19.42
Georgia	19.46
Hawaii	17.40
Idaho	17.02
Illinois	17.22
Indiana	16.13
Iowa	15.30
Kansas	16.24
Kentucky	15.35
Louisiana	17.20
Maine	16.72
Maryland	19.16
Massachusetts	17.76
Michigan	17.25
Minnesota	15.58
Mississippi	15.91
Missouri	16.09
Montana	16.83
Nebraska	16.33
Nevada	19.45
New Hampshire	17.00
New Jersey	19.20
New Mexico	16.20
New York	19.39
North Carolina	17.39
North Dakota	16.86
Ohio	16.01
Oklahoma	16.40
Oregon	16.84
Pennsylvania	16.96
Rhode Island	16.94
South Carolina	17.25
South Dakota	15.61
Tennessee	16.14
Texas	19.01
Utah	15.33
Vermont	16.92
Virginia	18.88
Washington	18.90
West Virginia	14.69
Wisconsin	15.26
Wyoming	16.91

Disclaimer: These are estimates, not observed, account-level APRs by state.

What Are Different Credit Card Types?

Different types of credit cards are designed to meet various spending habits and financial needs, ranging from low-interest cards to specialized rewards cards. Different types of cards include travel, airline, and hotel cards.

These cards offer points or perks for frequent travelers, while general rewards and cash-back cards provide incentives on everyday purchases. Gas rewards cards benefit drivers with fuel discounts, and student cards help young adults build credit with lower limits and educational tools. Knowing these types helps consumers choose the best card for their lifestyle and goals.

Type of Credit Card	Best For	Key Features
Low-Interest Credit Cards	Carrying a balance	Lower APR to reduce interest charges
Travel Rewards Cards	Frequent travelers	Points/miles redeemable for flights and travel perks
Airline Credit Cards	Loyal airline customers	Airline miles, priority boarding, free checked bags
Hotel Credit Cards	Regular hotel guests	Hotel points, room upgrades, free nights
Rewards Cards	Everyday spending	Points or rewards on various purchase categories
Cash-Back Credit Cards	Simple savings	Percentage of cash back on purchases
Gas Rewards Cards	Drivers who fuel often	Discounts or points on gas purchases
Student Credit Cards	Students building credit	Lower credit limits, educational tools

CreditNinja’s Final Thoughts on Credit Card APRs

Understanding your credit card’s APR is essential to managing your borrowing costs and making informed financial decisions. Knowing how interest rates work and how they vary based on your credit profile, card type, and issuer policies can help you avoid costly surprises and save money over time. 

Always take the time to compare credit card offers, paying close attention to the APR and any promotional rates, so you can choose the card that best fits your spending habits and financial goals.

FAQ

What is considered good annual percentage rates for a credit card?

A good APR for 2025 is generally anything below 18%, which is around the national average. If your APR is below 15%, that’s even better

Why is my credit card APR so high?

Your APR may be high due to a low credit score, limited credit history, or the type of card you have, like a rewards or store card. Issuers also adjust rates based on the prime rate, which can rise during periods of inflation.

What is the average credit card interest rate?

For credit card accounts that were assessed interest, the average annual percentage credit card interest rate was 21.95% as of February 2025, according to data from the Federal Reserve.

Can I negotiate my credit card APR?

Yes, you can negotiate! Many cardholders successfully lower their APR by calling their issuer, especially if they have a good payment history.

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Sources

1. https://www.businessinsider.com/personal-finance/credit-cards/average-credit-card-interest-rate
2. https://www.forbes.com/advisor/credit-cards/average-credit-card-interest-rate/ 
3. https://fred.stlouisfed.org/series/TERMCBCCALLNS?
4. https://www.experian.com/blogs/ask-experian/what-is-a-good-apr-for-a-credit-card/?
5. https://www.discover.com/credit-cards/card-smarts/good-interest-rate/
6. https://www.forbes.com/advisor/credit-cards/average-credit-card-interest-rate/
7. https://www.federalreserve.gov/releases/g19/20250507/ 
8. https://www.macrotrends.net/3153/us-credit-card-interest-rates#:~:text=U,as%20of%20May%202025