Pop Quiz Time – do you know the interest rate on your credit card?
Carrying a credit card balance from month to month can get expensive fast. The interest rate is one of the most important numbers to pay attention to.
Let’s break down what current credit card interest rates look like, what affects them, and how to find a better deal.
What Is a Good Credit Card Interest Rate?
Most credit card rates are not low. As of May 2025, the average interest rate on credit cards in the U.S. is around 24.28% APR (Annual Percentage Rate)(source: LendingTree).
Here’s what typical APRs look like based on credit scores:
- Excellent credit (720+): 18–21%
- Good credit (690–719): 20–23%
- Fair credit (630–689): 24–27%
- Poor credit (below 629): 27%+
These numbers shift based on market conditions, but one thing stays constant. The higher your credit score, the better your chances of getting a lower rate.
Fixed vs. Variable Interest Rates
Credit cards come with either fixed or variable interest rates.
Fixed rates:
Stay the same unless the issuer notifies you of a change.
Offer predictability, but changes can still happen with notice.
Variable rates:
Move up or down based on an index like the U.S. Prime Rate.
Most credit cards today use variable rates.
If interest rates rise, so will your variable APR. If rates fall, you may benefit from a lower payment — but that depends on your card issuer.
Are Rewards Cards Worth It?
Many credit cards offer cash back, travel points, or other perks. These rewards can be helpful if:
- You pay your balance in full every month.
- You don’t let the interest cancel out your earnings.
But rewards shouldn’t distract from the true cost of a card. If you're carrying a balance and paying 25% interest, a 2% cash back offer won’t come close to breaking even.
Always read the fine print. Know what you’re giving up for those perks.
Why Credit Unions Might Offer You a Better Deal
Credit unions operate as nonprofit cooperatives, which allows them to offer lower rates to their members — including on credit cards.
- Compared to national banks, credit unions tend to:
- Charge lower average interest rates
- Have fewer fees
- Offer more flexible qualification standards
Here at Radiant, our members have cards with with competitive APRs, no balance transfer fees, and no annual fees. Our cards are solid choices for anyone looking to save money while building credit.
Make Your Card Work for You — Not Against You
Before signing up for a credit card, ask these questions:
- What is the APR after any intro period?
- Is the rate fixed or variable?
- Are rewards tempting me to overspend?
- Will I realistically pay off the balance each month?
Having a credit card with a great interest rate is just ONE thing you can do to help yourself have a brighter financial future.
But should you use your credit card to pay for everything?
Let's talk about it.