High interest rates on credit cards typically start at 20% APR and go up from there

A high interest rate on a credit card is one that costs you significantly more money when you carry a balance. Most cards issued today fall into one of three ranges: standard rates between 16% and 21% APR, high rates between 22% and 29% APR, and penalty rates of 30% APR or higher. Where your card lands depends on your credit score when you apply, the card issuer's pricing, and sometimes the type of card.

The practical difference matters. On a $5,000 balance, a 16% APR costs you about $67 per month in interest alone. That same balance at 25% APR costs $104 per month — an extra $37 every month you don't pay it off. At 30% APR, you're paying $125 monthly. Over a year without paying down the principal, the difference between a standard rate and a high rate is hundreds of dollars.

Whether a rate is "high" also depends on what you're comparing it to. Credit cards as a category carry higher rates than personal loans or home equity lines of credit. But within the credit card market, 20% is now closer to average than to high. Cards marketed to people with fair or poor credit routinely start at 24% to 28%. Cards for people with excellent credit often start at 16% to 18%.

Key Takeaways

  • Rates above 22% APR are generally considered high for credit cards, though the market average has shifted upward in recent years.
  • Your credit score at the time you apply is the single biggest factor determining whether you get a standard or high rate.
  • A high rate on a $5,000 balance can cost you $30 to $60 more per month in interest than a standard rate.
  • Penalty rates (30% or higher) apply when you miss a payment, and they can stay in place for six months or longer even after you catch up.
  • The rate you're offered is not final — you can request a lower rate after six months of on-time payments, and shopping for a new card with a better rate is always an option.

How credit scores determine the rate you receive

Card issuers use your credit score as the primary input into their pricing model. A score of 750 or higher typically qualifies you for rates in the 16% to 21% range. A score between 670 and 749 usually lands you in the 20% to 25% range. Below 670, most issuers price you at 24% to 29% or higher.

This is not a fixed rule — different issuers have different thresholds and different pricing tiers. One bank might offer 18% to people with a 700 score, while another offers 22% to the same person. But the direction is consistent: higher credit scores get lower rates.

Your credit score reflects your payment history, the amount of debt you're carrying relative to your limits, how long you've had credit accounts open, and the mix of credit types you use. If you've missed payments or carried high balances in the past, your score will be lower, and you'll be offered a higher rate. If you have a thin credit file — few accounts, short history — you may also receive a higher rate because the issuer has less information about your reliability.

Penalty rates and how they differ from your standard APR

Most cards come with two rates: your regular APR and a penalty APR. The penalty rate kicks in when you miss a payment by 60 days or more. It is almost always higher than your regular rate — often 5 to 10 percentage points higher — and can push a card that started at 22% up to 29% or 30%.

The penalty rate applies to your entire balance, not just the missed payment. If you miss a payment, the issuer can apply the penalty rate to everything you owe on that card. Federal law requires that the penalty rate stay in place for at least six months, even after you catch up on payments. After six months of on-time payments, the issuer must review your account and may lower you back to your regular rate — but they are not required to do so automatically. You may need to call and request it.

Missing a payment by 30 days does not trigger the penalty rate, but it does appear on your credit report and may cause your score to drop, which can lead other issuers to raise your rates on their cards as well. This is why a single missed payment can ripple across your entire credit profile.

Introductory rates versus ongoing rates

Some cards offer a promotional APR for a limited time — often 0% for 6 to 21 months on purchases, balance transfers, or both. After the promotional period ends, your rate jumps to the card's regular APR. That regular rate is what matters for the long term.

A card advertising "0% for 12 months" might have a regular APR of 24% waiting on the other side. If you plan to carry a balance after the promotional period, that 24% is your real cost. The introductory rate is useful only if you can pay off the balance before it expires, or if you plan to transfer the balance to another 0% card before the rate increases.

When comparing cards with promotional rates, always look at the regular APR in the terms and conditions. The issuer is required to disclose it, usually in a table labeled "Pricing and Terms" or "APR and Fees." That number tells you what you'll actually pay once the promotion ends.

How high rates compare across different card types

Secured cards — cards that require a cash deposit as collateral — often come with rates in the 18% to 24% range. They are designed for people rebuilding credit, so the rates are higher than standard cards but sometimes lower than unsecured cards for the same credit profile.

Cards marketed to people with fair credit typically start at 22% to 28%. Cards for people with poor credit or no credit history can start at 28% to 36%. Business credit cards sometimes carry higher rates than personal cards, though they vary widely depending on the business's creditworthiness.

Rewards cards almost always have higher rates than no-rewards cards from the same issuer. This is because the issuer is paying out rewards to cardholders, and they offset that cost by charging higher interest rates. A rewards card might carry a 22% APR while a basic card from the same bank carries 18%. If you plan to carry a balance, the rewards are not worth the extra interest cost.

What you can do if you're offered a high rate

If you receive a card offer with a rate you think is too high, you have several options. First, you can simply decline the card and shop elsewhere. Different issuers have different pricing, so comparing offers can save you percentage points. A card from one bank at 24% might be available from another at 20% for the same credit profile.

Second, you can accept the card and request a lower rate after six months of on-time payments. Many issuers will reduce your rate if you call and ask, especially if your credit score has improved in the meantime. This is not may provide, but it costs nothing to request.

Third, you can use the card strategically — only for purchases you can pay off in full each month — and avoid carrying a balance. A high rate only costs you money if you owe money. If you pay in full by the due date, the APR is irrelevant.

Fourth, if you already have a balance on a high-rate card, you can transfer it to a card with a 0% promotional rate on balance transfers. This gives you a window of time — usually 6 to 21 months — to pay down the balance without interest accruing. Be aware that balance transfer fees typically run 3% to 5% of the amount transferred, so factor that into your decision.

Why rates have risen across the industry

Credit card rates have increased over the past few years as the Federal Reserve has raised its benchmark interest rate. When the Fed raises rates, banks' cost of borrowing goes up, and they pass that cost to consumers through higher credit card APRs. The average card APR has moved from around 16% in 2021 to 20% or higher in 2024, depending on the issuer and the cardholder's credit profile.

This means that what counted as a "high" rate five years ago might now be an average or even competitive rate. A 22% APR in 2024 is not unusual, whereas it would have been notably high in 2019. If you're comparing your current rate to rates you've seen advertised, make sure you're comparing rates from the same time period.

Frequently Asked Questions

Is 24% APR considered high for a credit card?

24% is in the upper-middle range rather than exceptionally high. It's higher than the average for people with good credit (usually 16% to 20%), but it's standard for people with fair credit. Whether it's "high" depends on what you may have access to for — if you have a 750 credit score and are being offered 24%, that's high for you. If you have a 650 score and are being offered 24%, that's competitive.

Can I negotiate my credit card APR down?

You can request a lower rate by calling your card issuer, especially after six months of on-time payments or if your credit score has improved. The issuer is not required to lower it, but many will reduce your rate by 1 to 3 percentage points if you ask. The worst they can say is no, and the call takes five minutes.

What happens to my rate if I miss a payment?

If you miss a payment by 60 days or more, your issuer can apply a penalty APR — usually 5 to 10 points higher than your regular rate — to your entire balance. The penalty rate stays in place for at least six months. After six months of on-time payments, you can request that your regular rate be restored, but the issuer may not do it automatically.

Does a 0% introductory rate mean I won't pay interest?

A 0% promotional APR means you won't pay interest during the promotional period — usually 6 to 21 months — as long as you make at least the minimum payment on time. Once the promotion ends, your regular APR applies to any remaining balance. If you carry a balance past the promotion, you'll owe interest at the regular rate, which is often 22% to 28%.

Why do rewards cards have higher interest rates?

Rewards cards cost the issuer more money because they're paying out cash back or points to cardholders. To offset that cost, issuers charge higher APRs on rewards cards than on basic cards. If you plan to carry a balance, the interest cost will outweigh the rewards value, so a basic card with a lower rate is the better choice.