Is a 24% APR High for a Credit Card?

The Annual Percentage Rate (APR) on a credit card represents the yearly cost of borrowed funds, including the interest rate and certain other charges. Understanding how APR functions is important because it directly impacts the overall expense of using credit, especially when a balance is carried over from one billing cycle to the next.

What Annual Percentage Rate Means

The Annual Percentage Rate (APR) on a credit card signifies the yearly cost of borrowing money. This rate applies to any outstanding balance not paid in full by the due date. While often used interchangeably with “interest rate,” APR provides a more complete picture of borrowing costs by including certain fees alongside the interest rate itself. For credit cards, the APR is typically a variable rate, meaning it can fluctuate over time.

Interest accrues on your credit card balance based on a daily periodic rate (DPR), calculated by dividing the APR by 365. Each day, this daily rate applies to your average daily balance, causing interest to compound. This means interest is charged on your original balance and any accumulated interest, making carrying a balance increasingly expensive.

Evaluating 24% APR

A 24% APR for a credit card is on the higher end for conventional credit cards. While credit card APRs vary based on individual creditworthiness and card type, the average credit card APR has recently hovered around 20% to 25%. In June 2025, the median average credit card interest rate was 23.99%.

An APR of 24% might be offered to consumers with average or fair credit scores, or for specific card types. For example, cards for those with credit scores in the “prime” (660-719) or “near prime” (620-659) ranges might see average APRs around 23.8% to 24.6%. Certain card products, such as secured credit cards, those designed for rebuilding credit, and rewards credit cards, carry higher APRs to offset associated risks or benefits. This rate aligns with what some consumers may encounter depending on their financial profile and card choice.

Factors Affecting Your APR

Several factors influence the Annual Percentage Rate (APR) a credit card issuer offers. A primary determinant is the applicant’s credit score and credit history, as these indicate their creditworthiness and perceived risk to the lender. Consumers with lower credit scores receive higher interest rates, while those with good or excellent credit qualify for lower APRs. This risk-based pricing ensures lenders are compensated for the likelihood of default.

The type of credit card product also impacts the assigned APR. Rewards credit cards, for example, feature higher APRs to help offset their loyalty programs. Conversely, low-interest credit cards are designed with the benefit of a lower ongoing variable APR. Prevailing market interest rates, particularly the Prime Rate, influence credit card APRs. Most credit cards have a variable APR tied to the Prime Rate, meaning if the Prime Rate increases or decreases, your credit card’s APR will likely follow suit.

Strategies for Avoiding Interest Charges

Consumers can avoid paying interest on their credit card balances by consistently paying the statement balance in full each billing cycle. This strategy leverages the grace period, the time between the end of a billing cycle and the payment due date. Ranging from 21 to 25 days, this period allows new purchases to remain interest-free if the entire balance from the previous statement is paid on time. If any portion of the balance is carried over, interest will accrue immediately on new purchases and the remaining balance.

Making at least the minimum payment due prevents late fees and avoids a penalty APR, but it does not prevent interest charges. Paying only the minimum amount means most of the payment goes towards accumulated interest rather than reducing the principal balance. This approach prolongs the repayment period and results in higher overall costs due to compounding interest. A complete payment of the statement balance is necessary to avoid interest.