The interest rate is incredibly important when choosing a credit card. If you cannot pay the balance off every month, you’re going to need to pay for that loan — which is all a credit card is, really — and the interest rate determines how much it costs. Many people who run into problems with credit card debt get trapped in a cycle where they can only afford to pay the interest and they never make any headway on the balance.
While the rate does vary from card to card, you should know that the average interest rate is 19.02%. That is if you are applying for a new card. If you have an account that already exists, the average rate is a bit lower, at 15.10%.
Remember, with existing accounts, the credit card company knows exactly what type of risk you may pose as a borrower. If you apply for a new card, they may have some idea of the risk based on your credit score, but they don’t have that payment history to back it up.
Your credit history really impacts the potential rate, as well. For example, those who have excellent credit tend to see an average rate of around 14.08%. Those who can only get a secured credit card, perhaps because they declared bankruptcy or have lower credit for some other reason, see an average of 18.20%. Secured cards are backed up by a down payment, but they see high rates despite this low risk.
If you’re struggling with debt in part because of high-interest rates, make sure you carefully consider all of your options.