This article discusses Average Credit Card APR. Each time you want to apply for a credit card, carefully examine and understand the interest rates and other fees. The Annual Percentage Rate (APR) shows how much interest you pay on your balance.  Always consider the cards with low APR.Average Credit Card APR

Average Credit Card APR; Average APR Nationwide

The average credit card APR is 14.73%  according to the Federal Reserve reports at the end of 2018. However, some customers pay no interest on their cards, this increases the average rate to 16.86% APR. Apparently, those who carry a balance and pay interest tend to have higher-rate cards.

Average Credit Card APR; Average Rates

If you are a first-time credit card applicant, extremely high or low numbers can affect the average credit card APR. Circumstances vary and averages can’t predict exactly what to expect. However, it is always important to have some information about the credit card before you apply.

Annual fee: Depending on the card, the annual fee can be small or big, very big. Some credit cards do not have any annual fees at all. If your credit card has high annual fees while you receive small rewards, consider another card as an option.

Grace period: Not minding your APR, If you constantly pay off your balance every month you may not pay any interest. This means that you can escape interest charges as long as you pay your balances monthly.

Moreover, Credit card APR depends, partly, on your creditworthiness. If your credit score is excellent, you can easily qualify for low-rate cards. When your income is stable, it is easier.

Calculate APR and Interest

Calculate the interest charges of your card to know how much you pay—and how much you might save with a different APR. The exact calculation varies from issuer to issuer, but the steps below give you a start on the process: Convert the annual percentage rate (APR) into a daily rate. It means dividing it by 365 days, then multiply the daily rate by your account balance.

Your credit card issuer may add the interest charge to your balance daily, causing your balance to grow every day. In that case, you’d repeat the steps above after adding the day’s interest charge and starting over with the new balance.

You can simplify the process by estimating your monthly charges. All you need to do is, divide your APR by 12 instead of 365 and calculate monthly interest charges

How to Minimize Interest Costs

Tactfully take advantage of promotions. You can shop for promotional credit card offers. You can even get a 0% APR temporarily, this will allow you time to pay down the debt and postpone interest charges. However, deferred interest offers can push you into paying interests.

Pay off your balance promptly every month to avoid interest costs. To take advantage of the grace period, use your card only for purchases and pay down the entire balance before your payment due date. Some cards do not give a grace period, and it may not apply to balances from a cash advance or other transactions, so check with your issuer for complete details. Remember that late payments can switch to a higher penalty APR and help you to incur more debt.

Sometimes, we can use other loans instead of using credit cards to borrow. Personal Loans in some cases have lower rates than a credit card. Additionally, they have fixed interest rates which are paid in installments.