Is a 24.99% APR Good or Bad? (2024)

FAQs

Is 24.99% APR high? ›

A 24.99% APR is not good for mortgages, student loans, or auto loans, as it's far higher than what most borrowers should expect to pay and what most lenders will even offer. A 24.99% APR is reasonable for personal loans and credit cards, however, particularly for people with below-average credit.

The APR you receive is based on your credit score – the higher your score, the lower your APR. A good APR is around 22%, which is the current average for credit cards. People with bad credit may only have options for higher APR credit cards around 30%. Some people with good credit may find cards with APR as low as 16%.

Generally, an APR below 21% is relatively low. Anything over 24% is more expensive. If you pay off your credit card balance in full every month, the APR won't be as important as you won't be paying interest. But if you forget and the APR is high, the interest charges will quickly rack up.

A good credit card APR is a rate that's at or below the national average, which currently sits above 20 percent. While there are credit cards with APRs below 10 percent, they are most often found at credit unions or small local banks. If you don't have good credit, you're likely to receive a higher credit card APR.

Even people with good credit scores make mistakes, and a bank may charge a penalty APR on your credit card without placing a negative mark on your credit report. Penalty APRs typically increase credit card interest rates significantly due to a late, returned or missed payment.

The First Call Resolution industry standard for a good FCR rate is 70% to 79%. Therefore, call centers with an FCR rate below 70% need improvement. Conversely, the World-class FCR rate is 80% or higher, and only 5% of call centers can achieve the World-Class FCR Rate from a CX journey perspective.

Anything below the average credit card interest rate — 24.71% for new offers, as of May 2024, according to a LendingTree study — is generally considered a good APR, and anything above that rate is considered high.

The Bottom Line. While the interest rate determines the cost of borrowing money, the annual percentage rate (APR) is a more accurate picture of total borrowing cost because it takes into consideration other expenses associated with procuring a loan, particularly a mortgage.

An annual percentage rate (APR) of 24.99% indicates that if you carry a balance on a credit card for a full year, the balance will increase by approximately 24.99% due to accrued interest. For instance, if you maintain a $1,000 balance throughout the year, the interest accrued would amount to around $250.00.

Can your APR go down? ›

Securing a lower interest rate may be as simple as asking your current credit card issuer to lower your APR. In other cases, it may make sense to improve your credit score or transfer your balance over to a new 0 percent APR credit card.

Your credit card's annual percentage rate (APR) is your credit card's interest rate. If you carry a balance on your credit card, you'll need to pay interest until it's paid off in full. If you pay off your monthly statement balance in full and on time, you likely won't need to pay interest on purchases.

In general, keep unused credit cards open so you benefit from longer average credit history and lower credit utilization. Consider putting one small regular purchase on the card and paying it off automatically to keep the card active. At Experian, one of our priorities is consumer credit and finance education.

For someone with a good or very good credit score, an APR of 20% could be good, while a 12% APR may be good for someone with an excellent score. If your score is lower, an APR of 25% could be considered good. No matter your score, the lower the APR, the better.

An annual percentage rate (APR) of 24.99% indicates that if you carry a balance on a credit card for a full year, the balance will increase by approximately 24.99% due to accrued interest. For instance, if you maintain a $1,000 balance throughout the year, the interest accrued would amount to around $250.00.

The maximum interest rate allowed by law for those within the MLA is capped at a 36% annual percentage rate. The types of financial products covered under the MLA include payday loans, credit cards, overdraft lines of credit and some installment loans.

Look for an APR below 36%, which consumer advocates agree is the highest rate an affordable loan can have, and make sure the monthly payments fit comfortably in your budget.