Fine print, Living with credit, Protecting yourself

Despite good credit, I can’t get an affordable APR

Kelly Dilworth

My credit score is the highest it’s ever been, but I keep getting offers for cards with absurdly high APRs.

What gives?

Many of the offers I’ve received lately are for premium cards with generous sign-up bonuses worth hundreds of dollars and ample card rewards. However, the APRs that I’m offered typically range from 17 percent (the lowest APR I’ve been offered so far) to 20 percent or more.

The average APR for rewards cards, by contrast, is 15.57 percent, according to’s Weekly Rate Report. Meanwhile, the average APR for subprime credit cards – which are typically reserved for cardholders with no credit history or a history of missed payments – is 23.01 percent.

Last year, I wrote a blog post about how I applied for a Discover card and was awarded a $13,000 credit limit – which is above average for cardholders with excellent credit – and a 21.24 percent (!) APR. I couldn’t believe Discover would charge such a high rate when my credit score was relatively high. If Discover trusted me with a five-figure credit limit, then why would it hit me an APR that’s higher than what some subprime credit cards charge?

A high APR could prove costly
I almost never carry a balance, so my card APR isn’t that important. However, it worries me that the only offers I receive are for cards with exceptionally high-interest rates. If I did have to carry a balance, the finance charges I would have to pay could prove unaffordable.

For example, if I charged $5,000 on a card with a 21.24 percent interest rate and could only afford to pay the minimum amount due, I’d be on the hook for over $6,000 in interest payments – more than double my original balance.

What concerns me more is that I’m not sure what else I can do – short of signing up for a mortgage – to materially increase my credit score and convince card issuers that I deserve an affordable APR. I always pay my bills on time, and I never come close to maxing out my cards.

I’ve also used credit for nearly a decade, so my ability to successfully handle credit should be relatively well established. If that’s not good enough to earn an APR that’s at least close to the national average, then what is?

Card APRs are tough to scrutinize
I’ve been monitoring credit card interest rates for several years now for, and rates on new card offers are currently at a record high. But the national average APR that tracks – which currently clocks in at 15.50 percent – only takes into account a card’s lowest possible APR.

Most cards from major issuers advertise a wide range of possible APRs, making it impossible for cardholders like me to guess how much we will be expected to pay. As a result, credit cards’ rate ranges make comparison shopping difficult. The average maximum APR new cards charge, for example, is currently 22.57 percent – more than 7 percentage points above the average minimum rate.

Because card issuers aren’t required to publicly disclose how many applicants receive the lowest available rate or a higher APR, there’s no way to tell what card issuers are actually charging new customers.

That, in turn, has got me wondering: How many other people with otherwise excellent credit scores are getting charged surprisingly high rates on new cards?

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  • Julie Black


    I’m taking a guess here, that if I were to review your credit report with you, I would see revolving credit (like credit cards) but I would not see Installment credit (like a mortgage).

    I’m not advising you to get a mortgage or buy furniture that you don’t need.

    Information here on and elsewhere explains that a credit score is composed of several things (and in the percentage breakdown having different types of credit is part of the score formula).

    Here is what I did:

    I deposited some money in savings with my credit union. Then I talked with a loan or consumer finance officer there at the credit union about borrowing money, secured by that savings. They charged me a rate that was 3% higher interest than what they were paying on the savings.

    After one or two payments they let me set up automatic payments from the savings account to the loan – I couldn’t withdraw the money while the pledge against the loan was in force, but the funds were accessible for the purpose of payments on the loan itself.

    So I made sure the savings balance was greater than the loan balance by the total interest charges, which with my loan was almost $300. Yes that was a cost. I did this to build credit and as an alternative to buying a car for cash (and I had the cash).

    I was going to buy that car anyway. The only “option” was whether I was going to create the installment loan by borrowing my money for the purchase instead of withdrawing it for the purchase.

    I hope this helps you.