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What can increase your credit card’s APR?

Pay your balance on time to minimize interest rate increases.

Credit cards’ interest rates are often variable. This means if you now pay 16% interest rates on your purchases, you could pay up to 32% in the future if you’re not careful. On the positive side, there is one situation where you can see your interest rates drop.

Why might your credit card’s APR increase?

If your card’s interest rate isn’t fixed, there are five reasons it could increase:

  1. Late payments. If you’re late for more than 60 days, most credit card providers will impose a penalty APR of up to 32%. Some card providers will reverse it once you keep your payments on time for at least six months, but most of them will keep this APR indefinitely.
  2. Intro APR period ends. Credit cards that come with a 0% intro APR period on purchases, balance transfers or both, will get an APR increase once the intro period ends. In most cases, you will lose your 0% intro APR period if you’re late for more than 60 days on your payment even if the intro APR period hasn’t expired yet.
  3. Change in the prime rate. The Federal Reserve occasionally makes changes to the prime rate, which in most cases will directly affect your credit card’s interest rates. But this doesn’t mean that every rate change will increase your APR. When the Fed makes a rate cut, your credit card APR should decrease, as well.
  4. Your credit score has dropped. If your credit score sees a substantial drop in a short period of time, credit card providers may increase your APR to minimize the risk.
  5. You’re a cardholder for at least 12 months. With the CARD Act of 2009, card providers can’t raise your APR unless 12 months have passed. Of course, if there’s a change to the prime rate or if you’re 60 days late on your payments, this rule doesn’t apply.

What should I do if my APR increases

If for some reason your APR increases, here’s what you should do:

  • Pay your balance on time. This is the obvious one. If you pay your balance in full before it’s due, you won’t accrue any interest on your purchases.
  • Build your credit. This one applies if your card issuer increased your APR because of a drop on your credit score. Typically, once you improve your credit score, your card provider should lower your APR.
  • Get a 0% APR credit card. If you have outstanding debt and you can’t pay it off with a higher APR, consider applying for a balance transfer credit card. This can help you consolidate your debt and pay it off without paying interest.
  • Negotiate. Call your card provider and ask them to lower your APR. Note, this could work only if you have a good or excellent credit score and if you have good financial habits.

Compare low-interest credit cards

If you want to make a large purchase and pay it off interest-free after some months, or if you’re looking to move your debt from another credit card, look for cards with 0% intro APR period on purchases, balance transfers or both.

Name Product Purchase APR Balance transfer APR Annual fee Filter values
Citi Simplicity® Card
0% intro for the first 18 months (then 14.74% to 24.74% variable)
0% intro for the first 18 months (then 14.74% to 24.74% variable)
With an intro APR of 18 months, this card has one of the longest balance transfer offers on the market. Plus, no late fees and no annual fee.
Citi® Diamond Preferred® Card
0% intro for the first 18 months (then 13.74% to 23.74% variable)
0% intro for the first 18 months (then 13.74% to 23.74% variable)

Best of Finder 2021

An impressive 18 months intro APR on balance transfers and purchases, as well as no annual fee make this one of the top 0% APR cards available.
Citi Custom Cash℠ Card
0% intro for the first 15 months (then 13.99% to 23.99% variable)
0% intro for the first 15 months (then 13.99% to 23.99% variable)
A new cashback card that automatically awards 5% to your highest eligible spending category each billing cycle, on up to $500 (then 1%).

Compare up to 4 providers

Bottom line

Your credit card APR is rarely fixed. This means, in some situations, such as changes in the prime rate, expiration of an intro APR period or if you’re late for 60 days or more on your payments — your card provider may increase your APR.

To avoid this, look for cards with fixed interest rates or cards with a 0% intro APR period on purchases and balance transfers.

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