22.15%Avg. APR on accounts charged interest (Q2 2026)
$1.263TU.S. credit card balances (Q2 2026)
Up to 21 mo.Longest 0% balance transfer periods (Oct 2026)
45 daysNotice required before an APR increase
Key takeaway: A credit card is a cheap tool if you pay the statement balance in full every month and an expensive loan if you do not. Banks charged an average of 22.15% on accounts that paid interest in the second quarter of 2026. Decide first whether you will carry a balance. If yes, look at low-APR and 0% offers. If no, compare rewards against the annual fee.
How we put this guide together: We used Federal Reserve and New York Fed data, federal rules summarized from the CARD Act and court records, card terms published by issuers and reported by NerdWallet and CreditCards.com, and myFICO credit-scoring guidance. Figures were checked in October 2026. Card offers, APRs and bonuses change often, so read the issuer's current terms before you apply. See our advertiser disclosure.

How credit card costs work

Most card APRs are variable and based on the prime rate, so they can change over time. According to the Federal Reserve, the average rate on credit card accounts assessed interest was 22.15% in the second quarter of 2026. Across all accounts it was 20.94%. Individual cards vary widely. In September 2026 the Wells Fargo Active Cash Card listed variable APRs of 18.74%, 24.74% or 28.74% depending on credit, and the Capital One Platinum Secured card listed 29.24%.

If you pay the full statement balance by the due date, you generally pay no interest on purchases, because most cards give a grace period when no balance carries over. Carry a balance and interest builds quickly: $3,000 at 22.15% costs about $55 a month in interest alone. Paying only the minimum stretches debt for years. In our worked example, a $6,000 balance at 22.15% with minimum payments took 212 months to clear and cost $9,416 in interest. Paying $300 a month cleared it in 26 months for $1,557.

Americans owed $1.263 trillion on credit cards in the second quarter of 2026, according to the New York Fed. That was up $54 billion from a year earlier. About 6.97% of card balances moved into serious delinquency over the year.

The main types of cards

TypeWho it suitsWhat to compare
Cash backPeople who pay in full and want simple rewardsFlat rate (often 2%) vs. bonus categories; caps; annual fee
Travel (points/miles)Frequent travelers who will redeem through transfer partners or a portalAnnual fee, point value, foreign transaction fees, credits
Balance transfer / 0% APRPeople paying down existing debtLength of 0% period (up to 21 months), transfer fee (usually 3%–5%), ongoing APR
BusinessOwners separating business spendingRewards on business categories, employee cards, personal guarantee
Secured / bad creditNew or rebuilding creditDeposit, annual fee, reporting to all three bureaus, upgrade path

Source: MoneyVerge summary of issuer terms and NerdWallet and Experian data, October 2026.

Two examples show the trade-off. The Wells Fargo Active Cash Card had no annual fee and paid a flat 2% cash rewards in September 2026. The Chase Sapphire Preferred charged $95 a year, paid 3x on dining and up to 5x on travel booked through Chase, and had no foreign transaction fee. A fee card makes sense only if its extra rewards and perks are worth more than the fee to you. Compare them in our cash back and travel card guides.

How to choose a card

  1. Know your credit. Get your free credit reports at AnnualCreditReport.com and check your score. Many rewards cards, such as the Chase Sapphire Preferred, require good or excellent credit.
  2. Decide on your main goal. Lower interest, rewards, or building credit. One card rarely does all three well.
  3. Estimate rewards with your real spending. Multiply your monthly spending in each category by the card's rates, then subtract the annual fee.
  4. Read the pricing table. Check the purchase APR, penalty APR, balance transfer and cash advance fees, and foreign transaction fee.
  5. Limit applications. Each application usually triggers a hard inquiry. For most people one more inquiry costs fewer than five FICO points, and inquiries count in the score for 12 months.

Common mistakes

  • Chasing a sign-up bonus you cannot afford. Bonuses often require thousands in spending within three months. Spending extra to qualify can cost more than the bonus is worth.
  • Letting a 0% period expire with a balance. Divide the balance plus the transfer fee by the number of promo months and pay at least that much. Our balance transfer guide walks through the math.
  • Using too much of your limit. Amounts owed make up 30% of a FICO score. High balances relative to limits can lower your score even if you pay on time.
  • Missing a payment. Payment history is 35% of a FICO score, and a late payment can bring a late fee and a mark on your credit reports. Set up autopay for at least the minimum.
  • Taking cash advances. They usually carry a fee, a higher APR than purchases, and no grace period, so interest starts right away.

Your rights and where to get help

The Credit CARD Act of 2009 gives you several protections. Issuers must give 45 days' notice before raising your rate, and you can reject the change by closing the card. They generally cannot raise the rate on a new account during its first year unless an exception applies, such as a late payment. Your due date must be the same each month, and bills must be mailed at least 21 days before payment is due. Over-limit fees apply only if you opt in. Applicants under 21 need independent income or a cosigner. A 2024 CFPB rule that would have cut most large-issuer late fees to $8 was vacated by a federal court in April 2025.

If you are behind, call the issuer before you miss a payment and ask about hardship programs. Nonprofit credit counselors affiliated with the NFCC or FCAA can review your budget and may offer a debt management plan. Our guide on paying off credit card debt compares the options.

Guides in this section

Best Travel Credit Cards of 2026Travel rewards cards compared on fees, point value and perksHow to Choose a Travel Credit CardA step-by-step way to pick a travel card for how you actually travelChase Sapphire Preferred ReviewChase Sapphire Preferred: earning, redemption, fee and fitAmerican Express Gold Card ReviewAmerican Express Gold Card: dining and grocery rewards vs. the annual feeBest Airline Credit Cards of 2026Co-branded airline cards and when loyalty to one carrier paysBest Hotel Credit Cards of 2026Hotel cards, free night certificates and elite status perksBest No Annual Fee Travel Credit CardsTravel cards with no annual fee and what you give upPoints vs. MilesHow transferable points differ from airline milesHow to Maximize Travel RewardsWays to get more value from points and milesBest Credit Cards for Airport Lounge AccessCards that include airport lounge access and the real costBest Credit Cards With No Foreign Transaction FeesCards with no foreign transaction fees for use abroadTravel Card Sign-Up Bonuses ExplainedHow sign-up bonuses work and the spending they requireBest Cash Back Credit Cards of 2026Cash back cards compared by earning structure and feesHow to Choose a Cash Back Credit CardMatching a cash back card to your spendingBest No Annual Fee Cash Back CardsCash back cards with no annual feeFlat-Rate vs. Category Cash BackFlat-rate vs. category cash back, with worked examplesBest Rotating Category Cash Back Cards5% rotating category cards, caps and activationBest Cash Back Cards for GroceriesCards that pay extra at supermarketsBest Cash Back Cards for GasCards that pay extra on gas and EV chargingBest Cash Back Cards for DiningCards that pay extra at restaurants and on deliveryBest American Express Cash Back CardsAmerican Express cash back cards comparedCash Back vs. PointsWhen cash back beats points, and vice versaHow to Redeem Credit Card RewardsRedemption options and how to avoid low-value onesBest Balance Transfer Credit Cards of 2026Balance transfer cards compared on 0% length, fee and ongoing APRHow a Balance Transfer WorksHow a balance transfer works, step by stepHow to Choose a Balance Transfer CardChoosing a transfer card for your balance and payoff timelineLongest 0% APR Credit Cards of 2026Cards with the longest 0% intro APR periodsBest No-Fee Balance Transfer Credit Cards of 2026Balance transfer cards with no transfer feeBalance Transfer Fees ExplainedHow transfer fees are calculated and when they are worth payingBalance Transfer vs. Personal LoanBalance transfer vs. personal loan for paying off debtHow a Balance Transfer Affects Your Credit ScoreHow a balance transfer affects your credit scoreBalance Transfer Denied? Here's Why and What to DoWhy transfers get denied and what to try nextCan You Do Multiple Balance Transfers?Rules for doing more than one balance transferHow to Pay Off a Balance Transfer Before the Promo EndsPaying off a transfer before the promo period endsBest Business Credit Cards of 2026Business credit cards compared for different kinds of companiesHow to Choose a Business Credit CardChoosing a business card by spending, team size and creditBusiness Credit Card vs. Personal Credit CardBusiness vs. personal cards: protections and reportingBest Cash Back Business Credit CardsCash back cards for business spendingBest Business Credit Cards for LLCs and Sole ProprietorsBusiness cards for LLCs and sole proprietorsBest Business Credit Cards for StartupsCards for new businesses with little historyBusiness Credit Cards With No Personal GuaranteeCorporate cards that do not require a personal guaranteeBest Employee Expense CardsEmployee cards and expense management toolsHow to Build Business CreditHow business credit scores work and how to build oneChase Ink Business Preferred ReviewChase Ink Business Preferred: rewards, fee and fitAmerican Express Business Gold Card ReviewAmerican Express Business Gold: category rewards and feeBest Credit Cards for Bad Credit in 2026Cards available with poor or limited creditBest Secured Credit Cards for 2026Secured cards compared on deposit, fees and upgrade pathHow to Choose a Credit Card for Bad CreditAvoiding high-fee cards when your credit is weakHow to Get Approved for a Credit Card With Bad CreditSteps that improve approval odds with bad creditUnsecured Credit Cards for Bad CreditUnsecured cards for bad credit and their feesStore Credit Cards for Bad CreditStore cards for rebuilding credit and their high APRsCapital One Platinum Secured Review 2026Capital One Platinum Secured: deposit, limits and graduationCredit One Bank Platinum Visa Review 2026Credit One Bank Platinum Visa: fees and alternativesHow Becoming an Authorized User Builds CreditBuilding credit as an authorized user on someone else's cardCredit Builder Loans ExplainedHow credit builder loans work and what they costHow to Rebuild Credit After BankruptcyRebuilding credit after Chapter 7 or Chapter 13

Frequently asked questions

What is a good APR for a credit card?

It depends on your credit. The Federal Reserve reported an average of 22.15% on accounts charged interest in the second quarter of 2026. Many cards list a range, such as 18.74%–28.74%, and the rate you get depends on your credit profile. If you pay in full each month, the APR matters much less.

Does applying for a credit card hurt my credit score?

Usually a little. A hard inquiry costs most people fewer than five FICO points, according to myFICO, and it counts in your score for 12 months. Checking your own credit is a soft inquiry and does not affect your score.

Is a card with an annual fee worth it?

Only if the extra rewards and perks you will actually use are worth more than the fee. For example, the Chase Sapphire Preferred charged $95 in September 2026, while the Wells Fargo Active Cash had no annual fee and paid a flat 2%. Estimate your rewards on both using your real spending.

How can I get a credit card with bad credit?

A secured card is the most common route. You pay a refundable deposit, which usually sets your limit. The Capital One Platinum Secured, for example, offered a $200 limit with a deposit of $49, $99 or $200 in September 2026. Pay on time and keep the balance low to build your history.

Can my card issuer raise my interest rate?

Yes, but the CARD Act limits when. Issuers must give 45 days' notice before raising your rate, and you can reject the change by closing the account. They generally cannot raise the rate in the first 12 months unless an exception applies, such as a late payment or the end of an intro rate.

Sources

Rates, fees and terms change often. Figures were checked in October 2026; confirm current details with the provider before you apply.