Variable APR on a Credit Card – What Is It?

Saturday, February 22nd, 2020
Updated: February 22nd, 2020
The content is accurate at the time of publication and is subject to change.

Even if you are new to the world of credit, you, probably, noticed that some cards’ terms contain the word “Variable” relative to interest rates. Most applicants tend to never pay attention to this addition and have no haziest notion about its exact meaning. However, credit cards with a variable rate are the majority. So what does variable APR mean?

What Does Variable APR Mean?

Variable APR, unlike fixed APR, implies its possible change over time. But if you now frantically started looking for your credit card agreement and found the phrase “variable APR” there, take it easy. It doesn’t mean the issuer will change the rate at their own sweet will.

Your card APR is based on a base lending rate added to a margin that issuer sets after checking your creditworthiness. That base rate in most cases is a prime rate or the interbank rate published monthly in the Wall Street Journal, which banks and credit unions charge when lending money to each other. The prime rate, in turn, is founded on the federal funds rate.

Why Can Variable APR Change?

When the federal funds rate undergoes changes, it triggers a chain reaction affecting the prime rate and then credit card variable APRs. Thus, if the Federal Reserve is going to raise rates, it will most likely lead to a variable APR increase and higher monthly payments on your credit card thereafter.

Unfortunately, in such situations, credit card issuers don’t specially inform their cardholders since the card terms that they accepted earlier presuppose the possibility of these changes. There’s nothing for it but to thoroughly examine your monthly card statements to discover changes.

What Type of APR Can Be Variable?

When you are looking for a new credit card, you probably check out purchase APR, the rate accrued to purchases made with the card, in the first place. But it’s not the only APR that can be variable. The variability may apply to balance transfer APR, the interest charged for balances transferred to the card from other accounts, and cash advance APR taken for withdrawing cash from the card.

Bottom Line

All in all, variable APR is something that you should take into consideration in order to control your expenses, but you definitely have no reason to care too much. The reality is, it is quite hard to find a credit card with a fixed rate now. Still, striking rate changes do not occur every month. For example, the Federal Reserve raised the fed funds rate from 2.25% to 2.5% in December 2018, at its March 2019 meeting, they decided to keep rates at this level through 2021, but in August 2019 the rate was even lowered back to 2.25%.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

Latest Low APR Credit Cards Guides

What Is Credit Cards’ 0% Intro APR and How to Use it Right? July 5th, 2020

Of course, everyone knows that the most effective way to get rid of credit card’s interest is to pay off the entire debt before the due date every month. However, this is life, and everything may happen. For example, you can make some major purchase, or you may suddenly need a large amount of money […]

Continue »
0% APR Credit Cards’ Pitfalls You Should Be Wary Of March 3rd, 2020

When choosing a credit card, one of the most important criteria for many applicants, apart from a $0 annual fee and rewards program, is the presence of a 0% intro APR period. In brief, once you apply for a 0% interest credit card and get approved, you can make purchases during the specified intro period, […]

Continue »
How to Lower Your Credit Card APR January 24th, 2020

APR is an annual percentage rate or an interest rate you need to pay on your credit card for certain operations. There are some types of APR: a purchase APR, a cash advance APR and a balance transfer APR. They can either be different or the same.

Continue »
How To Know If A Low APR Credit Card Is Right For You February 2nd, 2019

Do you pay your credit card balance off in full every month without fail? Or do you find that some months, it’s difficult to deliver the total amount due, and you need to let some of it ride until next month? Perhaps you can only pay the minimum amount due, as interest mounts with each statement that comes into your mailbox.

Continue »
How To Find The Best Low APR Credit Card For You July 11th, 2018

Credit cards are great for lots of things: collecting reward points and frequent flyer miles, paying for purchases when you don’t have cash on hand, and shopping online. But one thing no one likes is paying high-interest fees on their credit cards.

Continue »
Best Credit Offer
Best Credit Cards from
Check off the cards you want to compare. Then click the Compare link to go to the comparison table.
Consumer Rating: 5 / 5
Horizon Card Services Group One Freedom Card
Copyright © 2001-2024 All Rights Reserved.

See the credit card's terms and conditions on the online application page. Note that this website may be compensated by credit card issuers when the visitor applies for a card through the links on this website. We do our best to maintain all information accurate and up to date. However, we do not warrant the credit card information won't change. Click the "Apply Online" button and review the current info on the secure credit card terms page.

Information in these articles is brought to you by Banks, issuers, and credit card companies mentioned in the articles do not endorse or guarantee, and are not responsible for, the contents of the articles.

The webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the website are property of their respective owners.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer. Opinions expressed here are the author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult a card's issuing bank for terms & conditions. makes every effort to keep information up to date and accurate. However, the information regularly changes and is presented without warranty. Therefore, we strongly recommend all our readers to visit the credit card application page by clicking "Apply Online!" button to review the detailed credit card's terms and conditions. Note that may be compensated by the credit card issuers when the readers apply for a credit card through this site. is an independent, advertising-supported website which receives compensation from the credit card issuers and companies whose offers appear on the site. Compensation may impact how and where products appear on our site, including, for example, the order in which they may appear on the site pages. does not review or list all available financial or credit offers.

You've successfully subscribed!

Please specify the following:All these fields are optional

Thank you for providing this information! We will make sure our letters are useful for You.

User Generated Content Disclaimer: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.