What are credit card interest rates?

An introduction to interest rates and how you’re charged for borrowing.

Credit card interest rate basics

When you borrow money on a credit card, you can be charged interest for the service.

The amount of interest you’ll pay is worked out as a percentage of the money you borrow. This is an interest rate.

  • The higher it is is, the more expensive it'll be for you to borrow.
  • The lower it is, the cheaper it'll be for you to borrow.

Watch our short video for more details.

Are there credit card charges other than interest?

Yes. Aside from interest, you can also be charged various credit card fees – read more about credit card fees

Banks often use Annual Percentage Rate (APR), which takes into account both standard fees and interest, to approximate the cost of borrowing with a credit card.

What is APR?

There are different rates of interest for different usages

You can use a credit card in a variety of ways, with some cards better suited to certain uses than others. This is why you should always plan how you intend to use the card first and then pick one accordingly. You should also think about how much you can pay back, and when, so you know how much interest you will be charged.

Purchase rate

The rate of interest you’ll pay when you buy goods or services with your credit card. This is the rate most commonly seen in advertising and APR calculations, for example.

Balance transfer rate

When you move your borrowing from one card to another, this is a balance transfer. You might also be charged a fee to transfer your balance, on top of your balance transfer interest rate.

Money transfer rate

If you move money directly from your credit card’s available credit limit into a UK current account, this is a money transfer. You might also be charged a fee for this on top of your money transfer interest rate.

Cash transaction rate

When it comes to cash, your credit card interest rate works differently – as you’ll pay interest from the date of the transaction. There will probably also be fees, such as cash advance and ATM fees.

Frequently Asked Questions

Key points on credit card interest rates

  • Interest rates help tell you the cost of borrowing money.
  •  This cost is shown as a percentage of the money you’ve borrowed.
  • There can be different interest rates for card purchases, balance transfers, money transfers and cash transactions.
  • Interest doesn’t include any application fees, yearly fees, cash withdrawal fees and other extra charges.
  • You should still read the terms and conditions and summary box to see if a card is right for you.

How do I find out my credit card interest rate?

To see what your interest rate is, just log on to Internet Banking or register for Internet Banking if you’ve not already done so. Click the ‘View statement’ button next to your credit card, then select ‘PDF statements’. On your PDF statement you will find your credit card interest rates.

Where next?

Important legal information

Lloyds Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065 Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.Visit the Lending Standards Board website

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How much we lend and the issue of a credit card depends on an assessment of your circumstances. You must be 18 or over and a UK resident to apply.

Terms and conditions apply to all Lloyds Bank credit cards benefits. Full details will be sent with your card. After each introductory period ends you will be charged at the appropriate standard rate.

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