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If you’re considering a new credit card, frequent travelers may benefit from using a credit card with Priority Pass. Depending on the airport you happen to be in, you may be able to access lounges in the Priority Pass network. That could give you a welcoming lounge to relax, work, game, or even sleep in, plus food, drink, and other perks when traveling.

However, since there are different levels of access with Priority Pass, it’s important to understand what exactly the program offered involves, and whether it may make sense to become a member. Finding the right credit card can involve considering a variety of factors, so arm yourself with this intel.

What Is Priority Pass?

Priority Pass is a company offering a network of over 1,400 airport lounges, restaurants, and other services in 148 countries. Different features at qualifying airport lounges include free drinks and food, wifi, spa treatments, showers, and sleeping areas.

You can join Priority Pass with an annual membership, with different access tiers based on how often you travel. Some credit cards — typically luxury travel ones — offer free Priority Pass membership just for being a cardholder. That can make your time preflight or during a layover feel like a posh experience.

Depending on your membership, you may be able to bring guests free of charge into lounges.

Benefits of Priority Pass

There are an array of credit card rewards, such as cash back vs. miles. Here, a closer look at what you’ll enjoy if you get Priority Pass with your credit card.

Airport lounges within the Priority Pass network are popular with travelers because there are no requirements to access them other than being a member vs. some lounges that require you to fly with a certain airline on a specific class to gain access. Other benefits include worldwide access, luxury amenities, and complimentary food and drink. Here’s a closer look.

Airport Lounges

There are over 1,400 airport lounges worldwide, with many offering access within three hours of your flight. Though specific features differ between lounges, you can typically expect perks like complimentary food and beverages, wifi access, comfortable seating, workstations, and alcohol at select lounges. Some airport lounges may even allow you to pre-book or reserve lounge access so you’re guaranteed a spot when you arrive.

Restaurant Access

Priority Pass members also have access to a network of restaurants at select airport terminals. You will receive a credit to go towards a meal at participating restaurants, which can be a great way to save money on food. Depending on where you dine, there may also be promotional offers on occasion. Any amount you spend over the credited amount you will need to pay out of pocket. To receive the credit, you’ll typically present your Priority Pass card to a restaurant staff member and your boarding pass information.

Private Suites

How’s this for a perk? Select airports also offer private sleeping areas for you to rest, helpful if you’re between long haul flights. Most commonly, you’ll access through Minute Suites available at select locations. Members receive access to a private room which may include blankets, a workstation, white noise machine, and a daybed sofa if you want to take a nap.

Game Lounges

Some Priority Pass locations also offer lounges with gaming features. Called Game Space, these are locations where members can relax and play at various gaming stations with offerings for different ages. This might help time seem to pass a little more quickly before your flight.

Free Guests

Priority Pass members can take guests into lounges with them, often without an additional fee. Children are also allowed and may either count as an additional guest or be allowed in completely free of charge.

Recommended: How Do Credit Card Payments Work?

Why Get a Priority Pass Credit Card

Getting a credit card with Priority Pass access opens you up to a possible better travel experience than if you were to travel without lounge access. Many credit cards offer Priority Pass Select, a membership tier offering you access to certain airport lounges, restaurants and other experiences through the Priority Pass network.

You don’t need to pay an additional membership fee — your credit card’s annual fee typically should suffice. Priority Pass memberships can run up to several hundred dollars per year. If your credit card annual fee is around the same price, it may be worth it signing up for a card that offers Priority Pass as part of its rewards, especially if you can access other perks that more than offset the cost.

Examples of Credit Cards that Offer Priority Pass Membership

Credit card reward offers and perks can change quite often. Currently, these are among the credit cards that offer Priority Pass membership:

•   Capital One Venture X Rewards Credit Card

•   Chase Sapphire Reserve

•   Citi Prestige Card

•   The Platinum Card and Marriott Bonvoy Brilliant Card, both from American Express

•   Bank of America Premium Rewards Elite Card

Recommended: Guide to Automated Credit Card Payments

Pros and Cons of Paying for Priority Pass vs as a Priority Pass Credit Card Perk

There are both benefits and drawbacks to paying for Priority Pass membership yourself or getting on through

Pros

First, consider the advantages of getting Priority Pass as a credit card benefit.

•   Squeeze value out of card: Getting a credit card with Priority Pass membership included can help you to maximize the value of your card. As you evaluate credit card rewards, you want the benefits to more than offset the fees you pay.

•   Save on travel costs: Even if you don’t spend much time in airports, you can save money when traveling with the free meals feature at select Priority Pass restaurants.

Cons

Next, consider the potential disadvantages of getting Priority Pass with your credit card.

•   Fees: No matter if you have a credit card with airport lounge access or pay for a Priority Pass membership out of pocket, you probably have to pay an annual fee one way or another to gain access.

•   Charged for guests: Depending on the membership tier (even for memberships attached to a credit card), you could be charged for each guest that enters with you. If you’re using your membership that’s included with your credit card, you may want to ask if guests are free, or else you may get a “surprise” charge on your next statement. This can be important when traveling on a budget as a family too.

•   Select benefits: Not all Priority Pass memberships are the same. Ones attached to credit cards may change at any time, so you’ll need to ask what is included and what’s not. For example, some restaurants may not offer perks or discounts if you hold a certain credit card.

Priority Pass Tips

There are several ways to get the most out of your Priority Pass membership, whether or not you pay for it out of pocket or get one through a credit card.

•   To enroll out of pocket, head to the Priority Pass website and select the membership tier you want, and pay for the annual fee. You will need to provide details such as your name and address. Once paid, Priority Pass will send your membership card in the mail — you can activate the card online.

•   If you signed up for a credit card with Priority Pass access, you will also need to activate it. Depending on your credit card, you may need to activate your membership by first logging into your credit card account and selecting the correct link to follow the appropriate prompts.

Other tips to get the most out of your Priority Pass membership include:

•   Look up lounges in advance: When planning your flight itinerary and comparing airfare options, it can be wise to look at what layovers are available to you. If flights with similar itineraries are around the same price, consider booking one with better lounge access during your layover. Also check what lounge access you may have when coming back on your return flight. Some airports may also have more than one lounge, so pick one that seems like the best fit.

•   Prebook when possible: Some locations allow you to reserve a spot at an airport lounge. If it’s during peak travel season or you want to guarantee a place, pre-booking can increase the chances you don’t have to wait.

•   Check to see what benefits you have: Priority Pass Select memberships can vary, so it’s better to check ahead to see what you get. Same goes even if you’re paying for a different membership tier out of pocket.

•   Check benefits for authorized users: Some credit cards with Priority Pass memberships don’t allow authorized users the same access, whereas some do.

The Takeaway

Getting a credit card with Priority Pass membership can be beneficial, but only if you use this perk. You may also pay a higher annual fee since luxury credit cards are typically the only ones offering this type of benefit. If you’re not a frequent traveler, you may be better off with another credit card. You could likely pay out of pocket for the occasional use of a lounge.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What is the advantage of having a Priority Pass?

Priority Pass can make spending time in airports more comfortable and affordable. Having Priority Pass allows you access to over 1,400 airport lounges, restaurants, and services in over 148 countries.

Do you need your credit card with Priority Pass?

In most cases, you don’t need your credit card when accessing a Priority Pass lounge. You will need your membership card and your boarding pass.

Does Priority Pass give you free lounge access?

Yes, Priority Pass can give you free lounge access to over 1,400 airport lounges globally.

Photo credit: iStock/jacoblund

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Consumers may not know it, but financial institutions often rely on “bundled” credit reports to make more fully informed decisions before lending an individual money.

That process is known as a tri-merge credit report (also known as a three-in-one credit report.) The merged report can give the lender a more complete picture of an applicant’s financial situation, since each credit report may contain slightly different information.

You can’t request a merged credit report on your own but you can ask a lender to share their tri-merged report with you. Read on to learn more about what tri-merged credit reports are and how they can impact your chances of getting a loan.

What Is a Tri-Merge Credit Report?

A tri-merge credit report simply combines three credit reports from the three largest credit reporting bureaus — Experian, Equifax, and Transunion — and consolidates them into one credit report for creditors and lenders. They are most commonly used in the mortgage lending sector where more information is required to properly assess larger loans.

Creditors often rely on three-in-one credit reports because they want a thorough review of an applicant’s credit history, an outcome a lender may not get with input from just one credit reporting agency.


💡 Quick Tip: Need help covering the cost of a wedding, honeymoon, or new baby? A SoFi personal loan can help you fund major life events — without the high interest rates of credit cards.

How Do Merged Credit Scores Work?

A tri-merge credit report gives those lenders what they need – a comprehensive overview of a credit applicant using information from three credit reports, instead of one or two credit reports.

By combining all three credit scoring formulas and outcomes into a single credit report, creditors can get an expanded and more complete look at a credit applicant’s financial history (including payments and credit usage), based on the information included in the tri-merge credit report.

Recommended: Common Credit Report Errors and How to Dispute Them

Why Do You Have More Than One Credit Score?

Each credit scoring company has its own formula for calculating credit scores and one model may place more importance on one factor, such as payment history, while another may not. Also, different types of loans have different scoring methods.

The most commonly used credit scoring model is the FICO® Score, a base score that has a range of 300 (lowest score) to 850 (highest score). But within the FICO models, there are industry-specific ranges.

•   FICO® Auto Score Range is 250 to 900

•   FICO® Bankcard Score Range is 250 to 900

•   FICO® Mortgage Score Range is 300 to 850

VantageScore is another credit scoring model used by all three major credit reporting bureaus.

FICO Score and VantageScore base their calculations on different aspects of a person’s financial history.

•   FICO uses factors that are in a credit report, such as payment history of credit accounts, how much debt a person has, how long credit accounts have been open, how often new credit inquiries happen and how often new credit accounts are opened, and the mix of credit account types.

•   Vantage uses the same criteria as FICO, but places different levels of importance on each. Vantage also looks at additional factors that might not appear on a person’s credit report, such as rent and utility payments. Using factors such as these makes it possible for people who don’t have much of a credit history to have a credit score and be able to access consumer credit.

Lenders use credit scores and other information in the loan approval process.

What Does a Tri-Merge Credit Report Look Like?

Tri-merge credit reports offer creditors the same look and feel as a standard consumer credit report, with a few differences.

For starters, the third-party provider creating the three-in-one credit report culls the credit reports from each of the three primary credit-reporting firms (Experian, Equifax, and TransUnion) and pulls the most pertinent information for use in the tri-merge credit report.

In its final form, the tri-merge credit report includes the following sections.

•   An upfront summary that provides information on the credit applicant in capsule form.

•   A full section on the credit applicant’s financial accounts, focusing on larger accounts like mortgages, credit cards, auto loans, and any types of personal loans.

•   Data on the applicant’s credit payments history, any open accounts, any history of late or no credit payments, any tax liens or bankruptcies, and the applicant’s credit utilization ratio (i.e., the applicant’s outstanding credit balance divided by the total amount of revolving credit the applicant has available).

A tri-merge credit report may also include a specific credit report from any of the three major credit reporting agencies, based on the specific credit analysis needs of the mortgage lender who uses the three-in-one report.

Why Do Personal Loan Lenders Look at Your Tri-Merge Credit Report?

Tri-merge credit reports are more commonly used in mortgage lending than personal loan lending. But if you’re applying for a large personal loan — some lenders offer personal loans up to $100,000 — the lender may look at a tri-merge credit report to get a comprehensive picture of your creditworthiness. The tri-merge credit report will include any current or past personal loans and your payment history on those. The lender will use that information to determine approval for the loan you’re applying for.


💡 Quick Tip: Choosing a personal loan with a fixed interest rate makes payments easy to track and gives you a target payoff date to work toward.

How Does a Tri-Merge Credit Report Affect Your Loan Application?

Different lenders approach the risk of lending money with different tolerance levels, just as they each have different credit score requirements. A loan applicant whose credit reports don’t include late payments and unmanageable debt loads will likely be approved for a loan with favorable terms and lower interest rates.

Alternatively, a loan applicant whose credit report shows a large amount of existing debt and a history of late or missed payments may be offered a high interest rate and less favorable terms.

Because lenders that use a tri-merge credit report to assess an applicant’s creditworthiness are looking at a comprehensive picture, it’s in the best interest of the applicant to clean up their credit reports from each of the three major credit bureaus before they begin applying for a loan.

Recommended: Typical Personal Loan Requirements Needed for Approval

Is a Tri-Merge Credit Report a Hard Inquiry?

Any official lender review of a tri-merge credit report will be a hard inquiry and will temporarily impact your credit score. In general, each hard credit inquiry can decrease a credit score by five points.

The severity of any credit score decline due to a hard pull largely depends on the applicant.

A consumer with a strong credit report may see less of a credit scoring decline than one with a weak credit report. Multiple credit report hard inquiries can be a reason why a consumer with a weak credit history may see their credit scores decline moderately.

Recommended: Soft vs Hard Credit Inquiry: What You Need to Know

Can I Order My Own Tri-Merge Credit Report?

Tri-merge credit reports are available to lenders, but not generally to individuals. A lender may be willing to share with you the tri-merge credit report they pulled in your application process. A credit counselor who offers first-time homebuyer programs may also be able to pull a tri-merge credit report for you in a credit review process, but there may be a fee for that service.

However, you can — and it’s a good idea to do this — request a free copy of your credit report from AnnualCreditReport.com.

You can request a free copy of your credit report once a week from each of the three major credit bureaus. Reviewing all three of your credit reports will give you much of the same information as is included in a tri-merge credit report.

The Takeaway

Tri-merge credit reports can prove highly useful to mortgage and other lenders looking for a comprehensive review of an applicant’s credit history.

By merging the credit report analysis of the three major credit reporting agencies, creditors and lenders are getting a fully-formed outlook they likely wouldn’t get by relying on a single credit reporting agency.

For consumers, the key takeaway on three-in-one credit reports is simple – take a disciplined and diligent stance on your credit, review your credit reports on a regular basis, and ensure key issues like on-time payments and credit utilization rates are in good standing.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

FAQ

What is a tri-merge credit report?

A tri-merge credit report is a credit report combining information from the three major credit bureaus, Equifax, Experian, and TransUnion.

Is a tri-merge credit report a hard inquiry?

When a tri-merge credit report is pulled during the formal loan application process, it will be a hard inquiry on the applicant’s credit report.

Can I pull my own tri-merge credit report?

No. Tri-merge credit reports are available to lenders, not individuals, and they’re mainly used in the mortgage loan process. If you’re working with a credit counselor, you may be able to have a tri-merge credit report pulled during a credit review process.

Photo credit: iStock/Irina Ivanova

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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Ever since the first credit card debuted in 1958, people have been using them as a convenient form of payment, whether for big-ticket items or small daily purchases. As credit cards have become increasingly popular, options have multiplied. If you are looking to open a new credit card, you may be wondering, “Which credit card is right for me?”

While there is no single perfect credit card that is the best one for everyone, you can follow a few steps to see if you can find the right card for you. There are several variables to consider, from rewards to interest rates. Depending on your answers to some of the questions below, you may be able to narrow down your options and decide on the right card to apply for and use.

Check Your Credit

One of the first things that you will want to do is check your credit score. There are a number of places where you can check your credit score for free once a year. Credit scores typically range from 300 to 850, from poor to excellent.

Understanding your credit score can help you determine which credit cards you might be able to get. The way credit cards work is that typically, the cards with the highest rewards and most benefits also require the best credit scores. If your credit is fair or poor, you are not likely to be approved for those credit cards, so it may not make sense to even fill out an application.

Recommended: Guide to Credit Score Ranges

Identify Which Type of Credit Card You Need

There are many different types of credit cards out there, so the next step can be identifying which type of credit card you are looking for.

•   If you are looking for a rewards credit card that offers airline miles or other travel rewards, that can help narrow down your choices.

•   Another option might be a credit card that earns cash back with every purchase.

•   You might also compare interest rates and see which offer is most attractive to you.

•   If you are working on building your credit, there may be a student or secured credit card to suit your needs.

Understanding the different types of cards that are available can help you choose the right credit card for your specific situation.

Narrow Your Choices by Asking the Right Questions

As you make your decision about which credit card is right for you, consider these points:

•   Some credit cards offer higher rewards in specific bonus categories, while others may offer a flat rate on all purchases. If you make a lot of purchases at grocery stores, gas stations, or home improvement stores, you may want to get a credit card that offers higher rewards rates in those categories.

•   If you have more balanced spending, it might make more sense to get a credit card that offers a high rewards rate on all purchases, no matter where you spend. Many people like using cash back rewards, among the various redemption options.

•   You’ll also want to look at any annual or other fees associated with a card to make sure you are getting enough in value to offset the cost of any fees you have to pay. It can sometimes make sense to have a credit card with an annual fee if the benefits are worth it to you (say, you travel a lot, and the card offers access to a network of posh airport lounges). That said, there are many excellent credit cards that do not charge an annual fee.

•   If you are focused on building your credit, see which secured credit cards are available. These cards involve a cash deposit that serves as collateral in case you can’t make a payment.

Recommended: Understanding Purchase Interest Charges on Credit Cards

Apply for the Credit Card That Offers You the Highest Value

Once you’ve figured out what kind of rewards you want to earn and what card you are likely to be approved for given your credit history, you can look at a few cards that fit those criteria. Compare interest rates, and consider the three main reasons you might consider applying for any particular card:

•   The value of the rewards you will earn with everyday purchases.

•   How much you might get from any one-time initial credit card bonus offers.

•   Any perks or benefits you receive just from having the card.

Carefully review each of these benefits for any cards you are considering and then apply for the card that gives you the best value.

Credit Card Tips

Once you’ve received your new credit card, these tips may help as you use it:

•   Set up a plan to pay it off in full each and every month if possible. Interest rates on your balance tend to be steep, so avoid paying those costs as best as you can.

•   While you may be able to pay your credit card with a debit card in some instances, it will likely be easier to set up your credit card account to automatically be paid from your bank account.

•   If you’re using this new card to replace a previous card, you may want to update any automatic bill payments to use your new card information.

•   If your bill is due right before payday, call the issuer and see if you can shift the date by which payment is needed. Some card issuers can accommodate this request.

The Takeaway

There are hundreds of different credit cards out there, and each one comes with their own terms and perks. If you’re curious about “Which credit card is right for me?” know that there isn’t a single credit card that is the best credit card for everyone — instead, you’ll have to analyze the options and pick the best one for you.

Carefully review which cards you’re likely to be approved for, the rewards and benefits of each one, and any annual fees associated with the card to find the one that’s right for you.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How do I know what credit card is right for me?

There are a couple of different questions you’ll want to ask yourself to help decide which credit card is right for you. First, check your credit score, and look for a card that targets users within that credit score range. Then look for a card that offers rewards or benefits that you will find useful; also review whether an annual fee is charged.

How do I choose which card to use?

When you go to use your credit card, check to see which of your cards offers the most rewards for that type of purchase. If you have a card that offers a bonus rewards rate for those types of purchases, that could be a good one to use. Otherwise, use a credit card that offers a high rewards rate on all purchases.

Which credit card do most millionaires use?

It’s hard to say which credit card is most popular with millionaires, since that information is not generally considered public. However, it’s probably a safe bet that many millionaires might look for cards that offer a high level of benefits though they charge high annual fees. This might include The Platinum Card from American Express, the Chase Sapphire Reserve, or the Capital One Venture X card.

Photo credit: iStock/AscentXmedia

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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The credit card security code is generally found on the back of the credit card, close to or within the signature field. (There are a few exceptions, however; some American Express cards present the security code on the front of the card, separate from the main credit card number.)

In this article, you’ll learn the details you need about credit card security codes: not just where to find them, but also what they are, why they’re important, and tips for increasing your overall credit card security.

What Is a Credit Card Security Code?

A credit card security code is a numerical code, usually three or four digits long, that helps prevent fraudulent charges.

When you make a purchase that doesn’t involve physically presenting the credit card — for example, online — the point-of-sale system will usually prompt you to enter this security code.

Because the security code is not allowed to be stored by merchants, which helps protect against credit card hackers getting the information. Thus, the security code helps ensure fraudsters can’t use stolen credit card numbers to make digital purchases.

Other Common Names for Credit Card Security Codes

You may also hear the credit card code referred to as:

•   CVV, or Card Verification Value

•   CSC, or Card Security Code

•   CVC2, or Card Verification Code

•   CID, or Card Identification number

All of these terms signify that same three- or four-digit code on the back (or occasionally front) of your card.

When Do You Need Your Credit Card Security Code?

Your credit card security code is usually requested by the merchant whenever you’re making a credit card transaction without being physically present with the card.

The most common instance of this by far these days? That’s probably when you make an online purchase, but you may also make a credit card purchase over the phone and be asked to provide the security code.

Recommended: Understanding Purchase Interest Charges on Credit Cards

Why Credit Card Security Codes Are Important

Again, credit card security codes work to make your credit card information more secure — at least during purchases where you’re not physically present with the card. (When you are physically inserting, swiping, or tapping a credit card, other security features, such as the EMV chip, offer security measures.)

Where to Find Your Credit Card Security Code Number

Your credit card security code number is almost always on the back of your credit card, usually toward the right-hand side of the card beside or within the signature box. Some credit cards may list the credit card number on the back of the card, as well, but the security code is separate.

American Express cards list the security code on the front of the credit card, usually to the left of the card and always above the main credit card or account number.

Recommended: Guide to Checking Your Credit Card Approval Odds

How to Find Card Security Code Without the Card

The whole point of your credit card’s security code is to make the card impossible to use without being physically present. So, unfortunately, if you’ve lost your credit card, there’s no way to recover the code separately.

You may be able to ask the credit card issuer for a virtual version of the card, which will allow you to see the security code, or you may need to report the card lost or stolen and wait for a new card — with a new account number and security code — to arrive by mail.

Example of Credit Card Issuers That Use a Credit Card Security Code

These days, just about every major credit card issuer uses credit card security codes to help ensure the safety of their cardholders.

Discover, Visa, MasterCard, and American Express all use security codes — though as noted above, American Express cards are the only ones that list the code on the front of the card instead of the back.

Tips on Credit Card Security

Keeping your credit card information safe is the first step in preventing identity theft and fraudulent purchases. Fortunately, security measures like CVCs help make it easier, but here are some tips to help double your defenses.

•   Use secure passwords. These days, most people manage their credit cards (and many other types of financial accounts) online. Using secure passwords helps ensure fraudsters can’t hack into your online profiles to steal your information. Using a long password with a mix of numerical, alphabetical and special characters can help increase your level of security. If your credit card utilizes a PIN, change it often.

•   Be careful how you share credit card information. Though it may be safe to make a purchase through a legitimate, secure website or on an official company phone line, you should never email your credit card information or write it on a slip of paper for someone. If a merchant requests you to do so, shop elsewhere.

•   Sign up for alerts. Many credit card accounts can alert users by email, text message, or phone call when suspicious activity, like very high-priced purchases or transactions done at a different physical location than your home area, are made. Some cards may also automatically decline such transactions. (Don’t worry: if the charges are legit, you’ll be able to quickly verify them with the credit card company to get the transaction approved. It can also be helpful to let your credit card company know ahead of time if you’re planning to travel.)

The Takeaway

Want to know where the security code is on a credit card? Your credit card security code is located, in most cases, on the back of your card, close to or within the signature box. American Express cards list the security code on the front of the credit card. No matter where it is, the code helps keep your information safe when making transactions online or over the phone.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Is a credit card security code 3 or 4 digits?

Credit card security codes can actually be three or four digits long. Discover, Visa, and MasterCard all use three-digit codes that are printed on the back of the credit card, while American Express employs a four-digit code printed on the front of the card.

Is the security code the same as CVV?

Yes, the credit card security code is the same as the CVV, which stands for Card Verification Value. The code can also be known as a CSC (Card Security Code), CVC2 (Card Verification Code), or CID (Card Identification number).

Are all credit card security codes 3 digits?

Not necessarily. Credit card security codes can be three or four digits long, depending on what kind of card you have. The four- or three-digit code on a credit card is typically found on the back, but occasionally on the front.

Photo credit: iStock/Kantamard Lamasai

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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When it comes to picking a new credit card, there’s one detail you should not overlook: the card’s annual percentage rate, or APR. This represents the rate lenders charge to borrow, including fees and interest. But credit cards don’t have one single rate, and it may be hard to evaluate what’s a good deal and what isn’t.

In general, a good APR is one that’s below the current average interest rate, which is 21.47%, according to the latest data from the Federal Reserve at the start of 2024. However, what’s a good APR will also depend on the type of credit card, the various rates that could be assessed, and your own creditworthiness. This guide will take you through the details.

What Is an Annual Percentage Rate (APR)?

The APR on a credit card represents the total cost of the loan expressed in annual terms. A credit card’s APR includes the interest rate as well as any fees, including for late payments, foreign transactions, or returned payments.

Taking these fees into account when applying for a credit card helps to provide a fuller picture of what the loan may actually cost over its lifetime.

Keep in mind that APR is distinct from interest rate, which is simply the additional cost of borrowing money. Like APR, interest rate is typically expressed as a percentage of the principal. However, when looking at the average credit card interest rate vs. the average APR, you’re not comparing apples to apples.

For example, if a consumer takes out a $1,000 loan with a 10% simple interest rate and a one-year term, they will pay $1,100 over the lifetime of the loan — the principal $1,000 plus interest of $100.

While this example is extremely simplified, it’s helpful in demonstrating the difference between a simple interest rate and a not-so-simple APR calculation. If the consumer calculates the cost of the same $1,000 loan, considering the various fees that go into the APR, the number will likely be higher than the stated interest rate.

How Is APR Determined?

Knowing how APR is determined is an important part of understanding how credit cards work. A credit card’s APR is largely determined based on an individual’s financial specifics when they open the account.

•  The lender will look at the person’s credit score and credit history, as well as factors like their payment history and debt-to-income (DTI) ratio, which represents how much of an individual’s gross income is already going toward debt payments. In general, someone with a good payment history and credit score and a lower DTI ratio will qualify for a better APR.

•  However, APR isn’t only based on a borrower’s creditworthiness. Lenders will also take into account the current US prime rate, which is used to set rates on consumer loan products. Typically, a lender will take this rate and then bump it up a bit to minimize risk and increase profits.

•  Lastly, APR will vary based on the type of credit card. If you know what a credit card is, you’ll know all credit cards aren’t created equal. For instance, a credit card that offers lucrative rewards (like travel points or cash back) will generally have a higher APR than a more basic card.

When It Matters to Look at APR

If a consumer is comparing two similar loan or credit card offers, they may want to also look at the offer’s APR.

Let’s say a person has two loan offers. Each is a $1,000 loan with an interest rate of 10%. With just that information to compare the two, they seem equal to each other. A little more digging, though, will uncover that Offer A has a $100 origination fee while Offer B only has a $50 origination fee — both of which could be calculated and accounted for in the offer’s APR.

With credit cards, it could be that two cards have the same interest rate, but Card A has no late payment fees, while Card B carries a 20% late payment fee, making its APR potentially higher.

When it comes to APR, the devil really is in the details. And reading the fine print can reveal that the APR could make a difference to your credit card balance and debt management.

Types of Credit Card APR

To further complicate the answer to the question of what’s a good APR for a credit card, it’s important to understand that credit cards have different types of APR. The main one you’re probably going to want to consider when considering your total cost of borrowing is the purchase APR. However, if you’re planning to take out a cash advance or do a balance transfer, you’ll want to look at those APRs as well.

Introductory APR or Promotional APR

Sometimes, cards will offer a lower (or even 0%) APR to new customers for a limited time after they open the account. This APR can apply to purchases or to balance transfers. Introductory or promotional APRs must last at least six months, but they can be longer, too. Once this period is up, the regular APR kicks in.

Purchase APR

The purchase APR is the rate that applies when you use your credit card to make a purchase and then carry a balance into the next billing cycle, perhaps only making the credit card minimum payment. This is the most commonly discussed type of APR, and the main one you’ll want to look out for when comparing credit cards.

Cash Advance APR

A cash advance APR applies if you withdraw money from an ATM or bank using a credit card. Unlike your purchase APR, this APR doesn’t have a grace period, meaning interest starts accruing immediately. Additionally, cash advance APRs tend to be on the higher side.

Penalty APR

If you fail to make your payments on time, the penalty APR will kick in, driving up your card’s previous APR to one that’s often much higher. This is why it’s always important to make your credit card payments on-time — even if you’re in the midst of disputing a credit card charge, for instance.

Balance Transfer APR

A balance transfer APR will apply when you transfer any balances from other cards onto your credit card account. Often, this APR is comparable to the purchase APR, though this can vary depending on the credit card company.

How to Evaluate and Compare APRs

To get a sense of a credit card’s APR, follow these steps:

•  First take a look at a card’s purchase APR range, and compare that to other credit cards. For a fair comparison, make sure to look at the same type of credit card. (For example, only compare travel rewards cards to other travel rewards cards, or a credit-building card to another credit-building card.)

•  Then, get into the nitty-gritty and look at the APR for different types of transactions. Even one credit card can have varying APRs on different transactions. For example, a card may have a different APR on late payment penalties than it does for balance transfers or cash advances.

•  Evaluate each APR and compare those to any other offer you may have in front of you to ensure you pick the most competitive option. It’s a good idea to attempt to seek out the lowest rate possible for your financial situation. That way, you can feel confident using your credit card for what you need to use it for — which might include paying taxes with a credit card.

Low vs High APR Credit Cards

As you’re evaluating credit card APRs, it’s important to keep in mind that some credit cards tend to have higher APRs than others. For example, rewards credit cards generally have higher APRs, but provide value through perks, discounts, points, or other benefits.

On the other hand, many low-interest cards come with fewer perks. But again, these cards can save someone money in the long run if they need to carry a balance from, say, covering a large purchase at an establishment that accepts credit card payments.

Low-interest cards also tend to be reserved for those with higher than average credit scores, so they may be harder to qualify for with lower credit.

What Is a Good APR for a Credit Card?

According to the Federal Reserve, the U. national average credit card APR was 21.47% in December 2023. It’s reasonable to assume that an APR at or below the national average is considered “good.”

That said, qualifying for a “good” APR may hinge on a consumer’s credit score. For instance, someone with a below-average credit score may have a different definition of a good APR for a credit card compared to someone whose score is excellent.

APR and interest rates also change alongside federal interest rates changes. Because of this, it’s important for consumers to find the most recent data available on average credit card APR to ensure they aren’t relying on out-of-date information to inform their decision.

How to Avoid Paying APR

The APR a person qualifies for typically depends on their individual credit score. This means that those with credit scores on the higher end of the scale might qualify for lower APRs. If a consumer has a lower credit score, that doesn’t mean they’re totally out of luck, but they might be offered the same card at a higher APR.

However, there are a few ways a person can improve their chances of qualifying for a lower APR, and that starts by doing the work to build one’s credit score.

Tips for Qualifying for a Better APR

The APR a person qualifies for typically depends on their individual credit score. This means that those with credit scores on the higher end of the scale might qualify for lower APRs. If a consumer has a lower credit score, that doesn’t mean they’re totally out of luck, but they might be offered the same card at a higher APR.

However, there are a few ways a person can improve their chances of qualifying for a lower APR, and that starts by doing the work to improve their credit score.

•  One step is to check your credit report regularly for accuracy. US federal law allows consumers to get one free credit report annually from each of the three credit reporting agencies. Look out for any incorrect or suspicious charges. Even if you’d thought you’d resolved an issue related to a credit card skimmer, for instance, you’ll want to make sure those charges aren’t affecting your credit report in any way.

•  You can build your personal credit scores by making debt payments on time and trying to use only 30% of your available credit limit at any given time. Payment history accounts for 35% of the total credit score, and credit utilization — how much of a person’s total credit is being used at a given time — accounts for 30% of the total credit score.

Rebuilding a poor credit score can take some time, but it’s worth the work.

The Takeaway

Currently, the average credit card APR is 21.47%, and anything below that could be considered a good rate. However, when it comes to what is a good APR for a credit card, the answer is that it depends on a variety of factors. It will also depend on your credit scores and history as well as what type of credit cards and rewards you’re looking for. When you do get a credit card, it’s important to use it wisely so that you don’t wind up getting charged higher penalty rates.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What is a bad APR rate?

A bad APR for a credit card is generally one that’s well above the current national average credit card rate. APR for a credit card can vary widely, with some offering APRs as high as a whopping 36%.

What APR will I get with a 700 credit score?

A credit score of 700 is considered in the good range. It’s likely you could qualify for an APR around the average, though of course this will also depend on other factors, including the type of card and the current prime rate.

Does the interest rate on my credit card change?

Your credit card company can increase your interest rate. However, they are not permitted to do so within the first year of opening the account. Additionally, they must give you notice at least 45 days in advance.

What other financial products have an APR?

Many different types of lending products have APR. Beyond credit cards, this can include mortgages, car loans, and personal loans.

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