A credit card's APR is influenced primarily by what factor?

The annual percentage rate (APR) on a credit card is largely influenced by your credit history. This history comprises a variety of factors, including your payment history, the length of your credit history, the types of credit you have used, and how much you owe relative to your credit limits. Lenders assess this information to gauge the level of risk associated with lending to you. A strong credit history—characterized by timely payments and lower overall debt levels—indicates to lenders that you are less likely to default on payments, which can lead to a lower APR.

Other factors, while they may play a role in your overall financial situation, do not typically have as direct an influence on the APR assigned to a credit card. For example, income level and employment status can indicate financial stability but do not directly reflect creditworthiness as measured by your credit history. Similarly, your debt-to-income ratio helps assess your ability to manage monthly payments, but it is your credit history that most directly impacts the rate at which you are charged interest on a credit card balance.