Ultimately, the Annual Percentage Rate (APR) of a loan or credit card is up to the lender. Most lenders are governed in their rates by the prime rate (set by the Federal government) plus whatever the lending institution must add to that to be profitable. As you have already discovered, many lenders do base certain rates on the credit-worthiness of the potential borrower.

Normally, the better your credit is, the lower your rates will be. This makes logical sense because a person whose credit rating is good is seen by lenders as a good risk for paying back a loan and, therefore, would be in demand by many lenders as a customer. Lenders have many other offers to compete with, and so, they may offer more attractive rates to woo a customer over to their institution.

On the flip-side, a person with less-than-perfect credit is considered a higher risk for paying back a loan and, therefore, is in less demand as a customer. Since there is less competition for this customer, the rates that the customer is offered will tend to be higher than those offered to a low-risk customer.

Also, lenders offering credit to higher risk borrowers charge higher rates because higher risk borrowers are more likely to default. So, lenders need to make enough in interest to profit despite a higher number of bad loans that may result from lending to higher risk individuals.

On a happier note, as your credit improves with your on-time payments and the reduction of your overall debt, the rates offered to you should become more competitive, or lower. Your best bet may be to do some research on various lenders and simply shop around for a rate that agrees closest to what your situation demands.

For information on getting the credit you need, you may wish to read, "Becoming a Good Risk."