The average credit card interest rate is 21.09 percent.
APRs on most new credit card offers are still at a historic high, according to CreditCards.com’s latest Weekly Rate Report.
Among the 100 cards tracked weekly by CreditCards.com:
- Over half of new card offers still start APRs well above 20 percent.
- More than a third only offer APRs at 21.24 percent or higher.
- Nearly all new card offers — 87 out of 100 offers — currently start APRs at 17.99 percent or more.
Until last year, by contrast, the highest weekly APR average CreditCards.com had ever recorded was 17.8 percent.
But at least one major lender shifted course this week, selectively trimming the starting APR on a co-branded card for motorcycle enthusiasts. As a result, the average APR for brand-new cards slipped Wednesday for just the fifth time in a year.
Both U.S. Bank and Barclaycard widened APR ranges on select offers
At least two bank card issuers were active this week.
U.S. Bank cut the starting APR on the Harley Davidson Visa Signature card from 20.24 percent to 19.24 percent, causing the bank card’s lowest available interest rate to fall more than a full percentage point below the average APR for rewards credit cards. Currently, the average rewards card offer advertises a minimum APR of 20.87 percent.
However, U.S. Bank left the Harley Davidson card’s maximum APR unchanged at 29.99 percent. As a result, the range of possible interest rates on the Harley Davidson Visa Signature card widened this week by 10.75 percentage points.
Meanwhile, Barclaycard also widened the range of possible APRs on several more co-branded credit cards, pushing up the cards’ maximum APRs to 30.24 percent. As a result, the share of cards advertising APRs above 30 percent climbed to another all-time high this week.
Among the cards tracked weekly by CreditCards.com, a record number — 21 out of 100 card offers — now cap APRs at 30.24 percent or more.
CreditCards.com only considers a card’s lowest possible interest rate when calculating the national average. However, most general market cards advertise a wide range of potential interest rates, including maximum APRs that are often seven to 11 points higher than a card’s lowest rate.
The average maximum new card APR, for example, is currently 28.57 percent, according to CreditCards.com’s latest Weekly Rate Report — 7.48 percentage points above the average minimum card APR.
Roughly three quarters of all bank card offers currently advertise maximum APRs that are at least 7 points higher than a card’s best rate. Most advertise APR ranges that are as wide as 9 to 11 percentage points or more.
Among the cards tracked by CreditCards.com:
- 21 advertise APR ranges as wide as 7 to 8.75 percentage points.
- 51 advertise APR ranges as wide as 9 to 12 percentage points.
Some cards advertise APR ranges that are even wider, far surpassing benchmark interest rates.
- At least two advertise maximum APRs that are 14 points higher than the card’s best rate.
- One card tracked by CreditCards.com advertises a minimum rate that’s 16 points lower than its highest possible interest rate.
Meanwhile, the difference between a card’s benchmark interest rate — typically the U.S. prime rate — and the APR assigned to borrowers is also growing wider these days as lenders collect more interest income from borrowers.
Substantial gap between benchmark rates and card APRs is continuing to expand
Unusually high APRs on both new and existing credit card accounts have helped to fuel record profits for many lenders. This past week, for example, several major bank card lenders reported substantial profits from their credit card divisions, thanks in part to credit card holders carrying bigger balances for longer periods.
According to research by the Federal Reserve, roughly 80 percent of lenders’ card-related profits come from the interest income they collect from cardholders who carry a balance.
Over the past year and a half, APRs on both new and existing credit card accounts have climbed higher and faster than ever before, thanks in part to aggressive rate hikes from the Fed.
However, dramatically higher benchmark interest rates aren’t the only reason credit card APRs have climbed. Credit card lenders have also grown bolder with the rates they’re willing to charge and have independently introduced sharply higher APRs to select cards, outpacing federal rate hikes.
Lenders have also allowed the typical spread between a card’s prime rate and APR to continue to stretch wider, helping to exacerbate a trend that has been going on for years.
According to the Federal Reserve’s latest G.19 Consumer Credit Report, for example, the average APR on an open credit card account with an active balance climbed to 22.77 percent in August, up six percentage points from early 2022. (The U.S. prime rate, by contrast, climbed by 5.25 percentage points between March 2022 and August 2023.)
During that same period, the spread between the U.S. prime rate and the average APR on an interest-bearing card widened by a striking 1.35 percentage points. According to data collected by the Federal Reserve:
- In August 2023, 14.27 percentage points stood between the U.S. prime rate of 8.5 percent and the average APR charged to indebted borrowers.
- In the first quarter of 2022, by contrast, a notably smaller amount — 12.92 percentage points — separated the average APR on an interest-bearing card and the then-prime rate of 3.25 percent.
A similarly large gap also exists between brand-new card APRs and the U.S. prime rate.
According to data collected by CreditCards.com, for example:
- 59 percentage points now separate the average new card APR of 21.09 percent and the U.S. prime rate of 8.5 percent.
- A stunning 20.07 percentage points stand between the U.S. prime rate and the average maximum card APR of 28.57 percent.
Fifteen years ago, by contrast, there was typically far less daylight between the U.S. prime rate and average credit card interest rates.
Among new cards, for example, the average card offer began October 2008 with a minimum APR of 11.38 percent, according to CreditCards.com data — just 6.38 percentage points above the then-prime rate of 5 percent.
Similarly, only 8.64 percentage points stood between the average APR charged to open credit card accounts (which was 13.64 percent in the third quarter of 2008, according to Federal Reserve data) and the prime rate at the time.
Why interest rates are climbing
Most U.S. credit cards are tied to the prime rate, and when the federal funds rate changes, the prime rate typically changes by the same amount.
Lenders are free to set APRs on new cards as they wish and technically aren’t required to change the APRs when a card’s base rate changes. (On the other hand, lenders are required to match changes to the prime rate on open credit card accounts that are contractually tied to it.) Historically, most issuers do revise the APRs they advertise when the card’s base rate changes.
That’s what happened in the spring of 2020. After the Fed slashed rates by a point and a half in March 2020 in response to economic softening from the pandemic, nearly all of the issuers tracked weekly by CreditCards.com — with the notable exception of Capital One — lowered new card APRs as well.
Since then, most new cards included in this rate report continued to advertise the same APRs throughout the pandemic. As a result, the national average card APR hardly budged for nearly two years, remaining within a rounding distance of 16.00 percent for nearly 24 months.
But now that the prime rate is climbing, credit card offers are following suit. Current credit card holders will also see their rates climb, causing their debt to become much more costly to carry.
CreditCards.com’s Weekly Rate Report
| Rate | Avg. APR | Last week | 6 months ago |
|---|---|---|---|
| National average | 21.09% | 21.10% | 20.59% |
| Low interest | 18.22% | 18.24% | 17.60% |
| Cash back | 20.42% | 20.42% | 20.19% |
| Balance transfer | 19.23% | 19.25% | 18.70% |
| Business | 19.39% | 19.39% | 18.74% |
| Student | 19.99% | 19.99% | 20.99% |
| Airline | 20.82% | 20.82% | 20.29% |
| Rewards | 20.87% | 20.89% | 20.40% |
| Instant approval | 25.60% | 25.60% | 24.88% |
| Bad credit | 29.77% | 29.77% | 29.24% |
Methodology: The national average credit card APR comprises 100 of the most popular credit cards in the country, including cards from dozens of leading U.S. issuers and representing every card category listed above. (Introductory, or teaser, rates are not included in the calculation.)
Source: CreditCards.com
Updated: October 18, 2023
Historic interest rates by card type
Since 2007, CreditCards.com has calculated average rates for various credit card categories, including student cards, balance transfer cards, cash back cards and more.
How to get a low credit card interest rate
Your odds of getting approved for a card’s lowest rate will increase the more you improve your credit score. Some factors that influence your credit card APR will be out of your control, such as the age of your oldest credit accounts. However, even if you’re new to credit or are rebuilding your score, there are steps you can take to secure a lower APR. For example:
- Pay your bills on time. The single most important factor influencing your credit score — and your ability to win a lower rate — is your track record of making on-time payments. Lenders are more likely to trust you with a competitive APR and other positive terms, such as a big credit limit, if you have a lengthy history of paying your bills on time.
- Keep your balances low. Creditors also want to see that you are responsible for your credit and don’t overcharge. As a result, credit scores consider the amount of credit you’re using compared to how much credit you’ve been given. This is known as your credit utilization ratio. Typically, the lower your ratio, the better. For example, personal finance experts often recommend that you keep your balances well below 30 percent of your total credit limit.
- Build a lengthy and diverse credit history. Lenders also like to see that you’ve successfully used credit for a long time and have experience with different types of credit, including revolving credit and installment loans. As a result, credit scores, such as the FICO score and VantageScore, factor in the average length of your credit history and the types of loans you’ve handled (which is known as your credit mix). To keep your credit history as long as possible, continue to use your oldest credit card, so your issuer doesn’t close it.
- Call your issuers. If you’ve successfully owned a credit card for a long time, you may be able to convince your credit card issuers to lower your interest rate — especially if you have excellent credit. Contact your credit card issuer and try to negotiate a lower APR.
- Monitor your credit report. Check your credit reports regularly to be sure you’re accurately scored. The last thing you want is for a mistake or unauthorized account to drag down your credit score. You have the right to check your credit reports from each major credit bureau (Equifax, Experian and TransUnion) once per year for free through AnnualCreditReport.com. The three credit bureaus are also providing free weekly credit reports through 2023 due to the pandemic.