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Credit cards can be confusing. Understanding the essential terminology or how the Federal Reserve’s rates impact your account can be a lot to process. And, if you’re working on paying down debt or trying to better manage your finances, it’s not always clear what the best path forward is when it comes to credit cards and interest rates.
One of the key terms you’ll need to know is APR, which means “annual percentage rate.” This is the yearly interest rate you pay for borrowing money. The current average interest rate for credit cards is 14.39% —though it could be higher or lower depending on the strength of your credit score and your overall credit report.
There are different types of APR for purchases, cash advances, balance transfers, penalties and more. A good interest rate is 17%, the average is 19.49% and a bad interest rate is 24% (or higher). Learn more about credit card APR and interest rates to help you better manage and maintain your debt, finances and credit score.
On This Page:
The average credit interest rate is 19.49%. By knowing this, you can figure out if it’s worth it to apply for a new card.
The best APR a consumer can get on a new credit card is typically 17% if they have a super prime credit score of 720 or greater.
APR only applies to your unpaid balance, so you will get charged if you don’t pay off your monthly bill. This can make it much harder to get out of debt.
Some of the links on this page will take you to one of our partner's sites, where you can compare and apply for a selected credit card.
What Is the Average Credit Card Interest Rate in the US?
The average credit card interest rate in the U.S. is 19.20%, based on MoneyGeek’s dataset. The average interest rate on a credit card is 14.51%, according to the Federal Reserve’s data from the end of 2021. However, that is likely going to change.
As of early March 2022, the Federal Reserve announced that in order to control inflation, they will increase interest rates. The current interest rate is near zero, but there could be a half-point increase — the highest since 2000 — if price pressure doesn’t level off.
The average APR for credit cards is expected to rise faster than other types of loans, since credit card issuers base the interest rates on the Federal Reserve’s benchmark. If you have a lot of credit card debt, it’s likely going to become much harder to get out of it due to these high rates.
Average APR (Q3-2021)
MoneyGeek’s Partner Card Dataset
19.78% ( # of cards 102)
MoneyGeek’s Full Dataset
14.39% ( # of cards 2,275)
Federal Reserve Dataset
14.51% (# of cards Unknown)
Why Do Different Sites Show Different Average Interest Rates?
Different websites show different average interest rates due to the sample size of the cards that are being taken into account. For example, while MoneyGeek calculates the average interest rate as 19.20%, these sites came up with different numbers:
Why Do Credit Card Interest Rates Change Over Time?
Interest rates change over time for a few reasons. When the Federal Reserve changes the rate, typically credit card issuers will also — as this is how they make money. Credit cards have variable rates, so issuers can change them at any time.
Your personal rate may go up if your 0% interest promotional period expires, you have received a penalty interest rate because your payment is 60 days (or more) late or your credit score has dropped significantly. The Credit Card Accountability Responsibility and Disclosure Act of 2009 states that your credit card interest will not be raised in the first 12 months. Plus, you need to receive a 45-day notice in advance of any changes.
Historical APR Rates
Due to changes in the economy — and, in turn, the Federal Reserve’s prime rate — interest rates for credit cards fluctuate overtime. Generally, over the past five years, they have hovered around 17% for people with higher credit scores and close to 25% for people with lower credit scores.
Types of Interest Rates & Their Averages
There are different types of APR for credit cards.
For example, the APR you pay when you make a purchase is going to be different from the cash advance APR if you take money out of your credit card or penalty APR if you pay your bill 60+ days past the due date for your bill. The average cash advance APR is around 25%, while the average penalty APR is 29.99% — a significantly higher APR than your purchase APR.
Every credit card has a variable APR, which fluctuates depending on the Federal Reserve’s prime rate. A fixed APR applies to other types of loans, like some mortgages. A promotional APR is where you get a credit card with 0% interest for a certain amount of time, such as 12 or 18 months.
Before signing up for a card, you should be able to find out the APR rates for all these different categories. And if you already have a card, check your statement and/or call your credit card issuer to learn the different APR rates. Being informed prior to signing up for a card is your best course of action, though.
What Is a Good Interest Rate on a Credit Card?
A good interest rate will range from 17% to 22.50% for those with near prime, prime and super prime credit scores ranging from 620–720. Interest rates and APR ranges will vary based on the average credit score and what the prime and subprime rates are, according to the Federal Reserve.
When a credit card issuer offers you a card, you will be able to see the interest rate they are proposing you will pay. You can either accept their offer and card, or decline it and try to get a lower interest rate from another card issuer instead.
Is 24.99% a Good Credit Card Interest Rate?
Unfortunately, 24.99% is not a good credit card interest rate. If you have a deep subprime credit card score of 579 or lower, this is the type of rate you may be offered from card issuers, making it much more difficult to get out of debt. The average interest rate is 19.49%, while people with prime credit scores of 720 and above can score interest rates as low as 17%.
Is 10% a Good Credit Card Interest Rate?
While 10% would be an amazing credit card interest rate, it doesn’t seem to exist — this is only for other types of loans. The average interest rate on a credit card for someone with a prime credit score of 720 and above is 17%, so 10% would be impossible to achieve these days. The prime rate from the Federal Reserve is just too high, among other factors that affect credit card interest rates.
Factors That Affect APR
There are some major factors that will affect the APR you see on your credit card statement. They range from general factors, such as the Federal Reserve’s prime rate, to personal factors, such as your credit score and overall credit report. Lenders want to make sure that when you borrow, you will pay them back — and the higher the interest rate you have, it means the riskier the credit card issuers view you. After all, above all else, they just want their money back (preferably with interest accrued).
The Federal Reserve’s prime rate
The Federal Reserve will set the prime rate and credit card issuers will follow by either increasing or decreasing their rates.
Your credit score
Typically, the higher your credit score, the lower your interest rate will be.
Your credit report
Did you pay other issuers back on time? Is your debt ratio below 30%? Did you apply for many cards at once? These will definitely come into play.
You could have a 0% promotional rate for a certain period of time, like one year, and then it will go up after that. The jump could be significant depending on your score.
Average Interest Rates by Credit Score
It’s pretty simple: The higher your credit score and cleaner your credit report, the lower your APR will be and vice-versa. Keeping up with your payments, ensuring you don’t get into debt and not applying for too many cards at once will all affect your score.
Credit score category
Average APR (2020)
Super Prime (720 or greater)
Prime (660 - 719)
Near Prime (620 - 659)
Subprime (580 - 619)
Deep Subprime (579 or lower)
The percentage of Americans who have a credit card balance ranges from 35%–65% depending on the survey you find. To avoid getting into debt, don’t spend more than you can pay back and aim to pay your bills on time so you won’t get hit with interest.
Average Interest Rates by Card Type
Credit cards come with many benefits, aside from the fact that they can help you build your credit score and access better loans and interest rates. They also provide rewards points, travel miles, cash back and more. Cards that offer something a little more tend to have higher interest rates. Here is some data on the average interest rates by card type from internally sourced data.
Interest Rates for Travel Credit Cards
Travel credit cards have a higher interest rate than the total average because they offer you something in return if used correctly. The low APR for travel credit cards is 15.56%, while the high is 23.08%.
Interest Rates for Cash Back Cards
Many times, cash back cards have standard interest rates compared to regular credit cards. They are certainly lower than rates for rewards credit cards. The high interest rate for cash back cards is 23.34% and the low is 14.81%.
Interest Rates for Business Cards
Business credit cards typically offer a standard interest rate since they are not rewards cards. The high APR for a business card is 14.27%, while the low APR for a business card is 21.20%.
Interest Rates for Student Credit Cards
You may find that student credit cards have a higher interest rate than average because students, who tend to be younger, don’t have a long credit history or any credit history at all. They are seen as riskier, so the interest rate is higher. The high APR for a student card is 22.96% and the low APR is 18.74%.
Interest Rates for Rewards Cards
Interest rates for rewards credit cards are higher because you get something in return for spending on them. The high APR for rewards credit cards is 19.45%, and the low is 12.06% if you have a super prime credit score.
Interest Rates for Balance Transfers
If you have debt, you may be able to transfer it to a balance transfer card and pay 0% APR for a limited time period, like 12 or 18 months. The interest rate on these cards is 12.60% to 23.28%. The range is so huge because it depends on your credit score. It’s lower for prime borrowers and higher than average for those with lower credit scores.
To provide you with this helpful information, we used the data of 102 cards and 2,275 cards from our personal data set to figure out the averages for many of the interest rates. We also supplemented historical data from trusted sources, including financial experts.
MoneyGeek reached out to several industry experts for their insights about average credit card interest rates and how you can secure a better interest rate when applying for a new card.
- How can you try to get a credit card with a lower interest rate?
- How can you pay off debt faster when you have a high interest rate on your credit cards?
Founder and CEO of DebtMD
Debt Expert and Personal Finance Content Creator at Debt Free Gonnabe
Other Questions You May Have About Credit Cards and APRs
Do you have more questions about credit cards and APRs? Find answers to your questions below — understanding these concepts can help you make smarter, informed financial decisions.
Learning more about the following credit card resources can help increase your understanding about interest rates, APR, terminology and more.
- 2022's Best Credit Cards for Bad Credit: If your credit score isn’t high but you still need a credit card, find the best offers for this year.
- Best 0% APR Credit Cards in 2022: Find cards that are offering a 0% promotional APR so you can avoid interest charges for a certain period of time.
- Best Cash Advance Credit Cards for 2022: Need a cash advance? These credit cards can help. Just make sure you know how much interest they’re going to charge you before signing up.
- Credit Card Late Fees: Want to know more about credit card late fees? Find out how they’re charged, how they may impact your account and credit score and more.
- Credit Card Terms 101: Explore this credit card terminology glossary to learn more about key lingo and how it applies to your credit card options.
About Kylie Ora Lobell
- Legal Information Institute of the Cornell Law School. "Credit Card Accountability Responsibility and Disclosure Act of 2009." Accessed March 21, 2022.
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