Average Credit Card Interest Rates

According to MoneyGeek’s dataset, the average credit card annual percentage rate (APR) in the U.S. is 24.51%. The Federal Reserve reports a national average APR of 21.76%. Rates vary widely depending on factors like your credit score, the type of card you use and Federal Reserve rate hikes. For instance, travel rewards and cash back cards often carry higher APRs exceeding 24%, while low-interest cards average a more manageable 19.93%.

Credit cards also have different types of interest rates — such as purchase, cash advance, penalty and promotional APRs — each affecting how much you owe in various situations. An APR below the national average is generally considered “good,” with borrowers who have strong credit often qualifying for the lower end of their card issuer’s APR range. Understanding these rates and the factors that impact them can help you make smarter decisions to minimize costs and better manage your finances.

The average credit card interest rate in the U.S. is 24.51%, based on MoneyGeek’s dataset of 239 credit cards. In contrast, the Federal Reserve’s most recent data cites the average APR for all consumer credit card accounts as 21.76%.

Federal Reserve reports indicate that interest rates have risen steadily over the past few years, primarily due to increases in the federal funds rate aimed at controlling inflation. Since most credit card APRs are tied to the prime rate, they rise in response to these benchmark adjustments. This has made carrying a balance significantly more expensive, emphasizing the importance of paying off balances promptly to avoid accumulating high-interest debt.

Different websites report varying average credit card interest rates because they rely on distinct datasets and methodologies. Factors like the number of credit cards analyzed, the inclusion or exclusion of promotional or penalty rates and the timing of data collection can all influence the average APR reported.

MoneyGeek analyzed 239 credit cards, carefully categorizing the information by card type and APR ranges. This process ensures that our averages are calculated based on precise, reliable data, giving readers accurate insights into credit card interest rates.

As of August 2024, the Federal Reserve reports that the average APR across all consumer credit cards is 21.76%. This figure provides a baseline but may not reflect the unique variables or smaller sample sizes used by individual reporting sources.

Credit card interest rates change over time for a few reasons. When the Federal Reserve adjusts its benchmark interest rate — usually to manage inflation or stimulate economic growth — credit card issuers typically follow suit because most credit cards have variable APRs tied to the prime rate. This means that when the prime rate rises, issuers increase APRs to maintain profitability, which is one way credit card companies make money.

Your personal rate can also change based on specific factors, such as the expiration of a 0% promotional period, receiving a penalty APR after being 60 days or more late on a payment or a drop in your credit score. However, protections under the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) prevent issuers from raising their APR during the first 12 months of account opening (except in cases of missed payments). Credit card issuers must also provide at least 45 days’ notice before any APR changes take effect.

After remaining steady in 2020 and 2021, credit card APRs rose sharply in 2022. General purpose card APRs increased by 17.62% from 2021, driven by a four-point climb in the prime rate. Private label card APRs also hit a high of 27.70%, reflecting an 8% rise from the previous year, though they remain higher than general purpose rates.

These shifts mirror market interest rate adjustments and broader pricing trends. Most general-purpose cards are tied to variable-rate indices, causing their APRs to fluctuate with the prime rate.

• Average Purchase APR: 22.70%
• Average Cash Advance APR: 25%
• Average Penalty APR: 30% or higher
• Average Promotional APR: 0% (for 12 to 21 months)

Credit cards come with different types of APRs that affect how much you pay in interest under specific circumstances. For example, the APR you pay for purchases is typically lower than the cash advance APR, which averages around 25%. Penalty APRs, applied when payments are 60 or more days late, can reach as high as 30% or more — significantly higher than standard purchase APRs.

Most credit cards feature a variable APR, which fluctuates based on the Federal Reserve's prime rate. While a fixed APR is rare for credit cards, it's commonly found with other loans like mortgages. Promotional APRs, often offered as 0% interest for a limited period, such as 12 or 21 months, can help save on interest for purchases or balance transfers when used strategically. Balance transfers often fall under promotional APRs, starting at 0% during the introductory period but reverting to the card's standard rate afterward.

Before applying for a credit card, review the specific APR rates for purchases, cash advances and penalties. If you already have a card, check your statement or contact your issuer to confirm the applicable rates. Staying informed about these details helps you make smarter financial decisions.

A "good" APR on a credit card typically falls below the national average of 21.76%, as reported by the Federal Reserve. Rates can vary widely depending on your credit score and the card type. Borrowers with strong credit are more likely to qualify for rates closer to the lower end of their card issuer's APR range, whereas those with less-than-perfect credit may see rates closer to or above the average.

To find a rate that works for you, consider comparing offers with the current average as a benchmark. Cards with promotional 0% APR periods can also provide temporary relief from interest charges, helping you save on purchases or balance transfers.

A 24% interest rate is high for a credit card, especially for borrowers with good or excellent credit scores. Card issuers typically offer rates at this level to those with lower credit scores, such as subprime or deep subprime borrowers (credit scores below 620). Carrying a balance on a card with a 24% APR can make it challenging to pay off debt due to high interest costs.

A 7% APR would be exceptionally low for a credit card, but such rates are almost unheard of in today’s market. Credit card APRs are influenced by the Federal Reserve’s prime rate, which significantly impacts variable rates. As of 2022, the average APR for general-purpose credit cards was 22.70%, meaning a 7% APR is typically unavailable except in unique cases, such as specific promotional offers on secured loans or other financial products.

The average credit card interest rate varies by card type, ranging from 19.93% to 28.42%. Cards with perks like cash back or travel rewards tend to have higher rates, making them more expensive if you carry a balance.

By contrast, low-interest cards are designed for borrowers seeking to minimize costs. Choosing a card with a lower APR can help reduce interest payments and make it easier to manage debt, especially if you frequently carry a balance.

Several major factors influence the APR on your credit card, ranging from broad market conditions to your personal financial profile. These factors help lenders assess risk and set rates accordingly. A higher APR typically reflects greater risk from the lender’s perspective, meaning they see you as less likely to pay back borrowed funds on time.

MoneyGeek pulled APRs from 239 cards in our internal dataset to determine the averages for different types of interest rates. We also supplemented our dataset with historical data from the Federal Reserve.

Understanding how credit card interest rates work can help you save money and avoid debt. Here are some common questions about how rates are calculated, how to manage them and strategies to reduce or avoid interest.

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