The average credit card interest rate is 16.05%.
U.S. credit card lenders once again declined to revise APRs on some of the country best-known cards, according to the CreditCards.com Weekly Credit Card Rate Report. None of the 100 cards tracked weekly by CreditCards.com advertised new rates. As a result, the average starting APR for brand-new cards remained at 16.05% for the eighth consecutive week.
APRs have remained within rounding distance of 16% for nearly 10 consecutive months
APRs on brand-new credit cards have remained unusually stable for months now. For example, the average new card APR hasnât wavered by more than a quarter of a percentage point since April and it has remained just above 16% since mid-November. Earlier in the year, the average card APR briefly dipped to 15.97%, which is the lowest APR average CreditCards.com has recorded since 2017. But for most of 2020, the average card APR remained above 16%.
Despite their current stability, average APRs are dramatically lower than they were a year ago when the average APR began 2020 at 17.30%.
At that time, even cardholders with excellent credit were likely to be assigned rates as high as 17% or more. Today, by contrast, few general market cards that are marketed to borrowers with the best credit charge such high rates.
Among the 100 cards tracked by CreditCards.com, for example, only one general market card for borrowers with excellent credit currently charges a minimum APR above 16.99%. The Capital One Venture Rewards Card starts APRs at 17.24% and caps them at 24.49%. But most comparable cards charge lower rates.
Among travel rewards cards, for example:
- The Bank of AmericaÂ® Premium RewardsÂ® card and the Chase Sapphire Preferred Card both start APRs at 15.99%
- The APRs on the high-end Chase Sapphire Reserve card and Citi PrestigeÂ® Card start at 16.99%.
- The minimum APR on the Discover itÂ® Miles card is 11.99% while the APRs on a number of popular airline cards, such as the Southwest Airlines Rapid Rewards Premier Credit Card, the Delta SkyMilesÂ® Gold American Express Card and the Frontier Airlines World Mastercard from Barclays, start below 16%.
The average maximum card APR is also significantly lower. For example, the average maximum APR for all 100 cards included in the CreditCards.com rate report is currently 23.55%. The average median APR is 19.8%.
Capital Oneâs decision to leave rates alone last spring leaves it out of step with other issuers
When the Federal Reserve cut federal interest rates by more than a full percentage point last spring, Capital One was the only major, nationwide issuer not to match the central bankâs rate cut on new general market cards. As a result, cardholders with lower scores are less likely than other cardholders these days to secure a significantly lower APR than what they would have been able to get a year ago.
Thatâs because Capital One is one of the leading issuers of cards for borrowers with fair credit. Its line of subprime cards continues to charge the same 26.99% APR the cards advertised for much of last winter.
However, borrowers with lower scores do have more options than they had a year ago if they compare rates with other issuers. For example:
- The Discover itÂ® Secured card and the BankAmericard Secured Credit Card currently offer a 22.99% APR.
- The CitiÂ® Secured MastercardÂ® card starts APRs at 22.49%.
Not all lenders have given borrowers with bad credit a reprieve, though, amid the pandemic. For example, U.S. Bank dramatically hiked the APR on its flagship secured card, pushing the cardâs only APR to 25.99%. As a result, the average APR for all subprime cards tracked by CreditCards.com is the same as it was a year ago: 25.3%.
The average APR for rewards cards, by contrast, has fallen from 17.11% to 15.76%, while the average low interest card APR has tumbled from 14.1% to 12.77%.
See related:Â How do credit card APRs work?
*All information about the Chase Sapphire Preferred Card and the Citi Prestige has been collected independently by CreditCards.com and has not been reviewed by the issuer. This offer is no longer available on our site.
CreditCards.com’s Weekly Rate Report
|Avg. APR||Last week||6 months ago|
|Methodology: The national average credit card APR is comprised of 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.)|
|Updated: January 20, 2021|
Historic interest rates by card type
Some credit cards charge even higher rates, on average. The type of rate you get will depend in part on the category of credit card you own. For example, even the best travel credit cards often charge higher rates than basic, low interest credit cards.
CreditCards.com has been calculating average rates for a wide variety of credit card categories, including student cards, balance transfer cards, cash back cards and more, since 2007.
How to get a low credit card interest rate
Your odds of getting approved for a cardâs 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 length of time youâve been handling credit.
However, even if youâre new to credit or are rebuilding your score, there are steps you can take to ensure a lower APR. For example:
- Pay your bills on time. The single most important factor influencing your credit score â and your ability to win a lower rate â is your track record of making on-time payments. Lenders are more likely to trust you with a competitive APR â and other positive terms, such as a big credit limit â if you have a lengthy history of paying your bills on time.
- Keep your balances low.Â Lenders also want to see that you are responsible with your credit and donât overcharge. As a result, credit scores take into account the amount of credit youâre using, compared to how much credit youâve 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% of your total credit limit.
- Build a lengthy and diverse credit history. Lenders also like to see that youâve been successfully using 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 youâve 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 lender doesnât close it.
- Call your lender. If youâve successfully owned a credit card for a long time, you may be able to convince your lender to lower your interest rate â especially if you have excellent credit. Reach out to your lender and ask if theyâd be willing to negotiate a lower APR.
- Monitor your credit report. Check your credit reports regularly to make sure youâre being 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.