Average credit card interest rates: Week of October 11 2023

The average credit card interest rate is 21.10 percent.

Lenders left APRs on most new card offers unchanged this week, according to CreditCards.com’s latest Weekly Rate Report. As a result, the national average APR for brand-new credit cards held steady Wednesday after rising unexpectedly last week to its highest point on record. 

Consumers who compare credit card offers can expect APRs on most new cards to still be several points higher than they were last year. Among the 100 online card offers tracked weekly by CreditCards.com, for example: 

• More than half now start APRs somewhere between 20.24 percent and 31.99 percent. 
• Over a third — 35 out of 100 offers — start APRs above 21 percent. 
• An overwhelming majority — 87 out of 100 offers — start APRs at 17.99 percent or higher.  

A year ago, by contrast, minimum APRs above 20 percent were rare — especially on cards designed for borrowers with good to excellent credit.

Although APRs on most new credit cards were still climbing fast last autumn in tandem with rising benchmark interest rates, most new card offers continued to advertise APRs well below 18 percent. Among the cards tracked weekly by CreditCards.com, for example, only 18 out of 100 online card offers recorded last October started APRs above 20 percent. Fewer than half advertised minimum rates above 17.99 percent and around a quarter still offered APRs below 16 percent.  

Today, by contrast, just 15 out of 100 credit cards offer rates below 18 percent. Only seven out of 100 credit cards start rates below 17 percent and just three offer rates below 16 percent. 

Maximum APRs are also climbing sharply as lenders grow more comfortable with charging APRs near 30 percent. 

This week, for example, Barclaycard pushed the maximum APR on yet another co-branded credit card past the 30 percent threshold, causing the average maximum card APR to climb to another record high.

CreditCards.com only considers a card’s lowest possible interest rate when calculating the national average APR for brand-new cards. However, most general market credit cards advertise a wide range of potential interest rates, including maximum APRs that are often seven to 10 percentage points higher than a card’s lowest rate. 

Among the cards tracked by CreditCards.com, the average maximum credit card APR is currently 28.56 percent — 7.46 percentage points above the minimum APR average. 

The share of cards advertising APRs near 30 percent also broke another record this week. According to CreditCards.com’s latest Weekly Rate Report: 

• The vast majority of new card offers now cap APRs at 28.24 percent or more. 
• Just over half — 56 out of 100 offers — cap APRs above 29 percent. 
• A record number — 17 out of 100 card offers — advertise APRs above 30 percent. 
• A small but significant minority — 10 out of 100 cards — cap APRs above 31 percent.

That’s a striking change from previous years when such high rates were all-but-unheard of on a general market credit card. A year ago, for example, only one card included in the weekly rate report — a notoriously pricey subprime card — advertised an APR above 30 percent. Just seven out of 100 card offers capped APRs above 29 percent. Only 17 advertised rates above 28 percent. Instead, most new card offers limited APRs to 26.99 percent or less. 

The average APR on a card with existing credit card debt is also at a historic high right now, putting increasingly heavy pressure on indebted cardholders. According to the Federal Reserve’s latest Consumer Credit Report, the average APR on an interest-bearing credit card hit 22.77 percent in August, up from around 18.43 percent in the third quarter of last year. 

More borrowers under strain as record APRs clash with higher living costs

This year’s sharply higher interest rates are mostly due to a historic series of rate hikes from the Fed. Between March 2022 and July 2023, policymakers announced 11 separate rate increases in an aggressive bid to slow inflation, causing the central bank’s influential federal funds rate to soar. 

​​During that same period, credit card issuers have hiked APRs on most new and existing credit card accounts by the same amount. As a result, borrowers who opened cards at the beginning of last year have seen their existing card APRs jump by an astounding five and a quarter percentage points in less than 15 months. 

Fed officials are now widely expected to leave the Fed’s key rate in place until next year, according to the CME Fed Watch Tool. So credit card APRs may not rise much more this autumn, if they climb at all. 

But after nearly a year and a half of aggressive rate increases, APRs on most credit cards are currently in uncharted territory, putting unprecedented strain on borrowers with large balances.

According to Bankrate’s Minimum Payment Calculator, for example, a cardholder with an $8,000 credit card balance and a 21 percent APR must pay at least $220 a month to avoid defaulting on their payment. Similarly, a cardholder with an equivalent credit card balance and a 30 percent APR must spend at least $280 a month to keep their payments current. 

That extra financial pressure now appears to be weighing more heavily on consumers — many of whom are also contending with newly resumed student loan payments on top of rising living expenses. 

According to new research released this week by the Federal Reserve Bank of New York, for example, significantly more cardholders expressed concern this summer that they could soon fall behind on their credit card payments. “The average perceived probability of missing a minimum debt payment over the next three months increased by 1.4 percentage points to 12.5 percent,” wrote researchers. That’s “the highest reading since May 2020.” 

Younger borrowers under 40 with at least some college education were especially likely to worry about their ability to afford their minimum credit card payments. So were borrowers with lower incomes. 

So far, credit card delinquencies — late payments by 30 days or more — have remained relatively low by historical standards, but they have grown more common in the last year, according to research released earlier this year by the New York Fed. 

Now, with card APRs at historic highs and other living expenses still expanding, a growing number of cardholders could soon have even more trouble keeping up with their credit card payments.

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

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 11, 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.