Rate Report

Rate survey: Average card APR breaks new record, climbing to 16.81 percent


June 20, 2018: The average credit card interest rate soared to another 10-year high this week after the Federal Reserve increased its benchmark interest rate by a quarter of a percent

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The average credit card interest rate soared to another 10-year high this week after the Federal Reserve increased its benchmark interest rate by a quarter of a percent.

The average credit card APR climbed to 16.81 percent, according to the Weekly Credit Card Rate Report. It’s the highest weekly average has recorded since it began tracking rates in mid-2007. reviewed the APRs, annual fees and promotional terms of 100 U.S. credit cards. Among the 100 cards included in the weekly rate survey, 24 posted higher interest rates.

Several card issuers, including American Express, U.S. Bank and Wells Fargo, matched the Federal Reserve’s quarter-point rate hike this week. Other lenders are expected to eventually increase rates by the same amount. It often takes lenders a month or two to incorporate the Federal Reserve’s rate changes into new card offers. The rate hikes also affect cards that consumers already own.

As lenders gradually increase rates by a quarter of a percent, the average card APR will continue to climb, potentially surpassing 17 percent for the first time on record. Already, the national average APR is nearly a full percentage point higher than it was last year.

The Federal Reserve has signaled it will continue increasing rates over the next year. When that happens, card rates will continue to climb, forcing cardholders to pay substantially more to carry a balance.

On June 13, the Fed projected it would raise rates as often as two times this year, adding up to a .50 percent rate hike overall.

Depending on how much a cardholder owes and how aggressively they pay down debt, the ongoing rate changes could potentially add hundreds of dollars to their overall payments. For example, if someone owed $5,000 on a card that charged 16.81 percent, just one quarter-point rate hike would add more than $100 to their bill payments if they only paid the minimum amount due.

Interest rates have climbed sharply since the Federal Reserve first began hiking rates in late 2015. On December 1, 2015, for example, the average card APR clocked in at just 14.96 percent – nearly two points lower than it is now. If the Federal Reserve increases rates two more times this year, the average card APR – which only measures a card’s lowest possible interest rate – could potentially come within rounding distance of 18 percent for the first time ever. Meanwhile, the percentage of cards with truly low interest rates – below 11 percent – is likely to shrink to new lows. Already, the average card APR for low rate cards included in the weekly rate report has climbed to 13.70 percent.

So far, the higher rates haven’t deterred people from carrying a balance. According to the American Bankers Association’s latest Credit Card Market Monitor, released in April, roughly 44 percent of cardholders carried a balance in the fourth quarter of 2017 – up from 43.7 percent a year prior.

Meanwhile, a report released earlier this month by the Federal Reserve found that card balances climbed to roughly $1.03 trillion in April 2018.

The higher rates aren’t just affecting consumers’ bill payments. It’s also impacting how much they net in rewards after taking into account their interest payments.

According to a survey released June 19 by U.S. News and World Report, most travel card applicants – 70 percent – plan to pay their balances in full on their new cards. But only half manage to do so. The other half wind up paying interest at some point, U.S. News and World Report found.

See related: Fixed-rate cards are a shield against Fed rate hikes, Historical credit card rates, 2007-2018’s Weekly Rate Report

Avg. APR Last week 6 months ago
National average16.81%16.75%16.21%
Low interest13.70%13.63%12.95%
Cash back17.01%16.99%16.43%
Balance transfer16.05%15.98%15.44%
Instant approval19.05%19.05%18.62%
Bad credit23.80%23.74%23.52%
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: June 20, 2018



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Credit Card Rate Report Updated: September 18th, 2019
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