Research and Statistics

Average card APR climbs to all-time high of 15.29 percent


Dec. 28, 2016: Average rates on new credit card offers spiked again this week, according to the Weekly Credit Card Rate Report.

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Average rates on new credit card offers spiked again this week, according to the Weekly Credit Card Rate Report.

The national average APR jumped to a record high of 15.29 percent Wednesday after another major card issuer responded to the Federal Reserve’s mid-December rate hike with corresponding rate increases.

Citi bumped the APRs on its card offers by 0.25 percent – the same amount the Federal Reserve increased its benchmark interest rate by – causing the national average APR to rise to an all-time high. The second-highest APR has ever recorded was measured last week when the national average APR jumped to 15.27 percent. Before this month, the highest APR had ever recorded was 15.22 percent, set in December 2011 and tied in August 2016.

The Federal Reserve raised the federal funds rate, its benchmark interest rate, from 0.25 percent to 0.5 percent Dec. 14. Multiple card issuers, including American Express, Wells Fargo and U.S. Bank, have since increased rates by the same amount. Among the 100 cards tracked by, 38 have now increased rates by 0.25 percent.

The national average APR is expected to rise again soon after more card issuers respond to the Federal Reserve’s mid-December rate hike with corresponding rate increases.

While the federal CARD Act of 2009 prohibits retroactive rate increases on existing balances, it makes a few exceptions, and one allows card issuers to pass along rate hikes on variable rate cards tied to an index. Nearly all credit cards in the market today are variable cards, and the vast majority tie their rates to the prime rate index. In turn, the prime rate goes up and down with the federal funds rate. That means when the Federal Reserve increases the federal funds rate, card issuers may pass that rate increase to consumers.

Card issuers do not have to increase the rates on new card offers, but most do. The previous time the Fed raised rates, in December 2015, data shows that more than 90 percent raised rates within a few months.

For those with existing cards, your card agreement will dictate how quickly your card issuer may readjust rates. It usually happens within one billing cycle.

Card rates at record highs
Average rates on new card offers are currently at their highest point since began tracking rates in mid-2007.

 Separate from the Federal Reserve-related increases, a small number of card issuers also increased rates on select cards this year. However, most issuers left card offers alone throughout 2016, causing the national average APR to remain relatively stable for most of the year. Since Jan. 1, for example, the average APR has risen just 10 times and fallen four times. It remained unchanged 38 weeks out of 52. Card issuers rarely tweak card offers these days. In 2015, for example, the national average APR remained unchanged for 40 weeks. In 2014, it stayed the same for 36 weeks out of the year.

Card use is rising
Despite somewhat higher rates on new card offers, the number of consumers applying for and using their credit cards for everyday payments is picking up. According to new research from the consulting firm Mercator Advisory Group, for example, the percentage of U.S. consumers who own at least one general purpose credit card has grown from 61 percent in 2015 to 63 percent in 2016.

Young people between the ages of 25 and 34 are especially likely to own at least one credit card these days. According to Mercator, 65 percent of young adults in their late 20s and early 30s currently carry a credit card; in 2013, less than half (48 percent) of that age group used credit.

Analysts at Mercator say that more people are using credit cards these days, in part, because they’re doing more of their shopping online and through their mobile phones.

“The changing shopping habits of U.S. consumers to online and mobile shopping are clearly influencing their payment preferences, particularly among the older millennials with spending power,” said Mercator’s Karen Augustine in a news release.’s Weekly Rate Report
Avg. APRLast week 6 months ago
National average15.29%15.27%15.18%
Low interest12.09%12.09%11.98%
Cash back15.43%15.41%15.32%
Balance transfer14.53%14.51%14.38%
Instant approval17.88%17.88%18.04%
Bad credit22.95%22.92%22.56%
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: Dec. 28, 2016

See related:What rate increases will cost cardholders

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