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Rate Report

Average credit card interest rates: Week of Feb. 26, 2020

The average APR on new credit card offers rose to 17.35% after Citi took over a store card offered by a midwest retail chain

Summary

The average APR on new credit card offers has increased to 17.35%, according to the CreditCards.com Weekly Credit Card Rate Report.  

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The average credit card interest rate is 17.35%.

The average APR on new credit card offers climbed this week to its highest point since October 2019.

Citi spurred this week’s rate change by taking over the Meijer Mastercard and relaunching it as a Citi card with a higher APR. Previously, the Meijer Mastercard was issued by Comenity.

Citi eliminated the Meijer card’s APR range of 21.49% to 25.49% and replaced it with a flat APR of 26.49%. That caused the average minimum card APR to climb by 0.05 percentage points.

The average maximum card APR also edged up this week since the new Meijer card APR is a full percentage point higher than the maximum rate it previously offered.

The average maximum card APR is now 24.55%. Meanwhile, the average median card APR, which is closer to what many new cardholders are charged, is currently 20.95%.

Every week, CreditCards.com evaluates the APRs annual fees and promotional terms of 100 U.S. credit cards.

Most issuers tracked by CreditCards.com left interest rates alone this week. They also left promotional terms unchanged.

The average card APR is nearly a quarter of a percentage point lower now than it stood a year ago. However, by historical standards, rates are still near record highs.

Average rates on new card offers declined by more than half a percentage point in 2019 after reaching an all-time high of 17.8% in July.

Last year’s decline in rates was largely due to changes in federal interest rates. When the Federal Reserve revises its benchmark interest rate, the federal funds rate, most card issuers change rates on new credit card offers by the same amount.

However, multiple card issuers also chose to hike APRs on new card offers in the second half of 2019, despite a lower federal funds rate. As a result, the average APR for new card offers hasn’t declined nearly as sharply as federal interest rates.

See related: What’s the difference between statement balance and current balance?

Citi opens applications for the new Meijer supermarket card early

Citi had originally announced it would open the new Meijer Mastercard to applicants on March 1. However, it has since opened online applications several days earlier.

Despite being branded as a new card and charging a higher APR, the Meijer Mastercard under Citi isn’t all that different from the card Comenity offered.

Cardholders will continue to get a 10-cent discount on every gallon of gas they buy from Meijer. They will also get $10 back every time they’ve spent $750. That’s a 1.3% rewards rate on everyday purchases, making the Meijer card more generous than most retail store credit cards.

In addition, new cardholders will get a one-time $10 discount off their first purchase.

Only a small number of U.S. cardholders will be able to benefit from the new supermarket card, though.

The midwestern supermarket chain only services communities in Ohio, Michigan, Indiana, Illinois, Kentucky and Wisconsin.

Average credit card interest rates this week

Avg. APR Last week 6 months ago
National average17.35%17.30%17.71%
Low interest14.08%14.08%14.66%
Cash back17.32%17.32%17.63%
Balance transfer15.45%15.45%15.58%
Business14.95%14.95%15.55%
Student18.58%18.58%17.69%
Airline16.91%16.91%17.49%
Rewards17.17%17.11%17.49%
Instant approval20.01%19.56%20.22%
Bad credit25.37%25.37%25.24%
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.)
Source: CreditCards.com
Updated: February 26, 2020

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 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 length of time you’ve been handling credit.

However, even if you’re new to credit or are rebuilding your score, there are steps you can take to ensure a lower APR. For example:

  1. 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.
  2. Keep your balances low. Lenders also want to see that you are responsible with your credit and don’t overcharge. As a result, credit scores take into account 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% of your total credit limit.
  3. Build a lengthy and diverse credit history. Lenders also like to see that you’ve 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 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 lender doesn’t close it.
  4. Call your lender. If you’ve successfully owned a credit card for a long time, you may be able to convince your lender to lower your interest rate – especially if you have excellent credit. Reach out to your lender and ask if they’d be willing to negotiate a lower APR.
  5. Monitor your credit report. Check your credit reports regularly to make sure you’re 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.

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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Credit Card Rate Report Updated: February 26th, 2020
Business
14.95%
Airline
16.91%
Cash Back
17.32%
Reward
17.17%
Student
18.58%

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