The average APR on new credit card offers held steady this week, according to the CreditCards.com Weekly Credit Card Rate Report.
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The average credit card interest rate is 17.61 percent.
Every week, CreditCards.com evaluates the APRs, annual fees and promotional terms of 100 U.S. credit cards.
One card included in the weekly rate report advertised a slightly lower interest rate. However, the change was too small to affect the national average.
Consumers who apply for the TD Cash Credit Card from TD Bank are now offered a range of APRs starting at 14.99 percent and maxing out at 24.99 percent. Previously, the cash back card’s APR range was a quarter-point higher, starting at 15.24 percent.
TD is one of the last major banks to revise new card offers in response to the Federal Reserve’s July 2019 rate cut.
Among the 100 cards included in the weekly rate report, most cards now advertise lower rates than they did before the Federal Reserve trimmed its benchmark rate.
As a result, the national average APR for new credit card offers is currently at its lowest point since February.
The average maximum card APR has also declined slightly since July. CreditCards.com only considers a card’s lowest available interest rate when calculating the national average. However, most credit cards that cater to a variety of consumers advertise a wide range of potential interest rates.
Consumers who just barely qualify for a particular credit card are now offered a maximum APR of 24.98 percent, on average, according to CreditCards.com data. Meanwhile, the median credit card APR – which is closer to what many new cardholders are offered – currently stands at 21.30 percent.
See related: How to apply for a credit card and get approved
New rate cut announced at September FOMC meeting
Rates are likely to fall further over the next year as the Fed continues to adjust its benchmark interest rate.
The rate-setting Federal Open Market Committee voted to cut interest rates for the second time this year at its Sept. 18 meeting. Some analysts predict it will cut rates multiple times over the next year.
If so, APRs on new credit cards could fall significantly if enough card issuers tailor their offers to match the Fed’s latest rate cuts.
However, it’s not clear if lenders will continue to cut rates on new offers.
See related: 4 credit card moves to make before the year ends
Fed rate cuts don’t necessarily mean lower APRs
Most card issuers have matched the Fed’s latest rate change by trimming the APRs on new cards. However, lenders aren’t required to change rates on new offers.
In previous years, when the Federal Reserve aggressively cut interest rates, the national average APR on new credit card offers hardly budged, according to CreditCards.com data.
Issuers have also been more willing in recent years to raise APRs on new card offers when tailoring a rewards program. For example, a number of issuers have recently revamped their rewards programs, making them more generous. At the same time, they have also hiked rates on new offers – likely to help pay for the new rewards.
As issuers continue to compete with one another by offering increasingly lavish rewards programs, lenders are likely to keep offering generous rewards on general market cards and charging significant APRs along with them.
As a result, consumers searching for a new card may continue to see APRs that are well above what they used to be a few years ago, even if the Federal Reserve decides to aggressively cut rates.
Average credit card interest rates this week
|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: September 18, 2019|
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:
- 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. 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 percent of your total credit limit.
- 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.
- 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.
- 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.