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Rate Report

Average credit card interest rates: Week of May 12, 2021

The average APR for brand-new cards remained at 16.15% this week

Summary

For the sixth week in a row, the national average card APR remained at its highest point in just over a year. But compared to the APRs that lenders advertised before the coronavirus pandemic, the national average card APR is still unusually low.

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The average credit card interest rate is 16.15%.

The average APR on brand new credit cards remained at a one-year high this week, according to the CreditCards.com Weekly Credit Card Rate Report. None of the cards tracked weekly by CreditCards.com advertised new interest rates.

As a result, the average minimum annual percentage rate (APR) that lenders advertised online remained at 16.15% for the sixth straight week.

Meanwhile, the average maximum card APR remained at 23.65%, while the average median card APR – which is closer to what most cardholders with good-but-not-ideal credit get – stayed at 19.9%.

CreditCards.com only considers a card’s lowest possible interest rate when calculating the national average. But most consumer credit cards – particularly those for cardholders with good-to-excellent credit – advertise a wide range of possible APRs.

As a result, many new cardholders are assigned significantly higher rates than the minimum APRs lenders highlight on a credit card offer.

Overall, interest rates are well below the five-year average

Interest rates on brand-new credit cards are slightly higher now than they’ve been throughout most of the pandemic.

But compared to the rates that lenders advertised before the coronavirus pandemic shook up the U.S. economy and prompted the Federal Reserve to dramatically slash rates, APRs on most new card offers are unusually low – especially for borrowers with good-to-excellent credit.

In February 2020, for example, the average credit card interest rate stood at 17.35% – more than a full point higher than it stands today.

In 2019, average card APRs peaked at 17.8%. In 2018, the average APR for the year was 16.8%.

Overall, the five-year average for new credit card APRs currently sits at 16.69% – more than a half-point higher than the average card APR today.

In general, the rate cuts have extended across credit tiers. For example, the average median card APR is down by 1.05 percentage points compared to February 2020. The average maximum card APR is down by 0.90 percentage points.

But these days, not everyone is benefiting from such big cuts.

Cardholders with damaged credit haven’t received as much of a break

According to CreditCards.com data, nearly all new cardholders with good-to-excellent credit are enjoying significantly lower rates than they would have been able to get just over a year ago.

For example, the average APR for low interest credit cards has fallen by 1.17 percentage points since February 2020. The average APR for travel credit cards – which are typically reserved for borrowers with great credit – has dropped by 1.06 percentage points.

But the average APR for subprime credit cards has hardly budged. In February 2020, the average APR for cards designed for borrowers with bad credit was 25.37%. Today, it’s 25.3%.

Secured credit cards are also somewhat pricier, on average, compared to just over a year ago. Some lenders have hiked the APRs on their secured cards. Last year, for example, U.S. Bank increased the APR on the U.S. Bank Secured Visa card by several percentage points.

Other lenders have left APRs on secured cards unchanged altogether, despite lower federal interest rates. Last spring, for example, Capital One was one of the few issuers not to match federal rate changes on new offers. As a result, the Secured Mastercard® from Capital One continues to advertise a record 26.99% APR.

Borrowers who are rebuilding their credit do have more choices this year if they’re interested in a secured card. Last year, for example, Bank of America introduced a new cash back secured credit card. But like other secured rewards cards, the Bank of America Customized Cash Rewards Secured Card charges a relatively high variable APR: 23.99%.

Meanwhile, a number of retailers have also hiked APRs on co-branded cards this year. As a result, the average cost of credit for borrowers who can only qualify for subprime and store credit cards has also increased in recent months. Store credit cards are typically easier to qualify for than general market cards and so borrowers with lower scores will sometimes turn to them when they can’t qualify for other cards.

CreditCards.com’s Weekly Rate Report

Avg. APR Last week 6 months ago
National average16.15%16.15%15.97%
Low interest12.91%12.91%12.77%
Cash back16.03%16.03%15.85%
Balance transfer14.03%14.03%13.85%
Business14.22%14.22%13.91%
Student15.98%15.98%16.12%
Airline15.51%15.51%15.50%
Rewards15.85%15.85%15.75%
Instant approval18.47%18.47%18.38%
Bad credit25.30%25.30%24.43%
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: May 12, 2021

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% 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.

Editorial Disclaimer

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
Business
14.22%
Airline
15.53%
Cash Back
16.03%
Reward
15.84%
Student
15.98%

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