BACK

Rate Report

Average credit card interest rates: Week of January 12, 2022

Average credit card interest rates hold steady at 16.13% for 11th week

Summary

Average card rates remained at 16.13% again this week, according to the CreditCards.com Weekly Credit Card Rate Report. This is the 61st straight week that average card rates have remained above 16%. But with the Fed projecting up to three rate hikes for 2022, credit card interest rates are all-but-certain to climb this year.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs. Terms apply to the offers listed on this page.

The average credit card interest rate is 16.13%.

The average APR for brand new credit card offers remained at 16.13% again this week, according to the CreditCards.com Weekly Credit Card Rate Report, holding steady just above 16% for the 61st straight week. This is the 11th week in a row that the national average card APR has registered at 16.13%.

This time last year, the average APR for brand-new cards wasn’t much lower than it is today. For example, the average new card APR began 2021 at 16.05% and remained there for several weeks, before climbing to 16.11% by the end of January. Average rates then stayed fixed between 16.11% and 16.22% for the remainder of the year.

Most lenders tracked weekly by CreditCards.com haven’t revised credit card offers in months.

One lender, HSBC, has stopped advertising a card that was previously included in the Weekly Rate Report, the HSBC Gold Mastercard®, and is no longer accepting online applications. So CreditCards.com replaced it this week with the Bank of America® Unlimited Cash Rewards Credit Card.

The change in cards included in the rate survey didn’t affect the national average. But since the Bank of America Unlimited card is a cash rewards credit card, it did cause the average cash back card APR and the average rewards card APR to dip slightly on Wednesday. The average APR for cash back credit cards is now 16.08%, according to CreditCards.com data. The average APR for rewards credit cards is 15.88%.

No other card tracked by CreditCards.com advertised new interest rates this week. But these days, that’s nothing new.

Ever since the Federal Reserve pushed benchmark interest rates down to rock bottom in 2020 in response to the coronavirus pandemic, credit card lenders have taken an ultra-cautious approach toward pricing new offers and have largely refrained from hiking APRs on brand-new cards. But interest rates are all-but-certain to climb over the next year if the Fed increases target rates.

Fed has signaled rate hikes for 2022, portending higher card APRs

In December, members of the Federal Reserve’s rate-setting committee substantially revised their expectations for when they would increase federal interest rates. Previously, the Federal Open Market Committee (FOMC) had signaled that the Fed was unlikely to raise rates until at least 2023. But now, the central bank has pushed up that timeline significantly.

Most FOMC members project up to three rate hikes this year in order to help battle growing inflation and continue to support an economy that has been battered by the pandemic but is still growing at a relatively fast clip. As a result, credit card borrowers could see rates climb as high as 16.88% or more by next December if the Fed increases rates by up to three-quarters of a percentage point.

On Jan. 11, Federal Reserve chairman Jerome Powell told Congress that the Fed is prepared to hike rates even more aggressively if necessary in order to battle rising prices. Meanwhile, some analysts are now predicting that the Fed could be forced to raise rates as many as four times this year, causing the federal funds rate to increase by a full percentage point by 2023. If that happens, the average new card APR could end 2022 as high as 17.13% or more, depending on how banks respond to higher base rates.

Why rates on new card offers are all-but-certain to climb soon 

Most U.S. credit cards are tied to the U.S. prime rate, which is directly influenced by the Federal Reserve’s benchmark interest rate, the federal funds rate. When the federal funds rate changes, the prime rate typically changes by the same amount.

Lenders are free to set APRs on brand-new cards as they wish and technically aren’t required to change the APRs when a card’s base rate changes. (On the other hand, lenders are required to match changes to the prime rate on open credit card accounts that are contractually tied to it.) Historically, most lenders do revise the APRs they advertise when the card’s base rate changes.

That’s what happened in the spring of 2020. After the Federal Reserve slashed rates by a point-and-a-half in March 2020 in response to economic softening from the coronavirus pandemic, nearly all of the issuers tracked weekly by CreditCards.com – with the notable exception of Capital One – lowered new card APRs as well. That, in turn, caused the national average card APR to plummet to its lowest point since 2017.

Since then, most new cards included in the weekly rate report have continued to advertise the same APRs they had in the spring of 2020. As a result, the national average card APR has hardly budged for more than a year, remaining within a rounding distance of 16% since April 2020.

But if the Federal Reserve does increase its benchmark interest rate this year, as currently projected, then most credit card offers are likely to follow suit. Current credit cardholders will also see their rates climb, causing their debt to become much more costly to carry.

But in the meantime, credit cardholders and new applicants are continuing to enjoy much lower rates than they could get before the pandemic.

For most of 2021, rates stayed remarkably stable

Over the past year, the average new card APR has shifted just 13 times. In each case, it only moved by a handful of basis points. As a result, the average new card APR hardly budged in 2021.

The highest APR average that credit card rates reached last year was 16.22%, while the lowest APR average recorded in 2021 was 16.05%. Overall, the average new card APR for the full year of 2021 was 16.15%. Meanwhile, the average card APR for 2020 wasn’t much higher, clocking in at 16.35%. In 2019, by contrast, the average new card APR for the year was 17.57%, according to CreditCards.com data.

In the rare instances that lenders have changed card APRs, they have often lowered rates on select offers or introduced new cards with notably lower rates. Lenders’ willingness to cut rates rather than increase them is a big change from previous years when independent rate cuts by credit card lenders were rare.

CreditCards.com has been tracking the APRs of a representative sample of 100 U.S. credit cards for more than a decade and has typically found that lenders would often trim rates only when the Federal Reserve changed its target interest rate. Today, by contrast, at least some lenders appear to be cutting rates for competitive reasons rather than because of lower benchmark interest rates.

As a result, cardholders shopping for new cards are continuing to find ones with much lower APRs than they were able to find before the pandemic.

Two years ago, issuers regularly charged even steeper interest rates, including to consumers with good to excellent credit. In February 2020, for example, the national average card APR ended the month at 17.35%. And in December 2019 the average new card APR ended the year at 17.30%.

Cardholders with lower credit scores are more likely to see increases

Borrowers with lower credit scores, though, haven’t enjoyed as large a break on interest rates.

For example, among the few major rate hikes that CreditCards.com has detected since the spring of 2020, most have occurred on store credit cards or on subprime cards designed for borrowers with less-than-perfect credit. As a result, the average new card APR for subprime credit cards is now higher than it was right before the pandemic. In February 2020, the average minimum APR for subprime cards was 25.37%. It now stands at 25.8%.

Cardholders with good to excellent credit, by contrast, are enjoying far lower rates, on average.

Among the 100 cards tracked weekly by CreditCards.com:

  • The overwhelming majority offer starting rates below 17%.
  • More than half start rates at 14.99% or lower.
  • A quarter offer rates under 13%.
  • Several offer rates below 11%.

CreditCards.com’s Weekly Rate Report

Avg. APRLast week6 months ago
National average16.13%16.13%16.17%
Low interest12.94%12.94%12.98%
Cash back16.08%16.14%16.10%
Balance transfer13.99%13.99%14.15%
Business14.16%14.16%14.22%
Student16.78%16.78%16.78%
Airline15.46%15.46%15.51%
Rewards15.88%15.91%15.90%
Instant approval19.10%19.10%18.56%
Bad credit25.80%25.80%25.05%
Methodology: The national average credit card APR comprises 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: January 12, 2022

Historic interest rates by card type

Some credit cards charge even higher average credit card interest rates. 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. Since 2007, CreditCards.com has calculated average rates for various credit card categories, including student cards, balance transfer cards, cash back cards and more.

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 age of your oldest credit accounts. However, even if you’re new to credit or are rebuilding your score, there are steps you can take to secure 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. Creditors also want to see that you are responsible for your credit and don’t overcharge. As a result, credit scores consider 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 successfully used 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 issuer doesn’t close it.
  • Call your issuers. If you’ve successfully owned a credit card for a long time, you may be able to convince your credit card issuers to lower your interest rate – especially if you have excellent credit. Reach out to your credit card issuer and ask if it’d be willing to negotiate a lower APR.
  • Monitor your credit report. Check your credit reports regularly to make sure you’re 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. The three credit bureaus are also providing free weekly credit reports through April 22, on account of the pandemic.

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.

What’s up next?

In Rate Report

Card balances swelled in November, per Fed report

Credit card balances rose a whopping 23% in November, and total consumer credit also rose 11%, as consumers continued to spend.

See more stories
Credit Card Rate Report
Business
14.16%
Airline
15.46%
Cash Back
16.08%
Reward
15.88%
Student
16.78%

Questions or comments?

Contact us

Editorial corrections policies

Learn more