The average APR on brand-new credit card offers remained within rounding distance of 16% for the 70th straight week, according to the CreditCards.com Weekly Credit Card Rate Report.
The average credit card interest rate is 16.16%.
Credit card shoppers are continuing to see unusually low rates on most new credit card offers, according to CreditCards.com’s Weekly Credit Card Rate Report. On the same day the Federal Reserve announced that it would continue to leave federal interest rates unchanged, the national average credit card APR registered at 16.16% for the third consecutive week.
Average rates on brand-new offers are up slightly from last year. A year ago, for example, the average new card APR stood at 16.03%.
But compared to pre-pandemic interest rates, the APRs that most new cardholders are being offered these days are exceptionally low, on average.Two years ago, the average minimum card APR hovered closer to 18%, while the average maximum card APR remained well above 25%.
Today, by contrast, the average credit card caps prospective APRs at 23.69%. Meanwhile, very few cards for borrowers with excellent credit advertise maximum APRs above 25%.
Among the 100 cards tracked weekly by CreditCards.com, fewer than a quarter advertise maximum rates above 25%. Among those cards that do charge higher rates, most are store credit cards or subprime cards for borrowers who are building credit.
APRs on low-interest and rewards credit cards are particularly low compared to the years immediately preceding the pandemic. Two years ago, for example, the average APR for rewards credit cards was 17.58%, while the average APR for low-interest cards was 14.74%.
Today, the average APR for rewards cards is 15.9%, while the average APR for low-rate cards is 12.96%.
APRs on most new card offers have also remained stuck in time throughout most of the pandemic, giving the majority of credit card shoppers an unusually long window to find a lower rate offer. The average minimum APR, for example, has remained within a rounding distance of 16% for 70 straight weeks, according to CreditCards.com data.
Despite lower APRs, subprime cards are still pricey
Cardholders with damaged credit haven’t enjoyed nearly as big a break, though, as cardholders with prime scores.
The average APR for subprime credit cards, for example, fell significantly in early 2020 after the Federal Reserve cut its benchmark interest rate, the federal funds rate, by a point-and-a-half. Most lenders responded to lower federal interest rates by cutting APRs on new credit cards by the same amount.
But not all lenders chose to cut rates. Capital One, for example, continues to advertise the same rates that it advertised in February 2020, including on cards designed for borrowers with damaged credit.
Meanwhile, other lenders cut the APRs on store or subprime cards in the spring of 2020 but then increased them significantly later on. As a result, the average APR for subprime cards is nearly identical now to what it was before the pandemic. Some store cards are also advertising much higher APRs today than they did in early 2020.
Average rates for borrowers with bad credit are slightly lower now, though, than they were in 2019 when card APRs for all new borrowers were at an all-time peak, according to CreditCards.com data. But the difference isn’t nearly as dramatic as it is for prime credit cards.
In July 2019, for example, the average card APR for borrowers with bad credit was 25.33%. Today, it’s 25.05%.
Some issuers continue to float temporary offers
Every week, CreditCards.com compares the APRs that lenders advertise online to the rates they advertised previously.
This week, none of the lenders we follow made significant revisions to the rates they advertise.
However, some lenders, such as Credit One and Regions Bank, floated personalized card offers that shifted in price, depending on the time of day the offers were accessed and the computers used to view them. Since the offers we encountered were only temporary, CreditCards.com didn’t include them in this week’s calculation.
Lenders frequently advertise wide APR ranges on their websites, but reserve single-rate offers or alternative APR ranges for select cardholders. Lenders also frequently float test offers to different computer users, but then remove those offers after a brief period.
The alternative APRs that lenders advertise can vary widely from the public offers that a lender displays. For example, CreditCards.com’s editorial team frequently encounters APR differences as wide as 3 to 5 percentage points or more on the same cards. But CreditCards.com only considers a card’s publicly available APR range when calculating the national average.
CreditCards.com’s Weekly Rate Report
|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: July 28, 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.