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Rate Report

Average credit card interest rates: Week of December 1, 2021

Average credit card interest rates remain at 16.13% for fourth week

Summary

Average card rates remained unchanged again this week, remaining just above 16% for the fifty-fourth consecutive week.

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The average credit card interest rate is 16.13%.

The average APR for brand new credit card offers held steady this week, according to the CreditCards.com Weekly Credit Card Rate Report, clocking in at its lowest point since June for the fifth consecutive week.

None of the cards tracked weekly by CreditCards.com advertised new interest rates. But these days, that’s nothing new.

Ever since the Federal Reserve pushed benchmark interest rates down to rock bottom last year 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.

In the rare instances that lenders have changed card APRs, they have lowered APRs on select offers or introduced new cards with notably lower rates. For example,

  • In November, First National Bank of Omaha (FNBO) slashed the APR on the bank’s Evergreen by FNBO Credit Card by more than three percentage points, making it one of the most competitive cash back cards on the market. The FNBO Credit Card is one of the few no-annual-fee rewards cards to offer 2% cash back on every purchase.
  • In October, Wells Fargo replaced its signature no-frills balance transfer card with a more generous version with a much lower standard interest rate. The new Wells Fargo Reflect℠ Card currently advertises one of the most competitive 0% APR offers on the market, giving cardholders up to 21 months to carry a balance interest-free. It also advertises a standard APR (12.99% to 24.99% variable) that’s well below average for a balance transfer card.
  • Meanwhile, Capital One slashed rates on several rewards cards in September, including the Capital One Venture Rewards Credit Card and the Capital One Quicksilver Cash Rewards Credit Card. The rate cuts brought the cards’ APRs closer in line to the APRs charged by competing credit cards with relatively low pandemic-era 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 only trim rates when federal interest rates changed. 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 a new card are continuing to find cards with much lower APRs than they were able to find before the pandemic.

In February 2020, for example, the national average card APR ended the month at 17.35%. Two years ago, issuers regularly charged even steeper interest rates, including to consumers with good to excellent credit. In December 2019, for example, the average new card APR started at 17.27%.

Why rates on new offers are much lower now

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 technically aren’t required to change the APRs on brand-new credit cards when a card’s benchmark interest 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.) But historically, most lenders do revise the APRs they advertise when the prime 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 advertised 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.

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. Among the most dramatic rate hikes we detected, for example:

  • This past August, Credit One eliminated the minimum APR on the Credit One Bank® Platinum Visa® for Rebuilding Credit and now advertises just one single APR of 23.99%. Previously, Credit One offered a minimum APR of 17.99% to select cardholders.
  • Last spring, the Techron Advantage Visa co-branded gas card sustained a three-point rate hike, causing the card’s APR to surge to 29.99%.

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, for example, 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%16.13%
Low interest12.94%12.94%12.91%
Cash back16.14%16.14%16.03%
Balance transfer13.99%13.99%14.03%
Business14.16%14.16%14.22%
Student16.78%16.78%15.98%
Airline15.46%15.46%15.51%
Rewards15.91%15.91%15.85%
Instant approval19.10%19.10%18.47%
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: December 1, 2021

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.

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
14.16%
Airline
15.46%
Cash Back
16.14%
Reward
15.91%
Student
16.78%

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