Average credit card interest rates: Week of September 27, 2023

With the Fed's key rate on pause, sky-high credit card APRs stay put — for now


Lenders left credit card offers unchanged this week, according to CreditCards.com’s latest Weekly Rate Report. As a result, the average APR for brand-new credit cards remained fixed Wednesday at its highest point since CreditCards.com began tracking new card APRs in 2007.

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The average credit card interest rate is 21.07 percent.

The Federal Reserve is taking a temporary break from hiking rates and so, it seems, are credit card issuers.

Among the 100 cards tracked weekly by CreditCards.com, none advertised new interest rates. As a result, the average APR for new cards held steady Wednesday at its highest point on record.

With benchmark rates stalled at a 22-year high, card APRs idle well above previous peaks

Policymakers at the Federal Reserve could still announce one more rate hike before 2024. So APRs on most new card offers may still have a way to go before they peak.

According to projections released last week, most members of the Federal Reserve’s rate-setting committee expect the Fed’s target rate to climb by another quarter of a percentage point this year. As a result, the average APR for brand-new cards could peak as high as 21.32 percent or more before the year is over.

Lenders technically don’t have to follow the Fed’s lead when pricing new card offers, but, historically, most do. Over the past year and a half, for example, the Federal Reserve has announced 11 separate rate increases in an aggressive bid to stamp out inflation, causing the federal funds rate to climb to its highest point since 2001.

During that same period, most lenders tracked by CreditCards.com have swiftly matched each rate increase, causing APRs on a majority of online card offers to climb by at least 5.25 points or more. As a result, the average APR on a brand-new card has inflated by an unprecedented 4.9 percentage points since March 2022.

Among the 100 cards tracked weekly by CreditCards.com:

  • Over half currently start APRs above 20 percent, while more than a third advertise minimum APRs above 21 percent.
  • Only 16 out of 100 online card offers advertise APRs below 18 percent.
  • An even tinier share of card offers — 7 out of 100 offers — start rates below 17 percent.
  • Most new credit cards — 77 out of 100 offers — cap rates at 28 percent or more.
  • More than half — 54 out of 100 online card offers — cap rates at 29 percent or higher.
  • A record number of new card offers — 16 out of 100 offers — advertise maximum rates above 30 percent.
  • Meanwhile, nine out of 100 online card offers only advertise APRs in the 30-percent range.

Until last year, by contrast, the highest weekly APR average CreditCards.com had ever recorded was 17.8 percent. Back then, in July 2019, the average maximum card APR stood at 25.16 percent. Today, the average APR on a typical card offer maxes out at 28.52 percent, according to CreditCards.com data.

But even if policymakers at the Fed decide to leave rates in place in the coming months or cut them after the New Year, APRs on most new card offers are unlikely to return anywhere close to pre-pandemic levels anytime soon.

New card APRs are likely to stay inflated through much of 2024

Members of the Fed’s rate-setting committee are scheduled to meet two more times this year, once in late October and then again in mid-December, and opinions vary widely on the Fed’s likeliest next move. As Fed officials have repeatedly noted, their decision to revise the Fed’s key rate this autumn will depend heavily on upcoming economic data.

Until recently, most market observers expected the Fed to announce one more quarter-point rate hike on November 1. But according to the CME Fed Watch Tool, a substantial number of market observers have since changed their minds and now predict that the Fed will instead leave rates in place until 2024.

In fact, many now predict that the Fed won’t revise the federal funds rate again until next summer.

Either way, cardholders are likely to remain stuck with unusually high card APRs for some time. According to the Federal Reserve’s latest G.19 Consumer Credit Report, the average cardholder with existing credit card debt was charged an APR of 22.16 percent in May, up from 16.17 percent early last year.

Fed officials have so far shown little appetite for cutting rates significantly anytime soon — particularly since key economic signals, such as the U.S. job market, are still relatively strong.

Although controversial, the Fed’s policy of keeping rates high in response to unusually rapid price increases has long been seen by Federal Reserve policymakers as a key tool for combating inflation.

Rather than cut rates, officials have instead signaled that they are more likely to keep rates at historic highs long after the New Year.

Meanwhile, credit card lenders have shown little willingness so far to independently cut rates themselves, despite charging APRs that are already well above benchmark rates.

According to CreditCards.com’s latest Weekly Rate Report, 12.57 percentage points currently separate the U.S. prime rate of 8.5 percent from the average minimum card APR of 21.07 percent.

That’s a big change from previous years when lenders typically charged far less interest, on average — even when benchmark rates were relatively high. In September 2007, for example, only 5.62 percentage points stood between the prime rate of 7.75 percent and the average new card APR of 13.37 percent.

Why interest rates are climbing

Most U.S. credit cards are tied to the prime rate, and when the federal funds rate changes, the prime rate typically changes by the same amount.

Lenders are free to set APRs on 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 issuers do revise the APRs they advertise when the card’s base rate changes.

That’s what happened in the spring of 2020. After the Fed slashed rates by a point and a half in March 2020 in response to economic softening from the pandemic, nearly all of the issuers tracked weekly by CreditCards.com — with the notable exception of Capital One — lowered new card APRs as well.

Since then, most new cards included in this rate report continued to advertise the same APRs throughout the pandemic. As a result, the national average card APR hardly budged for nearly two years, remaining within a rounding distance of 16.00 percent for nearly 24 months.

But now that the prime rate is climbing, credit card offers are following suit. Current credit card holders will also see their rates climb, causing their debt to become much more costly to carry.

CreditCards.com’s Weekly Rate Report

RateAvg. APRLast week6 months ago
National average21.07%21.07%20.41%
Low interest18.23%18.23%17.45%
Cash back20.36%20.36%20.02%
Balance transfer19.25%19.25%18.54%
Instant approval25.50%25.50%24.70%
Bad credit29.68%29.68%29.05%

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: September 27, 2023

Historic interest rates by card type

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 percent 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. Contact your credit card issuer and try to negotiate a lower APR.
  • Monitor your credit reportCheck your credit reports regularly to be 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 2023 due to the pandemic.

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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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