Average credit card interest rates: Week of September 6, 2023

Average card APR hits new peak after more lenders push new card APRs to record heights


The average APR for brand-new cards climbed again this week after a few more lenders belatedly matched the Federal Reserve’s July rate hike. As a result, the average credit card interest rate is now at its highest point on record, according to CreditCards.com’s latest Weekly Rate Report, settling more than three points above a pre-pandemic peak.

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.

The average credit card interest rate is 21.07 percent.

With just two weeks to go until Federal Reserve officials announce another rate decision, credit card lenders are still catching up to the Fed’s last rate hike from July.

According to CreditCards.com’s latest Weekly Rate Report, several card issuers pushed up the APRs they advertise online to record highs this week, including three of the nation’s leading lenders for military service members and veterans, as well as some smaller bank card lenders.

As a result, the average APR for brand-new cards sailed past another all-time high on Wednesday, landing seven basis points above 21 percent for the first time since CreditCards.com began tracking new credit card offers in mid-2007.

Until last year, by contrast, the highest weekly APR average CreditCards.com had ever recorded was 17.8 percent. In fact, average card APRs have mostly hovered closer to 15 and 16 percent for most of the past decade.

With the prime rate at a 22-year high, some lenders are hiking APRs even more aggressively

After more than a year of historic rate increases, credit card debt is more expensive now than ever. But that’s still not stopping lenders from introducing even bigger rate increases to select cards.

This week, for example, several lenders pushed the APRs they advertise online well past previous records, once again testing just how much more than they can charge on a new credit card without scaring away potential customers.

Although lenders technically don’t have to hike APRs on new card offers when federal rates increase, historically, most do.

Most of the lenders that were active this week belatedly matched the Fed’s quarter-point rate hike from July, including USAA, Navy Federal Credit Union and Truist. As a result, all three lenders are now advertising APRs that are five-and-a-quarter percentage points higher than what they advertised last winter.

But at least one credit card issuer, Pentagon Federal Credit Union, went further this week, hiking the starting APR on the credit union’s signature balance transfer card by an entire point.

The lowest APR that credit union members can expect on any PenFed card is now 17.99 percent, which is just one basis point below the maximum APR for any credit union card. (Unlike bank-issued credit cards, credit union cards can currently only charge a maximum APR of 18 percent.)

Until last year, by contrast, the Virginia-based credit union offered some of the lowest rates around for an unsecured credit card. In March 2022, for example, the minimum APR on the PenFed Gold Visa started at 7.49 percent — 10 and a half percentage points below where it starts now — while the best available APR on the PenFed Power Cash Rewards card started at 14.99 percent.

Meanwhile, two other credit card issuers that increased rates by a quarter point this week — TD Bank and First National Bank of Omaha (FNBO) — had previously introduced even steeper rate hikes, outpacing federal rate increases. As a result, the APR on the TD Cash credit card, is now up by 7.25 percentage points compared to March of last year while the APR on the Evergreen by FNBO card is up by 6.25 percentage points.

In addition to starting APRs well above 20 percent, both cards also cap APRs near 30 percent. Such high APRs have grown increasingly common in recent months as lenders dramatically hike rates on a wide variety of general market credit cards, including balance transfer and rewards cards marketed to borrowers with great credit.

Meanwhile, the share of cards advertising minimum APRs that are even close to the 15-year average of 15.9 percent are now dwindling near extinction.

Among the 100 cards tracked weekly by CreditCards.com, for example, just 13 offer rates under 17.99 percent and only three offer rates below 16 percent. Instead, most new card offers start APRS at 19.24 percent to 22.24 percent or more and cap them near 29 to 30 percent.

With three more Fed meetings scheduled for 2023, new card APRs could climb further still

The credit card market has transformed at a rapid clip this year, thanks in part to a historic number of rate hikes from the Fed.

In the span of just fourteen months, policymakers announced 11 separate rate increases, including four three-quarter-point rate hikes and two half-point ones, causing the Fed’s target rate to climb to its highest point since 2001.

But with at least three more Fed meetings on the near horizon, APRs on most new card offers could still have a way to go before they peak.

Policymakers are scheduled to meet again for a two-day meeting starting on September 19 and are widely expected to leave interest rates unchanged this month.

But according to the CME Fed Watch Tool, observers are divided over whether policymakers will announce one more rate hike at the Fed’s next policy meeting in late October or at the last policy meeting of the year in mid-December.

Fed policymakers also appear similarly uncertain over whether or not to effectively end their historic rate-hiking campaign this fall and simply leave higher rates in place for an indefinite period or hike the Fed’s key rate one last time in order to further weaken inflation and ensure it doesn’t come roaring back.

Although controversial, the Fed’s policy of raising rates in response to steep price increases has long been seen by Federal Reserve policymakers as a key tool for combating inflation. Part of the goal, for example, is to help slow down the economy without allowing it to sour into a recession.

In public speeches and interviews, Fed officials have repeatedly given mixed signals about the central bank’s likely path in the months ahead and have insisted that unfolding economic data will help them to decide whether or not to further increase rates.

Some Fed officials have continued to make the case for at least one more rate hike before the New Year, while others have hinted that rate hikes may be done for now, particularly since evidence shows the economy is already cooling as intended and both small businesses and consumers are likely to face a more challenging path in the months ahead.

If Fed officials do announce another rate hike, the impact on card APRs is likely to be significant.

For example, if most lenders hike rates by another quarter of a percentage point, then the average new card APR could climb to an all-time high of 21.32 percent or more.

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%21.04%20.37%
Low interest18.23%18.18%17.40%
Cash back20.36%20.33%20.00%
Balance transfer19.25%19.20%18.49%
Instant approval25.50%25.50%24.68%
Bad credit29.68%29.68%29.09%

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 6, 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.

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.

Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more