Average credit card interest rates: Week of Nov. 23, 2022

Many holiday shoppers are being assigned higher rates on brand-new cards than ever before


Three weeks after the Fed’s latest major rate hike, the national average credit card APR is already well above 19 percent, according to CreditCards.com’s Weekly Credit Card Rate Report. It’s all-but-certain to keep climbing as more lenders respond to higher federal interest rates with equivalent rate increases of their own.

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The average credit card interest rate is 19.28 percent.

As holiday shoppers scout the market this season for a brand-new card to help finance gifts and other purchases, they are likely to see higher APRs on a wide variety of cards than they have ever seen before.

With federal rates at their highest point in more than a decade, APRs on brand-new card offers are continuing to climb at a dizzying pace, according to CreditCards.com’s Weekly Credit Rate Report. Cards that only recently advertised APRs as low as 15.99 to 16.99 percent, for example, are now advertising rates closer to 17 to 18 percent. Meanwhile, other cards that continue to advertise relatively low rates to cardholders with good to excellent credit are likely to become significantly more expensive in the coming weeks as more lenders catch up to the Fed’s latest rate increases.

As a result, the kinds of APRs that credit card shoppers could find last holiday season are quickly becoming all-but-extinct, with only a small fraction of cards now advertising APRs near 15 and 16 percent.

Among the 100 cards tracked weekly by CreditCards.com, barely a third now offer rates below 17 percent — even to cardholders with the best credit. A year ago, by contrast, nearly all of the most competitive U.S. credit cards tracked by CreditCards.com — 81 out of 100 cards — offered minimum rates that low. In fact, most cards included in the weekly rate report — 56 out of 100 cards — advertised APRs under 15 percent last holiday season. This year, by contrast, only 12 out of 100 cards tracked weekly by CreditCards.com still offer rates under 15 percent. 

Even cards with APRs between 17 and 18 percent are quickly disappearing this year. Among the cards tracked weekly by CreditCards.com, just under half now offer a minimum rate below 18 percent. 

Soon, even those kinds of APRs could become tough for holiday shoppers to find on a brand-new card once more lenders respond to the Fed’s most recent rate increases with equivalent rate hikes of their own. 

Card issuers aren’t holding back from passing on federal rate increases

Lenders technically don’t have to pass on higher rates to brand-new credit card applicants when federal interest rates change. But historically, most do. As a result, consumers searching for a new card could soon have even more trouble securing a competitive card with an APR that’s well below 19 percent. 

It’s only been three weeks since the Federal Reserve announced its last three-quarter-point rate hike — its fourth such rate increase since June — and average card APRs are already closer to 20 percent than they’ve ever been before. 

Once more lenders push up APRs on brand-new offers by the same amount, the share of cards advertising APRs under 19 percent will continue to shrink. Meanwhile, cards advertising APRs well below 16 percent are likely to grow even more endangered. 

So far, just under half of the nation’s biggest lenders have matched the Fed’s latest rate hike, including American Express, Wells Fargo, Citi and U.S. Bank. However, several other lenders have not yet changed the APRs they advertise online, including Chase, Discover, Bank of America and Capital One.

Once all or most of those lenders hike the APRs they advertise by three-quarters-of-a-percentage-point, as they are expected to do soon, the national average credit card APR will break another all-time record. 

Fed hikes fuel dramatic rise in credit card interest rates

Cardholders with excellent credit aren’t the only ones confronting major rate hikes this holiday season. When federal rates increase, issuers not only push up the minimum APRs they advertise. They also routinely increase the maximum APRs they offer on a new card. As a result, cardholders with less-than-perfect credit are also seeing far higher rates these days.

For example, a number of cards that still offer minimum APRs below 19 percent have also begun advertising maximum APRs as high as 27 percent or more, according to CreditCards.com data. In addition, many applicants are now being assigned APRs that are somewhere in the middle of the two extremes.

The average credit card offer advertises a maximum APR of 26.71 percent. Meanwhile, the average median card APR — which is closer to what many new cardholders are assigned — is currently 23 percent. 

A year ago, by contrast, the average credit card advertised a minimum APR of 16.13 percent and an average maximum APR of 23.63 percent. The average median APR stood at just 19.88 percent. 

CreditCards.com only considers a card’s lowest possible interest rate when calculating the national average. However, most credit card offers advertise a wide range of possible APRs — particularly on general market and rewards cards that appeal to a broad audience.

Lenders’ rate increases also driving this year’s higher rates

Higher federal interest rates aren’t the only reason average card APRs are so high these days. Card issuers have also independently increased the amount of interest income they routinely collect from new cardholders, causing the spread between a card’s advertised APR and its prime rate to widen significantly in recent years. 

In November 2007, for example, the U.S. prime rate stood at 7.5 percent (a half point higher than it stands today), while the average APR for brand-new cards stood at 12.97 percent. At that time, just 5.47 percentage points stood between the prime rate and the average new card APR. Today, by contrast, more than twice that amount — 12.28 percentage points — separates the prime rate from the average minimum card APR. 

That hasn’t stopped lenders from continuing to pass on the Fed’s most recent rate increases. So cardholders with prime credit scores who are hoping for the kinds of rates they could once get from top lenders may be out of luck.

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 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 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.

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 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 average19.28%19.23%16.58%
Low interest16.37%16.28%13.53%
Cash back18.90%18.84%16.51%
Balance transfer17.37%17.30%14.57%
Instant approval22.42%22.34%19.67%
Bad credit28.12%28.12%26.09%

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: Nov. 23, 2022

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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