Average Credit Card Interest Rates & Stats – Complete Guide to Credit Card APR

Credit cards can be a potent financial tool when used correctly. They allow users to build credit, earn points, and open doors for vacations and rewards that would not be possible without them. However, if credit cards have a dark side, it’s their annual percentage rate(APR). Unfortunately, if you’re like 44% of credit cardholders,¹ you will probably carry a balance at some point.

APR is a visualization of the annual interest rate consumers must pay for unpaid portions of their monthly credit card bills. It is the price credit card users pay to borrow money from credit card issuers, usually at a much higher rate than other forms of borrowing money, like an auto loan or personal loan.

Knowing your credit card’s APR and ensuring you have the lowest APR is incredibly important. Despite that, almost half of Americans (47%) don’t know their credit card’s annual APR.² 

While no credit card APR is necessarily “good” for the consumer, they vary among cards and users. With APR being affected by several factors, including credit card type, credit score, and available promotions, it’s important to research and get a reasonable rate.

Quick Facts and Stats

• The average APR for new credit card offers was 21.59% as of May 2024.³ This is up from 21.47% in the final quarter of 2023.
• The APR for rewards cards is 20.91% to 28.15%.⁴
• A typical penalty APR is 29.99%.⁵
• The average new card APR for subprime credit cards has fallen since before the pandemic — 22% in March 2024⁴ compared to 25.37% in February 2020.
• While APRs steadily increased since 2014, the pandemic brought about lower interest rates in 2020. This changed in 2022 as the Federal Reserve raised rates to the highest level in 22 years. This remains the case in May of 2024.
• At the end of 2023, American credit card debt sat at close to $1,125 billion.⁶ This is the most ever carried over.
• The state which carried across the most debt on average per card was New Jersey. Residents here held a balance of $8,909 at the end of 2023.⁶
• Mississippi had the lowest balance, sitting at just $4,956.⁶ 
• According to the Fed, the percentage of people in Q2 2023 who are 30+ days late on their credit card payment (and thus accruing interest) increased from 2.08% to 2.77% in the third quarter of 2023, making it the highest number since 2012.

Why Your Credit Card’s APR Matters

Even if you plan on paying off your credit card in full each month and never carrying a balance, life happens! Being aware of your card’s APR details is important so you can minimize your interest costs.

To start, your Purchase APR is the standard APR that applies when you make purchases. This purchase APR can be either fixed or variable:

• Fixed APR is locked in when you sign up for your credit card and won’t change except under specific circumstances, such as making a late payment (triggering your penalty APR). Fixed APRs are rare.
• Variable APR is more common. This APR can change over time and is usually based on a benchmark rate (for example, the prime rate plus 3.5%). When the prime rate increases or decreases, your credit card’s APR will change as well.

Either way, interest payments can be small in the short term, but over the long run, they can add up to significant fees and make it harder to pay down your card. For example:

If you have a $1,000 balance on your card that you pay over 6 months, you’ll spend $13 more in interest with a higher APR:

• $39 in interest if your card has an 18.49% APR (the median APR if you have an “excellent” credit score)
• $52 in interest if your card has a 24.74% APR (the median APR if you have a “fair” credit score)

This adds up much quicker if you have a higher balance and/or take longer to pay off the balance. The interest on a $10,000 balance that takes you 3 years to pay off will be $1,033 more with a higher APR:

• $2,871 in interest if your card has an 18.49% APR (the median APR if you have an “excellent” credit score)
• $3,904 in interest if your card has a 24.74% APR (the median APR if you have a “fair” credit score)

This shows that it’s always best to be aware of your credit card’s APR and try to get the lowest rate your issuer offers.

Where Do I Find My Card’s APR?

So, where do you find your credit card’s APR? You have a couple of options:

• Monthly Statement — There will be a section of the statement marked “Interest Charge Calculation” or a similarly worded section near the end of your credit card’s monthly statement.
• Credit Card Terms and Conditions — It will be located in the Schumer box within your card’s terms and conditions. Even if you didn’t keep your original paperwork, this can normally be found online by searching for your specific card.

Average APR in America

If you haven’t sought out or received a credit card offer in some time, you may have an antiquated understanding of the average credit card APR. To find out whether you’re getting a reasonable APR, we turn to the average APR in the U.S. Over time, credit card interest rates ebb and flow, so it’s important to have a pulse on what the average APR looks like today.

Below is the average APR in the U.S. over the past few years, according to the Federal Reserve:

In 2016, America’s average APR was 12.35%. In 2020, the average APR in the U.S. rose to 14.71%. That is more than a 2% net increase over 5 years. Interestingly, the average APR in 2020 was slightly lower than in 2019, when it reached 15.05%. Rates have steadily increased from those historic lows following the Fed’s interest rate hikes. Currently, the average APR is 21.59%⁷ in 2024.

However, this doesn’t mean that you’re locked into that credit card interest rate if you apply for a card today. Every individual receives a unique APR based on several factors, including the card type and credit score. Let’s dive into some of these contributing factors, starting with the type of card you want.

Average APR by Credit Card Type

The type of credit card you want to qualify for affects the APR offered. The amount you can expect to pay on average in APRs for your card type is as follows:⁶

With APR sitting at a similar level across almost all cards, it’s more important than ever to think about choosing one whose perks are right for your spending needs. The one exception is low-interest credit cards – although it’s important to remember these often carry a smaller total budget, with little-to-no extra perks. 

How does your credit card compare? If your APR is significantly higher than these averages, it might be a good time to call your card’s issuer to negotiate a lower APR.

Average APR by Credit Score

Speaking of bad credit, the most important metric to consider is your credit score. In fact, card issuers rely heavily on your credit report and credit score when evaluating your risk level and assigning an APR to your credit card offer accordingly. Building up a good credit score will help you secure an APR on the lower end of the range for the card you are considering.

Credit score ranges as defined above are based on FICO’s credit score ranges:

• Excellent — 741 to 850
• Good — 670 to 740
• Fair — 580 to 669
• Bad/No Credit — 350 to 579

Here is a look at an average breakdown of what APR you can expect to receive, depending on which credit bracket you fall into:

• Excellent — 20.49%-27.49% (average APR)
• Good — 19.49%-28.49%
• Fair — 24.62%-29.99%
• Bad/No Credit — 26.99%

The outlier here appears to be the bad/no credit field, but keep in mind that most cards offered for people who fall within these credit score ranges are secured cards and/or cards with much lower credit limits. Both of these reduce the risk to the issuer. So, while you might get a better rate than someone in the “Fair” bracket, the chances of being approved for a “regular” type of credit card are also significantly lower. 

Although rates are increasing overall, improving your credit score can help you qualify for the best available options.

Average Credit Card Interest Rates by Issuer

Each issuer sets the APRs for its credit card products. The issuers all have a slightly different risk-based pricing policy that guides the range of interest rates they advertise and offer to customers.

• American Express — 20.99% to 29.99% (average APR) 
• Bank of America — 18.24% to 28.24%
• Barclays — 21.24% to 29.99%
• Capital One — 18.99% to 29.99%
• Chase —21.49% to 28.49%
• Citi — 20.87% to 29.24%
• Discover — 17.24% to 28.24%
• Synchrony Bank — 20.49% to 25.99%
• U.S. Bank — 19.24% to 28.74%
• Wells Fargo —16.24% to 25.49%

Source: Investopedia

For example, Discover and Wells Fargo offer cards with much lower APRs than their competitors — both in the lowest APRs and the median APR across all cards. Barclays Bank, Capital One, and American Express have a median that is higher than competitors. These issuers also have cards with the highest APRs offered, right around 30%.

Bottom Line:

Issuer average APRs also tend to factor in credit score since some cards are only available to those with good-to-excellent credit. 

Types of Credit Card Interest Rates

Promotional Rates

Another way to score a low APR is to look for cards that offer promotional rates. These come in various forms, such as 0% interest for an introductory time period or a zero-dollar balance transfer fee. While promotional rates can absolutely help you secure lower interest rates, debt.org cautions that they are liable to decrease your credit score due to increased risk to credit issuers.

If you go for a promotional rate, it’s always best to read the fine print. There will likely be conditions and exclusions to be aware of. You might owe interest on missed payments during the promotional period or immediately owe interest on any balance you carry when the promotional period ends.

What happens when the promotional rate ends? It’s important to know whether you are on a variable or fixed-rate plan and the differences between the 2.

Variable Rates

Variable rates are, just as the name implies, variable. Credit issuers can change them at any time without warning to the cardholder. The rate depends on a few variables.

The issuer will consider several variables, like the Federal Reserve Discount Rate, interest on U.S. Treasury Bills, or the prime rate published by the Wall Street Journal. Then, they will add a margin of percentage points (more for users with bad credit) to develop an APR.

For example, the prime rate is 8.5% as of May 2024. According to debt.org, a card company might add 10 to 12 percentage points for those with good credit and 23 to 26 percentage points for bad credit. That means credit depending, your variable APR would be between 18.5% and 34.5%.

The current prime rate has been steady since July of 2023. The lowest that the rate has sat at since 2017 was in February of 2022, when it was just 3.25%. That’s a rise of 525 base points between then and now. 

Fixed Rates

Fixed rates, then, are the opposite. Consumers with fixed-rate plans are locked into interest rates unless the card issuer gives a 45-day notice. The cardholder can then opt out of the plan or continue at the newer rate. There are, of course, certain situations where a fixed rate could change, including:

• Being more than 60 days late with a payment
• Completing a debt management program
• Ending a promotional fixed rate

Types of APR

There are several types of APR. Knowing how each factors into different usage scenarios with a credit card can help you manage your interest effectively. Here are the most important APR types to be aware of, according to the Bank of America:¹⁴

Introductory APR

Introductory APR is synonymous with promotional APR, as discussed above. Whether you are getting a balance transfer deal or a lower interest rate, it typically lasts for a specified amount of time before the purchase APR takes its place.

Purchase APR

This standard APR will be applied to all purchases you make with the card. It is typically the rate advertised when you apply or are offered a plan from a card issuer.

Penalty APR

Fail to make the minimum payment on time, and you’ll be charged a penalty APR, a rate even higher than your card’s default. Per the CARD Act, credit card issuers are allowed to raise your APR if you are more than 60 days late on payments during the first year of your account. A typical penalty APR is 29.99%.⁵

Cash Advance APR

Card issuers often charge a different, higher interest rate when you borrow cash using your credit card. There are no grace periods for this.

Hot Tip:

Don’t confuse APR with APY. 

How To Reduce Your APR

If you already have a credit card with an issuer and you’re hoping to get them to lower your existing APR, you can do a few things to renegotiate a lower rate. Reach out to your credit card issuer directly and ask if they’d be willing to negotiate a lower APR. Here’s some information to have on hand:

• Show a Positive Payment History — Point out your track record of making on-time payments. Lenders are more likely to give you a lower APR (in addition to other benefits, like a bigger credit limit) if you’re a trustworthy borrower.
• Show a Change in Credit Score — Maybe you started with good credit but now have excellent credit. This is definitely a reason for an issuer to offer you a lower rate. Just be aware that to confirm your higher credit score, the issuer may need to run a credit check on you again!
• Be Aware of Competitor Offers — Know what the competition offers and use it to your advantage. Let your credit card company know you’re searching for the best rate, and be armed with the correct information.

If you’re in the market for a new credit card, the best thing you can do is ensure your credit score is as high as possible. To do this, be sure to:

• Monitor Your Credit Report — Check your credit reports regularly to ensure you’re accurately scored. You have the right to check your credit reports from each major credit bureau (Equifax, Experian, and TransUnion) for free through AnnualCreditReport.com.
• Keep Debt Balances Low —Issuers want to know that you’re not over-extending yourself. Lenders look at the amount of credit you’re using compared to how much credit you’ve been given (also known as your credit utilization). Typically, the lower, the better, but try to keep it below 30%.
• Show an Impressive Credit History — Lenders like to see that you have a long history with different types of credit, including revolving credit and installment loans. This means the average length of your credit history and the types of loans you’ve handled (known as your credit mix) are significant to lenders.

Final Thoughts

A great deal goes into deciding your personal credit card interest rate, from your credit score to the type of APR applied to the type of credit card you want. Understand the nuances of credit card interest before jumping into the first offer that arrives in your mailbox. Otherwise, you could be in for a rude awakening when your introductory rate expires, and suddenly, you owe 29.99% on that late payment.

If your card has a higher-than-expected interest rate, try to negotiate a lower rate with your issuer.  It’s also important to be aware of other APRs in case you need a balance transfer, miss a payment, or take advantage of an introductory offer on your card.

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References

¹ Kelton, Katie. Bankrate. (2024, March 11). 2 in 3 Americans with debt are chasing credit card rewards. https://www.bankrate.com/finance/credit-cards/chasing-rewards-in-debt/#americans.
² Ramsey. (2023, November 16). The State of Personal Finance in America Q2 2023. https://www.ramseysolutions.com/budgeting/state-of-personal-finance#:~:text=Almost%20half%20of%20all%20credit%20card%20holders%20(47%25)%20don%E2%80%99t%20know%20the%20APRs%20on%20their%20credit%20cards.
³ Schultz, Matt. LendingTree. (2024, June 13). Average Credit Card Interest Rate in America Today. https://www.lendingtree.com/credit-cards/study/average-credit-card-interest-rate-in-america/#:~:text=The%20average%20APR%20for%20all,Fed%20began%20tracking%20in%201994.
⁴ Li Cain, Sarah. SoFi. (2024, March 15). Average Credit Card Interest Rates: Updated for 2024. https://www.sofi.com/learn/content/average-credit-card-interest-rate/.
⁵ Brown, Kaitlyn. Credit.com (2023, December 4). What Is Penalty APR? + How to Avoid It. https://www.credit.com/blog/penalty-apr/.
⁶ Schultz, Matt. LendingTree. (2024, June 13). 2024 Credit Card Debt Statistics. https://www.lendingtree.com/credit-cards/study/credit-card-debt-statistics/.