Average credit card interest rate and how your own APR compares

Quick Answer

Your rate may sit well above the average if your credit is weaker, in which case ask your issuer for a lower rate or compare other cards. Check whether your APR is variable, because it can change with a benchmark.

Credit card interest is the cost of borrowing money on a revolving line of credit, so you should understand how interest rates work to evaluate your own annual percentage rate.

Current national credit card interest standards

The average credit card interest rate depends on your credit history and the specific card terms. According to Federal Reserve Board, G.19 Consumer Credit, the average credit card annual percentage rate (APR) is 21.19% across all accounts. For accounts assessed interest, the rate is 22.36% according to Federal Reserve Board, G.19 Consumer Credit.

The Federal Reserve consumer credit release rates are annual percentage rates. These figures represent simple unweighted averages of each bank’s most common rate for new car and personal loan products.

National interest rate benchmarks

Account Status	Interest Calculation	Applicable Rate
Standard active account	Total interest charged	Average interest rate on credit cards
Interest bearing account	Interest assessed daily	Higher average interest rate
New card application	Base rate offered	Current average credit card interest rate
Paid in full monthly	No interest accrued	Zero percent interest rate

What is the typical national rate?

To see if your rate is typical, check your monthly statement for the annual percentage rate. You can reduce your costs by paying the full balance before the due date to avoid interest.

How does the average on accounts that pay interest differ from the overall average?

The average on accounts that pay interest is higher than the overall average because the total average includes accounts with zero percent rates.

Impact of balance payment habits

The second figure reflects what people who carry balances pay. The first figure includes many consumers who pay their balance in full each month. You can see how these different categories impact costs in the comparison below.

Average card cost comparison

Account category	Interest behavior	Cost impact
All credit accounts	Includes zero percent rates	Lowers total average
Interest bearing accounts	Excludes zero percent rates	Raises specific average
Paid in full accounts	Avoids all interest charges	Reduces personal cost
Carried balance accounts	Incurs ongoing interest costs	Increases monthly cost

Why do interest bearing accounts cost more

Interest bearing accounts cost more because they exclude promotional periods and zero percent offers. Accounts assessed interest are accounts that were charged interest, which usually means the balance was not paid in full. You may qualify for lower rates by paying on time or you can negotiate with a lender to decrease your rate.

Impact of credit history on your offer

A lower credit score generally leads to a higher interest rate on a credit card offer. Higher credit scores typically result in lower interest rates. Lenders use your credit history to determine the risk of lending money to you.

Credit card APR by score

• Lower credit scores often result in higher interest rates because lenders perceive a higher risk of default. A credit score is a numerical rating that represents your reliability as a borrower based on your financial history.
• Higher credit scores generally allow borrowers to request lower interest rates from lenders.
• Borrowers must check the specific offer for their own APR to see the rate assigned to their credit profile.

Accounts assessed interest: interest assessed accounts show the cost for active borrowers

Accounts assessed interest are credit card accounts that currently carry a balance and are being charged a fee. This figure is calculated by excluding accounts with zero balances from the average. Comparing this to the overall average shows what people who actually owe money are paying.

Annual percentage rate (APR): the APR determines the cost of your credit card debt

An annual percentage rate (APR) is the yearly cost you pay to borrow money on your card. It is calculated as a percentage of your outstanding balance. Knowing this number helps you see if your specific rate is higher or lower than the national average.

How does your credit score affect the offer?

Lenders use your credit score to decide the specific interest rate for your account. A score that reflects reliable repayment history helps you avoid high interest costs. You should check the specific offer to see how your personal score affects your available rate.

Where do you find your own APR?

You can find where do you find your own APR by checking your monthly credit card statement. These documents list the specific interest rates for your account. You can also locate your rate within your original card agreement or by logging into your online account portal.

Credit card accounts often feature multiple different rates for different types of transactions.

Interest disclosure locations

• Monthly statements list the annual percentage rate for each category of debt.
• Cardholder agreements define the interest rates for every transaction type.
• Online account portals display current rates in the account summary area.
• Purchase interest rates represent the cost for standard retail transactions.
• Cash advance rates specify the cost for withdrawing cash from an ATM.

Where is my personal rate listed

Look for the purchase APR on your billing statement to find the rate for standard spending. The statement identifies the specific interest rate for each balance type. You can also view these figures by logging into your credit card’s online portal or by reviewing your signed terms of service.

Reasons for fluctuating card costs

Credit card interest rates change because most cards use a variable rate. A variable rate is a cost that fluctuates based on a benchmark index. When the underlying benchmark rate moves, you can avoid a penalty APR as the interest rate on the credit card changes automatically.

Link between APR and prime rate

Most credit card agreements link the annual percentage rate to a benchmark like the prime rate. The prime rate is the base interest rate that commercial banks charge their most creditworthy customers. This means the cost of borrowing moves in tandem with broader economic shifts. A borrower can see these changes reflected on their monthly billing statement.

Why do lenders change these costs?

Lenders adjust these costs to respond to changes in the broader economy. When the cost for banks to borrow money increases, they raise the benchmark rates. This ensures the lender maintains a specific profit margin on the credit extended to consumers.

Borrowers at different credit levels

Borrowers with good credit

If your score is above average, you are likeliest to see rates below the averages.

Borrowers who carry balances

If you are charged interest each month, the accounts-assessed figure fits you better than the all-accounts one.

Borrowers with lower scores

Because your score is below fair, your rate may be above the average, so compare options.

Average rate misreadings

• Treating the average as your rate is a mistake. Your own APR depends on your credit and card.
• Ignoring the difference between the two averages is a mistake. The all-accounts figure includes people who pay no interest.

Manage your credit card interest by comparing your current rate

Making an informed decision about your debt requires having your most recent billing statement ready for review.

Steps to evaluate your interest rate

1. Locate your APR on your statement. Find the annual percentage rate listed on your monthly billing summary. Note this specific percentage to use for your comparison.
2. Compare it with the Federal Reserve averages. Check if your rate is higher than 21.19 percent across all accounts or 22.36 percent across accounts assessed interest as reported by the Federal Reserve Board, G.19 Consumer Credit.
3. Check whether your APR is variable. Look for the term variable or fixed in your account terms. Knowing if your rate can change helps you predict future costs.
4. Ask your issuer about a lower rate. Contact your credit card provider to request a lower interest rate. Ask them what specific criteria you meet to qualify for a reduction.
5. Compare other cards if your APR is high. Look at the rates offered by different providers. Choose a different card if you find a lower rate than your current one.

Frequently asked questions