If you use a credit card, you’re probably already familiar with credit card interest. However, interest rates can be confusing, and it’s understandable if you’re not sure how your card’s interest rate compares to the average.
If you feel your interest rate is too high or you’re card shopping and aren’t sure what kind of rate to look for, check out the average credit card interest rates in the US for different types of borrowers.
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What is the average credit card interest rate?
In 2021, the Consumer Financial Protection Bureau (CFPB) estimated the average credit card APR to be 19.2%. 1 This is somewhat higher than the numbers given by the Federal Reserve (who claim the average credit card interest rate was 14.71% in 2020 and had grown to 15.13% by May 2022). Our own research suggests that the CFPB’s numbers are more accurate. 2
Interest rates, which in the context of credit cards are usually referred to as annual percentage rates (APRs), vary widely based on a number of factors, including:
- The type of lending institution extending credit (e.g., bank, credit card company, store, credit union)
- The lender themselves and their policies
- The current prime rate (described below)
- The credit card in question
- The borrower’s information (including employment status and salary)
- The borrower’s credit score
As you can see, credit card interest rates depend on many factors. One of the leading factors is the prime rate, which is a fluctuating interest rate that’s based on the federal funds rate set by the Federal Reserve. If a credit card’s APR is labeled “variable,” this means it changes along with the prime rate.
As of July 2022, the prime rate is 5.5%.
What’s the highest interest rate on a credit card?
Credit cards don’t actually have just one APR; they have several. The highest interest rate on a credit card is usually its penalty APR.
Penalty APR is a raised interest rate that may be charged after you’ve missed two payments on your card (meaning you didn’t pay at least your monthly minimum). Penalty APRs are usually 29.99% or higher and can last a maximum of 6 months.
There’s no federally mandated maximum interest rate for credit cards in general, although some states have restrictions. As a rule of thumb, regular APRs near or above 30% are considered quite high.
Which credit cards have the highest interest rates?
Credit cards for bad credit and credit cards for no credit charge the highest interest rates. The interest rate you’re offered is usually based on a metric called “creditworthiness,” which encompasses the payment history on your credit report and your credit score.
Among the credit cards for credit builders or re-builders, we’ve found the following to have exceptionally high interest rates:
- PREMIER Bankcard® Mastercard® (36%)
- Total Visa® (34.99%)
- First Access Visa® (34.99%)
- FIT Mastercard® (29.99%)
How do credit card interest rates vary by credit score?
Next to the prime rate, perhaps the second biggest determinant of a credit card’s interest rate is the borrower’s credit score.
Those with bad credit scores or limited borrowing histories are usually offered very high APRs, while those with good or excellent credit can score low-interest cards or even ones with 0% APR introductory periods.
Here’s how interest rates vary on average based on borrowers’ credit scores:
Average credit card APR based on FICO and VantageScore
| Credit Score | FICO Range | VantageScore Range | Average APR |
|---|---|---|---|
| Bad | 300–669 | 300–600 | 24%+ |
| Fair | 670–739 | 601–660 | 22%–24% |
| Good | 740–799 | 661–780 | 20%–22% |
| Excellent | 800–850 | 781–850 | 16%–18% |
How can you get a better interest rate on your credit card?
If you’re worried that your credit card’s interest rate is too far above the average—or too high for you in general—there are steps you can take to secure a lower APR.
Improve your credit score
The best way to get a lower interest rate on a credit card is to build and maintain a good credit score. If your score is less-than-perfect right now, improving your credit score will qualify you for better cards with more favorable borrowing terms, like low interest or 0% APR offers.
Negotiate your interest rate
If you’re feeling buried in interest charges from carrying over balances on your credit card, you can call your issuer and try to negotiate a lower credit card interest rate. Remember that your lender wants to be repaid as much as you want out of debt, so they may be willing to work with you to better your borrowing terms and make paying off your balance easier.
Consolidate your credit card debt
Struggling with debt is made significantly worse if you’re being charged a high interest rate. If you’re battling rapidly accumulating interest charges while paying off your balances, consider consolidating your credit card debt.
To consolidate credit card debt, move one or more high-interest balances onto a new low-or-no-interest credit card or personal loan.
Get a 0% APR card
Whether you’re consolidating debt or worried about interest charges on an upcoming purchase, you may benefit from a zero-interest credit card. 0% APR cards are credit cards that won’t charge interest for a set amount of time (usually 6–18 months).
However, 0% APR credit cards are usually only available to borrowers with good or excellent credit. If you can qualify, check out the best deals for 0% APR credit cards below.
Apply for a credit card at a credit union
Credit card interest rates depend on your credit score, the card itself, and the lender. If you’re only finding high interest rates on cards from traditional banks or credit card companies, look into applying for a credit card through a credit union.
Credit unions are nonprofit financial institutions that often offer low-interest credit cards. Search MyCreditUnion.gov to find a legitimate credit union near you.
