This was originally supposed to be a year of falling interest rates. Instead, rates have reversed course and moved upward.
The Federal Reserve recently raised its interest rate, and market rates such as mortgage rates and bond yields have also been rising. It was only a matter of time before credit cards were affected as well.
So far, only a minority of credit cards have raised their rates, but more may soon follow. Fortunately, there are things you can do to minimize the impact of rising credit card rates, or avoid it altogether.
How did the rate environment change in the third quarter of 2026?
When 2026 began, the Federal Reserve expected to lower interest rates modestly during the year. Instead, in its September meeting, the Fed raised rates for the first time since 2023.
The Fed was following a course that mortgage rates and bond yields had already set. Mortgage rates bottomed out in February of 2026, and have been rising ever since. By the beginning of October, 30-year mortgage rates had risen by a net total of 1.13% this year.
Like mortgage rates, 10-year Treasury bond yields reached their low point in February and have been rising steadily since then. By the end of September, those yields had risen by a net total of 1.11% in 2026.
Compared with rate increases of over 1% for mortgages and bond yields, the Fed’s increase of just 0.25% looks minor. However, the Fed has historically preferred to make changes incrementally. If the economic environment doesn’t change, there may be more rate increases on the way.
What is it about the economy that’s sending interest rates higher? Quite simply, inflation. Since hitting a low of 2.3% in the spring of 2025, the year-over-year Consumer Price Index increase has risen to 3.4%. With oil prices remaining stubbornly high, lenders have to protect themselves against the risk of further price increases. That means higher interest rates.
How did rising rates affect credit cards?
Credit cards are no exception to being sensitive to inflation. Some credit card rates are directly linked to the Federal Reserve rate, while others simply react to the same trend as the Fed.
Even though the Fed didn’t raise rates until mid-September, by the end of the month, nearly 16% of the cards in the CardRatings Credit Card Rate Survey had already raised their rates. Don’t be surprised if more follow suit in the months to come.
Since most cards haven’t yet acted, the impact so far is somewhat muted. The survey found that as of early October, the overall average credit card rate was 23.98%, up by 0.09% from the previous quarter. However, individual cards increased rates by as much as 4.25%.
As a group, rates offered to people with weaker credit were most affected. These rates rose by 0.23% during the quarter, compared to the 0.09% overall increase.
Cards that don’t charge annual fees were also disproportionately affected by rate increases. The average rate for this group rose by 0.57% during the quarter, to 23.53%. However, that rate is still lower than the average for credit cards with annual fees, which was 24.44%.
➤ LEARN MORE:How does the Federal Reserve impact credit card interest?
Did credit card fees also rise?
Along with the average credit card rate, credit card fees also rose during the quarter. The average among cards that charge an annual maintenance fee rose to $243.24, an increase of $8.47. Just under half the cards in the survey charge an annual fee, which was the same as the previous quarter.
Credit card fees in the survey varied a great deal, ranging from a low of $39 a year to a high of $895.
➤ SEE MORE:Best credit cards with an annual fee
How to avoid rising credit card rates
Credit card rates are on the rise, and more increases may follow. So what can you do to avoid rate increases, or at least minimize their impact? Here are some ideas:
- Shop around. While credit card rates may generally move in one direction or another together, there are still huge differences in the rates available from different cards. Rates in the survey ranged from a low of 14.99% to a high of 35.99%, so shopping for a competitive rate can make a meaningful difference.
- Reduce your balance. Since interest is charged on the amount you owe, rising rates make this a great time to reduce your balance. That would save you money under any circumstances, but it’s becoming even more meaningful in today’s rate environment.
- Improve your credit score. Credit card rates for people with great credit are a lot lower than those for people with poor credit. Many credit cards offer a range of rates based on the customer’s credit score. The average difference from the lowest to highest rates cards offer is 8.26%, so there’s a lot to be saved by improving your credit.
There’s nothing you can do to hold back the tide of rising credit card rates. However, there are steps you can take to reduce its impact on you.
➤ SEE MORE:Why is it getting harder for people with low credit scores to get credit?
Measuring the average credit card interest rate – methodology
The CardRatings.com study looked at 51 popular credit card offers and their terms at the start of the fourth quarter of 2026. These offers represent a cross-section of different card types for varying credit qualifications. CardRatings calculated the overall average interest rate and fee. It also broke down the data into different groups such as fee and no-fee cards and minimum and maximum interest rates.
Frequently asked questions about credit card rates
Does the Federal Reserve set credit card rates?
Why did some credit card rates rise and others didn't?
Why do credit cards list a range of rates instead of just one?
This article was originally published in February 2024, but is updated quarterly to reflect the most recent available data.
