What is the average credit card interest rate?

Credit card companies were slow to react to the Fed’s rate cuts, but most made up ground during the final quarter of 2025.

For consumers, that means a much-needed break on credit card rates. The amount of a break depends on the card you choose and your creditworthiness.

With most credit cards having just changed their rates, this is a good time to compare the rates you’re getting with what’s available on the market. While banks are generally cutting credit card rates, some are doing so much more quickly than others.

Catching up with the Fed: Most credit cards responded to rate cuts

The Fed made three rate cuts in the latter part of 2025. The first of these happened in September. However, most credit card issuers were slow to react.

When CardRatings surveyed credit card rates at the beginning of October, it found that despite the recent rate cut, most rates were still unchanged from three months earlier. In fact, less than a third of the credit cards in the survey had lower rates by early October.

The latest survey yielded very different results. When CardRatings checked rates at the beginning of January 2026, it found that 96% of cards in the survey had lowered rates over the past three months. The average credit card rate now stands at 24.12%.

Looking back a little further, the Fed has cut rates by a total of 0.75% since the middle of last year. Over that same period, the average credit card in the survey has dropped by 0.72%—almost a mirror image of the Fed’s moves.

However, averages don’t necessarily reflect the deal that you’re getting. A small number of cards have slashed rates by as much as 2% – well in excess of the Fed’s rate cut. On the other hand, there are still a couple of holdouts that haven’t changed since the Fed started cutting rates in the second half of last year.

 ➤  LEARN MORE:How does the Federal Reserve impact credit card interest?

Strong credit earns the biggest rate cuts

As always, one of the best ways to get a good credit card rate is to maintain a strong credit score.

Most credit cards charge a range of different rates. The low end of the range is for people with excellent credit, and the high end is for people with poorer credit. The added interest is intended to compensate the credit card companies for the fact that people with poor credit are more likely to miss payments.

How much of a difference does this make? The latest CardRatings survey found that the best rates offered by credit card companies averaged 20.15%. At the high end of the range, the average was 28.10%. The difference is 7.95% – an indication of how much you can save with excellent credit.

Not only do people with strong credit generally get better credit card rates, but they’re also benefitting more from recent rate cuts.

The best rates charged by credit card companies – those offered to customers with excellent credit – fell by an average of 0.81% over the second half of 2025. Meanwhile, the top rates offered to customers with weaker credit fell by an average of just 0.64%.

One reason for this is that rates are falling because of concern that the economy is weakening. 2025 saw a huge drop-off in job growth. It was by far the worst year for jobs since the pandemic year of 2020. With more families under financial stress, credit card companies have to be more cautious.

High credit card balances and rising numbers of late payments add to the worrisome picture. So, credit card companies are less likely to lower rates for their riskiest customers. Some consumers may actually see a rise in interest rates if credit conditions continue to get worse.

 ➤  SEE MORE:Why is it getting harder for people with low credit scores to get credit?

Cards with fees don’t get a break on rates

After some high-profile credit cards raised their fees earlier in the year, fees generally settled down in the fourth quarter. Here again, though, the story depends on which credit card you have.

As of early January, the average annual credit card fee was $233.72. Still, that average only applies to cards that charge fees. Just over half the credit cards in our sample did not charge annual fees.

Among cards that charge annual fees, these range from a low of $39 to a high of $895. Of course, the benefits associated with those fees also vary greatly. It’s important to measure the benefits you get from a credit card if you’re going to be paying a regular fee on it.

Typically, the benefits of cards with annual fees don’t include lower interest rates. Cards that charge an annual fee also tend to charge higher interest rates. The average rate on cards with annual fees was 25.02%, compared with 23.27% for cards that don’t charge those fees.

 ➤  SEE MORE:Best credit cards with an annual fee

Today’s conditions demand a fresh look at your credit cards

Whether it’s interest rates or fees, this is a critical time to take a fresh look at what you’re paying for your credit cards.

While we’ve just seen a flurry of rate changes by credit cards, that may slow down in 2026. Over the past couple of years, the Fed has cut interest rates by a total of 1.75%. Notably, though, it expects to make just one 0.25% rate cut in 2026. So, the best way to make a meaningful dent in your credit card rate may be to shop around for a better deal.

Besides comparing interest rates and fees, keep in mind how you’re likely to use the card. For example, interest rates are only important if you expect to carry a balance on your card. As for fees, you should add up the value of any benefits you’re likely to receive as a cardholder to decide if it’s worth the cost.

This is a time of sudden changes in the economy. Be prepared to change your credit card habits in response.

Tips for getting the best credit card deal

As seen, when the Fed cuts interest rates, the responses of credit card companies are likely to vary. Regardless of what the Fed does, expect differences between credit card rates to continue to be substantial. That makes it especially important to look at which individual cards offer the best deals.

Beyond interest rates, there are other considerations in choosing a credit card. The following are some tips for getting the best deal for your needs:

• Decide how you’re going to use the card. How you use the card affects the importance of certain characteristics. For example, if you don’t typically carry a balance, interest rates are less important than if you do. Also, keep in mind how heavily you plan to use the card, and whether there are certain things, like travel, you’re likely to use the card for most.
• Consider rates, fees and rewards. Once you plan for how you’ll use the card, you can estimate the impact of interest rates, fees and rewards on your account. That will help you measure the trade-offs among these factors for your planned usage.
• Shop around to find the best terms for your situation. As the study found, there is are wide range of fees and interest rates out there. A little comparison shopping can make a bigger difference than Fed rate cuts typically do.
• Work on your credit. The wide range of interest rates also indicates how much more you might have to pay if you have poor credit. This spread has been widening as credit conditions deteriorate. Working to improve your credit score can pay off by qualifying you for better credit card terms.

 ➤  SEE MORE:Best credit card offers

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 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.

This article was originally published in February 2024, but is updated quarterly to reflect the most recent available data.