What is the average credit card interest rate?

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

What is the average credit card interest rate?

A new CardRatings.com study found that the current average credit card interest rate is 24.78%. What you actually pay also depends on fees, your credit score, and how you use your card(s). So, in addition to the average rate, CardRatings has compiled other key statistics to help you figure out the best credit card deal for your situation.

High, low and average credit card rates

During the second quarter of 2024, the overall average interest rate among dozens of credit cards studied by CardRatings.com was 24.78%. If that sounds high to you, remember that rates have been heading higher for most of the past two years. The second quarter of this year was no exception, in that the average credit card rate rose by 0.21%.

Overall, the Federal Reserve raised the Federal funds rate by a total of 5.25% between 2022 and 2023. If you haven’t checked recently, this would be a good time to take a fresh look at your most recent credit card statement to see what you’re paying now.

An important thing to understand about how credit cards work is that the average isn’t necessarily indicative of every customer’s experience. While the Fed was raising rates over the past two years, each credit card company made its own decisions about how much to raise rates. These decisions are based on a variety of factors in addition to changes in the Fed funds rate.

Because there are so many different factors that can affect credit card rates, the range of rates can be surprisingly wide at any given time. For example, the rates CardRatings found in its recent study range from a low of 18.24% to a high of 35.90%. That means some customers are paying nearly twice as much interest as others on every dollar of credit card debt.

The Federal Reserve has indicated that it expects to lower interest rates later this year. However, that depends on inflation continuing to ease. Also, credit conditions are worsening. That means credit card companies may keep rates high for some customers to protect against default risk.

Impact of credit score on credit card interest rates

Besides the various business factors that affect the rates different credit card companies charge, the credit history of individual customers also has a big impact on credit card rates.

You’ve probably noticed that many credit card advertisements don’t list a single interest rate. Instead, they often give a range of rates.

The low end of that range is the rate given to customers who qualify for the card’s best rate. The high end of the range is the rate offered to customers with the weakest credit scores. By looking at the difference between one end of the range and the other, you can get a sense for how much more people with poor credit have to pay.

For example, the average range of rates offered by credit cards is currently from 21.38% to 28.17%, a difference of 6.79%. That represents a typical example of how much more interest you could pay for having poor-to-mediocre credit. If you have especially bad credit, you could pay 10% or more in higher interest on a credit card.

Annual credit card fees and impact on rates

Interest rates aren’t the only cost you may pay for using a credit card. Fifty nine percent of the cards studied in the survey have an annual fee.

The average amount of these annual fees is $115.44. This is up by $17.80 since the end of 2023. Notably though, there is a huge range of different fees. The study found annual fees that ranged from $29 to $995. Plus, 42% of the cards studied had no annual fees at all.

So, along with interest rates, fees are an important consideration when choosing a credit card. You might think there would be some kind of trade-off between rates and fees, such as cards with annual fees offering lower interest rates. However, this is not generally the case. On average, cards with fees actually have slightly higher interest rates than those without fees.

With that in mind, why would anybody choose a credit card with an annual fee? The reason is that those cards often have some characteristics that some customers feel justify the fee.

These characteristics may include rewards programs that are generous enough to make up for the fee, especially for frequent credit card users. Some credit cards may offer exclusive access to things like airport lounges and early bird ticket programs for concerts and sporting events. Other credit cards may offer fees in exchange for accepting customers who otherwise might not qualify for a credit card.

Tips for getting the best credit card deal

The wide range of interest rates on credit cards shows why it’s important to shop around for the best deal. However, rates are not the only consideration. The following are some tips for making sense of all the factors that go into choosing a credit card.

  • Decide how you’re going to use the card. How you use the card affects how important certain characteristics are. 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, such as travel, you are likely to use the card for most often.
  • 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 are wide ranges of fees and interest rates out there. A little comparison shopping can make a big difference.
  • 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. Working to improve your credit score can pay off by qualifying you for better credit card terms.

Measuring the average credit card interest rate – methodology

The CardRatings.com study looked at 57 popular credit card offers and their terms as of 6/30/2024. These offers represent a cross-section of different card types for varying credit qualifications. CardRatings.com 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.

Richard Barrington
Cardratings Contributor

Richard has over 30 years of experience in financial services, including 23 years with the investment management firm Manning & Napier Advisors, Inc., where he led the Marketing Group and served on the firm’s Investment Policy Group and Executive Group. Over the years, Barrington has...Read more

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