What is the average credit card interest rate? – Forbes Advisor

Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors.

the Federal Reserve keeps tabs on the average interest rate that US consumers pay for a variety of different financial products, including credit cards. In 2021, the average credit card interest rate in the United States on accounts with interest-bearing balances was 16.45%.

Of course, the annual percentage rates (APRs) you pay on your own credit cards may not match the national average. Credit card APRs can vary widely depending on a number of factors, from your credit score to your debt ratio and beyond.

Find the best credit cards for 2022

No credit card is the best option for every family, every purchase or every budget. We have selected the best credit cards so as to be the most useful for the greatest number of readers.

Average Credit Card Interest Rate by Credit Score

Higher credit scores have the potential to help you qualify for lower interest rates on credit cards, loans, and other types of financing. Therefore, a good credit score can save you money.

Bad credit scores, on the other hand, indicate a higher risk for the credit card company. This status tends to result in higher APRs for you as the cardholder. It is not uncommon to come across credit cards with APRs as high as 25% to 30%.

The exact interest rates on credit cards may differ from company to company, as well as from cardholder to cardholder. The type of credit card you open can also play a role in your APR, with rewards credit cards often offering higher interest rates than other types of credit card products.

Below is an overview of the approximate APR range you might encounter on a general purpose credit card, based on your credit score. You should always check with the individual credit card issuer to confirm what rates are offered on any account you are considering.

How Your Credit Card Interest Rate May Affect You

When it comes to interest rates, it’s always best to get the lowest number possible. On paper, the difference between an APR of 15% and an APR of 20% may seem minimal. But if you’re running a balance on your credit card account, a lower interest rate has the potential to save you thousands of dollars. Below is an example.

As you can see above, your credit card interest rate can also affect how long it takes you to pay off your credit card debt. A lower APR can make eliminating debt faster and easier.

Of course, the best way to manage credit cards is to pay your balance in full each month. If you can develop this habit and avoid credit card debt in the first place, your account APR should have no impact on your budget. In fact, when you pay off your entire statement balance every month, you can avoid paying credit card interest.

How to lower the interest rate on your credit card

If you’re struggling to pay off your credit card debt, getting a lower interest rate could help you save money and get out of debt faster. Below are several strategies you can use to try and lower your credit card APR.

  • Balance Transfer: You may be able to open a new credit card to take advantage of a low-rate or 0% APR balance transfer offer. Low introductory interest rates on balance transfer credit cards don’t last forever (usually 12-18 months). But if you can afford to aggressively tackle your debt while the introductory APR is in place, you might be able to take on a big chunk of your credit card debt, or maybe pay it off. fully.
    A balance transfer calculator can help you factor in balance transfer fees, introductory rates, and more to add up your potential savings. It’s also wise to compare multiple balance transfer credit card offers to make sure you find the best deal that’s right for you. Keep in mind that you will generally need good to excellent credit to qualify.
  • Consolidation loan: Another way to find a lower interest rate for your existing credit card debt is to pay it off with a debt consolidation loan. Depending on your credit score, debt-to-income ratio (DTI), and other factors, you may be able to take out a new personal loan with a lower interest rate than what you’re paying on your credit card accounts.
    A low rate debt consolidation loan could save you money and speed up the process of eliminating debt. Plus, by consolidating your revolving credit card debt with an installment loan, you could reduce your credit card usage rate and potentially improve your credit score at the same time.
  • Ask your credit card issuer: Your APR credit card is not carved in stone. You can ask your credit card issuer if they’re willing to lower your credit card interest rate, and in some cases you might be successful.
    Let the card issuer know if you’ve seen credit card offers with lower interest rates than you’re considering. Having an on-time payment history on your account and a good credit score could also work in your favor when applying.

Quick tips to improve your credit

Whether you’re trying to get a low interest rate on a new credit card account or looking to lower the APR on an existing account, having a good credit score can give you an edge. Good credit improves your chances of qualifying for new accounts and getting the best interest rates and terms that credit card companies have to offer.

In truth, it can take a while to go from bad or even fair credit to a good credit score. But there are actions you can take that could help you see an improvement in your credit score sooner rather than later.

  • Check your credit reports. Knowing where you stand is a critical step when trying to improve your credit. The good news is that checking your three credit reports with the major credit bureaus (Equifax, TransUnion, and Experian) is easy and free. To visit AnnualCreditReport.com to claim a free credit report from each office once every 12 months. During the pandemic, you can enjoy free weekly access to your credit reports through the same website.
  • Take note of derogatory credit information. Once you have your reports in hand, go through them from top to bottom. Write down any negative information you find that could hurt your credit scores. You may not be able to do anything about these issues until they eventually disappear from your credit report. But you can make a point to avoid repeating the same mistakes.
  • Dispute credit errors. As you go through your credit reports, you should also list any credit report errors or signs of fraud that you discover. The Fair Credit Reporting Act (FCRA) allows you to dispute any inaccurate information that appears on your credit report with the appropriate credit bureau.
  • Pay off your credit card balances. Reducing your credit card balances and, by extension, your credit utilization rate can be one of the most effective ways to improve your credit score. Credit utilization is a major credit score factor, largely responsible for 30% of your FICO score. When you have a low credit utilization ratio, it indicates that you have lower credit risk.
  • Show a positive payment history. How you pay your credit obligations — on time or late — is the most important factor in determining your FICO score. When you avoid late payments, you can set yourself up for credit score success. Yet even the occasional delinquency on your credit report could potentially be a major setback.
  • Consider opening new accounts. If you have a thin credit history or need to establish credit for the first time, opening new credit accounts could benefit you. Without a credit history, it can be difficult to qualify for certain loans or credit cards. But some options, like secured credit cards or credit-building loans, can work well for you as long as you always pay on time. You can also consider asking a friend to add you as an authorized user on an existing credit card account.

Find the best credit cards for 2022

No credit card is the best option for every family, every purchase or every budget. We have selected the best credit cards so as to be the most useful for the greatest number of readers.


Improving your credit can make it easier to qualify for attractive credit card interest rates. But don’t be too discouraged if you need to raise your credit score before you can qualify for the best deals available. As long as you pay off your statement balance in full each month, you can enjoy the many benefits of credit cards without paying interest charges, regardless of the current APR of your credit card account.

Comments are closed.