Guide to Current Credit Card Interest Rates

Credit card APR is an important financial concept to grasp.

The annual percentage rate on your credit card determines the amount of interest you’re charged every year on outstanding balances. Although it’s best to pay off your balances in full and not pay interest, the truth is that carrying a credit card balance is fairly common.

Before going further into which credit cards have the best interest rates, you should learn about average current credit card rates and what factors affect them. When you compare credit cards, even the best rewards credit card you can find isn’t worth having if you have to pay a high interest rate.

Here’s what you need to know about current credit card interest rates:

Average Credit Card Interest Rates

The average credit card APR changes significantly depending on the type of credit card in question. For example, the average credit card APR for low-interest credit cards is 12.80 percent, whereas the average APR for instant-approval credit cards is 16.50 percent.

On a broader level, according to the Federal Reserve, the average credit card interest rate across all accounts is slightly over 13 percent, with the most recent data, from August 2017, showing the current average APR is 14.87 percent.

Check Out: Interest Rates Over the Last 100 Years

Credit Card Comparison and Credit Card Interest Rates at a Glance

Average credit card interest rates for some of the most common credit card types fall between 11 and 17 percent. You can find the lowest credit card rates on student credit cards, low-APR credit cards and balance transfer credit cards. The highest APR credit cards are instant-approval credit cards, business credit cards and bad-credit or subprime credit cards.

Take a look at the following credit card information to compare interest rates and see which credit card makes sense for you.

Current Credit Card Interest Rates
Card TypeLow Credit Card APRHigh Credit Card APRMedian Credit Card APRAverage Credit Card APR
Low-Interest Credit Cards3.75%20.99%12.87%12.80%
Student Credit Cards0.00%17.00%13.40%11.00%
Balance-Transfer Credit Cards8.49%25.49%13.20%13.76%
Airline Credit Cards8.25%19.25%15.49%14.80%
Hotel Credit Cards12.25%19.25%15.49%15.46%
Cash Back Credit Cards8.25%24.40%14.74%14.72%
Reward Credit Cards3.75%29.90%14.74%15.07%
Bad-Credit Credit Cards9.90%24.40%17.49%16.71%
Instant Approval Credit Cards11.87%19.89%17.74%16.50%
Business Credit Cards14.74%18.49%16.49%16.55%
Rates accurate as of Nov. 8, 2017

Historical Credit Card Interest Rate Trends

To give you an idea of how credit card interest rates have fluctuated over the last 20 years, you must understand how the U.S. economy works. During a typical business cycle of the U.S. economy, the stock market rises and falls, interest rates go up and down, and credit card APRs follow suit.

As of January 1997, the average credit card APR was 15.82 percent. That rate reached its 20-year peak shortly after that, hitting 15.92 percent in July 1997. Rates bounced around after that, hitting a 20-year low of 12.10 percent as of January 2009. By the end of January 2017, the average APR sat at 14.26 percent.

Compare: Best Balance-Transfer Credit Cards

Factors That Affect Credit Card Interest Rates

Many factors determine how banks determine credit card interest rates. One influential factor is the federal funds rate, which impacts a number of interest rate trends, including that of credit card APRs. In June 2017, credit card interest rates rose because the Fed raised the federal interest rate by 0.25 percent.

Multiple factors influence credit card rates beyond the Fed. For example, the type of APR also affects your credit card rate. Variable credit card APRs change depending on the index they’re referencing, such as the U.S. prime rate; so your credit card interest rate can fluctuate as the prime rate rises and falls. On the other hand, non-variable credit card APRs don’t depend on a reference rate and are more stable.

Your credit card APR can also vary depending on what you do with the card. Your credit card issuer might charge a specific APR for balance transfers and another rate for standard purchases. Some cards offer promotional rates, which can start low but then jump up dramatically after the credit card offers expire.

Prepare: What Another Fed Rate Hike Means for Your Wallet

Choosing the Best Card for You

When it comes to the best credit card rates, no one size fits all. Depending on your financial standing and lifestyle, one type of credit card and one specific credit card APR might make more sense than another credit card. Evaluate your own financial needs before deciding on which credit card and APR fits your life.

Find Out: 10 Things You Should Never Put on a Credit Card