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What is the Average Credit Card Interest Rate? How Can You Lower the Interest Rate on Your Credit Card?

The average credit card interest rate is approximately 27.80%, subject to fluctuations based on market conditions and individual credit profiles.

by Tamilchandran

Updated Dec 21, 2023

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What is the Average Credit Card Interest Rate? How Can You Lower the Interest Rate on Your Credit Card?

What is the Average Credit Card Interest Rate?

Credit card interest rates can vary widely based on factors such as the cardholder's creditworthiness, the type of credit card, and prevailing market conditions. The 27.80% this week average serves as a general benchmark, but individuals may encounter rates both higher and lower than this figure.

To navigate the complex landscape of credit card interest rates, consumers should carefully review terms and conditions before selecting a card and strive to maintain a good credit score to access more favorable rates.

Card Type

Rate This Week

Student Cards




Hotel Cards


Flexible Rewards Cards


Cash Back Cards


Business Cards


Balance Transfer Cards


Airline Cards


0% APR Cards


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What is the Average Credit Card Interest Rate By Credit Score?

Having a higher credit score increases the likelihood of qualifying for lower interest rates on credit cards, loans, and other financing options, resulting in potential cost savings. Conversely, lower credit scores pose a higher risk to credit card companies, leading to elevated APRs for cardholders, sometimes reaching 25% to 30%.

Interest rates on credit cards vary among companies and individual cardholders. The specific type of credit card you choose also influences your APR, with rewards credit cards commonly having higher interest rates compared to other card products.

Credit Score Rating

Approximate FICO® Score Range

Credit Card APR Range (2020)


740 and Above

16% - 18%


670 - 739

20% - 22%


580 - 669

22% - 24%

Deep Subprime

579 and Below

24% and Above

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Average Credit Card Debt

It's worth noting that the average credit card debt figure can vary based on factors such as geographic location, income levels, and economic conditions. The $5,733 average provides a snapshot of the national landscape, but individuals should be aware of their own financial situations.

To maintain a healthy financial profile, it's advisable to pay attention to spending habits, create a realistic budget, and prioritize debt repayment. By doing so, individuals can harness the benefits of credit cards without succumbing to the pitfalls of excessive debt.

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What Does Credit Card Interest Mean?

Credit card interest, commonly expressed as an Annual Percentage Rate (APR), signifies the cost associated with borrowing money or maintaining an outstanding balance on your credit card. This rate, influenced by market dynamics and individual creditworthiness, is levied on any unpaid balance when the full credit card bill is not settled each month.

In essence, credit card interest serves as the fee for the privilege of delaying your credit card payments. If not handled judiciously, it can result in mounting debt due to the compounding of interest on unpaid balances, posing a potential financial burden over time.

To navigate this aspect of credit management effectively, it is crucial to comprehend your credit card's specific APR, payment terms, and due dates. This understanding empowers individuals to make informed financial decisions and prevent unnecessary interest charges.

How Can You Lower the Interest Rate on Your Credit Card?

Unlock practical methods to reduce your credit card interest rate and enhance your financial well-being with these strategic approaches. Take charge of your financial journey by implementing these proactive measures, empowering you to manage and decrease your credit card interest rates effectively.

1. Explore Balance Transfer Offers

  • Investigate enticing balance transfer offers allowing you to move existing credit card debt to a new card featuring a lower or 0% introductory APR.
  • Understand that these favorable introductory rates typically have a limited duration, providing a focused period for efficient debt repayment.
  • Utilize a balance transfer calculator to assess potential savings, considering balance transfer fees and introductory rates.
  • Keep in mind that eligibility often relies on maintaining good to excellent credit.

2. Consider Debt Consolidation Loans

  • Evaluate eligibility based on factors like credit score, debt-to-income (DTI) ratio, and other financial considerations.
  • Recognize that a low-rate debt consolidation loan not only saves money but also streamlines the debt repayment process.
  • Note that consolidating revolving credit card debt into an installment loan may positively impact your credit score by reducing the credit card utilization rate.

3. Negotiate with Your Credit Card Issuer:

  • Acknowledge that your credit card's APR is negotiable, providing an opportunity for direct communication with your credit card issuer.
  • Approach the negotiation by referencing lower interest rate offers and highlighting responsible credit behavior.
  • Emphasize a history of on-time payments and a solid credit score as leverage in the negotiation.
  • Be prepared to discuss your loyalty as a customer and explore potential promotional or lower-rate options.

What Methods Improve Credit?

Elevating your credit score involves a strategic approach encompassing various practices. From vigilant monitoring of credit reports to proactive steps like reducing credit card balances and fostering a positive payment history, these methods collectively contribute to enhancing your creditworthiness and financial prospects. Explore the following key strategies to embark on a journey toward an improved credit standing.

Checking Your Credit Reports

Regularly monitoring your credit reports from major bureaus like Equifax, TransUnion, and Experian is a fundamental step in understanding and improving your credit. Platforms like AnnualCreditReport.com, especially during the pandemic, provide valuable insights into your credit status.

Identifying Negative Information

As you scrutinize your credit reports, pay close attention to any derogatory or negative information that might impact your credit scores. Recognizing and addressing these issues is essential for comprehending areas of improvement in your credit history.

Disputing Inaccuracies

Leverage your right under the Fair Credit Reporting Act (FCRA) to dispute inaccuracies found on your credit reports with the relevant credit bureau. Swiftly correcting errors or signs of fraud can positively impact your overall credit standing.

Reducing Credit Card Balances

Effectively managing your credit card balances plays a pivotal role in enhancing your credit score. Lowering these balances, and subsequently your credit utilization ratio, reflects responsible credit usage, positively influencing your creditworthiness.

Maintaining Positive Payment History

Consistently making timely payments on your credit obligations is paramount in determining your FICO Score. This practice not only showcases your reliability as a borrower but also significantly contributes to the ongoing improvement of your credit score.

Considering New Credit Accounts

For those seeking to build or establish credit, exploring opportunities such as secured credit cards or credit-builder loans can be instrumental. Additionally, becoming an authorized user on a trusted individual's credit card allows you to leverage their positive credit history as you work toward strengthening your own.

What Types of Interest Rates Are Associated With Credit Cards?

Credit cards come with various interest rates, each serving a specific purpose. These include Purchase APR, Balance Transfer APR, Introductory APR, Cash Advance APR, and Penalty APR. Understanding these different rates is crucial for effective credit card management and financial decision-making.

Purchase APR (Annual Percentage Rate)

The Purchase APR is the interest rate applied to the balance of your credit card for purchases you make. It's the standard interest rate that cardholders encounter when they don't pay their full statement balance by the due date. If you carry a balance from month to month, the Purchase APR is what accumulates interest charges on those outstanding balances.

Balance Transfer APR

The Balance Transfer APR applies when you transfer balances from other credit cards or loans to your credit card account. Many credit card companies offer promotional periods with a low or even 0 percent balance transfer APR when you initially open the account. However, it's crucial to be aware that after this introductory period expires, the balance transfer APR will typically revert to the regular rate.

Introductory APR

Credit card companies often use an Introductory APR as an incentive to attract new applicants. This interest rate is typically lower than the standard Purchase APR and, in some cases, can be as enticing as a 0 percent APR. The Introductory APR is effective for a predetermined period after you open the credit card account, giving you a temporary reprieve from high-interest charges. Once this introductory period concludes, the rate switches to the regular APR.

Cash Advance APR

When you use your credit card to withdraw cash from an ATM or conduct cash-equivalent transactions, such as purchasing casino chips, the Cash Advance APR takes effect. This interest rate is often higher than the Purchase APR and may come with additional fees, making it an expensive way to borrow money. It's crucial to note that interest on cash advances usually begins accruing immediately, without a grace period.

Penalty APR

If you miss a payment or make a late payment, your credit card issuer may impose a Penalty APR. This rate is notably higher than the standard APR, sometimes reaching as high as 29.99 percent. However, federal regulations stipulate that issuers must review your account after six months of making timely payments, and they may lower the Penalty APR if you've demonstrated responsible payment behavior.

What is the Average Credit Card Interest Rate - FAQs

1. What is the average credit card interest rate in the United States?

The average credit card interest rate in the U.S. is approximately 27.80%.

2. How can I lower the interest rate on my credit card?

You can lower your credit card interest rate by exploring balance transfer offers, considering debt consolidation loans, or negotiating with your credit card issuer.

3. What is the average credit card debt in the United States?

The average credit card debt in the U.S. is around $5,733.

4. How can I improve my credit score?

You can improve your credit score by regularly checking your credit reports, disputing inaccuracies, reducing credit card balances, maintaining a positive payment history, and considering new credit accounts.

5. What are the different types of credit card interest rates?

Credit cards have various interest rates, including Purchase APR, Balance Transfer APR, Introductory APR, Cash Advance APR, and Penalty APR, each serving specific purposes in credit card management.

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