Average Credit Card Interest Rate Is 22.70% (2023)

Average Credit Card Interest Rate Is 22.70% (1)

The average credit card interest rate for purchases is now 22.70%, according to December rates and offer data collected by The Balance, the highest average APR since we began recording them.

Key Takeaways

  • The average APR on credit card purchases rose to 22.70%, another in a string of increases we’ve seen since the Federal Reserve began boosting rates last spring.
  • Store credit cards have the highest average interest rate at 26.31%.
  • Business credit cards have the lowest average interest rate at 20.46%.
  • Student credit cards have the lowest average interest rate among consumer cards at 21.60%.

In December, The Balance recorded 157 pricing changes among the offers in its database, a significant bump from the 91 we recorded in November. Most of the interest-rate moves were hikes of 0.75 percentage points (89 price changes) or 0.50 percentage points (51 price changes). We also recorded a handful of 1.5 percentage point hikes (11) and one 3.0 percentage point increase.

Credit card interest rates are based on the prime rate, which closely follows the benchmark rate set by the Federal Reserve. In mid-December, the Fed boosted rates 0.50 percentage points, the seventh rate hike this year.

Add it all up and the rate moves moved the average 0.33 percentage points higher in December.

Average Credit Card Interest Rates (APRs) on Purchases by Card Category

Card type is just one factor that influences a credit card’s interest rate. To learn how The Balance categorizes card types, see the “Methodology” section at the bottom of this report. Other determining factors include your credit score and the type of transactions you charge to your card.

Average Credit Card Interest Rates Based on Card Type
Average APR1 Month Ago6 Months Ago1 Year Ago
All Credit Cards22.70%22.37%21.33%20.45%
Business Credit Cards20.46%20.17%18.66%17.30%
Student Credit Cards21.60%21.02%19.93%20.02%
Cash-Back Credit Cards21.61%21.31%20.29%19.31%
Travel Rewards Credit Cards22.14%21.72%20.53%19.35%
Secured Credit Cards22.82%22.64%21.63%20.74%
Store Credit Cards26.31%26.09%25.24%24.28%


A credit card often has a range of APRs, such as 17.99% to 25.99%. The better your credit score, the more likely you are to get approved for an interest rate on the lower end of the range.

Cash Advance Rates

Most credit cards allow you to tap your available credit by using the physical card to withdraw cash at an ATM or via a convenience check. About 89% (316 cards) of the offers we track allow cash advances, but that convenient feature typically comes at a cost: an APR that’s higher than the average rate across all cards.

  • Average cash-advance APR: 28.00%, up from last month’s 27.68%. In many cases, issuers juiced cash-advance rates alongside their purchase-rate hikes—0.75 or 0.50 percentage points.


On top of high APRs, cash-advance transactions usually come with an added fee and accrue interest immediately, so it’s best to avoid taking advances—especially if you’re trying to minimize costs.

Penalty Interest Rates

A credit card’s penalty rate is a higher interest rate some credit card issuers charge should you fail to meet the terms of the agreement. If you fall behind on your monthly credit card payments, exceed your credit limit, or your bank returns a monthly payment, your standard purchase APR may rise to the penalty interest rate (or “default rate”).

While not all credit cards charge penalty rates, many do, including 138 (about 39%) of the cards surveyed for this report.

  • Average penalty APR: Based on The Balance’s card sample, the average penalty rate in December was 29.42%, up slightly from the previous month’s 29.37%. December’s penalty rate is 6.72 percentage points higher than the average purchase APR.
  • Highest penalty APR: 33.74% is the highest penalty rate any of the cards in our database charge. The most popular penalty APR is 29.99%; 110 cards in our database charge it.


If you pay your credit card bill on time every month, you won’t have to worry about a high-cost penalty interest rate. If you can’t afford to make a payment, check with your card issuer to see what financial-hardship options are available to protect your credit card APR and your credit score.

Average APR Based on Recommended Credit Score

Based on the card offer data collected by The Balance, credit cards marketed to consumers with bad and fair credit scores (below 670, according to FICO) have an average purchase APR of 25.31%. This is 3.16 percentage points higher than the 22.15% average APR of cards marketed to people with what FICO considers good or excellent credit.

A good credit score indicates to lenders that you can manage credit cards, loans, or debt repayment, and it often results in lower interest rates. Conversely, cards that accept applicants with lower credit scores charge higher interest rates to make up for the risk of default.


The type of credit score you see advertised on a card offer page is a recommendation. While it’s a good benchmark, your credit score is just one of several factors that credit card issuers consider when deciding to approve a card application.

What Average Credit Card APRs Mean for You

If you’re in the process of paying off credit card debt, remember that credit card interest compounds, meaning previous interest charges are included in each monthly interest calculation.

As a result, card balances can grow quickly, and every APR percentage point matters. Even small changes to your card’s interest rate—similar to what we’ve seen happen to the average credit card APR over the past year—can add up to higher debt costs. So if you fall behind on your monthly payments, those costs can rise even more under a much higher penalty APR.


This monthly report is based on credit card offer data collected and monitored on a rolling basis by The Balance for 356 U.S. credit cards. The most recent data was collected throughout December 2022. Our data pool includes offers from 45 issuers, including the largest national banks. We track average interest rates on both a weekly and monthly basis for each card category, plus the overall average rate for all cards.

How We Calculate APR Averages

The Balance gathers purchase and transaction APR information from current credit card terms and conditions. If a credit card APR is posted as a range, we first determine the average of that range, then use that figure in our overall average rate calculations. We do this so the statistics are true averages—not skewed toward the low or high end of a spectrum.

The overall average APR in this report is an average of the average APR in each category we track: travel, cash-back, secured, business, student, store cards, and “other” (which includes balance-transfer cards and low-cost, no-frills cards).

How We Calculate Average Rates vs. the Fed

We look at interest rates by card category and transaction type to give a clearer view of the interest rate you can expect to pay based on the kind of card you're using, or how you plan to use it. By comparison, the August data (the most recent available) from the Federal Reserve puts the average credit card APR at 19.07%. However, the Fed calculates its rate based on voluntary reporting from 50 credit-card-issuing banks, and it's unclear what goes into those averages or what types of cards make up those averages.

The Fed also reports an average rate on accounts that are charged interest (meaning those that carry balances month to month), although its calculation gives more weight to accounts with high balances. In August, the average interest rate on credit cards accruing finance charges was 20.40%, a new high. The previous record high in the series, which dates to 1994, was 17.14%, recorded in the second quarter of 2019.

How We Categorize Cards

We assign a category to each credit card in our database, and a card can go in only one category. Here’s how we define them:

  • Business credit cards: Cards that small-business owners can apply for and use to make purchases for their companies
  • Cash-back credit cards: Cards that offer cash back on most purchases you make with the card
  • Travel rewards credit cards: Cards that allow you to earn extra points or miles on travel purchases, either with specific travel brands or on a variety of travel-related expenses; cards that offer high-value travel redemption options are also part of this group.
  • Student credit cards: Cards for college or graduate students who are at least 18 years old
  • Secured credit cards: Cards requiring a security deposit that’s usually the same amount as the credit limit; these cards are aimed to help people with poor or no credit build credit.
  • Store credit cards: Cards you can use at particular retail stores and sometimes, other places; they often offer discounts or rewards for purchases made at the associated store (or chain of stores).
  • Other: Cards that do not fit any of the following categories: business, cash-back, student, travel, secured, and store; this includes cards that offer very few—if any—features.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

  1. Board of Governors of the Federal Reserve System. “Open Market Operations.”

  2. MyFICO. "What Is a FICO Score?"

  3. Board of Governors of the Federal Reserve System. "Consumer Credit - G.19." See Charts.

  4. Board of Governors of the Federal Reserve System. "Consumer Credit - G.19." See About.

  5. Board of Governors of the Federal Reserve System. "Consumer Credit - G.19.” See Historical Data.


Is a 22 percent interest rate high for a credit card? ›

If you want to know whether a credit card has a good APR, compare it with the average credit card APR, which is currently above 20 percent. If the card's APR is below the national average, that's a good APR.

Is a 20% interest rate on a credit card good? ›

A good APR for a first credit card is anything below 20%. Most first-timers have no credit history, so they need to prove themselves as responsible borrowers before getting a really low APR. But there are some exceptions. Student cards also give lower rates, but you have to be a student to get one.

Is 24.99 APR good for a credit card? ›

Is 24.99% APR good? A 24.99% APR is not particularly good for those with good or excellent credit. If you have average or below-average credit, however, it is a reasonable rate for credit cards. Still, you should aim for a lower rate if possible.

Is 25% APR high? ›

This is one example of “bad APR,” as carrying a balance at a 25% APR can easily create a cycle of consumer debt if things go wrong and leave the cardholder worse off than when they started.

Is 24% interest high for a credit card? ›

Yes, a 24% APR is high for a credit card. While many credit cards offer a range of interest rates, you'll qualify for lower rates with a higher credit score. Improving your credit score is a simple path to getting lower rates on your credit card.

What is a really good credit card interest rate? ›

Average Credit Card Interest Rates by Category
CategoryLatest (September 2023)Q2 2023
Excellent Credit17.91%17.52%
Good Credit23.96%23.47%
Fair Credit26.26%25.77%
Store Cards30.42%29.95%
5 more rows

Is 25% APR credit card good? ›

The APR you receive is based on your credit score – the higher your score, the lower your APR. A good APR is around 20%, which is the current average for credit cards. People with bad credit may only have options for higher APR credit cards around 30%. Some people with good credit may find cards with APR as low as 12%.

Is 20% interest rate too high? ›

A 20% APR is reasonable for personal loans and credit cards, however, particularly for people with below-average credit. You still shouldn't settle for a rate this high if you can help it, though. A 20% APR is reasonable but not ideal for credit cards. The average APR on a credit card is 22.39%.

Is 17% interest on a credit card high? ›

A good interest rate is 17%, the average is 19.49% and a bad interest rate is 24% (or higher). Learn more about credit card APR and interest rates to help you better manage and maintain your debt, finances and credit score.

Is 29.9% APR good for a credit card? ›

Anything over 24% is towards the expensive side. If you pay your balance off each month the APR will not be as important. However, if you forget to pay it off and you are paying a high APR, the interest charges will rack up. Some store cards have higher APR rates than traditional credit cards.

Is 18% APR on a credit card bad? ›

How good a credit card APR will be depends on how long it remains in effect. Low introductory APRs last for only a limited time before a high regular APR takes their place, for example. And an 18% regular rate won't cost you too much for a month or two, but carrying a balance for a long time will be expensive.

Why is my APR so high with good credit? ›

Card rates are high because they carry more risk to issuers than secured loans. With average credit card interest rates climbing above 20 percent, the best thing consumers can do is strategically manage their debt.

Is 22.9% APR bad? ›

A 22.99% APR is reasonable but not ideal for credit cards. The average APR on a credit card is 22.39%. A 22.99% APR is decent for personal loans.

Is 27 percent APR high? ›

It can be easy to fall into the trap that many stores attempt to lure us into if we don't understand how these store cards work, Green said. Ultimately, the decision will come down to three questions, First, will you be able to pay off the balance in full every month? An interest rate of 27 percent is extremely high.

What does 25% APR look like? ›

Supposing your credit card has a 25% APR and you carry a $100 balance for a year, you would owe $125 by year's end.

Is 18% interest high for a credit card? ›

How good a credit card APR will be depends on how long it remains in effect. Low introductory APRs last for only a limited time before a high regular APR takes their place, for example. And an 18% regular rate won't cost you too much for a month or two, but carrying a balance for a long time will be expensive.

Why is my credit card interest rate so high? ›

Credit card companies need to make a profit

Since credit cards are designed for large-scale consumption, issuers do business with all sorts of consumers. Because it's risky to lend credit to millions of Americans with varying credit histories, issuers charge higher average APRs across their entire customer base.


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