Average credit card interest rates: Week of February 15, 2023

Higher-than-ever APRs on brand-new cards are on track to keep increasing as lenders and borrowers alike contend with higher costs and an ever-changing economy


The average APR for brand-new cards rose again on Wednesday, according to CreditCards.com’s latest Weekly Rate Report, landing at another all-time high. But with the country’s economic outlook still fairly unpredictable, not every lender is closely following the Fed’s rate hikes.

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The average credit card interest rate is 20.30 percent.

APRs on brand-new cards continue to rise as lenders respond to the Fed’s latest interest rate increase with rate hikes of their own.

Two weeks after Federal Reserve officials announced their eighth straight rate increase since last spring (this time hiking rates by a quarter of a percentage point), several lenders have already increased APRs on brand-new cards by the same amount.

But not every lender is closely matching the Fed’s rate hikes. According to CreditCards.com’s latest Weekly Rate Report, for example, some lenders hiked APRs on select cards by even more than the Fed this week. As a result, the national average card APR landed at its highest point ever on Wednesday after a handful more lenders adjusted the APRs they advertise online.

With inflation still at a historic high, extra steep borrowing costs are here to stay

Unfortunately, cardholders hoping for a break from this year’s higher-than-ever rates are unlikely to get one any time soon.

Year over year, the average APR for brand-new cards is already up by a record 4.17 percentage points and is all but certain to keep climbing as the Fed continues fighting an inflation rate that has so far proved surprisingly resilient.

Policymakers have made clear that they plan to continue hiking federal interest rates and leave them at levels not seen in years for as long as it takes to wrestle inflation closer to a target rate of 2 percent. But after nearly a year of aggressive rate hikes — including four three-quarter-point rate increases and two half-point ones — the inflation rate is still well over the Fed’s goal and shows little sign of tumbling sharply any time soon.

New data released this week, in fact, showed that inflation rose even higher than expected in January, causing the Consumer Price Index to swell, year over year, to 6.4 percent. That’s down slightly from December when prices hit 6.5 percent, but it’s well above the inflation levels Fed officials say they want to see before they’ll consider backing down from further hiking rates.

Meanwhile, additional data released in the past week showed that the economy is also hanging on stronger than expected this year, despite sharply higher borrowing and living costs and a range of other stressors weighing on U.S. businesses and consumers.

For example, retail sales climbed 3 percent in January, said the Commerce Department on Wednesday, surprising analysts who expected damper sales after a relatively weak holiday season. Slower retail sales in December had previously sparked fears that higher prices from inflation were weighing heavily on consumers.

In addition, new jobs data released Friday showed that businesses are so far hiring at a surprisingly strong rate. Last week, for example, the Labor Department reported that employers added a whopping 517,000 jobs in January.

The economy’s resilience is good news for consumers who are worried about losing their jobs to a possible recession. But it could make it much harder for the Federal Reserve to slow the economy enough to significantly dampen inflation.

As a result, borrowing costs could stay high for some time — and are likely to just keep growing in the next year. That, in turn, could feel like a heavy burden to consumers who have already seen rates on their existing cards and other loans increase at a record pace.

Future rate increases could be tough for many cardholders to absorb

Research shows that many consumers are already struggling with the combination of sharply higher lending costs and rising prices. For example, a CreditCards.com debt survey released last month found that 72 percent of cardholders who carried balances added to their debt loads in the past year and many say that inflation and higher costs are to blame.

In fact, more than a third of cardholders with balances told pollsters that higher rates, in particular, were a key factor causing their debt loads to inflate.

But if the Fed hikes rates even more in the coming months, then those cardholders could see their balances climb even higher.

Many analysts already expect the Fed to hike rates at least two more times by summer. For example, 46 out of 86 economists polled earlier this month by Reuters said that the Fed was likely to increase rates by a quarter of a percentage point in both March and May, causing the Fed’s target rate to climb by another half point.

If that happens, cardholders could soon see average APRs on brand-new cards climb within a rounding distance of 21 percent for the first time ever. Until last year, the highest weekly average CreditCards.com had ever recorded was 17.80 percent.

Meanwhile, Federal Reserve officials are also signaling that they’re open to hiking rates by even more than that if consumer prices stay high. That, in turn, could make credit card debt even harder for cardholders to carry.

As federal rates climb, so too do most card APRs

Cardholders looking for a brand-new card may also have a tough time finding an affordable option.

Technically, credit card lenders don’t have to hike APRs on new cards when federal interest rates increase. But, historically, most do.

For example, nearly all of the lenders that have revised APRs, since the Fed’s last rate announcement, have hiked APRs by the same amount. Meanwhile, most lenders have also faithfully matched the Fed’s previous rate hikes.

As a result, APRs on most cards tracked by CreditCards.com are currently up by at least 4.25 to 4.50 percentage points since March.

But according to a new analysis by CreditCards.com, some lenders are pushing up rates even more aggressively than the Fed, causing APRs on those cards to balloon even higher.

This week, for example, at least one lender, First National Bank of Omaha, hiked the minimum APR on a card tracked by CreditCards.com by a full percentage point. Whereas most cards have increased rates by a total of 4.5 percentage points since last March, the minimum APR on the Evergreen by FNBO Credit Card has swelled by a total of 5.25 percentage points. The card’s maximum APR remains unchanged.

Meanwhile, Pentagon Federal Credit Union recently hiked the minimum APR it advertises on the PenFed Gold Visa Card by two percentage points. Its minimum APR is now up by 8 points since last year.

Similarly, TD Bank has also recently increased the APR on the TD Cash Visa Card by more than the Fed’s total rate hikes, since last March. The card’s APR is up by 6.25 percentage points.

The higher rates on certain cards underscores just how important it has become for consumers to compare rates before settling on a brand-new card. Now that federal rates are continuing to climb, it could grow even harder for new cardholders to find a lower APR.

Why interest rates are climbing

Most U.S. credit cards are tied to the prime rate, and when the federal funds rate changes, the prime rate typically changes by the same amount.

Lenders are free to set APRs on new cards as they wish and technically aren’t required to change the APRs when a card’s base rate changes. (On the other hand, lenders are required to match changes to the prime rate on open credit card accounts that are contractually tied to it.) Historically, most issuers do revise the APRs they advertise when the card’s base rate changes.

That’s what happened in the spring of 2020. After the Fed slashed rates by a point and a half in March 2020 in response to economic softening from the pandemic, nearly all of the issuers tracked weekly by CreditCards.com — with the notable exception of Capital One — lowered new card APRs as well.

Since then, most new cards included in this rate report continued to advertise the same APRs throughout the pandemic. As a result, the national average card APR hardly budged for nearly two years, remaining within a rounding distance of 16 percent for nearly 24 months.

But now that the prime rate is climbing, credit card offers are following suit. Current credit card holders will also see their rates climb, causing their debt to become much more costly to carry.

CreditCards.com’s Weekly Rate Report

RateAvg. APRLast week6 months ago
National average20.30%20.28%17.98%
Low interest17.35%17.35%15.07%
Cash back19.96%19.94%17.78%
Balance transfer18.43%18.41%16.07%
Instant approval24.55%24.53%21.29%
Bad credit29.09%29.09%27.02%

Methodology: The national average credit card APR comprises 100 of the most popular credit cards in the country, including cards from dozens of leading U.S. issuers and representing every card category listed above. (Introductory, or teaser, rates are not included in the calculation.)

Source: CreditCards.com

Updated: February 15, 2023

Historic interest rates by card type

Since 2007, CreditCards.com has calculated average rates for various credit card categories, including student cards, balance transfer cards, cash back cards and more.

How to get a low credit card interest rate

Your odds of getting approved for a card’s lowest rate will increase the more you improve your credit score. Some factors that influence your credit card APR will be out of your control, such as the age of your oldest credit accounts. However, even if you’re new to credit or are rebuilding your score, there are steps you can take to secure a lower APR. For example:

  • Pay your bills on time. The single most important factor influencing your credit score — and your ability to win a lower rate — is your track record of making on-time payments. Lenders are more likely to trust you with a competitive APR and other positive terms, such as a big credit limit, if you have a lengthy history of paying your bills on time.
  • Keep your balances low. Creditors also want to see that you are responsible for your credit and don’t overcharge. As a result, credit scores consider the amount of credit you’re using compared to how much credit you’ve been given. This is known as your credit utilization ratio. Typically, the lower your ratio, the better. For example, personal finance experts often recommend that you keep your balances well below 30 percent of your total credit limit.
  • Build a lengthy and diverse credit history. Lenders also like to see that you’ve successfully used credit for a long time and have experience with different types of credit, including revolving credit and installment loans. As a result, credit scores, such as the FICO score and VantageScore, factor in the average length of your credit history and the types of loans you’ve handled (which is known as your credit mix). To keep your credit history as long as possible, continue to use your oldest credit card, so your issuer doesn’t close it.
  • Call your issuers. If you’ve successfully owned a credit card for a long time, you may be able to convince your credit card issuers to lower your interest rate — especially if you have excellent credit. Contact your credit card issuer and try to negotiate a lower APR.
  • Monitor your credit reportCheck your credit reports regularly to be sure you’re accurately scored. The last thing you want is for a mistake or unauthorized account to drag down your credit score. You have the right to check your credit reports from each major credit bureau (Equifax, Experian and TransUnion) once per year for free through AnnualCreditReport.com. The three credit bureaus are also providing free weekly credit reports through 2023 due to the pandemic.

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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