Average Credit Card Interest Rate

The median available rate we track exceeds the Federal Reserve average

23.24%

The median rate of interest across all credit cards in the Investopedia card database for February 2023.

The median credit card interest rate for all credit cards in the Investopedia database stands at 23.24% in February 2023, a rise of 50 basis points over the median rate in January, based on average advertised rates across several hundred of the most popular card offers in the market. Investopedia’s average rate data differs markedly from the overall credit card rate average tracked by the Federal Reserve (the Fed), which was most recently quoted to be 19.07% for November 2022, due to the fact that the Fed samples a relatively limited number of banks and only considers the low end of the interest rate range advertised by card issuers. Given that the average FICO credit score in the U.S. was 716 as of April 2022, up 5 points from its level in 2020, according to Experian, Investopedia believes it is more accurate to track the median midpoint value of advertised credit card interest rate ranges rather than the low end as a 716 credit score would not qualify for the best rates available as implied by Fed average rates.

Key Takeaways

  • The median available interest rate from Investopedia's database of over 300 cards is 23.24%
  • Credit card interest rates are largely determined by credit quality of the applicant
  • The best credit card rates are reserved for those with excellent credit

Credit card interest rates are expected to continue to adjust upward in response to Fed rate increases in 2022 and 2023, as most card issuers employ variable interest rates that are indexed to the Federal Reserve’s Prime Rate. However, the lower and upper ends of available card rates can change from month to month depending on competitive pressures and individual banks' risk policies. The Federal Reserve has pivoted to an aggressive policy of rate increases to its benchmark federal funds interest rate to combat rising inflation that began at the end of 2021. Specifically, due to dramatic increases in the consumer price index in Q4 of 2021, and in all four quarters of 2022 the Fed has indicated that interest rate hikes will continue to occur, though at a slower pace in 2023. The latest increase announced on February 1 was for 0.25%. This compares to a string of 0.75% increases in the second half of 2022. A wide variety of consumer loans, including credit cards, are tied to movements of the Fed funds rate which is the mechanism the Fed employs to stimulate or slow the magnitude of lending depending on economic conditions.

Several factors influence how individual credit card rates are set, the most important of which is credit quality, with those with excellent credit receiving the lowest rates and those with no credit or bad credit receiving the highest rates. Other factors include the type of credit card and the risk-based pricing policies of the specific credit card issuer. 

Investopedia tracks average advertised rates for new applicants, which are typically quoted as a range for each card product, across more than 300 card offers, which are shown below broken out by credit quality, card type, and card issuer.

Interest Rates by Credit Quality Types

Different ranges of credit quality can vary depending on the type of score used but the most popular credit score used by credit card lenders is the FICO score.

Different ranges of credit quality can vary depending on the type of score used but the most popular credit score used by credit card lenders is the FICO score. Credit quality is defined according to the FICO score ranges for each credit quality level:

FICO Credit Score Ranges
Excellent 740-850
Good  670-739
Fair 580-669
Bad/No Credit 350-579

For those needing to build or rebuild their credit it's critical to begin actively using credit responsibly - which means always paying bills on time and keeping utilization below 30% of credit lines. A secured credit card can be a good place to start if you don't already have credit in your name. It can take time but responsible credit use can produce positive results after as little as six months and builds over time.

Interest Rates by Credit Card Types

  • Rewards: Credit cards that offer points, miles, or cash back on purchases
  • Student: Credit cards designed for for the limited credit history and credit education needs of college students
  • Secured: Credit cards that require a security deposit that serves as an initial credit line
  • Business: Credit cards designed for small business owners providing segregation of business expenses, working capital and often rewards and discounts on business-related purchase categories.

Interest Rates by Issuer

Credit card issuers have different risk-based pricing policies that cause variation in the ranges of interest rates they advertise and eventually assign to customers based on approved applicants' credit scores.

Prime Rate Trend

Credit card interest rates are predominantly indexed to the Prime Rate along with a margin which varies at the card product level and individual account holder's credit quality. The Prime Rate currently stands at 7.50%, having risen 350 basis points since the first of the year following several rate increases by the Federal Reserve, most recently with another increase of .50% in December. Fed Chairman Powell indicated in a speech at the end of November that the magnitude of future increases would likely be less than .75%, as the most recent hike of 50 basis points indicates. The current prime rate has now surpassed its previous decade-high reached in Q4 2018.

Delinquency Rate Trend

Credit card delinquency rates, defined as accounts that are 90 days or more overdue, has been below 3% in recent years with a high point of 2.76% in January of 2020. However, during the pandemic the delinquency rate fell to a low of 1.48%, bottoming out in April of 2021. With the highest inflation in 40-years, caused by supply chain issues and increased consumer demand, driving higher spending on credit cards, the delinquency rate up has risen significantly to 2.08% at the end of Q3. This is up 27 basis points from the rate seen at the end of Q2.

Credit Card Debt Trend

Total consumer revolving credit card debt passed the $1 trillion mark just prior to the pandemic and then fell sharply to a low of $970 billion in January 2021. Since then revolving debt has climbed back beyond pre-pandemic levels to $1.17 trillion for the most recent month reported, October 2022, reflecting continued strong consumer demand and credit card spending. Pent up consumer demand coupled with supply chain issues and resulting shortages of goods and services has also fueled record inflation levels not seen since the early 1980's. Fed increases to its discount rate charged to banks for overnight lending has a direct impact on credit card interest rates that adjust automatically, as they are pegged to the prime rate.

Methodology

Investopedia tracks individual credit card rates on more than 300 network-branded cards offered to the public from 43 of the nation’s largest banks and issuers. Most credit card rates are advertised in the form of a range from low to high depending on the applicant’s credit score. In determining average rates by credit quality, card type, card type, or card issuer, Investopedia calculates the average mid-point of advertised interest rate ranges and also calculates the average of the lower and upper ends of rates that are expressed in ranges.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Board of Governors of the Federal Reserve System. "Consumer Credit - G.19."

  2. Experian. "What Is the Average Credit Score in the U.S.?"