Knowing the Average Helps You Find the Best Credit Card Rates for You
When we do the homework of figuring out which credit card is right for us, one of the most important factors to look at are credit card interest rates (also known as the annual percentage rate, or APR). Since the average household pays $6,658 in interest each year, it is important to know the best credit card rates.
Some companies may claim to have low APR, but what is that compared to? How do you know if that card is actually offering a good credit card interest rate? What is the average credit card interest rate?
This guide will help you answer these questions and understand average credit card rates in general. This way, you can get the best credit card interest rates possible for you. By comparing various credit card APR rates, you will know what a good credit card interest rate looks like.
How Do We Find the Average Credit Card Interest Rate?
So, how exactly do we know what the average credit card interest rates are? We took a three-tiered approach. These are the methods we used to bring you information on credit card interest rates:
- Three credit card examples: Below, we will compare credit card rates from three examples: one low, one average, and one high. These will help us better understand the interest ranges and what types of cards often come with these credit card APR rates.
- AdvisoryHQ’s credit card database: We will look through our comprehensive credit card database of well over 100 popular credit cards to calculate our own average credit card rate.
- Information from other sources: We will also look at what other sources and statistics are saying about current credit card interest rates.
See Also: Top Best Credit Cards with No Balance Transfer Fee (15–21 Months with Zero Balance Fees)
Do You Only Pay Credit Card Interest Rates on Purchases?
Before we dive in, it is important to note that we normally pay attention to credit card interest rates when it comes to purchases, but there are actually three common areas in which we pay credit card rates:
- Purchases: If you have a balance at the end of the month, you will normally be charged credit card rates.
- Balance Transfers: If you transfer a balance from another credit card over to a new credit card, you will usually be charged a balance transfer credit card APR rate.
- Cash Advances: If you pull out part of your credit limit in the form of cash, you will have to pay (typically high) credit card rates.
For this guide, we will focus on purchase APR, since that is the most common way you would have to pay credit card interest rates. But we will also touch on the other two.
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2017 Comparison Reviews
The list below is sorted alphabetically :
- Chase Freedom® Credit Card
- First PREMIER® Bank MasterCard® Credit Card
- Visa® Titanium Signature Rewards
Credit Card Interest Rates Brief Comparison & Ranking
Credit Card Name | Interest Rate Comparison | APR Purchases |
| Chase Freedom® Credit Card | Average | 5.99–18.00% |
| First PREMIER® Bank MasterCard® Credit Card | Highest | 14.24–23.24% |
| Visa® Titanium Signature Rewards | Lowest | 36.00% |
Chase Freedom® vs. First PREMIER® Bank MasterCard® vs. Visa® Titanium Signature Rewards
These three credit cards serve as great examples for finding the lowest, highest, and average credit card interest rates. Of course, you may find a lower rate or a higher right, but they serve as a good starting point to compare credit card rates.
Image Source: Chase
Chase Freedom® Credit Card: We start with a good example of an average credit card interest rate. This card is geared for those with fair to excellent credit and offers some cashback perks. There are countless credit cards that offer similar average credit card interest rates.
First PREMIER® Bank MasterCard® Credit Card: This credit card is unsecured and geared for people who have no credit or bad credit. Cards like this one often have the highest credit card interest rate ranges because they are not dealing with those who have not proven their creditworthiness.
Visa® Titanium Signature Rewards: This credit card is the perfect example of the lowest credit card rates. This particular card is geared toward active military and veterans. Not everyone will be eligible for rates this low, but it shows you what is possible for the best credit card interest rates.
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More About the Lowest Credit Card Interest Rates
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Since knowing an average is only possible by understanding the highs and lows, let us take a look at the lowest credit card rates.
Among our AdvisoryHQ database of nearly 140 popular credit cards, here is what we found:
- The minimum percentage lowest credit card interest rate is 5.99% (as seen in the Visa® Titanium Signature Rewards card above)
- The maximum percentage lowest credit card interest rate is 11.25%
Anytime you can get credit card rates in the single digits (9.99% or lower), you undoubtedly have one of the best credit card interest rates. But as our information on the average credit card rate will show, anything under 14% or 15% counts as some of the best credit card interest rates too.
More About the Highest Credit Card Interest Rates
Now, let’s take a peek at the facts about the highest credit card interest rate options. Among our AdvisoryHQ database of nearly 140 popular credit cards, this is what we found:
- The minimum percentage highest credit card interest rate is 36% (as seen in the First PREMIER® Bank MasterCard® Credit Card above)
- The maximum percentage highest credit card interest rate is 36%
For many people with no credit, bad credit or even poor credit, they are only able to qualify for higher interest rates. Also, many of these cards with the highest credit card interest rates also offer travel perks.
There is no real federal law restricting how high credit card companies can keep their credit card rates. In fact, some credit cards with 79.9% credit card rates made the news a few years ago.
Typically, however, high credit card APR rates will be in the upper 20s (Example: 26.24%).
So What Is the Average Credit Card Interest Rate?
Now it is time to focus on the average credit card interest rate. We will start by looking to our own research. Among our AdvisoryHQ database of credit cards of nearly 140 popular credit cards, we found:
- The minimum percentage average credit card interest rate is 14.11%
- The maximum percentage average credit card interest rate is 21.95%
These numbers show that any card with a range between 14% and 21% is not only considered an average credit card rate but also a fairly good credit card interest rate.
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What Else Do We Know About the Average Credit Card Rate?
Keep in mind that credit card rates change frequently. Also, new cards come out and others are discontinued. So it is important to take a comprehensive look at credit card interest rates over the past few months or years from different perspectives.
This means we also want to look at other financial sources to see what they have come up with in determining the average credit card interest rate.
The financial website ValuePenguin broke down average credit card interest rate by credit card type in 2016. Its results are:
- Travel rewards cards: 15.99%
- Business credit cards: 15.37%
- Cashback credit cards: 20.90%
- Student credit cards 19.80%
Bankrate, another financial website, calculated the average variable credit card rate at 16.28% for November of 2016.
NerdWallet shows us historical average credit card rates. Here are some from the past:
- 2011: 13.04%
- 2000: 14.91%
- 1993: 16.83%
- 1988: 17.78%
- 1976: 17.05%
What Is the Average Credit Card Interest Rate on Balance Transfers?
Now, for a quick look on balance transfers. If you are interested in putting a balance transfer on your new credit card, here is some info on the average credit card rate on balance transfers.
Among our AdvisoryHQ database of nearly 140 popular credit cards, here is what we found:
- The lowest credit card interest rate range on balance transfers is 5.99%–7.90%
- The highest credit card interest rate range on balance transfers is 25.24%–29.99%
- The average credit card interest rate range on balance transfers is 13.54%–21.53%
What Is the Average Credit Card Interest Rate on Cash Advances?
We will finish up our look into average credit rate ranges as we compare credit card rates on cash advances. If you need to take cash out from your credit card, these will be the possible credit card APR rates you may see.
Among our AdvisoryHQ database of nearly 140 popular credit cards, this is what we found:
- The lowest credit card rates range on cash advances is 6.74%–6.99%
- The highest credit card interest rate range on balance transfers is 32.00%–36.00%
- The average credit card interest rate range on balance transfers is 21.11%–24.12%.
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What Will Your Rate Be?
It is important to know that while we can show you the average credit card interest rates, it does not necessarily mean you will get that exact rate.
You probably have noticed that most credit cards offer an APR range. For example, Chase Freedom® offers an APR of 14.24–23.24%. That 14.24% is significantly lower and “better” than the 21.24%.
So, how do you get the best credit card interest rates?
What APR the credit card company ends up giving you will depend upon your creditworthiness. If you have bad credit, you will get a higher APR. If you have an excellent credit score, you will receive a lower APR.
Conclusion: The Average Credit Card Interest Rate
Now you have a better idea of what to expect when it comes to paying interest rates. This information can help you navigate various credit card offers to find the best credit card rates for you.
To wrap it all up, remember to keep these three important points in mind while you shop around for a good credit card interest rate:
- Most sources agree that the average credit card interest rate will be somewhere between 14% and 20%. Use these numbers as a guide when determining what a good credit card interest rate will be for you.
- The average credit card interest rate does not take your credit score into factor. You may need to work to bring your credit score up in order to take advantage of the best credit card rates available. On the other hand, a great credit score will give you even better credit card rates than the average.
- Finding the best credit card rates only matters for those who keep a balance on their credit card from month to month. The #1 way to avoid paying any of these credit card rates is to focus on paying off your credit card balance regularly.
Now you can take this information on average credit card interest rates and find the best credit card interest rates for you.
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AdvisoryHQ (AHQ) Disclaimer: Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info. Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.