Average credit card interest rates: Week of January 27, 2021

The average credit card interest rate is 16.11%.

The national average credit card APR rose Wednesday to its highest point in nearly nine months, according to the CreditCards.com Weekly Credit Card Rate Report.

U.S. Bank revised several credit card APRs this week, causing the national average card APR to increase for the first time in weeks. Among the 100 cards tracked weekly by CreditCards.com, for example, three U.S. Bank cards advertised new offers, including two business cards.

For example, U.S. Bank hiked the lowest possible APRs on the U.S Bank Business Cash Rewards World Elite™ Mastercard® and the U.S. Bank Business Platinum card by 2 percentage points, causing both cards’ APRs to exceed pre-pandemic levels for the first time in months.

A year ago, for example, the lowest available APR on the Business Edge Cash Rewards card was 13.74%. It’s now 13.99%.

Meanwhile, the minimum APR on the Business Platinum card was 11.74% last January. Today, the best rate new cardholders can get is 11.99%.

U.S. Bank also increased the maximum APR on the Platinum card by an even larger margin this week, hiking the card’s maximum APR by 3 percentage points. Applicants may now receive an APR as high as 20.99%, up from a previous high of 17.99%.

U.S. Bank customers who want to transfer a balance are also contending with higher rates this week. The U.S. Bank Visa Platinum Card offers one of the longest balance transfer periods on the market, giving cardholders 20 months to repay an old balance. But once the card’s interest-free period expires, it will grow significantly more expensive.

The card’s minimum APR rose by half a percentage point, while its maximum rate climbed by 2 percentage points. As a result, the best rate new cardholders can expect is now 14.49%, while those with lower scores may get hit with an APR as high as 24.49%.

Average card APRs are likely to remain unusually low for a long time

Despite this week’s rate hike, average rates on new card offers are still near three-year-lows­­—and are unlikely to rise much higher anytime soon.

Since the beginning of the pandemic, only a handful of issuers have been willing to make big changes to brand-new offers. U.S. Bank has been among the most active lenders this year. However, most card issuers tracked by CreditCards.com haven’t touched card offers in months. As a result, the national average card APR has remained within striking distance of 16% since March.

APRs on most card offers tumbled dramatically last spring after most credit card issuers matched the Federal Reserve March 2020 rate cuts. A small number of issuers have reversed at least some of those rate cuts. But the majority of cards tracked by CreditCards.com continue to advertise the same unusually low APR they’ve advertised since spring.

Meanwhile, the Federal Reserve is also taking a wait-and-see approach to consumer lending rates, making it even less likely that cardholders will see a big rate increase in the near future.

On Jan. 27, 2021, the central bank announced that it will again leave its benchmark interest rate near zero. It also signaled that rates will likely remain low for some time since the U.S. economy is still relatively weak.

The economy has struggled so far to recover from the economic impact of the pandemic, making it unlikely that the Fed will increase rates any time soon. As a result, most U.S. credit card holders can expect lower rates for months and possibly years to come. As long as the Fed keeps rates near rock bottom, most lenders are also likely to keep interest rates unusually low.

*All information about the U.S Bank Business Cash Rewards card, the Business Platinum and the Visa Platinum has been collected independently by CreditCards.com and has not been reviewed by the issuer. This offer is no longer available on our site.

CreditCards.com’s Weekly Rate Report

Avg. APR Last week 6 months ago
National average 16.11% 16.05% 16.03%
Low interest 12.88% 12.77% 12.83%
Cash back 15.91% 15.85% 16.09%
Balance transfer 13.93% 13.85% 13.93%
Business 14.22% 13.91% 13.91%
Student 16.12% 16.12% 16.12%
Airline 15.56% 15.53% 15.48%
Rewards 15.80% 15.76% 15.82%
Instant approval 18.47% 18.38% 18.65%
Bad credit 25.30% 25.30% 24.43%
Methodology: The national average credit card APR is comprised of 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: January 27, 2021

Historic interest rates by card type

Some credit cards charge even higher rates, on average. The type of rate you get will depend in part on the category of credit card you own. For example, even the best travel credit cards often charge higher rates than basic, low interest credit cards.

CreditCards.com has been calculating average rates for a wide variety of credit card categories, including student cards, balance transfer cards, cash back cards and more, since 2007.

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 length of time you’ve been handling credit.

However, even if you’re new to credit or are rebuilding your score, there are steps you can take to ensure a lower APR. For example:

  1. 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.
  2. Keep your balances low. Lenders also want to see that you are responsible with your credit and don’t overcharge. As a result, credit scores take into account 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% of your total credit limit.
  3. Build a lengthy and diverse credit history. Lenders also like to see that you’ve been successfully using 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 lender doesn’t close it.
  4. Call your lender. If you’ve successfully owned a credit card for a long time, you may be able to convince your lender to lower your interest rate – especially if you have excellent credit. Reach out to your lender and ask if they’d be willing to negotiate a lower APR.
  5. Monitor your credit report. Check your credit reports regularly to make sure you’re being 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.

Source: creditcards.com