What Is The Average Credit Card Interest Rate?

Average Credit Card Interest Rate By Card Type

Average credit card interest rate by card type 2021

The average consumer credit card rate is 17% as of June 1, 2021 according to the latest credit card tracking bureau.

With the US Bank Prime Rate at 5%, credit card companies are charging 12% over Prime. In other words, credit card companies are making big bucks off you!

The US Bank Prime Rate or “lending rate” has averaged 3% above the Federal Funds rate, which is currently at 2.25% in 2021. The Prime Rate is used to adjust the interest rates for HELOCs, credit cards, and student loans. The Prime Rate is considered the rate at which banks lend to the most creditworthy borrowers.

With a 12% spread over Prime, credit card companies are essentially saying they require a 12% return over Prime in order to be in the business of lending credit with a card to the average consumer.

If all consumers paid their credit card debts in full and never welched on a payment, the spread over Prime rate would probably be close to zero. The other way to lower credit card rates is if consumers reduce demand for credit card usage and the government either regulates more tightly and/or encourages more competition.


My one and only personal credit card has a interest rate of 10.25%, or a full 7% points over prime.  I’ve had the card for 10 years and have never missed a payment in 120+ billing cycles.  Sure my rate is still 6.5% below the average, however, compared to mortgage rates below 4% and student loan rates below 3%, 10.25% is ridiculously high.

I gave my credit card company a ring to see if they can lower the rate, even though I never plan to give them the satisfaction of making 10.25% off me, and they politely declined.  Since I only have one personal credit card, I don’t easily have a backup to switch to, leading me not wanting to spend the time to apply a new.

High interest rates should discourage you from using your credit card and at the very least, never carry a balance.  We know in practice, this is not the case as credit card companies earn billions a year from consumer’s lack of spending discipline.  I hope as a ONIG Financial Blog reader, you know better than to ever spend more than you earn and carry a balance.

Average credit card interest rate

Wealth Building Recommendation

Track Your Wealth For Free: In order to optimize your finances, you’ve first got to track your finances. I recommend signing up for Personal Capital’s free financial tools so you can track your net worth, analyze your investment portfolios for excessive fees, and run your financials through their fantastic Retirement Planning Calculator. Those who are on top of their finances build much greater wealth longer term than those who don’t. I’ve used Personal Capital since 2012. It’s the best free financial app out there to manage your money.

Planning for retirement when paying for private grade school

Are you on the right retirement path? There is no rewind button.

Updated for 2021 and beyond.

Click here for Source

  • Site Yorum

Bir yorum bırak